Independent Auditor’s Report

The Board of Directors
Fuyo General Lease Co., Ltd.

OpinionWe have audited the accompanying consolidated financial statements of Fuyo General Lease Co., Ltd.
(the Company) and its consolidated subsidiaries (the Group), which comprise the consolidatedbalance sheet as at March 31, 2023, and the consolidated statements of income, comprehensive
income, changes in net assets, and cash flows for the year then ended, and notes to the consolidated
financial statements.
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, 2023, and its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance withaccounting 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 accordancewith these requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significancein our audit of the consolidated financial statements of the current period. These matters wereaddressed in the context of the audit of the consolidated financial statements as a whole, and informing the auditor’s opinion thereon, and we do not provide a separate opinion on these matters.

Ernst & Young ShinNihon LLC

Estimate of residual value of real estate under operating lease transactions
Description of Key Audit Matter

Auditor’s Response

Fuyo General Lease Co., Ltd. and its consolidated
subsidiaries (the Group) is engaged in leasing,installment sales, commercial loan origination,and other financial services. The Group recorded
assets for lease of ¥797,218 million in property,
plant and equipment, at cost less accumulated
depreciation on the consolidated balance sheets
for the fiscal year ended March 31, 2023. Realestate lease assets with a carrying amount of¥500,617 million were recognized as described in
Note XXI, “Real estate leasing business,” to theconsolidated financial statements. These assets
account for 16% of consolidated total assets.

We performed the following audit procedures,among others, to evaluate the key assumptions
such as future cash flows and other inputs
required to estimate the residual value of realestate under operating lease transactions byselecting a sample of transactions based on
quantitative significance, remaining years of thelease term, and the type of lease payments:

As described in “4. Summary of significant
accounting policies,” “(2) Depreciation andamortization” under Note I, “Basis of presentation,”assets leased under operating lease transactions
are depreciated to their residual value using thestraight-line method over the lease term and thedepreciation cost is included in the cost of sales.
The residual value at the end of the lease term isestimated at the inception of the lease and isrevised, as deemed necessary, during the lease
term. If a loss on disposal of the leased assets is
expected, the corresponding amount is recorded
under cost of sales.
As described in Note II, “Significant accounting
estimates,” the Group estimates the residual value
using future cash flows and discount rates, andthe significant assumption for estimating theresidual value is future cash flows. The future
cash flows of real estate lease transactions are
estimated based on considerations such as termsof contracts, rents, and occupancy rates. However,these transactions are highly individual in natureand the estimation of the residual value requires
complex judgment, and specialized knowledge
and experience. In addition, since the value ofeach property in real estate lease transactions is
significant and operating lease transactions are
not full payout, an inaccurate estimation of theresidual value can have a considerable impact on
profit or loss calculations.
Based on the above, we have determined theestimation of the residual value of real estate
under operating lease transactions to be a key
audit matter.

Ernst & Young ShinNihon LLC(1) Audit procedures performed for lease contracts
that commenced in the current year
・ In order to evaluate the inputs such as rents
and the occupancy rates of the properties,
which form the basis for calculating future
cash flows used by the Group in estimating
the residual value, we inspected external
evidence, including real estate valuation
reports, by involving the real estate valuation
experts from our network firm.
・ In addition, for properties selected according
to certain criteria, we evaluated the inputs
such as rents and the occupancy rates of theproperties, which form the basis for calculating
future cash flows, by comparing such inputs
with past results and available external data.
・ Further, we recalculated the residual value toevaluate the Group’s estimation process.
(2) Audit procedures performed for lease contracts
that commenced in previous years
In order to evaluate the Group’s estimate of theresidual value, we compared actual rents andoccupancy rates with the original estimates toanalyze the cause of differences.
(3) Audit procedures performed for lease contracts
terminated during the current year
In order to evaluate the effectiveness of theGroup’s estimation process, we reconciled
actual sale prices with the sale agreements andcompared these prices with the estimatedresidual values.

Determination of indications of impairment of goodwill
Description of Key Audit Matter

Auditor’s Response

The Group acquires businesses with the aim offurther expanding and growing its business andrecorded goodwill of ¥27,986 million on the
consolidated balance sheets for the fiscal year
ended March 31, 2023, which consists of goodwill
related to the acquisition of Accretive Co., Ltd.,G.I Holdings Inc., LN Holdings, Co., Ltd.,
Yamato Lease Co., Ltd., Work Vision Co., Ltd.,
Human Centrix Co., Ltd., and Pacific Rim Capital,Inc.

We performed the following audit procedures, among
others, to evaluate the Group’s determinations
regarding indications of impairment of the CGU
to which goodwill belongs.

As described in “4. Summary of significant
accounting policies,” “(9) Amortization method
and period of goodwill” under Note I, “Basis ofpresentation,” the Group estimates the useful lifeof goodwill and amortizes it on a straight-line
basis over this period. However, if there are any
significant changes having an adverse effect on
the entity and the recoverable amount of goodwill
is assumed to decrease, the Group determines that
there is an indication that goodwill may be impaired.
If the total amount of expected undiscounted
future cash flows is less than the carrying amountof the cash generating unit (CGU), an impairment
loss on goodwill must be recognized.
The Group determines whether there are any
indications of impairment by, for example,
comparing the initial business plan at the time ofacquisition of each subsidiary with actual results,
analyzing factors related to the differences between
them, and considering the impact on future
performance based on these factors. This involves
significant management judgment on the current
and future business environment. In addition, with
the increase in goodwill due to multiple acquisitionsin the past several years, the significance ofmanagement judgment related to the indicationsof impairment of goodwill has also increased.

・ In order to evaluate determinations by theGroup regarding the possibility of significant
deterioration in the operating environment, we
performed a comparative analysis between theinitial business plan at the time of acquisitionof each subsidiary with the actual financial
results through the end of the current fiscal
year and a variance analysis on the differences
identified between the business plan figures
and actual results.
・ In order to evaluate determinations by the Group
regarding the possibility of significant future
deterioration in the operating environment, wemade inquiries of the responsible department
about the basis for estimates of revenue growth
rates and so forth of each subsidiary, performed
trend analysis, and compared the revenue growth
rates of each subsidiary with external data,such as growth rates of the industry to which
each subsidiary belongs.
・ In order to evaluate the Group’s determinationof whether any changes have occurred or are
expected to occur, which significantly reduce
recoverable amounts, we made inquiries ofmanagement and inspected related materials to
consider the consistency between the initialbusiness plan of each subsidiary, the business
policy of the Group for the current and following
fiscal years, and the Group’s medium-termbusiness plan.

Based on the above, we have determined thedeterminations regarding indications of impairmentof goodwill to be a key audit matter.

Other Information
Other information comprises information included in disclosure documents that contains audited
consolidated financial statements, but does not include the consolidated financial statements andour auditor’s report thereon.
We have concluded that other information does not exist. Accordingly, we have not performed
any work related to other information.
Ernst & Young ShinNihon LLC

Responsibilities of Management, the Corporate Auditor and the Board of Corporate Auditors
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 suchinternal 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 theGroup’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 Corporate Auditor and the Board of Corporate Auditors are responsible for overseeing theGroup’s financial reporting process.
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 anauditor’s report that includes our opinion. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected toinfluence 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:・ 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 areappropriate 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 theGroup’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 toevents or conditions that may cast significant doubt on the Group’s ability to continue as agoing 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 orconditions 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 theunderlying transactions and events in a manner that achieves fair presentation in accordancewith 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 groupaudit. We remain solely responsible for our audit opinion.
Ernst & Young ShinNihon LLC

We communicate with the Corporate Auditor and the Board of Corporate Auditors 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 Corporate Auditor and the Board of Corporate Auditors with a statementthat we have complied with the ethical requirements regarding independence that are relevant toour 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, andwhere applicable, related safeguards.
From the matters communicated with the Corporate Auditor and the Board of Corporate Auditors,
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 mattersin our auditor’s report unless law or regulation precludes public disclosure about the matter orwhen, in extremely rare circumstances, we determine that a matter should not be communicatedin our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
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.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect tothe year ended March 31, 2023 are presented solely for convenience. Our audit also included thetranslation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation
has been made on the basis described in Note 1 to the consolidated financial statements.
Ernst & Young ShinNihon LLC
Tokyo, Japan
August 9, 2023
/s/ Yuji Ozawa
Designated Engagement Partner
Certified Public Accountant/s/ Toru Nakagiri
Designated Engagement Partner
Certified Public Accountant

Ernst & Young ShinNihon LLC

Consolidated financial statements
Consolidated balance sheets
Millions of yen
As of March 31,
2023

Notes
AssetsCurrent assets
Cash and deposits
Installment receivables
Lease receivables and investments in leases
Operating loans
Accounts receivable - other loans tocustomers
Operational investment securities
Other operating assets
Accounts receivable - lease
Other
Allowance for doubtful accounts

3
3
3

¥

907,799
400,564
6,670,680
2,461,419
887,595

2454,966
33,21026,172
72,698(2,672)

323,021
23,34424,80766,556(2,717)

3,406,968
248,692
195,986
544,392(20,011)2,097,123

2,024,888

15,704,083

797,218

671,643

5,969,883

839

15,111

6,286

798,057

686,754

5,976,169

29,407
10,732
3,872

31,801
4,673
3,754

220,21480,36929,001

842,070

726,984

6,305,754

138

195

1,038

27,986
11,116

21,234
9,367

209,571
83,245

39,10230,602292,816

39,24130,797

293,854

125,286
439
523
2,897
41,740(231)

120,259
539
88
2,976
42,554(331)

938,198
3,292
3,917
21,698
312,572(1,732)

170,656

166,087

1,277,944

1,051,968

923,869

7,877,551

4
645

1
944

32
4,831

649

945

4,863

3

1, 3, 71, 3
1Intangible assets
Assets for lease
Other intangible assets
Goodwill
Other
Total other intangible assets
Total intangible assets
2, 3Total investments and other assets
Total non-current assets
Deferred assets
Organization expenses
Business commencement expenses
Total deferred assets
Total assets$

114,443

Total property, plant and equipment

Investments and other assets
Investment securities
Distressed receivables
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts

72,157
66,877
1,019,764
316,633

118,529

Total assets for lease
Other operating assets
Construction in progress
Own-used assets

¥

3, 7

Total current assets
Non-current assets
Property, plant and equipment
Assets for lease
Assets for lease
Advances for purchase of assets forlease

121,227
53,491
890,802328,697

As of March 31,
2022

Thousands of U.S.
dollars (Note I)
As of March 31,
2023¥

3,149,740

The accompanying notes are an integral part of these statements.
- 1 -

¥

2,949,704$

23,586,497

Millions of yen
As of March 31,
2023

Notes
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of bonds payable
Current portion of long-term borrowings
Commercial papers
Payables under securitization of leasereceivables
Current portion of long-term payables under
securitization of lease receivables
Lease liabilities
Income taxes payable
Deferred profit on installment sales
Provision for bonuses
Provision for bonuses for directors (andother officers)
Provision for share awards for directors (andother officers)
Provision for future lease payments
Provision for loss on guarantees
Asset retirement obligations
Other

¥

3, 7

¥

35,441
568,563
30,000328,958
371,000$

253,983
4,379,295
336,978
2,946,905
2,291,448

8

24,20029,400181,219

3, 8

5,628

16,50842,145

7,500
7,359
699
3,002

10,827
8,145
810
2,811

210

200

56,164
55,1105,238
22,487
1,573

21

205

162

4
24
–
67,122331
148,564

34
184–
502,639

1,479,030

1,451,473

11,075,563

3, 7

316,397829,614227,137
779,458

2,369,308
6,212,482

3, 8

8,725

15,19765,342272
18,4303,122

530
17,1222,974

2,037
138,012
23,382

378

160

2,831

606

410

4,540

314
365
4,147
78,898

476
440
3,825
76,2562,354
2,739
31,055590,823

1,261,272

1,123,990

9,444,903

2,740,303

2,575,464

20,520,466

3

Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Long-term payables under securitization oflease receivables
Lease liabilities
Deferred tax liabilities
Retirement benefit liability
Provision for retirement benefits for
directors (and other officers)
Provision for share awards for directors (andother officers)
Provision for maintenance costs
Provision for loss on guarantees
Asset retirement obligations
Other

33,916584,81145,000393,529
306,000

As of March 31,
2022

Thousands of U.S.
dollars (Note I)
As of March 31,
2023

Total non-current liabilities
Total liabilities- 2 -Millions of yen
Notes

As of March 31,2023

As of March 31,
2022

10,532
1,902
306,782(2,067)

10,532
7,278
277,361(2,463)78,86914,2502,297,305(15,481)

317,149

292,7092,374,942

36,00038,547

269,589(4,608)17,936163(3,932)5,509(0)(34,507)134,317
1,223

49,49240,124

370,622541
42,253650
40,754

4,058
316,409

Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeShare acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

Thousands of U.S.
dollars (Note I)
As of March 31,
2023

409,437¥

3,149,740

The accompanying notes are an integral part of these statements.

- 3 -374,239¥2,949,704

3,066,031$

23,586,497

Consolidated statements of income and statements of comprehensive income
Consolidated statements of income

FY2022(April 1, 2022 March 31, 2023)¥
688,655
591,338
97,31645,75551,561

FY2021(April 1, 2021 March 31, 2022)¥
657,847
568,988
88,85842,82446,034

Thousands of
U.S. dollars(Note I)
FY2022(April 1, 2022 March 31, 2023)$
5,156,921
4,428,176
728,746
342,635
386,111

78
2,357
437
252

13
2,332
–
268

586
17,652
3,277
1,892

6,028

3,293

45,142

95
81
575
9,906

1,743
121
514
8,289

716
610
4,307
74,182

1,017
78
–
100

775
34
430
40

7,616
587
–
751

458

266

3,433

114
1,768
59,69952
1,600
52,723855
13,242447,051

64
–
–
64

840
10
73
924

481
–
–
481

256
85

357
2

1,923
641

5

1,349

–

10,107

3
4

0
41
–
1,734
58,02916,658494
17,15240,876
1,936
38,939

642
40
9
1,052
52,595
17,052(933)
16,11936,4762,589
33,886

6308–
12,985434,547
124,743
3,704
128,447
306,100
14,503
291,597

Millions of yen

Notes
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Gain on investments in investment partnerships
Share of profit of entities accounted for using
equity method
Recoveries of written off receivables
Reversal of provision for loss on guarantees
Other
Total non-operating income
Non-operating expenses
Interest expenses
Bond issuance costs
Foreign exchange losses
Loss on investments in investment partnerships
Distributions of profit or loss on silent
partnerships
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of investment securities
Gain on transition of retirement benefit plan
Other
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Loss on step acquisitions
Loss on liquidation of subsidiaries andassociates
Impairment losses
Loss on disposal of non-current assets
Loss on revision of retirement benefit plan
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

1
3
2

¥

The accompanying notes are an integral part of these statements.
- 4 -

¥

$

Consolidated statements of comprehensive income
Thousands of
U.S. dollars(Note I)
FY2022(April 1, 2022 –March 31, 2023)

Millions of yen
FY2022(April 1, 2022 –March 31, 2023)

Notes
ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, netof taxShare of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests¥

1

40,876FY2021(April 1, 2021 –March 31, 2022)¥

36,476$306,100(2,529)(6,297)(18,945)(687)
12,464

(742)
7,910

(5,147)
93,335

163

26

1,228

26

808

200

9,437

1,705

70,671¥50,314¥38,181$

376,771¥

48,307¥35,583$361,749

2,006

The accompanying notes are an integral part of these statements.

- 5 -

2,597

15,023

Consolidated statements of changes in equity
FY2022 (From April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of
period¥Capital surplus

10,532¥Retained earnings

7,278

¥

277,361

Total shareholders’equityTreasury shares¥(2,463)¥292,709

Changes during period
Dividends of surplus(9,425)(9,425)

Profit attributable toowners of parent

38,93938,939Purchase of treasury
shares–

Disposal of treasury
shares(93)

Purchase of shares of
consolidated
subsidiaries

396

302

(5,376)(5,376)

Change in ownershipinterest of parent due totransactions with noncontrolling interests–

Net changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period–¥

10,532(5,376)¥29,4201,902¥

306,782396¥

24,440(2,067)¥317,149(Millions of yen)

Accumulated other comprehensive income
Valuationdifference on
available-forsale
securities
Balance at beginning of
period¥38,547

Deferred
gains orlosses onhedges¥Foreigncurrencytranslation
adjustment(3,932) ¥

5,509

Total
Remeasureaccumulated
ments ofother
definedcomprehenbenefit plans
sive income

Shareacquisitionrights

Noncontrollinginterests

Total net
assets¥¥¥¥ 374,239(0) ¥40,124650

40,754

Changes during period
Dividends of surplus(9,425)

Profit attributable toowners of parent

38,939Purchase of treasury
shares–

Disposal of treasury
shares302

Purchase of shares of
consolidated
subsidiaries(5,376)

Change in ownershipinterest of parent due
to transactions with
non-controllinginterests–

Net changes in items
other thanshareholders’ equity(2,546)(675)

12,426

163

9,368

(108)

1,498

10,757

Total changes during
period(2,546)(675)

12,426

163

9,368

(108)

1,498

35,197

Balance at end of period ¥36,000(4,608) ¥17,93642,253¥ 409,437

¥

¥

- 6 -

163

¥

49,492¥541¥

FY2021 (From April 1, 2021 to March 31, 2022)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of
period¥Capital surplus

10,532¥Retained earnings

6,197

¥

251,320

Total shareholders’equityTreasury shares¥(1,912)¥

266,138

Changes during period
Dividends of surplus(7,824)(7,824)

Profit attributable toowners of parent

33,88633,886

Purchase of treasury
shares
Disposal of treasury
shares

(646)

(646)

95

74

(20)

Purchase of shares of
consolidated
subsidiaries–

Change in ownershipinterest of parent due totransactions with noncontrolling interests

1,081

1,081

Net changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period–¥

10,532

1,081¥

26,041

7,278¥

277,361(551)¥(2,463)

26,571¥

292,709(Millions of yen)

Accumulated other comprehensive income
Valuationdifference on
available-forsale
securities
Balance at beginning of
period¥44,833

Deferred
gains orlosses onhedges¥Foreigncurrencytranslation
adjustment(2,656) ¥Total
Remeasureaccumulated
ments ofother
definedcomprehenbenefit plans
sive income(3,698) ¥(50) ¥

38,427

Shareacquisitionrights

Noncontrollinginterests

Total net
assets¥¥¥ 344,796

704

39,527

Changes during period
Dividends of surplus(7,824)

Profit attributable toowners of parent

33,886

Purchase of treasury
shares(646)

Disposal of treasury
shares

74

Purchase of shares of
consolidated
subsidiaries–

Change in ownershipinterest of parent due
to transactions with
non-controllinginterests

1,081

Net changes in items
other thanshareholders’ equity(6,285)(1,276)

9,208

50

1,697

(53)

1,227

2,871

Total changes during
period(6,285)(1,276)

9,208

50

1,697

(53)

1,227

29,442

Balance at end of period ¥38,547(3,932) ¥

5,509

(0) ¥

40,12440,754¥ 374,239

¥

¥

- 7 -

¥

650

¥

FY2022 (From April 1, 2022 to March 31, 2023)(Thousands of U.S. dollars) (Note I)
Shareholders’ equity
Share capital
Balance at beginning of
period$Capital surplus

78,869$Retained earnings

54,508$2,076,993

Total shareholders’equityTreasury shares$(18,447)$

2,191,923

Changes during period
Dividends of surplus(70,583)(70,583)

Profit attributable toowners of parent

291,597

291,597

Purchase of treasury
shares–

Disposal of treasury
shares

(702)

Purchase of shares of
consolidated
subsidiaries

2,966

2,264

(40,258)(40,258)

Change in ownershipinterest of parent due totransactions with noncontrolling interests–

Net changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period–$

78,869(40,258)$

220,312

14,250$2,297,305

2,966$

183,020(15,481)$2,374,942(Thousands of U.S. dollars) (Note I)
Accumulated other comprehensive income
Valuationdifference on
available-forsale
securities
Balance at beginning of
period$ 288,660

Deferred
gains orlosses onhedges$Foreigncurrencytranslation
adjustment(29,448) $41,259Total
Remeasureaccumulated
ments ofother
definedcomprehenbenefit plans
sive income

Shareacquisitionrights

Noncontrollinginterests

Total net
assets$$$ 305,188$ 2,802,455(1) $300,471

4,873

Changes during period
Dividends of surplus(70,583)

Profit attributable toowners of parent

291,597

Purchase of treasury
shares–

Disposal of treasury
shares

2,264

Purchase of shares of
consolidated
subsidiaries(40,258)

Change in ownershipinterest of parent due
to transactions with
non-controllinginterests–

Net changes in items
other thanshareholders’ equity(19,071)(5,059)93,058

1,224

70,152(816)

11,22180,557

Total changes during
period(19,071)(5,059)93,058

1,224

70,152(816)

11,221

263,576

4,058$ 316,409$ 3,066,031

Balance at end of period $ 269,589$(34,507) $ 134,317

$

1,223

The accompanying notes are an integral part of these statements.

- 8 -

$

370,622$

Consolidated statements of cash flows
Thousands of
U.S. dollars(Note I)
FY2022(April 1, 2022 March 31, 2023)

Millions of yen
FY2022(April 1, 2022 March 31, 2023)

Notes
Cash flows from operating activities
Profit before income taxes
Depreciation of assets for lease
Loss on retirement of assets for lease and costof property for lease sales
Depreciation of other operating assets
Depreciation
Amortization of goodwill
Impairment losses
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for bonuses
and bonuses for directors (and other officers)
Increase (decrease) in provision for future lease
payments
Increase (decrease) in provision for retirement
benefits for directors (and other officers)
Increase (decrease) in provision for shareawards for directors (and other officers)
Increase (decrease) in provision formaintenance costs
Increase (decrease) in provision for loss on
guarantees
Increase (decrease) in retirement benefit
liability
Loss (gain) on valuation of short-term andlong-term investment securities
Interest and dividend income
Capital costs and interest expenses
Loss (gain) on investments in investment
partnerships and silent partnerships
Share of loss (profit) of entities accounted forusing equity method
Loss (gain) on sale of short-term and long-term
investment securities
Loss on liquidation of subsidiaries andassociates
Loss (gain) on disposal of non-current assets
Decrease (increase) in installment receivables
Net decrease (increase) in lease receivables andinvestments in leases
Decrease (increase) in accounts receivable lease
Decrease (increase) in operating loans
Decrease (increase) in accounts receivable other loans to customers
Decrease (increase) in operational investment
securities
Purchase of assets for lease
Purchase of other operating assets

¥

- 9 -

58,02940,595

FY2021(April 1, 2021 March 31, 2022)¥

52,595
46,175$434,547
303,999

90,840152,268

680,249

2,559
2,739
1,619
0

2,522
2,336
1,405
642

19,17020,51812,129
6

(601)

(406)

(4,506)

167

8

1,253

0

0

7

207

5

1,557

12

177

90

(162)

(94)

(1,217)

(81)

(121)

(610)

405

46

3,033

256

357

1,923

(2,435)
11,965(2,345)
10,155(18,238)
89,601

(152)

(228)

(1,141)(6,028)(3,293)(45,142)

(64)

(840)

(481)

1,349

–

10,10741
13,291

40
17,555308
99,534

136,887

90,527

1,025,070

1,892

7,307

14,169(6,633)(3,678)(49,677)(4,030)3,449(30,178)(131,708)(39,812)(986,283)(216,032)(6,244)(220,598)(4,821)(1,617,733)(46,762)

FY2022(April 1, 2022 March 31, 2023)
(434)
100
(1,223)(1,770)(3,194)FY2021(April 1, 2021 March 31, 2022)
(23)
18
4,302
1,265
(3,873)Thousands of
U.S. dollars(Note I)
FY2022(April 1, 2022 March 31, 2023)(3,257)751(9,165)(13,256)(23,920)

2,021

3,420

15,13916,507(1,315)

123,616

695

115,1285,211Interest and dividends received
Interest paid
Income taxes refund (paid)

3,510(11,382)(16,972)2,706(10,209)(18,650)

26,284(85,240)(127,096)

Net cash provided by (used in) operating
activities(24,149)

88,974(180,841)

Millions of yen

Notes
Decrease (increase) in retirement benefit asset
Decrease (increase) in distressed receivables
Decrease (increase) in guarantee deposits
Increase (decrease) in trade payables
Increase (decrease) in lease liabilities
Increase (decrease) in guarantee deposits
received
Other, net
Subtotal- 10 -

FY2022(April 1, 2022 March 31, 2023)

FY2021(April 1, 2021 March 31, 2022)

Thousands of
U.S. dollars(Note I)
FY2022(April 1, 2022 March 31, 2023)(2,676)(9,177)(2,179)(12,163)(20,041)(68,725)

1,309

1,543

9,804

2

(2,397)(3,589)(17,956)

2

348

–

2,609

200

718

1,502

(12,393)(15,669)(92,806)

6,414(1,850)48,037(65,000)
459,699(357,873)(99,200)
353,067(336,531)(486,746)
3,442,414(2,679,897)(5,200)(700)(38,940)

4

42

33

(17,351)(42,054)(129,932)

110,000(30,000)–
302

64,530(30,000)(646)
74

823,723(224,652)–
2,264(6,869)–(51,442)(9,425)
(281)
(377)

(7,824)
(288)
(154)

(70,583)(2,105)(2,830)Net cash provided by (used in) financing
activities

84,042(101,534)

629,346

Effect of exchange rate change on cash and cash
equivalents

1,735

1,433

12,996

Net increase (decrease) in cash and cash
equivalents

49,235(26,796)368,696

Millions of yen

Notes
Cash flows from investing activities
Purchase of own-used assets
Purchase of investment securities
Proceeds from sale and redemption of
investment securities
Purchase of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from purchase of shares ofsubsidiaries resulting in change in scope of
consolidation
Other, net
Net cash provided by (used in) investing
activities
Cash flows from financing activities
Net increase (decrease) in short-termborrowings
Net increase (decrease) in commercial papers
Proceeds from long-term borrowings
Repayments of long-term borrowings
Net increase (decrease) in payables under
securitization of lease receivables
Proceeds from securitization of leasereceivables
Repayments of payables under securitization oflease receivables
Proceeds from issuance of bonds
Redemption of bonds
Purchase of treasury shares
Proceeds from disposal of treasury shares
Purchase of shares of subsidiaries not resulting
in change in scope of consolidation
Dividends paid
Dividends paid to non-controlling interests
Other, net

Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

71,957
1¥

121,192

The accompanying notes are an integral part of these statements.

- 11 -

98,753¥

71,957

538,843$907,539

Notes to consolidated financial statements
I.

Basis of presentation

Fuyo General Lease Co., Ltd. (the “Company”) and its domestic consolidated subsidiaries maintain theirbooks of account in conformity with generally accepted accounting principles in Japan, and its foreign
consolidated subsidiaries maintain their books of account in conformity with those of their countries of
domicile.
The accompanying consolidated financial statements have been compiled from the consolidated financial
statements prepared by the Company as required under the Financial Instruments and Exchange Act of Japanand have been prepared in accordance with generally accepted accounting principles in Japan.
Japanese yen amounts, which are indicated in millions of yen, are rounded down by truncating the figures
below one million. As a result, the totals do not necessarily agree with the sum of the individual amounts.
The amounts in US dollars presented in the consolidated financial statements are translated from the amounts
in Japanese yen at the exchange rate of ¥133.54 to US$1.00, in effect at March 31, 2023, solely for theconvenience of overseas readers. Therefore, this does not imply that those amounts in yen can be converted
into equivalent amounts in US dollars at this or any other exchange rate.
1.

Scope of consolidation(1) Number of consolidated subsidiaries: 65 companies
Names of significant consolidated subsidiaries:
Fuyo Auto Lease Co., Ltd.
YAMATO LEASE CO., LTD
Sharp Finance Corporation
Accretive Co., Ltd.
INVOICE INC.
FGLGROUP Business ServiceCO., Ltd.
FGL GROUP Management Service Co., Ltd
FGL LeaseUp Business Service Co., Ltd.
Fuyo General Lease (USA) Inc.
Fuyo General Lease (HK) Limited
Fuyo General Lease (Asia) Pte. Ltd.
Fuyo General Lease (China) Co., Ltd.
FGL Aircraft Ireland Limited
In the fiscal year ended March 31, 2023, FGL LeaseUp Business Service Co., Ltd. was included in thescope of consolidation because it succeeded to the lease expiration processing business through anincorporation-type company split from Fuyo Lease Sales Co., Ltd., and Human Centrix Co., Ltd. andPacific Rim Capital, Inc. were included in the scope of consolidation due to the Company’s acquisitionof their shares. Pacific Rim Capital, Inc. was excluded from the scope of application of the equity
method due to its inclusion in the scope of consolidation.
In addition, Fuyo Network Service Co., Ltd. was excluded from the scope of consolidation since it
was dissolved as a result of an absorption-type company split following restructuring of the ICT
business and others in the Group.
(2) Non-consolidated subsidiaries
Reason for exclusion from the scope of consolidation
Among the non-consolidated subsidiaries, 153 companies including FK Ignicion Leasing Ltd. aremainly business operators, etc. of leasing businesses conducted through silent partnerships. Their
assets and gains or losses are effectively not attributable to such subsidiaries or are immaterial, so they
have been excluded from the scope of consolidation pursuant to Article 5, paragraph (1), item (ii) of
the Regulation on Terminology, Forms and Preparation Methods of Consolidated Financial Statements.

- 12 -

(3) Special purpose entities subject to disclosure
For an overview of special purpose entities subject to disclosure, overview of transactions using
special purpose entities subject to disclosure, amount of transactions with special purpose entities
subject to disclosure, etc., see “Information on special purpose entities.”
2.

Application of equity method(1) Number of associates under the equity method: 18 associates
Names of significant associates:
Yokogawa Rental & Lease Corporation
Marubeni Fuyo Auto Investment (CANADA) Inc.
In the fiscal year ended March 31, 2023, the Company made additional acquisitions of shares in Pacific
Rim Capital, Inc. and excluded it from the scope of application of the equity method, while including
it in the scope of consolidation.
(2) Non-consolidated subsidiaries and associates which the equity method was not applied
Reason the equity method was not applied to the companies
Among the non-consolidated subsidiaries, 153 companies including FK Ignicion Leasing Ltd. aremainly business operators, etc. of leasing businesses conducted through silent partnerships. Their
assets and gains or losses are effectively not attributable to such subsidiaries or are immaterial, so they
are excluded from the scope of being accounted for using the equity method. Investments in thesecompanies are valued at cost.
(3) With regard to the entities accounted for using equity method whose balance sheet dates differ fromthe consolidated balance sheet date, the financial statements of these companies for their respective
fiscal years have been applied.
3.

Fiscal year ends of consolidated subsidiaries
Among the consolidated subsidiaries, 24 overseas consolidated subsidiaries including Fuyo General
Lease (USA) Inc. have balance sheet dates of December 31, while 12 domestic consolidated subsidiaries
including General Incorporated Association C・C・S Holding have balance sheet dates of January 31.
Financial statements of the respective subsidiaries as of the respective closing dates, with necessary
adjustments with regard to material activities transactions during the periods up to the consolidatedbalance sheet date, have been reflected in the consolidation.
The financial statements of F.O. Aerial Leasing Ltd. and four other companies are based on theprovisional settlement of accounts conducted as of the consolidated balance sheet date.
The closing date of other consolidated subsidiaries is the same as the consolidated balance sheet date.

4.

Summary of significant accounting policies(1) Standard and method of valuation of significant assets
1) Securities
Other securities
Securities other than shares without a market price, etc.
Fair value method based on market price, etc. on the consolidated balance sheet date
Note that the cost of securities sold is computed based on the moving-average method. The
entire net unrealized gains or losses are booked directly as net assets.

- 13 -

Shares without a market price, etc.
Stated at cost determined by the moving-average method
The amortized cost method is applied to the difference between the acquisition cost and theamount of bonds where interest rate adjustment is recognized.
2) Derivative financial instruments
Fair value method(2) Depreciation and amortization
1) Assets for lease
Mainly amortized over the lease agreement period using the straight-line method with the residual
value being the estimated amount to be realized when the lease agreement period ends
Note that an additional amount is booked as depreciation for the estimated amount of loss on
disposal of assets for lease due to cancellation of lease agreements or customer insolvency, etc.
2) Other operating assets
Straight-line method
3) Leased assets
Leased assets under finance leases that do not transfer ownership
Amortized over the lease agreement period using the straight-line method with no residual value4) Own-used assets
Declining balance method
However, the straight-line method is applied to buildings (excluding facilities attached tobuildings) acquired since April 1, 1998 and facilities attached to buildings and structures acquiredsince April 1, 2016, and is applied for overseas consolidated subsidiaries.
The estimated useful lives of own-used assets are principally as follows:
Buildings

3 to 50 years

Equipment

2 to 20 years5) Other intangible assets
Straight-line method
Computer software intended for internal use is amortized by the straight-line method over theestimated useful lives (5 to 10 years).
(3) Accounting method for deferred assets
1) Organization expenses
Organization expenses are amortized by the straight-line method within five years after the date offounding.
2) Business commencement expenses
Business commencement expenses are amortized by the straight-line method within five years after
the business commencement date.
3) Bond issuance costs
Bond issuance costs are expensed upon payment.

- 14 -

(4) Accounting policy for significant allowances and provisions
1) Allowance for doubtful accounts
To cover possible losses from bad debts, the Company sets aside an allowance for the estimatedamount of doubtful receivables deemed uncollectible. This allowance is based on historical default
rates for general receivables and the individual analysis of debtors’ financial positions for doubtfulreceivables, distressed receivables, etc.
With respect to the bankruptcy claims, etc., an estimated uncollectible amount is calculated bydirectly deducting amounts expected to be recovered from the amount of claims. The direct
deduction totaled ¥7,314 million (U.S.$54,775 thousand) in the fiscal year ended March 31, 2023
and ¥5,393 million in the fiscal year ended March 31, 2022.
2) Provision for bonuses
To prepare for payment of bonuses to employees, a provision for the estimated payment amountborne in the fiscal year is recorded.
3) Provision for bonuses for directors (and other officers)
To prepare for payment of bonuses to directors, a provision for the estimated payment amountborne in the fiscal year is recorded.
4) Provision for future lease payments
To cover possible losses from future lease payment receivables for operating leases (subleases), a
provision for the amount deemed uncollectible is recorded. This provision is based on the historicaldefault rates for normal claims, the analysis of individual receivables with respect to classified
loans in addition to bankruptcy claims, etc.
5) Provision for loss on guarantees
To cover possible losses on guarantees, etc., the Company provides an allowance for estimated loss,
taking into consideration the financial condition of the financial guarantees as well as other factors.
6) Provision for retirement benefits for directors (and other officers)
Since this equates to the benefits for directors and corporate auditors, the entire amount that would
be required to be paid at the end of the fiscal year is recorded according to internal regulations.
7) Provision for share awards for directors (and other officers)
To prepare for the provision of the Company’s shares, etc. to directors and other officers of theCompany based on the Regulations for Provision of Shares to Officers, the Company posts theestimated amount of share-based benefit obligation as of the end of the fiscal year.
8) Provision for maintenance costs
To cover future payments for maintenance costs that are required in specific lease transactions andmaintenance services, a provision for estimated cost is recorded by the Company.
(5) Retirement benefits
1) The method for attributing estimated retirement benefits for periods of employee service
For the calculation of retirement benefit obligations, the benefit formula method is used to attribute
estimated retirement benefits for the period up to the end of the fiscal year.
2) Actuarial differences and prior service cost
With respect to prior service cost, the Company and one of the Company’s domestic consolidated
subsidiaries expense the entire amount of it in the fiscal year of occurrence, but one of theCompany’s domestic consolidated subsidiaries amortizes it by the straight-line method over a
period (10 years) within the average remaining service years for employees at the time ofrecognition, starting from the fiscal year of occurrence.

- 15 -

With respect to actuarial differences, the Company expenses the entire amount of them in the fiscal
year of occurrence, but three of the Company’s domestic consolidated subsidiaries amortize themby the straight-line method over a period (5 to 11 years) within the average remaining service years
for employees at the time of recognition, starting from the fiscal year following the fiscal year ofoccurrence.
3) Unrecognized actuarial differences and unrecognized prior service cost
Unrecognized actuarial differences and unrecognized prior service cost after tax effect adjustments
are recorded as remeasurements of defined benefit plans classified in accumulated othercomprehensive income of net assets.
4) Simplified accounting method by small-scale businesses, etc.
Certain domestic consolidated subsidiaries use simplified accounting methods in relation to thecalculation of the retirement benefit liability and the retirement benefit expenses. In the case of thetermination allowance plan, retirement benefit obligations are recorded as the amount to be paidfor voluntary retirement as of fiscal year-end. In the case of the corporate pension plan, retirement
benefit obligations are recorded as the amount of actuarial liability calculated under the latest
pension funding program.
(6) Recognition of significant revenues and expenses
1) Accounting policy for sales and cost of sales arising from finance leases
Sales and cost of sales are recorded when lease payments should be received.
2) Accounting policy for revenue from operating leases
Based on the lease payments that should be received each month under the lease agreement basedon the lease agreement periods, recorded as lease payments corresponding to such transitional
period.
3) Accounting policy for revenue from sale of leased properties
Recorded as sales revenue when leased properties are delivered to the customer and theperformance obligation is satisfied.
(7) Standard for translation of significant foreign-currency-denominated assets or liabilities into JapaneseyenForeign currency-denominated monetary receivables and payables are translated into Japanese yen at
the spot exchange rate on the consolidated balance sheet date, and exchange differences are treatedas gains or losses.
Meanwhile, the assets, liabilities, income and expenses of overseas subsidiaries, etc. are mainlytranslated into Japanese yen at the spot exchange rate on the consolidated balance sheet date, andexchange differences are recorded as foreign currency translation adjustment or non-controllinginterests of net assets.
(8) Significant hedge accounting methods
1) Hedge accounting
Hedging activities are accounted for by the deferred hedge method. Interest rate swaps that satisfy
the required conditions are subject to accounting under exceptional treatment.
2) Hedging instruments and hedged items(a) Hedging instruments

Interest rate swaps, currency swaps and forward exchange contracts(b) Hedged items

Borrowings and forecast transactions in foreign currencies, etc.

- 16 -

3) Hedging policies
The Company uses derivatives, in accordance with its internal “Basic Policy for Managing Market
and Liquidity Risks,” for the purpose of hedging risks associated with interest-rate and foreign
currency fluctuations arising from its sales and financial operations.
4) Assessing hedge effectivenessThe assessment of hedge effectiveness of interest rate swaps is by the correlation between thechange in aggregated amount of cash flow of the hedging instruments and the change in aggregatedamount of cash flow of the hedged items and other factors.
With regard to forward exchange contracts, when the principal terms for the hedged items andhedging instruments are substantially the same, the hedge relationship is considered highly
effective.
With regard to interest rate swaps subject to accounting under exceptional treatment an assessmentof hedge effectiveness is omitted.
(9) Amortization method and period of goodwill
Apart from immaterial amounts, goodwill is amortized by the straight-line method over a period notexceeding 20 years from the effective date.
(10) Scope of funds in consolidated statements of cash flows
Cash and cash equivalents in the consolidated statement of cash flows consist of cash on hand, demand
deposits and short-term investments with a maturity of three months or less from the date of acquisition,
which are readily convertible into cash and have an insignificant risk of changes in value.

II.

Significant accounting estimates

Of the accounting estimates made in preparing the consolidated financial statements for the fiscal year ended
March 31, 2023, the items that may have a significant impact on the consolidated financial statements for thefollowing fiscal year are “Assets for lease (property, plant and equipment).”(1) Amount recorded in the consolidated financial statements
FY2022:¥797,218 million (U.S.$5,969,883 thousand)

FY2021:¥671,643 million(2) Information regarding significant accounting estimates for identified items
1) Method of calculation of amounts
The Company records the acquisition cost of leased assets under operating leases less accumulated
depreciation. Depreciation is calculated mainly using the straight-line method with the leaseagreement period as the depreciation period and the estimated disposal amount at the end of thelease agreement period as the residual value.
The estimated disposal amount is calculated based on the details of individual assets, individual
contracts and other factors, taking into account future cash flows, discount rates, and net sales
values, etc.
Note that an additional amount is booked as depreciation for the estimated amount of loss on
disposal of assets for lease due to cancellation of lease agreements or customer insolvency, etc.

- 17 -

In assessing impairment of assets for lease, the Company groups assets, and for asset groups whose
profitability has declined significantly, the book value of the assets for lease is written down to therecoverable amount, and the difference is recorded as an impairment loss.
2) Main assumptions used to calculate the amounts
The main assumption is the “future cash flow” for estimating the “residual value.”
Future cash flows are evaluated individually based on the contractual terms, etc. and conditions ofeach project. The “future cash flows” for each individual lease contract are established based on
external factors such as the economic environment, interest rate fluctuations, and competition in
the market.
Although we are expecting the moderate recovery to proceed as economic and social activities
normalize, we also anticipate the continuation of prevailing uncertainties such as rising geopoliticalrisk and instability of financial systems in Europe and North America, and cash flows derived
mainly from leased properties will be affected to a certain extent. Although this situation is subject
to uncertainty, the Group has made estimates based on available information.
3) Impact on the consolidated financial statements for the following fiscal year
The main assumption, “future cash flow” for estimating the “residual value,” is subject to a highdegree of estimation uncertainty, and any change in the assumptions used for the initial estimate
may have a significant impact on the valuation of the assets for lease in the consolidated financial
statements for the following fiscal year.

III.

Change in accounting policy

Application of Implementation Guidance on Accounting Standard for Fair Value Measurement
The “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance
No. 31, June 17, 2021, hereinafter, “Fair Value Measurement Accounting Guidance”) has been applied
from the beginning of the fiscal year ended March 31, 2023, and the new accounting policy provided forby the Fair Value Measurement Accounting Guidance has been applied prospectively in accordance withthe transitional treatment stipulated in paragraph 27-2 of the Fair Value Measurement Accounting
Guidance. As a result, evaluation of some investment trusts, which was previously performed usingreference prices, has been changed to a method that uses net asset values per unit.
In the note regarding investment trusts in matters concerning the breakdown of financial instruments byfair value level and other matters in Note XIII. “Financial instruments,” notes for the previous fiscal year
have not been stated in accordance with paragraph 27-3 of the Fair Value Measurement Accounting
Guidance.

IV.

New accounting standards and implementation guidances not yet applied‧

Accounting Standard for Current Income Taxes (ASBJ Statement No. 27, October 28, 2022)‧

Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No. 25, October28, 2022)‧

Implementation Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28,
October 28, 2022)(1) Overview
The “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No.
28) and relevant implementation guidances (hereinafter, “ASBJ Statement No. 28, etc.”) were releasedin February 2018. While the transfer of authority for practical guidelines on tax effect accounting at- 18 -

the Japanese Institute of Certified Public Accountants to the Accounting Standards Board of Japan wascompleted, it was decided, in the process of the transfer, that the following two issues would be
reviewed again after the release of ASBJ Statement No. 28, etc. Now those issues were deliberated
and announced.
‧

Classification of tax expenses (taxation on other comprehensive income)‧Tax effect on sale of shares of subsidiaries, etc. (shares of subsidiaries or shares of associates) in thecase where the group taxation regime is applied(2) Scheduled date of adoption
Effective from the beginning of the fiscal year ending March 31, 2025.
(3) Impact of adoption of such accounting standard and implementation guidances
The amounts that affect the consolidated financial statements by adopting the Accounting Standard
for Current Income Taxes and related implementation guidances are currently being evaluated.

V.

Change in accounting estimates
For aircraft the Group owns as assets for lease, the Group in principle had estimated the disposal pricewhen the lease contract expires based on a useful life of 21 years and a residual value ratio that would
make the residual value 10% of the acquisition price of those assets for lease and set that as the residual
value. From the beginning of the fiscal year ended March 31, 2023, the Group has revised the method
to in principle basing the estimate on a useful life of 25 years and a residual value ratio that would
make the residual value 15% of the acquisition price, and these changes shall be applied prospectively.
For the aircraft held as assets for lease, under the new medium-term management plan that has started
in the fiscal year ended March 31, 2023, the Group has changed from a business model that holds
equipment over a long period to a business model that switches equipment depending on the market
environment, etc. In conjunction with this change, in the first quarter ended June 30, 2022, the Groupexamined the useful life and residual value of aircraft based on data compiled from past transactions
in aircraft leases and a forecast of aircraft demand, etc., going forward, and changed to a useful lifeand residual value that are better matching with reality in light of the long-term demand of aircraft andthe extending length of years of service life.
As a result, operating profit, ordinary profit and profit before income taxes for the fiscal year ended
March 31, 2023, increased by ¥2,065 million (U.S.$15,470 thousand) each than would have been thecase using the previous method.

VI.

Additional information

Board Benefit Trust (BBT) Plan
Based on the resolution reached at the 49th Annual General Meeting of Shareholders held on June 22,
2018, the Company has introduced a new share-based payment plan or Board Benefit Trust (BBT) (the“Plan”) for the Company’s directors, excluding outside directors, (the “Eligible Directors”) and
executive officers who currently do not serve as directors (the “Executive Officers.” The Eligible
Directors and Executive Officers are hereinafter collectively referred to as the “Directors, etc.”).
(1) Overview of the transaction
The Plan is a share-based payment plan, under which the Company’s shares will be acquired by a trust(the trust to be established under the Plan is referred to hereinafter as the “Trust”) using funds that theCompany will contribute, and the Company’s shares and cash equivalent to the market price of theCompany’s shares (the “Company’s share, etc.”) will be provided to the Eligible Directors from theTrust in accordance with the Regulations for Provision of Shares to Officers established by the- 19 -

Company. In principle, the Company’s shares, etc. will be provided to the Eligible Directors on theirretirement.
(2) Treasury shares remaining in trust
The shares of the Company remaining in trust are recorded as treasury shares under net assets basedon the book value in trust (excluding the amount of incidental costs). The book value and the numberof shares of treasury shares under the Plan are ¥1,061 million (U.S.$7,946 thousand) and 149,800
shares as of March 31, 2023 and ¥1,254 million and 177,100 shares as of March 31, 2022.
(3) Book value of borrowings recorded based on the gross method
Not applicable- 20 -

Notes for consolidated balance sheets

VII.
*1

Accumulated depreciation for property, plant and equipment
Thousands of
U.S. dollars

Millions of yen
Assets for lease
Other operating assets
Own-used assets*2

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

195,748
14,798
3,766

167,973
12,4232,620

Investment securities in non-consolidated subsidiaries and associates were as follows:
Thousands of
U.S. dollars

Millions of yen
Operational investment securities (other)
Investment securities (shares)(of which investment in joint ventures)
Investment securities (other)*3

1,465,844
110,817
28,204As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

1,300
26,715(24,084)
19,7391,300
29,095(27,874)
13,3889,735
200,053(180,351)
147,820

Assets pledged as collateral and liabilities secured by collateral(1) Assets pledged as collateralThousands of
U.S. dollars

Millions of yen

Cash and deposits
Installment receivables
Lease receivables and investments in leases
Accounts receivable - other loans tocustomers
Accounts receivable - lease
Operating lease and other contract receivables
Assets for lease (property, plant andequipment)
Other operating assets (property, plant andequipment)
Total

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

¥

3,239
418
11,946

3,122555
13,77024,256
3,133
89,457

1,791

3,427

13,414

78
9,453

106
10,021584
70,79549,48752,327

370,586

17,347

18,565

129,908

93,762¥

101,897$

702,134

Note: Besides the above assets pledged as collateral, the Company provided investment securities (¥602 million(U.S.$4,509 thousand) in the fiscal year ended March 31, 2023, ¥602 million in the fiscal year ended March 31,2022) as third party security for bank loans taken out by business partners. The Company maintains deposits ofinvestment securities (¥3 million (U.S.$22 thousand) and ¥3 million as of March 31, 2023 and March 31, 2022,
respectively) for the purpose of sales transactions.

(2) Liabilities secured by collateralThousands of
U.S. dollars

Millions of yen
Other (current liabilities)
Long-term borrowings (current portion
included)Long-term payables under securitization oflease receivables (current portion included)
Total

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

¥

6

6

51

62,55970,404

468,473

18

68

138

62,585- 21 -¥

70,479$468,662

*4

Loan commitments in lending operations (as lender)
The unused credit balance, etc. in relation to loan commitment in lending operations was as follows:
Thousands of
U.S. dollars

Millions of yen
Total loan commitments
Balance of loans extended
Difference

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023¥

12,685
4,067

¥

3,055
1,450

$

94,99430,455

¥

8,618

¥

1,605

$

64,539Note that the above loan commitment agreements, a condition of lending is review of the borrower’s
use of funds and credit standing, etc., so this does not necessarily mean the full amount of loans will
be extended.
*5

Overdraft agreements and loan commitments (as borrower)
The Company has concluded overdraft agreements and loan commitment agreements with 77
correspondent financial institutions, etc. (77 in the fiscal year ended March 31, 2022) for the efficient
procurement of working capital. The unused balance, etc. at the end of the fiscal years ended March
31, 2023 and 2022 based on these agreements was as follows:
Thousands of
U.S. dollars

Millions of yen

Upper limit on overdrafts and total loan
commitments
Balance of borrowings drawn
Difference*6

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

1,250,007
575,084¥

674,922

1,033,097
522,819¥

510,278

9,360,544
4,306,460$

5,054,084

Contingent liabilities(1) Guarantees provided on borrowings, etc. of business partners, etc.
Thousands of
U.S. dollars

Millions of yen

Mizuho Bank, Ltd. (Note)
JAPAN SECURITIZATIONCORPORATION (Note)
Cutlass Solar Partners LLC
IBM Japan, Ltd. (Note)
Sumitomo Realty & Development Co., Ltd.
(Note)PLIC Corp., Ltd.
AEON Mall Co., Ltd.
Pacific Rim Capital, Inc.
Employees (funds for purchasing housing)
Others (773 in the fiscal year ended March
31, 2023, 835 in the fiscal year ended March
31, 2022)
Total

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

¥

81,891

41,895613,238

4,166

1,006

31,197

2,249
1,556

–
1,625

16,842
11,654

1,272

1,272

9,527

1,227
1,021
–
2

–
1,100
4,957
3

9,189
7,647
–
22

23,83627,039178,497

117,223¥

78,900$877,813

Note: The Company has guaranteed loans, etc. held by Mizuho Bank, Ltd. and others.

(2) One of the Company’s domestic consolidated subsidiaries engaged in business guarantee
operations and the balance of guarantees for borrowings of general customers and other entitieswas ¥25,061 million (U.S.$187,673 thousand) as of March 31, 2023 and ¥31,777 million as ofMarch 31, 2022.

- 22 -

*7

Non-recourse debt included in borrowings were as follows:
Thousands of
U.S. dollars

Millions of yen
Current portion of long-term non-recourse
borrowings
Long-term non-recourse borrowings
Total

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

5,408
29,703¥35,111

3,176
31,340¥34,51640,501
222,431$

262,932

The assets corresponding to the non-recourse debt were as follows:
Thousands of
U.S. dollars

Millions of yen

Accounts receivable - other loans tocustomers
Assets for lease (property, plant andequipment)
Total

*8

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

29,845
3,645¥

33,49035,077–¥35,077

223,496
27,295$

250,791

Payables under securitization of lease receivables, long-term payables under securitization of leasereceivables
Payables under securitization of lease receivables and long-term payables under securitization of leasereceivables include the amount of funds raised through securitization of lease agreement receivables,
etc.
Note that the balance of lease agreement receivables, etc. transferred through this was ¥51,584 million(U.S.$386,288 thousand) as of March 31, 2023 and ¥76,934 million as of March 31, 2022.

- 23 -

VIII.
*1

Notes for consolidated statements of income
Revenue from contracts with customers
Net sales are not categorized separately and stated as revenue from contracts with customers andrevenue from other sources. The amount of revenue from contracts with customers is disclosed in the
consolidated financial statements in Note XXII. “Revenue recognition, 1. Information on
disaggregation of revenue from contracts with customers.”*2

Major components of selling, general and administrative expenses for the fiscal years ended March
31, 2023 and 2022, were as follows:
Thousands of
U.S. dollars

Millions of yen
FY2022(April 1, 2022 March 31, 2023)
Provision of allowance for doubtful accounts
Bad debts expenses
Employees’ salaries, allowances and bonuses
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Retirement benefit expenses
Provision for retirement benefits for directors(and other officers)
Provision for share awards for directors (andother officers)
Welfare expenses
Rent expenses
Depreciation
Amortization of goodwill

*3

¥

1,218
448
16,7572,521

FY2021(April 1, 2021 March 31, 2022)¥

FY2022(April 1, 2022 March 31, 2023)

2,620
378
14,949
2,802

$

9,122
3,356
125,489
18,883

204

200

1,530

1,059

975

7,933

49

43

367

230

229

1,726

3,947
2,719
2,739
1,619

3,425
2,384
2,336
1,405

29,55820,362
20,51812,129Impairment losses
The Group recorded impairment losses for the following asset groups:
FY2022 (From April 1, 2022 to March 31, 2023)
Location

Minato-ku, Tokyo

Use

Idle assets

Telephone subscription
rightsAmount(Thousands of
U.S. dollars)

Amount(Millions of yen)

Type

¥

0

$

6

The Group classifies its asset groups based on offices, etc., as the minimum unit for generating cash
flows. In addition, idle assets are grouped individually.
With respect to the telephone subscription rights mentioned above, due to a decrease in dormitories
and company housing, etc., for which integrated telecommunication services for residential buildings
are provided, one domestic consolidated subsidiary recorded an impairment loss for the entire amountof the book value of telephone subscription rights classified as idle with a memorandum value of ¥1and a market value of zero in extraordinary losses.

- 24 -

FY2021 (From April 1, 2021 to March 31, 2022)
Location

Use

Amount(Millions of yen)Type

Ireland

Assets for lease

Transportation equipment(aircraft)

Chiyoda-ku, Tokyo

Other intangible assets

Customer-related assets

Minato-ku, Tokyo

Idle assets

Telephone subscription rights

¥

2,048
641
0

The Group classifies its asset groups based on offices, etc., as the minimum unit for generating cash
flows. In addition, idle assets are grouped individually.
In regard to the above transportation equipment (aircraft), the expected future cash flows have declined
for one overseas consolidated subsidiary, so the book value of the assets for lease whose profitability
has declined is written down to the recoverable amount, and the impairment loss is stated as cost of
sales. Further, the recoverable amount of such assets is calculated from the net sales value or the value
in use. In the case of using net sales value, the amount is based on the assessed value reasonably
calculated by a third-party, and in the case of using value in use, the amount is calculated by the future
cash flows discounted at a rate of 2.62% to 4.75%.
In regard to the customer-related assets, there are no longer expectations for revenue from someexisting customers that were anticipated at the time of acquisition of shares for one domestic
consolidated subsidiary, so the value in use is evaluated at zero and deducted from the book value. The
amount of such reduction in assets is recorded in extraordinary losses as an impairment loss.
In addition, with respect to the telephone subscription rights mentioned above, due to a decrease indormitories and company housing, etc., for which integrated telecommunication services forresidential buildings are provided, one domestic consolidated subsidiary recorded an impairment loss
for the entire amount of the book value of telephone subscription rights classified as idle with amemorandum value of ¥1 and a market value of zero in extraordinary losses.
*4

The breakdown of loss on disposal of non-current assets is as follows.
Loss on retirement of non-current assets
Thousands of
U.S. dollars

Millions of yen
FY2022(April 1, 2022 March 31, 2023)

FY2021(April 1, 2021 March 31, 2022)

FY2022(April 1, 2022 March 31, 2023)

Buildings
Equipment
Leased assets
Software

¥

27
5
–
7

¥

11
13
9
6

$

205
43
–
59

Total

¥

41

¥

40

$

308

*5

Loss on liquidation of subsidiaries and associates
FY2022 (From April 1, 2022 to March 31, 2023)
The amount of loss incurred due to the business liquidation of Saisai Seikatsu LLC, an equitymethod associate of the Company, was recorded in loss on liquidation of subsidiaries and associates.
FY2021 (From April 1, 2021 to March 31, 2022)
Not applicable- 25 -

IX.
*1

Notes for consolidated statements of comprehensive income
Reclassification adjustments and income tax effect relating to other comprehensive income
Thousands of
U.S. dollars

Millions of yen
FY2022(April 1, 2022 March 31, 2023)
Valuation difference on available-for-salesecurities:
Gains or losses arising during the year
Reclassification adjustments to profit orloss¥

Amount before income tax effect
Income tax effect
Valuation difference on available-forsale securities¥

Deferred gains or losses on hedges:
Gains or losses arising during the year
Reclassification adjustments to profit orloss
Amount before income tax effect
Income tax effect
Deferred gains or losses on hedges¥

Foreign currency translation adjustment:
Gains or losses arising during the year
Foreign currency translation adjustment(4,354)FY2021(April 1, 2021 March 31, 2022)¥$(32,607)

646

(717)

4,842

(3,707)
1,177(9,073)
2,775(27,765)
8,820(2,529)¥(6,297)$(18,945)(1,239)(1,449)(9,279)

342

415

2,563

(896)
209

(1,034)291(6,715)
1,568

(687)

¥

12,464¥(8,355)

FY2022(April 1, 2022 March 31, 2023)

12,464

(742)

$

7,910
¥

7,910

(5,147)
93,335$93,335Remeasurements of defined benefit plans, netof tax:Gains or losses arising during the year
Reclassification adjustments to profit or
loss

346

44

2,597

(89)

(5)

(670)

Amount before income tax effect
Income tax effect

257
(93)

39
(13)

1,927
(699)

Remeasurements of defined benefit
plans, net of tax¥

Share of other comprehensive income ofentities accounted for using equity method:
Gains or losses arising during the year
Reclassification adjustments to profit or
loss

163

¥

26

$

1,228

34

771

260

(7)

37

(60)

Share of other comprehensive incomeof entities accounted for using equity
method

¥

26

¥

808

$

200

Total other comprehensive income

¥

9,437

¥

1,705

$

70,671- 26 -

Notes for consolidated statements of changes in equityX.

FY2022 (From April 1, 2022 to March 31, 2023)
1.

Type and total number of shares issued, and type and number of treasury shares
Number of shares atthe beginning of theyear (Shares)

Issued shares
Common shares
Total
Treasury shares
Common shares (Note)
Total
Notes: 1.
2.

2.

Decrease (Shares)

Number of shares atthe end of the year
(Shares)

30,287,810
30,287,810

–
–

–
–

30,287,810
30,287,810

361,957
361,957––

58,30058,300303,657
303,657

The number of common shares in treasury shares at the end of the year includes the 149,800 of the Company’s
shares held by the Board Benefit Trust (BBT).
The 58,300 decrease in the number of common shares in treasury shares was a 31,000 decrease due to theexercise of stock options and a 27,300 decrease due to provision to the Board Benefit Trust (BBT).

Share acquisition rights and treasury shares acquisition rights

Category

Reportingcompany(parent
company)

3.

Increase (Shares)

Type of
Number of shares to be issued upon exercise of
Balance atshares to beshare acquisition rights (Shares)
Balance atComponent of
the end ofissued upon
the end ofshare
the year
exercise of
the yearacquisition(Thousands
Beginning
End of theshare(Millions of
Increase
Decreaserightsof U.S.
of the year
year
acquisition
yen)dollars)
rightsShare
acquisition
–
–
–
–
– ¥
541 $ 4,058
rights as stock
options

Dividends(1) Dividends paid

(Resolution)
June 23, 2022
Annual General
Meeting of
Shareholders
November 8, 2022
Board of Directors
Notes: 1.
2.

Type of shares

Total amount ofcash dividends(Millions of yen)

Dividend per share(Yen)

Common shares

¥

¥

4,665

Common shares

155

4,759

158

Record date

Effective date

March 31, 2022

June 24, 2022

September 30, 2022 December 7, 2022

Total amount of cash dividends which resolved at Annual General Meeting of Shareholders held on June 23,
2022, include cash dividends of ¥27 million for the Company’s shares held by Board Benefit Trust (BBT).
Total amount of cash dividends which resolved at Board of Directors held on November 8, 2022, include cash
dividends of ¥23 million for the Company’s shares held by Board Benefit Trust (BBT).

(2) Dividends for which record date is in this fiscal year but the effective date for the dividends is in
the following fiscal year
Total amount ofcash dividends(Millions of yen)

(Resolution)

Type of shares

June 23, 2023
Annual General
Meeting of
Shareholders

Common shares ¥5,574

Source ofdividends
Retainedearnings- 27 -

Dividend pershare (Yen)¥185

Record date

Effective date

March 31, 2023

June 26, 2023

Total amount ofcash dividends(Thousands of
U.S. dollars)(Resolution)

Type of shares

June 23, 2023
Annual General
Meeting of
Shareholders

Common shares $Dividend per
share(U.S. dollars)

Source ofdividends
Retainedearnings

41,746$

1.39

Record date

Effective date

March 31, 2023

June 26, 2023

Note: Total amount of cash dividends include cash dividends of ¥27 million (U.S.$208 thousand) for the Company’s shares
held by Board Benefit Trust (BBT).

FY2021 (From April 1, 2021 to March 31, 2022)
1.

Type and total number of shares issued, and type and number of treasury shares
Number of shares atthe beginning of theyear (Shares)

Issued shares
Common shares
Total
Treasury shares
Common shares (Note)
Total
Notes: 1.
2.

3.

2.

Decrease (Shares)

Number of shares atthe end of the year
(Shares)

30,287,810
30,287,810

–
–

–
–

30,287,810
30,287,810

290,885
290,885

85,57285,572

14,50014,500361,957
361,957

The number of common shares in treasury shares at the end of the year includes the 177,100 of the Company’s
shares held by the Board Benefit Trust (BBT).
The 85,572 increase in the number of common shares in treasury shares is due to an increase of 85,500 sharesthrough the acquisition of treasury shares by the Board Benefit Trust (BBT) and an increase of 72 sharesthrough the acquisition of fractional unit shares.
The 14,500 decrease in the number of common shares in treasury shares was a 9,400 decrease due to theexercise of stock options and a 5,100 decrease due to provision to the Board Benefit Trust (BBT).

Share acquisition rights and treasury shares acquisition rights

Category

Reportingcompany(parent
company)

3.

Increase (Shares)

Component of shareacquisition rights

Type of
Number of shares to be issued upon exercise of share
shares to beacquisition rights (Shares)
Balance at theissued uponend of the year
exercise of
Beginning
End of the (Millions ofshare
Increase
Decreaseyen)of the year
year
acquisitionrightsShare acquisitionrights as stock
options

–

–

–

–

–

¥

650

Dividends(1) Dividends paid

(Resolution)
June 23, 2021
Annual General
Meeting of
Shareholders
November 5, 2021
Board of Directors
Notes: 1.
2.

Type of shares

Total amount ofcash dividends(Millions of yen)

Dividend per share(Yen)

Common shares¥¥

Common shares

3,912
3,912

130
130

Record date

Effective date

March 31, 2021

June 24, 2021

September 30, 2021 December 6, 2021

Total amount of cash dividends which resolved at Annual General Meeting of Shareholders held on June 23,
2021, include cash dividends of ¥12 million for the Company’s shares held by Board Benefit Trust (BBT).
Total amount of cash dividends which resolved at Board of Directors held on November 5, 2021, include cash
dividends of ¥11 million for the Company’s shares held by Board Benefit Trust (BBT).

- 28 -

(2) Dividends for which record date is in this fiscal year but the effective date for the dividends is in
the following fiscal year
Total amount ofcash dividends(Millions of yen)

(Resolution)

Type of shares

June 23, 2022
Annual General
Meeting of
Shareholders

Common shares ¥4,665

Source ofdividends
Retainedearnings

Dividend pershare (Yen)¥155

Record date

Effective date

March 31, 2022

June 24, 2022

Note: Total amount of cash dividends include cash dividends of ¥27 million for the Company’s shares held by Board Benefit
Trust (BBT).

- 29 -XI.
*1

Notes for consolidated statements of cash flows
Relationship between cash and cash equivalents at end of period and cash and deposits stated on the
consolidated balance sheets
Thousands of
U.S. dollars

Millions of yen
FY2022(April 1, 2022 March 31, 2023)
Cash and deposits
Time deposits with maturity of over threemonths¥Cash and cash equivalents¥*2

121,227

FY2021(April 1, 2021 March 31, 2022)¥

72,157(34)
121,192

FY2022(April 1, 2022 March 31, 2023)
$

(200)
¥

71,957907,799(260)$

907,539

Major components of assets and liabilities of a newly consolidated subsidiary due to acquisition ofshares

FY2022 (From April 1, 2022 to March 31, 2023)
The following includes the breakdown of assets and liabilities at the time of acquisition andconsolidation of Human Centrix Co., Ltd., and the relation between the acquisition cost of shares andnet consideration paid for acquisition (net price).

Millions of yen
Current assets
Non-current assets
Goodwill
Current liabilities
Non-current liabilities
Valuation difference¥

Acquisition cost of shares
Cash and cash equivalents
Difference: net consideration paid for
acquisition

689
106
776
(102)
–
947

$

2,418
(380)
¥

2,037

Thousands of
U.S. dollars
5,163
801
5,816
(768)
–
7,095
18,107(2,851)$

15,257

The following includes the breakdown of assets and liabilities at the time of consolidation as a result of
the additional acquisition of shares of Pacific Rim Capital, Inc. which had been an entity accounted forusing equity method, and the relation between the acquisition cost of shares and net consideration
provided for the acquisition (net price).

- 30 -

Millions of yen
Current assets
Non-current assets
Goodwill
Current liabilities
Non-current liabilities
Non-controlling interests
Valuation difference¥

Acquisition cost of shares
Acquisition cost up until the time control
was obtained
Loss on step acquisitions
Acquisition cost of additionally acquired
sharesCash and cash equivalents
Foreign currency translation adjustment
Difference: net consideration provided for
acquisition

16,6395,121
7,483(11,732)(5,487)(1,110)(97)$

Thousands of
U.S. dollars
124,60238,35556,042(87,860)(41,096)(8,318)(731)

10,81680,996(8,398)(62,888)

85

641

2,503

18,749(2,876)24(21,542)
183

¥

(348)

$

(2,609)FY2021 (From April 1, 2021 to March 31, 2022)
The following includes the breakdown of assets and liabilities at the time of consolidation as a result of
the additional acquisition of shares of NIHON CREDIT LEASE CORPORATION which had been an
entity accounted for using equity method, and the relation between the acquisition cost of shares and net
consideration paid for the acquisition (net price).
Current assets
Non-current assets
Goodwill
Current liabilities
Non-current liabilities
Valuation difference

Millions of yen
¥
9,829
9
21
(8,416)(1)(21)

Acquisition cost of shares
Acquisition cost up until the time control
was obtained
Loss on step acquisitions

1,420
(429)
2

Acquisition cost of additionally acquired
sharesCash and cash equivalents
Difference: net consideration paid for
acquisition

994
(39)
¥

955

The following includes the breakdown of assets and liabilities at the time of acquisition andconsolidation of WorkVision Corporation, and the relation between the acquisition cost of shares andnet consideration paid for acquisition (net price).

- 31 -

Current assets
Non-current assets
Goodwill
Current liabilities
Non-current liabilities
Valuation difference¥

Acquisition cost of shares
Cash and cash equivalents
Difference: net consideration paid for
acquisition

Millions of yen
5,328
1,427
1,900
(2,662)(2,267)971
4,700(2,066)¥2,633- 32 -

Lease transactions

XII.

As lessee
1.

Finance leases (including intangible assets)
Finance lease transactions (including intangible assets) that do not transfer ownership
1)

Details of leased assets
Mainly servers, network equipment and office equipment.

2)

Depreciation method for leased assets
The depreciation method for leased assets is described in “4. Summary of significant accounting
policies (2) Depreciation and amortization” under “Basis of presentation.”

2.

Operating leases
Future lease payments required under non-cancellable operating leases
Thousands of
U.S. dollars

Millions of yen

Within one year

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

700

Over one year

610

406
Total

¥

1,107

5,247

959
¥

1,569

3,044
$

8,291

As lessor
1.

Finance leases(1) Breakdown of investments in leases
Thousands of
U.S. dollars

Millions of yen
As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

Lease receivables
Estimated residual value
Future interest income¥

803,166
18,911(94,377)¥

938,940
18,216(108,680)$

6,014,424
141,617(706,734)

Investments in leases¥

727,700¥

848,475$

5,449,307(2) Estimated collectible amount of portion of lease receivables arising from lease receivables andinvestments in leases after the consolidated balance sheet date(Millions of yen)
As of March 31, 2023
Within one
year
Lease receivables
Investments in leases¥

53,443
267,799

Over three
years andwithin four
years

Over one year Over two years
and within two
and within
years
three years¥

28,834
169,510¥

27,152
125,628- 33 -¥

28,582
94,842

Over four
years andwithin five
years
¥

9,161
42,834

Over fiveyears¥

28,696
102,550

(Thousands of U.S. dollars)
As of March 31, 2023
Within one
year
Lease receivables$

400,204

Investments in leases

Over three
years andwithin four
years

Over one year Over two years
and within two
and within
years
three years$

2,005,387

215,923$

1,269,361

203,330$

940,759

214,038

Over four
years andwithin five
years$

Over fiveyears

68,605710,219$

320,760

214,890
767,938(Millions of yen)
As of March 31, 2022
Within one
year
Lease receivables¥

Investments in leases

49,858Over three
years andwithin four
years

Over one year Over two years
and within two
and within
years
three years¥

296,135

45,367
189,019¥

26,268¥132,196

18,502

Over four
years andwithin fiveyears¥

97,788Over fiveyears

15,88955,352¥

28,465
168,447(3) For finance lease transactions that do not transfer ownership under lease agreements concluded
prior to April 1, 2008, the appropriate book value (net of accumulated depreciation or amortization)
for the assets for lease as of March 31, 2008 is recorded as the price of the investments in leases atthe beginning of the fiscal year.
In addition, the straight-line method is used for allocating to each period the equivalent amount ofinterest for such investments in leases for the period remaining after the application of theaccounting standards, etc.
Note that the consequent impact is omitted for both the fiscal years ended March 31, 2023 and2022 because of immateriality.
2.

Operating leases
Future lease payments required under non-cancellable operating leases
Thousands of
U.S. dollars

Millions of yen

Within one year

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

Over one year
Total

3.

71,692
321,318¥

393,01060,926296,322¥357,248536,862
2,406,159$

2,943,020

Sublease transactions
Lease receivables and investments in leases, and lease liabilities under sublease transactions on the
consolidated balance sheets are before interest deductions
Thousands of
U.S. dollars

Millions of yen
Lease receivables and investments in leases
Lease liabilities (current liabilities)

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

4,244
7,065

- 34 -

7,463
9,888

31,78752,913

XIII.

Financial instruments

1.

Status of financial instruments(1) Policy on financial instruments
The Group is engaged in leasing and installment transactions for machinery, equipment, etc. andfinancial transactions such as the provision of operating loans. The Group uses direct and indirect
financing to procure funds for purchasing assets to lease or to sell through installment sales and forproviding operating loans to customers. The Group’s indirect financing mainly consists of loans
from financial institutions, and its direct financing includes issuing bonds payable, commercial
papers and securitization of receivables. As the Group holds financial assets and financial liabilities
that are subject to interest rate fluctuation, assets and liabilities are comprehensively managed
through asset-liability management (ALM) to mitigate the negative impact of interest rate
fluctuations.
Derivatives are only used for mitigating currency and interest rate fluctuation risks and are not used
for speculative purposes.
(2) Details of financial instruments and associated risks
Lease receivables and investments in leases, and operating loans are trade receivables due from
customers and subject to credit risks associated with customer default. Foreign currencydenominated receivables and payables arising from overseas business are subject to risks
associated with foreign currency fluctuations.
Operational investment securities and investment securities include business partners’ shares,
bonds, and investments in limited partnerships, etc. Those investments are subject to credit risks
associated with the issuers and market price fluctuation risks.
Bonds payable, commercial papers, lease liabilities, long-term borrowings, and long-term payables
under securitization of lease receivables are used to procure funds for purchasing assets to lease or
sell through installment sales to customers. These payables are subject to risks that may compel
the Company to procure funds with exceptionally high interest rates and to liquidity risks (funding
risks) that may negatively affect the Company’s ability to obtain funding and result in losses.
A portion of long-term borrowings have floating interest rates and are therefore subject to interest
rate fluctuation risks.
The Company uses foreign currency-related derivatives to reduce risks associated with foreign
currency fluctuations that affect foreign currency-denominated receivables and payables. The
Company uses interest rate-related derivatives to reduce interest rate fluctuation risks that affectborrowings. Please refer to the aforementioned in “4. Summary of significant accounting policies(8) Significant hedge accounting methods” under “Basis of presentation” in regard to hedge
accounting methods for hedge accounting, hedging instruments and hedged items, hedging policies
and methods for assessing hedge effectiveness, etc.
(3) Risk management system for financial instruments
1)

Management of credit risks (default risks, etc.)
The Company’s management system and rules for credit risks are prescribed in its internal“Basic Policy for Managing Credit Risks.”
For all transactions that involve credit risks such as leases, installment sales, selling andpurchasing, financing, and guarantee operations, the Company uses a credit risk measurement
method, etc., identifies on a timely basis the location and size of credit risks, and responds
adequately as necessary.
The Company’s credit risk department is engaged in the following duties: 1) daily monitoringof the effectiveness of the credit risk management system, 2) screening and management ofcredit transactions involving business partners, 3) maintenance and enhancement of risk asset- 35 -

soundness, 4) enhancement of protection against doubtful receivables and implementation of
measures related to collection of those receivables, and 5) guidance, support, etc. for theCompany’s offices and subsidiaries and associates. The department also rates debtors based on
their financial status, etc. and degree of credit risk (i.e., their ability to pay debts). The credit
ratings are used for credit risk management, portfolio investment and management, credit risk
measurement, guidelines on pricing of individual credits, and self-assessment and recognitionof adequate credit allowances, etc. based on the self-assessments. Furthermore, the department
regularly monitors the status of the Company’s main business partners, manages payment-due
dates and credit balances on a customer-by-customer basis, and closely monitors customers to
identify potential impediments to the collectability of receivables (e.g., due to worsening
financial condition) and takes steps to mitigate such impediments.
The effectiveness and appropriateness of credit risk management are examined through internal
audits.
2)

Management of market risks (risks associated with foreign exchange rates, interest rates, etc.)
The Company’s market risk management rules and procedures are prescribed in its internal“Basic Policy for Managing Market and Liquidity Risks.”
Market risks are controlled by comprehensively examining various factors such as financial
position (revenues and shareholders’ equity), balance between target revenues and risk levels,interest rate prospects, market environments, past results, and the level of risk management forvarious risks. The Company manages its exposure to risks when deemed necessary for the
purpose of reducing risks and expanding revenues.
The Company’s ALM Committee meets once a month as a general rule, and on an ad-hoc basis
as needed, to review and examine practical measures related to market risk management and tomonitor performance. At the monthly meeting, etc., the finance division reports on mattersrelated to market risk management, including the status of market risk control, interest rate
prospects, developments of market environment, etc., and hedge transactions, etc.
The Company’s consolidated subsidiaries are subject to the Company’s “Basic Policy forManaging Market and Liquidity Risks.”(i)Interest rate fluctuation risk management
The Company comprehensively manages interest rate fluctuation risks using ALM. The
ALM Committee ascertains and monitors the status of ALM operations and discusses future
direction and strategy based on the Company’s ALM policies.

(ii) Foreign exchange risk management
The Company manages foreign exchange risk on a case-by-case basis, using forward
exchange contracts as a general rule.
(iii) Price fluctuation risk management
With regard to operational investment securities and investment securities, the Company
regularly monitors the fair value of these securities as well as the financial status of issuersand continuously reviews its financial position considering market conditions and its
relationship with the issuers.
(iv) Derivatives
With regard to derivatives, the Company uses forward exchange contracts for the purposeof hedging risks associated with foreign currency fluctuations that affect its foreign
currency-denominated receivables and payables. The Company uses interest rate swap
contracts for the purpose of hedging interest rate fluctuation risks that affect its borrowings.
The Company’s finance division is authorized to engage in and manage derivatives, inaccordance with internal regulations and individuals authorized on job responsibilities andpursuant to the approval of the Company’s president (CEO) or officer in charge of thefinance division.

- 36 -

The Company’s consolidated subsidiaries’ derivative-related transactions are subject to theCompany’s internal regulations “Basic Policy for Managing Market and Liquidity Risks.”
In accordance with the Company’s “Regulations on Managing Subsidiaries and Associates,”
the Company’s consolidated subsidiaries report to the Company on derivative-relatedtransactions. These reports explain the subsidiary’s policy on engaging in the transaction,
provide a validation of the transaction’s objective, and detail the derivatives’ status,
counterparties, outstanding positions, and unrealized gains or losses.
(v)

Quantitative information on market risk
The major types of financial instruments affected by interest rate risk, the Group’s main risk
factors, are “Installment receivables,” “Lease receivables and investments in leases,”“Operating loans,” other marketable securities recorded under “Operational investment
securities and investment securities,” “Bonds payable,” “Long-term borrowings,” “Longterm payables under securitization of lease receivables,” and interest rate swaps contracts
included in “Derivatives.” The Group performs quantitative analysis in managing the riskof interest rate fluctuations. This quantitative analysis incorporates the potential change invalue of these financial assets and liabilities based on a reasonable range of potential interest
rate movements. To calculate the potential change in value, the financial assets and liabilities
are split into fixed-rate and variable-rate categories. For the fixed-rate category, theCompany allocates the book value of the instruments into appropriate categories based on
their interest-payment dates and applies an appropriate potential range of interest rate
movements to each category. Assuming all risk factors other than interest rates remain
constant, as of the fiscal year-end, a 10 basis point (0.1%) change in interest rates would
result in a change of ¥4,030 million (U.S.$30,180 thousand) for the fiscal year ended March
31, 2023 and a change of ¥4,042 million for the fiscal year ended March 31, 2022 in the fairvalue of these financial assets and liabilities. This potential change in value is based on theassumption that all risk factors other than interest rates remain constant and does notincorporate the effects of correlation between interest rates and the other risk factors. If
interest rates fluctuate beyond the assumed reasonable range, the value of these financial
assets and liabilities may be affected by more than the Group has estimated.

3)

Management of liquidity risks associated with funding (risks of failure to pay on due date)
The Company’s management system and rules for liquidity risks are prescribed in its internal“Basic Policy for Managing Market and Liquidity Risks.”
With regard to liquidity risks (funding risks), the Company’s finance division rigorously
controls funding for ordinary operations. The division prepares daily statements of cash
receipts/disbursements and an outlook of weekly and monthly cash receipts/disbursements,
analyzes investment and cash receipt/disbursement data, and receives reports, etc. from eachdivision to determine the impact on the Company’s funding activities. The division also
adequately controls liquidity, enhances capital efficiency, and optimizes liquidity risks andfunding costs.
Funding is measured by adequately monitoring economic conditions, market environments, etc.
Liquidity risks are allocated to management categories by level of funding and managed basedon predetermined response policies and implementation standards for each category.
The Company’s finance division also monitors consolidated subsidiaries’ funding status andtakes appropriate action as necessary based on that status.

(4) Supplementary explanation related to fair values, etc. of financial instruments
Because calculations of fair values of financial instruments involve variable inputs, the results ofcalculations may vary depending on what premises and assumptions are used. Contract amounts
and other derivatives data presented in “Derivatives” are nominal contract amounts or notionalamounts used in calculations and do not indicate the amount of exposure.

- 37 -

2.

Fair values, etc. of financial instruments
The book values, the fair values and their differences are as follows. Note that shares without a market
price, etc. and investments in partnerships, etc. are not included in the following table (See (Note)). In
addition, cash and deposits, short-term borrowings, commercial papers and payables under
securitization of lease receivables are omitted from the notes because their fair value are close to theirbook value due to being settled in a short period of time.
As of March 31, 2023
Millions of yen
Book value (A)¥52,700Difference (B) - (A)(1) Installment receivables*1,2(2) Lease receivables and investments inleases*2(3) Operating loans*2(4) Operational investment securities andinvestment securities*3
Other securities¥

Total assets¥

1,592,945¥

1,629,525¥

36,580

¥

7,772

¥

7,772

¥

–

(1) Lease liabilities(current liabilities and non-current
liabilities)(2) Bonds payable(current portion included)(3) Long-term borrowings(current portion included)(4) Long-term payables under securitizationof lease receivables(current portion included)

52,532

Fair value (B)¥167

889,386

923,198

33,811

327,937

330,5382,601

323,088

323,088–361,397

363,033

1,636

1,223,144

1,224,536

1,391

14,353

13,685(668)

Total liabilities¥

1,606,667¥

1,609,027

¥

2,359

Derivatives*4(i) Hedge accounting not applied(ii) Hedge accounting applied

¥

–
412

¥

–
412

¥

–
–

Total derivatives

¥

412

¥

412

¥

–

- 38 -

Thousands of U.S. dollars
Book value (A)$394,641

Difference (B) - (A)(1) Installment receivables*1,2(2) Lease receivables and investments inleases*2(3) Operating loans*2(4) Operational investment securities andinvestment securities*3
Other securities$

Total assets$

11,928,600$

12,202,529$

273,929$

58,202$58,202$–(1) Lease liabilities(current liabilities and non-current
liabilities)(2) Bonds payable(current portion included)(3) Long-term borrowings(current portion included)(4) Long-term payables under securitizationof lease receivables(current portion included)393,385

Fair value (B)

$

1,257

6,660,078

6,913,269

253,192

2,455,722

2,475,203

19,481

2,419,416

2,419,416–

2,706,286

2,718,537

12,252

9,159,386

9,169,807

10,421

107,486

102,481(5,005)

Total liabilities$

12,031,360$

12,049,027$

17,667

Derivatives*4(i) Hedge accounting not applied(ii) Hedge accounting applied

$

–
3,087

$

–
3,087

$

–
–

Total derivatives

$

3,087

$

3,087

$

–

*1.
*2.
*3.

*4.

Net of deferred profit on installment sales.
Net of general and specific allowances for doubtful accounts related to installment receivables, lease receivables
and investments in leases, and operating loans.
Operational investment securities include investment trusts that have applied the treatment of regarding the net
asset value per unit as the fair value in paragraph 24-3 and paragraph 24-9 of the “Implementation Guidanceon Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021).
Assets and liabilities arising from derivatives are carried at net amounts with amounts in parentheses
representing a net liability position.

- 39 -

As of March 31, 2022
Millions of yen
Book value (A)¥66,358Difference (B) - (A)¥Total assets¥

1,652,226¥

1,699,806¥

47,580¥11,357¥

11,357¥–(1) Lease liabilities(current liabilities and non-current
liabilities)(2) Bonds payable(current portion included)(3) Long-term borrowings(current portion included)(4) Long-term payables under securitizationof lease receivables(current portion included)

65,802

Fair value (B)(1) Installment receivables*1,2(2) Lease receivables and investments inleases*2(3) Operating loans*2(4) Operational investment securities andinvestment securities
Other securities¥

556

1,018,101

1,063,189

45,088315,915

317,850

1,935

252,407

252,407–257,137

255,693(1,443)

1,108,416

1,116,617

8,200

31,706

31,695(10)

Total liabilities¥

1,408,618¥

1,415,365

¥

6,746

Derivatives*3(i) Hedge accounting not applied(ii) Hedge accounting applied

¥

–
(380)

¥

–
(380)

¥

–
–

Total derivatives

¥

(380)

¥

(380)

¥

–

*1.
*2.
*3.

Net of deferred profit on installment sales.
Net of general and specific allowances for doubtful accounts related to installment receivables, lease receivables
and investments in leases, and operating loans.
Assets and liabilities arising from derivatives are carried at net amounts with amounts in parentheses
representing a net liability position.

Note: The amounts of shares without a market price, etc. and investments in partnerships, etc. recorded on the consolidatedbalance sheet are as follows, and not included in the information on fair value of financial instruments “Assets (4)Other securities.”
Thousands of
U.S. dollars

Millions of yen
Unlisted shares*1
Subsidiary’s shares / associates’ shares*1
Investments in limited partnerships, etc.*2
Total
*1.

*2.

3.

As of March 31, 2023¥
10,42146,454200,288

As of March 31, 2022¥
10,05842,483
138,332

As of March 31, 2023$
78,037
347,873
1,499,839¥¥$

257,164

190,874

1,925,750

This equates to shares without a market price, etc., and is not subject to fair value disclosure in accordance withparagraph 5 of the “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ
Guidance No. 19, July 4, 2019).
Investments in partnerships, etc. is not subject to fair value disclosure based on paragraph 27 of the“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31,
June 17, 2021).

Matters concerning the breakdown of financial instruments by fair value level and other matters.
The fair value of financial instruments is categorized by the following three levels according to theobservability and materiality of inputs used in calculating fair value.

- 40 -

Level 1 fair value:

Fair value calculated from (unadjusted) market prices in active markets
for identical assets or liabilities

Level 2 fair value:

Fair value calculated directly or indirectly using observable inputs otherthan Level 1 inputs

Level 3 fair value:

Fair value calculated using significant unobservable inputs

If multiple inputs that materially affect the measurement of fair value are used, the fair value iscategorized into the lowest priority level in fair value measurement among the levels of those inputs.
(1) Financial assets and financial liabilities recorded on the consolidated balance sheet at fair value
As of March 31, 2023
Millions of yen
Category

Fair value
Level 1

Operational investment securities
Bonds payable
Preferred securities / beneficial
interest in trusts, etc.
Investment securities
SharesInvestment trusts
Derivatives
Interest rate-related¥

Total assets¥

Derivatives
Foreign currency-related¥

Total liabilities¥

Level 2–¥

Level 3

168,721

¥

Total

8,609

¥

177,330

–

470

4,392

4,863

68,858
613

–
–

–
–

68,858
613

–

623

–

623

69,472¥

169,814¥

13,002

¥

–
–

¥

210

252,289

¥

210
¥

¥

–
¥

–

210
¥

210

Thousands of U.S. dollars
Category

Fair value
Level 1

Operational investment securities
Bonds payable
Preferred securities / beneficial
interest in trusts, etc.
Investment securities
SharesInvestment trusts
Derivatives
Interest rate-related

$

–

$

$

Derivatives
Foreign currency-related$

Total liabilities$

Level 3

1,263,449

$

Total

64,470$1,327,920

–

3,524

32,89436,418515,640
4,596

–
–

–
–

515,640
4,596–

Total assets(*)

Level 2520,236

4,666$

1,271,639

$
–
–

–
$
$

1,580
$

97,365

1,580

4,666
$
$

–
$

1,889,240

–

1,580
$

1,580

Investment trusts that have applied the treatment of regarding the net asset value per unit as the fair value inparagraph 24-3 and paragraph 24-9 of the “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No. 31, June 17, 2021) are not included in the above table. The book value ofinvestment trusts that have applied the treatment in paragraph 24-3 is ¥29,736 million (U.S.$222,680 thousand),and the book value of investment trusts that have applied the treatment in paragraph 24-9 is ¥41,686 million(U.S.$312,162 thousand).

- 41 -

As of March 31, 2022
Millions of yen
Category

Fair value
Level 1

Operational investment securities
Bonds payable
Preferred securities / beneficial
interest in trusts, etc.
Investment securities
SharesDerivatives
Interest rate-related

¥

–

¥

¥

Derivatives
Interest rate-related
Foreign currency-related¥

Total liabilities¥

Level 3

108,665

¥

Total

5,836

¥

114,501

–

–

5,597

5,597

68,358––68,358–

Total assets(*)

Level 2

68,358

97¥

108,762¥

11,434

¥

–
–
–

–
¥

478

188,555

¥

452
25
¥

97
¥

–
–
¥

–

452
25
¥

478

Investment trusts, etc. to which transitional measures have been applied in accordance with Article 5, paragraph
6 of the Supplementary Provisions of “Cabinet Office Order Partially Amending the Regulation on Terminology,
Forms and Preparation Methods of Financial Statements” (Cabinet Office Order No. 9 of March 6, 2020) are
not included in the above table. The amount of investment trusts, etc. on the consolidated balance sheet is¥63,949 million.

(2) Financial assets and financial liabilities not recorded on the consolidated balance sheet at fair value
As of March 31, 2023
Millions of yen
Category

Fair value
Level 1

Level 2–¥

Level 3

Installment receivables
Lease receivables andinvestments in leases
Operating loans¥

Total assets

¥

–

¥

–

¥

1,306,437¥

1,306,437

Lease liabilities¥
Bonds payable
Long-term borrowings
Long-term payables under
securitization of lease receivables

–
–
–

¥

7,772
363,033
1,224,536

¥

–
–
–

¥

7,772
363,033
1,224,536

Total liabilities

–

–

¥

–

–

¥

–

Total

- 42 -

1,609,027

330,538–¥–

52,700923,198

330,538

13,685¥¥923,198––

52,70013,685¥

1,609,027

Thousands of U.S. dollars
Category

Fair value
Level 1

Installment receivables
Lease receivables andinvestments in leases
Operating loans$

Total assets

Level 2–$

Level 3
–

$

Total

394,641$

394,641––

6,913,269

6,913,269––

2,475,203

2,475,203

$

–

$

–

$

9,783,114$

9,783,114

Lease liabilities$
Bonds payable
Long-term borrowings
Long-term payables under
securitization of lease receivables

–
–
–

$

58,202
2,718,537
9,169,807

$

–
–
–

$

58,202
2,718,537
9,169,807

Total liabilities

–

–

$

102,481$

12,049,027–$

102,481–$

66,358¥12,049,027

As of March 31, 2022
Millions of yen
Category

Fair value
Level 1

Installment receivables
Lease receivables andinvestments in leases
Operating loans¥

Total assets

Level 2–¥

Level 3–¥

Total
66,358––1,063,189

1,063,189––

317,850

317,850

¥

–

¥

–

¥

1,447,399¥

1,447,399

Lease liabilities¥
Bonds payable
Long-term borrowings
Long-term payables under
securitization of lease receivables
Derivatives
Interest rate-related

–
–
–

¥

11,357
255,693
1,116,617

¥

–
–
–

¥

11,357
255,693
1,116,617

Total liabilities

–

¥

–

31,695–31,695

–

0

–

0

¥

- 43 -

1,415,365¥–¥

1,415,365

Notes: 1. Explanation of evaluation techniques and inputs used in calculating fair value
Operational investment securities and investment securities
Operational investment securities and investment securities for which there are published market
prices such as the stock exchange price or prices provided by relevant financial institutions orinformation vendors, where the unadjusted market prices in active markets can be used, arecategorized as Level 1 fair value. This mainly includes listed shares.
If the market is not active, even if using published market prices, the items are categorized as Level
2 fair value. This mainly includes bonds payable.
If the market price cannot be obtained, fair value is calculated by discounting total principal andinterest, etc. by a rate calculated based on an internal rating. Since significant unobservable inputs
are used in the calculation, these are categorized as Level 3 fair value.
Investment trusts which have transaction prices in markets and for which unadjusted prices in active
markets can be used are categorized as Level 1 fair value. This mainly includes listed investment
trusts. For investment trusts with no transaction price in markets, the fair value is determined basedon the net asset value per unit and other valuation methods. If there are no significant restrictions forwhich market participants would demand compensation for the risk on cancellation or repurchaserequests, the net asset value per unit is used as the fair value, and the investment trusts are categorized
as Level 2 fair value. If there is any significant restriction for which market participants would
demand compensation for the risk on cancellation or repurchase requests, the investment trusts aremeasured with the net asset value per unit regarded as the fair value, and are not categorized into any
level in accordance with paragraph 24-7 and paragraph 24-12 of the Implementation Guidance on
Accounting Standard for Fair Value Measurement.
Installment receivables
Fair values are calculated by discounting uncollected receivables at the rate applied to new contracts.
The Company calculates the fair values of doubtful receivables by deducting estimated losses on bad
debts from their book values as of the consolidated balance sheet date. The resulting amount closely
approximates the doubtful receivables’ fair values. Estimated losses on bad debts are calculated basedon estimated cash flows or estimated net realizable value, etc. covered by collateral or guaranty.
Since the impact on unobservable inputs is material for all fair values, these are categorized as Level
3 fair value.
Lease receivables and investments in leases
Fair values of lease receivables and investments in leases are calculated by subtracting majoradministrative and maintenance expenses from the total of uncollected lease receivables and lease
payment. The Company calculates the fair values of doubtful receivables by deducting estimatedlosses on bad debts from their book values as of the consolidated balance sheet date. The resulting
amount closely approximates the doubtful receivables’ fair values. Estimated losses on bad debts arecalculated based on estimated cash flows or estimated net realizable value, etc. covered by collateralor guaranty.
Since the impact on unobservable inputs is material for all fair values, these are categorized as Level
3 fair value.
Operating loans
Fair values of floating-rate operating loans are based on their book value. Market rates are reflectedin the rates on floating-rate operating loans in a short period of time, so their book value closely
approximate their fair values as long as the borrower credit status does not change materially after
loan issuance. Fair values of fixed-rate operating loans are calculated by discounting total principal
and interest for each borrower at the rate applied to new contracts. The Company calculates the fairvalues of doubtful receivables by deducting estimated losses on bad debts from their book values asof the consolidated balance sheet date. The resulting amount closely approximates the doubtfulreceivables’ fair values. Estimated losses on bad debts are calculated based on estimated cash flows
or estimated net realizable value, etc. covered by collateral or guaranty.

- 44 -

Since the impact on unobservable inputs is material for all fair values, these are categorized as Level
3 fair value.
Lease liabilities
To calculate the fair values of lease liabilities, the instruments are first allocated to categories
according to maturity terms. Total principal and interest for each category is discounted at a notional
rate that is assumed would apply to borrowing in the same amount.
Since the impact on unobservable inputs is immaterial, these are categorized as Level 2 fair value.
Bonds payable (current portion included), Long-term borrowings (current portion included), Long-termpayables under securitization of lease receivables (current portion included)
Fair values of floating-rate loans and payables in these categories are based on their book value.
Market rates are reflected in the rates on these loans and payables in a short period of time, and theCompany’s credit status has not changed materially since issuance, so their book value are deemed
to closely approximate to their fair values. To calculate the fair values of fixed-rate loans and payablesin these categories, the instruments are first allocated to categories according to maturity terms. Total
principal and interest for each category is discounted at a notional rate that is assumed would apply
to borrowing in the same amount.
Since the impact on unobservable inputs is immaterial for all fair values, these are categorized as
Level 2 fair value.
Derivatives
Derivatives are over-the-counter (OTC) transactions, and calculated based on the price indicated byrelevant financial institutions, etc. The main inputs used in these evaluation techniques are interest
rates and foreign exchange rates, etc. Since observable inputs are used, their fair value is categorized
as Level 2 fair value.
2. Information concerning Level 3 fair value for financial instruments recorded on the
consolidated balance sheet at fair value(1) Quantitative information concerning significant unobservable inputs
As of March 31, 2023
Category

Evaluation techniqueSignificant unobservable
inputsScope of inputs

Operational investment securities
Bonds payable

Discounted present value
methodDiscount rate

2.55%

Preferred securities, etc.

Discounted present value
methodDiscount rate

6.50% - 15.43%

As of March 31, 2022
Category

Evaluation techniqueSignificant unobservable
inputsScope of inputs

Operational investment securities
Bonds payable

Discounted present value
methodDiscount rate

2.00%

Preferred securities / beneficial
interest in trusts, etc.

Discounted present value
methodDiscount rate

5.60% - 11.49%- 45 -

(2) Reconciliation from the balance at beginning of year to the balance at end of year,
unrealized gain and loss recognized in profit and loss for the period
As of March 31, 2023
Millions of yen

Beginningof yearProfit and loss or othercomprehensive income
for the period
Net amounts
Transfersof purchase, Transfers tofrom Level 3
Recorded insale, issuance Level 3 fair
fair value
Recorded
otherandvalue (*2)(*3)
in profit comprehensettlement
and loss sive income(*1)

Unrealized gains andlosses on financial
assets and financial
liabilities held on the
End of year consolidated balance
sheet date among theamount recorded togains and losses forthe period

Operational investment
securities
Bonds payable¥

5,836 ¥

– ¥

5,597
¥

11,434 ¥Preferred securities, etc.
Total(127) ¥

2,900

–

246

(1,451)

– ¥

119

¥

1,448

¥

– ¥

¥

–

¥

8,609

–

–

4,392

– ¥

– ¥

13,002

¥

–

¥

–

–

Thousands of U.S. dollars

Beginningof yearProfit and loss or othercomprehensive income
for the period
Net amounts
Transfersof purchase, Transfers tofromLevel 3
Recorded insale, issuance Level 3 fair
fair
value
Recorded
otherandvalue (*2)(*3)
in profit comprehensettlement
and loss sive income(*1)

Unrealized gains andlosses on financial
assets and financial
liabilities held on the
End of year consolidated balance
sheet date among theamount recorded togains and losses forthe period

Operational investment
securities
Bonds payable$

Preferred securities, etc.
Total

$

*1.
*2.
*3.

43,709 $– $(954) $

21,716

41,915–

1,847(10,868)

85,624 $

– $

892

$

10,849

$

$

– $

– $

64,470––32,894– $– $97,365$–$

Included in “valuation difference on available-for-sale securities” under “other comprehensive income” in the
consolidated statement of comprehensive income.
There were no transfers from Level 2 fair value to Level 3 fair value during the fiscal year. Note that in the caseof a transfer, such transfer occurs on the final day of the accounting period.
There were no transfers from Level 3 fair value to Level 2 fair value during the fiscal year. Note that in the caseof a transfer, such transfer occurs on the final day of the accounting period.

- 46 -––

As of March 31, 2022
Millions of yen

Beginningof yearProfit and loss or othercomprehensive income
for the period
Net amounts
Transfersof purchase, Transfers tofromLevel 3
Recorded insale, issuance Level 3 fair
fair
value
Recorded
otherandvalue (*2)(*3)
in profit comprehensettlement
and loss sive income(*1)

Unrealized gains andlosses on financial
assets and financial
liabilities held on the
End of year consolidated balance
sheet date among theamount recorded togains and losses forthe period

¥

¥

¥

Operational investment
securities
Bonds payable
Preferred securities /
beneficial interest in
trusts, etc.
Total

3,403
¥

*1.
*2.
*3.

5,000

8,403

–

¥

–
¥

–

36

¥

437
¥

474

800

¥

1,756
¥

2,556

–

¥

–
¥

–

–
–

¥

–

5,836

¥

5,597
¥

11,434–¥

Included in “valuation difference on available-for-sale securities” under “other comprehensive income” in the
consolidated statement of comprehensive income.
There were no transfers from Level 2 fair value to Level 3 fair value during the fiscal year. Note that in the caseof a transfer, such transfer occurs on the final day of the accounting period.
There were no transfers from Level 3 fair value to Level 2 fair value during the fiscal year. Note that in the caseof a transfer, such transfer occurs on the final day of the accounting period.

(3) Explanation of the fair value valuation process
The Group defines policies and procedures concerning the calculation of fair value in its
accounting division and calculates fair value in that division in line with such policies andprocedures. The calculated fair value is verified at the accounting division or the standalone
finance division on the validity of the evaluation technique and inputs used in calculating
fair value and the appropriateness of the categorization of fair value level.
When calculating fair value, a valuation model that can most appropriately reflect the nature,
special characteristics and risk of the individual assets is applied. In addition, if using amarket price obtained from a third-party, the evaluation technique and inputs used are
confirmed and the validity of the price is verified by appropriate methods such as monthly
trends analysis.
(4) Explanation concerning the impact on fair value if the significant unobservable inputs arechangedThe discount rate, which is a significant unobservable inputs used in calculating fair valueof items such as corporate bonds, is an adjustment rate relative to standard market interest
rates such as TIBOR and swap rates. It mainly comprises the risk premium, which is thecompensation required by market participants for the uncertainty of cash flows fromfinancial instruments derived from credit risk. In general, a pronounced rise (fall) in the
discount rate causes a pronounced fall (rise) in fair value.

- 47 -––

3. Information on investment trusts that have applied the treatment in paragraph 24-3 andparagraph 24-9 of the “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No. 31, June 17, 2021)(1) Reconciliation of investment trusts that have applied the treatment in paragraph 24-3 andparagraph 24-9 from the balance at beginning of year to the balance at end of year
As of March 31, 2023
Millions of yen
Profit and loss or othercomprehensive income
for the period
Beginningof yearAmounts ofinvestment Amounts of
Unrealized gains andtrustsinvestment
losses on investment
Net amounts whose net trusts whose
trusts held on the
net asset
consolidated balance
Recorded in of purchase, asset value
End of year
Recordedsale andper unit value per unit
sheet date among theotherin profit
shall beshall not beamount recorded tocomprehen- redemption
and lossregarded as regarded asgains and losses forsive income(*1)
the fairthe fair value
the period
(*2)
value

Investment trusts whose
investment trust property isfinancial instruments(paragraph 24-3)¥ 31,679¥

Investment trusts whose
investment trust property isreal estate (paragraph 24-9)

31,138Category

Total¥ 62,818¥(550) ¥

556

–

1,253

(550) ¥

1,810¥

(1,949)

¥

9,294
¥

7,344

–

¥

–
¥

–

–

¥

–
¥

–

29,736¥

41,686¥71,422––¥–Thousands of U.S. dollars
Profit and loss or othercomprehensive income
for the period
Beginningof yearAmounts ofinvestment Amounts of
Unrealized gains andtrustsinvestment
losses on investment
Net amounts whose net trusts whose
trusts held on theofpurchase,
asset
value
net
asset
consolidatedbalance
Recorded in
End of year
Recorded
sale
and
per
unit
value
per
unit
sheet
date
among
the
other
in profit
redemption
shall
be
shall
not
be
amountrecordedtocomprehenand loss
regardedasregarded
as
gains
and
lossesforsive income(*1)
the fairthe fair value
the period
(*2)
value

Investment trusts whose
investment trust property isfinancial instruments(paragraph 24-3)$ 237,231$ (4,122) $Investment trusts whose
investment trust property isreal estate (paragraph 24-9)

233,180

Total$ 470,411

*1.
*2.

–

4,170

$ (14,599)

9,384

69,598$ (4,122) $ 13,554$

54,998

$

–

$

–
$

–

–

$

–
$

–

222,680$

312,162$

534,842–$

Included in “Cost of sales” on the consolidated statement of income.
Included in “valuation difference on available-for-sale securities” under “other comprehensive income” in the
consolidated statement of comprehensive income.

- 48 -––

(2) Breakdown of investment trusts that have applied the treatment in paragraph 24-3 bycontent of restrictions on cancellation as of the consolidated balance sheet date
As of March 31, 2023

The record date for cancellation is limited, and the interval is long.

4.

Book value(Thousands of
U.S. dollars)Book value(Millions of yen)Content of restrictions on cancellation¥

29,736$

222,680

Redemption schedule by term for monetary receivables and securities with maturity after the
consolidated balance sheet dates
As of March 31, 2023
Millions of yen
Within one year

Cash and deposits
Installment receivables
Lease receivables and investments inleasesOperating loans
Operational investment securities
and investment securities
Other securities with maturities
Bonds (government bonds)
Bonds (corporate bonds)
Bonds (other)
Other

¥

Total

¥

121,227
21,740Over one year andwithin five years

Over five years andwithin ten years¥¥–
27,100–3,112Over ten years
¥

–
1,537

292,981

483,41774,95939,44369,422

229,174

26,496

3,603

–
8,621
–
20,674–
27,693–
131,639–
56,815–48,180–2,806–
24,028534,668¥

899,026¥

209,565¥

71,420Thousands of U.S. dollars
Within one year
Cash and deposits
Installment receivables
Lease receivables and investments inleasesOperating loans
Operational investment securities
and investment securities
Other securities with maturities
Bonds (government bonds)
Bonds (corporate bonds)
Bonds (other)
Other

$

Total

$

907,799
162,801

Over one year andwithin five years

Over five years andwithin ten years$$–
202,940–
23,309Over ten years$–
11,5142,193,962

3,620,017

561,329295,372

519,863

1,716,152

198,418

26,986–64,562–
154,820–
207,382–
985,772–
425,458–
360,795–
21,019–179,937

4,003,807$- 49 -

6,732,263$

1,569,309$

534,828

As of March 31, 2022
Millions of yen
Within one year
Cash and deposits
Installment receivables
Lease receivables and investments inleasesOperating loans
Operational investment securities
and investment securities
Other securities with maturities
Bonds (government bonds)
Bonds (corporate bonds)
Bonds (other)
Other

¥

Total

¥

5.

72,15729,304

Over one year andwithin five years

Over five years andwithin ten years¥¥–
33,073–
2,609

Over ten years
¥

–
1,890

314,971534,633

115,684

54,47467,514

211,31233,559

4,246

–
–
–
22,437–28,415–
107,518–
25,893–23,652–
17,327–
18,967506,386¥

914,953¥

201,399¥

96,906

Repayment schedule by term for bonds payable, long-term borrowings, and other interest-bearing debt
after the consolidated balance sheet dates.
As of March 31, 2023
Millions of yen

Short-term borrowings
Commercial papers
Payables under
securitization of leasereceivables
Lease liabilities
Bonds payable
Long-term borrowings
Long-term payables under
securitization of leasereceivables
Total

Within one
year

Over one year
and within
two years

Over twoyears andwithin three
years

¥

¥

¥

584,811306,000––––

Over three
years andwithin four
years

Over four
years andwithin five
years

¥

¥

–
–

–
–

Over five
years
¥

–
–

24,200

–

–

–

–

–

3,611
45,000393,5291,700
35,000298,565

830
89,378
222,578661
40,000116,692286
96,677
119,918681
55,341
71,860

5,628

2,931

3,983

491

423

895

¥ 1,362,780¥

338,197¥- 50 -

316,771¥

157,845¥

217,304¥

128,779

Thousands of U.S. dollars
Within one
year
Short-term borrowings
Commercial papers
Payables under
securitization of leasereceivables
Lease liabilities
Bonds payable
Long-term borrowings
Long-term payables under
securitization of leasereceivables$ 4,379,295
2,291,448

Total

Over one year
and within
two years

Over twoyears andwithin three
years

Over three
years andwithin four
years

Over four
years andwithin five
years

$

$

$

$

–
–

–
–

–
–

–
–

Over five
years
$

–
–

181,219

–

–

–

–

–

27,048336,978
2,946,905

12,733262,094
2,235,772

6,222
669,304
1,666,756

4,954
299,536
873,840

2,142
723,955
897,994

5,103
414,420
538,120

42,145

21,956

29,830

3,680

3,168

6,708

$ 10,205,037$ 2,532,554$ 2,372,112$ 1,182,009$ 1,627,259$

964,351

As of March 31, 2022
Millions of yen

Short-term borrowings
Commercial papers
Payables under
securitization of leasereceivables
Lease liabilities
Bonds payable
Long-term borrowings
Long-term payables under
securitization of leasereceivables
Total

Within one
year

Over one year
and within
two years

Over twoyears andwithin three
years

Over three
years andwithin four
years

Over four
years andwithin five
years

¥

¥

¥

¥

¥

568,563
371,000

–
–

–
–

–
–

–
–

Over five
years
¥

–
–

29,400

–

–

–

–

–

4,316
30,000328,958

3,043
45,000296,393

1,639
35,000199,744749
42,241
117,713579
40,00069,3081,028
64,896
96,29816,508

6,520

3,063

4,106

626

879

¥ 1,348,747¥

350,957¥- 51 -

239,447¥

164,810¥

110,515¥

163,103

XIV.

Securities

1.

Other securities
As of March 31, 2023
Millions of yen
TypeAcquisition
cost

Book value(1) Shares¥

67,167¥

16,980Difference¥

50,186(2) Bonds
1)
Securities whose book value
exceeds their acquisition cost

Government bonds andlocal government bonds,
etc.

2)

Corporate bonds

3)

Other

(3) Other
Subtotal(1) Shares

–

–

–

37,02336,700

323

–

–

–

42,191

37,1295,062

146,382

90,80955,572

1,691

2,093

(402)

–

–

–

140,307145,320(5,013)(2) Bonds
1)
Securities whose book value does
not exceed their acquisition cost

Government bonds andlocal government bonds,
etc.

2)

Corporate bonds

3)

Other

(3) Other
Subtotal
Total

¥

–

–

–

34,70735,025(317)

176,706

182,439(5,732)

323,088¥273,249¥

49,839Thousands of U.S. dollars
Type

Acquisition
cost

Book value(1) Shares$

502,973$

127,154

Difference$

375,819(2) Bonds
1)
Securities whose book value
exceeds their acquisition cost

Government bonds andlocal government bonds,
etc.

2)

Corporate bonds

3)

Other

(3) Other
Subtotal(1) Shares

–

–

–

277,245274,824

2,421

–

–

–

315,949

278,041

37,9081,096,167

680,019

416,148

12,667

15,678(3,011)–––

1,050,675

1,088,218(37,543)–––

259,907262,282(2,375)(2) Bonds
1)
Securities whose book value does
not exceed their acquisition cost

Government bonds andlocal government bonds,
etc.

2)

Corporate bonds

3)

Other

(3) Other
Subtotal

1,323,249

Total

$

2,419,416

1,366,179$

2,046,198(42,930)$

373,218

Note: Shares without a market price, etc. and investments in limited partnerships, etc. are not included in the abovetable.

- 52 -

As of March 31, 2022
Millions of yen
TypeAcquisition
cost

Book value(1) Shares¥

65,844¥

15,346

Difference¥

50,498(2) Bonds
1)
Securities whose book value
exceeds their acquisition cost

Government bonds andlocal government bonds,
etc.

2)

Corporate bonds

3)

Other

(3) Other
Subtotal(1) Shares

–

–

–

97,33895,700

1,638

–

–

–

35,213

31,636

3,576

198,396

142,683

55,713

2,513

2,864

(351)

–

–

–

17,163

17,400(236)(2) Bonds
1)
Securities whose book value does
not exceed their acquisition cost

Government bonds andlocal government bonds,
etc.

2)

Corporate bonds

3)

Other

(3) Other
Subtotal
Total

¥

–

–

–

34,33335,167(833)

54,01055,432(1,421)

252,407¥

198,115¥

54,291

Note: Shares without a market price, etc. and investments in limited partnerships, etc. are not included in the abovetable.

2.

Other securities soldFY2022 (From April 1, 2022 to March 31, 2023)
Millions of yen

Type(1) Shares(2) Bonds
1) Government bonds and local
government bonds, etc.
2) Corporate bonds3) Other(3) Other
Total

Sales proceeds
¥

¥

Total

Total gain¥

Total loss
64

¥

–

–

–

–

–
–
2,476

–
–
98

–
–
–

2,546

¥

162

¥

–

Thousands of U.S. dollars

Type(1) Shares(2) Bonds
1) Government bonds and local
government bonds, etc.
2) Corporate bonds3) Other(3) Other

70

Sales proceeds
$

$

525

Total gain$

Total loss

481

$

–

–

–

–

–
–
18,545

–
–
736

–
–
–

19,070- 53 -

$

1,217

$

–

FY2021 (From April 1, 2021 to March 31, 2022)
Millions of yen

Type(1) Shares(2) Bonds
1) Government bonds and local
government bonds, etc.
2) Corporate bonds3) Other(3) Other
Total

3.

Sales proceeds
¥

¥

1,160

Total gain¥

Total loss

840

¥

–

–

–

–

–
–
2,480

–
–
481

–
–
–

3,640

¥

1,322

¥

–

Impairment losses on securities
During the fiscal year ended March 31, 2023, impairment loss recorded on securities amounted to¥544 million (U.S.$4,079 thousand) (securities classified as other securities, etc.: ¥544 million(U.S.$4,079 thousand)) and during the fiscal year ended March 31, 2022, impairment loss recordedon securities amounted to ¥544 million (securities classified as other securities, etc.: ¥544 million).
The Company recognizes the impairment losses where the decline in the price at year end is greaterthan or equal to 50% of the acquisition cost. Where the decline in the price is between 30% and lessthan 50% of the acquisition cost, the Company may recognize impairment losses, taking into
consideration the credit rating of the issuer, the materiality of the amount, the likelihood of the
securities recovering in price, etc., as well as the analysis of the level of market price by looking at the
gap between the book value and the highest and lowest price and other data during the fiscal years
ended March 31, 2023 and 2022.

- 54 -

XV.
1.

Derivatives
Derivatives to which hedge accounting is not applied(1) Foreign currency-related
As of March 31, 2023
Not applicable
As of March 31, 2022
Not applicable(2) Interest rate-related
As of March 31, 2023
Not applicable
As of March 31, 2022
Not applicable2.

Derivatives to which hedge accounting is applied(1) Foreign currency-related
As of March 31, 2023
Millions of yen
Hedge accounting

Type of contracts

Hedged item

Contract
amount, etc.

Contract
amount, etc. ofover one year

Borrowings¥¥

Fair value

Currency swap contracts
Principle treatment

Receive yen,
pay U.S. dollars

7,256

–

¥

(200)

Currency swap contracts
Receive yen,pay Thai baht

Borrowings

Total

1,134
¥

8,391

–
¥

–

(10)
¥

(210)

Thousands of U.S. dollars
Hedge accounting

Type of contracts

Hedged item

Contract
amount, etc.

Contract
amount, etc. ofover one year

Borrowings$$

Fair value

Currency swap contracts
Principle treatment

Receive yen,
pay U.S. dollars

54,343–$(1,502)Currency swap contracts
Receive yen,pay Thai baht

Borrowings

Total

8,493
$

- 55 -

62,835

–
$

–

(78)
$

(1,580)As of March 31, 2022
Millions of yen
Hedge accounting

Type of contracts

Hedged item

Contract
amount, etc.

Contract
amount, etc. ofover one year

Borrowings

¥

519

¥

–

¥

(25)

¥

519

¥

–

¥

(25)

Fair value

Currency swap contracts
Principle treatment

Receive yen,pay Thai baht
Total(2) Interest rate-related
As of March 31, 2023
Millions of yen
Type of contracts

Hedged item

Contract
amount, etc.

Contract
amount, etc. ofover one year

Principle treatment

Interest rate swap
contracts:
Fixed rate payment,
floating rate receipt

Borrowings¥¥

Exceptional treatment ofinterest rate swaps

Interest rate swap
contracts:
Fixed rate payment,
floating rate receipt

Borrowings

Hedge accounting

Total

51,8498,243¥

60,093

27,770Fair value

¥

623

7,423
¥

35,194(Note)¥

623

Thousands of U.S. dollars
Type of contracts

Hedged item

Contract
amount, etc.

Contract
amount, etc. ofover one year

Principle treatment

Interest rate swap
contracts:
Fixed rate payment,
floating rate receipt

Borrowings$ 388,270$ 207,958

Exceptional treatment ofinterest rate swaps

Interest rate swap
contracts:
Fixed rate payment,
floating rate receipt

Borrowings

61,73155,593$ 450,002$ 263,551

Hedge accounting

Total

Fair value

$

4,666

(Note)$

4,666

Note: Since interest rate swaps which are subject to accounting under exceptional treatment of interest rate swaps areaccounted for as part of borrowings that are hedged items, their fair value is included in the relevant borrowings.

- 56 -

As of March 31, 2022
Millions of yen
Type of contracts

Hedged item

Contract
amount, etc.

Contract
amount, etc. ofover one year

Principle treatment

Interest rate swap
contracts:
Fixed rate payment,
floating rate receipt

Borrowings¥¥

Exceptional treatment ofinterest rate swaps

Interest rate swap
contracts:
Fixed rate payment,
floating rate receipt

Borrowings

Hedge accounting

Total

79,84015,637¥

95,47842,480Fair value

¥

8,037
¥

50,518(354)(Note)¥(354)

Note: Since interest rate swaps which are subject to accounting under exceptional treatment of interest rate swaps areaccounted for as part of borrowings that are hedged items, their fair value is included in the relevant borrowings.

- 57 -XVI.
1.

Retirement benefits
Overview of the Group’s retirement benefits plan
The Company has a defined-benefit corporate pension fund plan (established by the Company andGroup companies) and a defined-benefit corporate pension plan as its defined-benefit system, and it
also has a defined-contribution pension plan as its defined-contribution system.
The defined-benefit corporate pension fund plan is the only fund type and provides a lump-sum
payment or pension based on the employees’ final salary points and lengths of service. Furthermore,certain defined-benefit corporate pension fund plans have retirement benefit trusts.
The defined-benefit corporate pension fund plan (established by the Company and Group companies)
which is multi-employer type of pension plan is accounted for in the same manner as a definedcontribution pension plan because it is not possible to reasonably estimate the value of plan assets
corresponding to the contribution of each company.
The defined-contribution pension plan was transferred from a termination allowance plan on
November 1, 2009. The defined-contribution pension plan, under which employees are participants,
is funded by the contributions based on the participant’s plan course and eligibility.
Some of the domestic consolidated subsidiaries have a defined-benefit corporate pension plan and atermination allowance plan as its defined-benefit pension system.
Some of the domestic consolidated subsidiaries, which have a defined-benefit corporate pension plan
and a termination allowance plan, use simplified accounting methods for calculation of retirement
benefit liability and retirement benefit expenses. In the termination allowance plan, retirement benefit
obligations are recorded in the amount to be paid for voluntary retirement as of fiscal year-end. In thecorporate pension plan, retirement benefit obligations are recorded in the amount of actuarial liability
calculated under the latest pension funding programs.
In the fiscal year ended March 31, 2022, a ¥9 million loss on revision of retirement benefit plan as aresult of a change in the termination allowance plan of one domestic consolidated subsidiary wasrecorded in extraordinary losses. In addition, due to the transition from the defined-benefit corporate
pension plan to the defined contribution plan a ¥10 million gain was recorded in extraordinary income.
The Company and some of its domestic consolidated subsidiaries may make lump-sum payments ofpremium retirement benefits to some employees at their retirement and certain situation.

2.

Defined-benefit pension plan (excluding pension plans using the simplified accounting methods)(1) Reconciliation of retirement benefit obligations as of beginning of year and as of end of year
Thousands of
U.S. dollars

Millions of yen
FY2022(April 1, 2022 March 31, 2023)
Retirement benefit obligations at beginning ofyear
Service cost
Interest cost
Actuarial gains or losses
Retirement benefits paid
Decrease due to the transition to thedefined-contribution pension plan
Increase by the new consolidated
subsidiary
Retirement benefit obligations at end of year¥¥

13,337

FY2021(April 1, 2021 March 31, 2022)¥

12,217

FY2022(April 1, 2022 March 31, 2023)$

99,878

595
69
81
(618)

574
65
46
(535)

4,463
522
612
(4,631)

–

(52)

–

–

1,023

–

13,466¥

13,337$

100,844

Note: Service costs and interest costs are included in “Cost of sales” and “Selling, general and administrative expenses”
on the consolidated statement of income.

- 58 -

(2) Reconciliation of plan assets as of beginning of year and as of end of year
Thousands of
U.S. dollars

Millions of yen
FY2022(April 1, 2022 March 31, 2023)
Plan assets at beginning of year
Expected return on plan assets
Actuarial gains or losses
Contribution from employer
Retirement benefits paid
Decrease due to the transition to thedefined-contribution pension plan¥

Plan assets at end of year¥

11,889
221
(195)
853
(400)

FY2021(April 1, 2021 March 31, 2022)¥

11,731
212
(55)
480
(476)

–
12,368FY2022(April 1, 2022 March 31, 2023)
$

(3)
¥

11,88989,034
1,658(1,465)
6,394(3,002)–$

92,618(3) Reconciliation of retirement benefit obligations and plan assets at end of fiscal year and retirement
benefit liability and retirement benefit asset recorded in the consolidated balance sheets
Thousands of
U.S. dollars

Millions of yen
Retirement benefit obligations for fundedpension plans
Plan assets

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

13,466

13,337

100,844(12,368)(11,889)(92,618)

Net assets or liabilities recorded in the
consolidated balance sheets

1,098

1,448

8,226

Retirement benefit liability
Retirement benefit asset

1,621
(523)

1,536
(88)

12,142(3,917)

Net assets or liabilities recorded in the
consolidated balance sheets

¥

1,098

¥

1,448

$

8,226

(4) Breakdown of retirement benefit expenses
Thousands of
U.S. dollars

Millions of yen
FY2022(April 1, 2022 March 31, 2023)
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Other
Retirement benefit expenses for definedbenefit pension plan

FY2021(April 1, 2021 March 31, 2022)

FY2022(April 1, 2022 March 31, 2023)

¥

595
69
(221)
140
(54)

¥

574
65
(212)
135
(66)

$

4,463
522
(1,658)
1,051
(410)

¥

529

¥

495

$

3,969

Note: Retirement benefit expenses are included in “Cost of sales” and “Selling, general and administrative expenses”
on the consolidated statement of income.

- 59 -

(5) Remeasurements of defined benefit plans
The components of items recorded in remeasurements of defined benefit plans, net of tax
included in other comprehensive income were as follows:
Millions of yen

Actuarial gains or losses

FY2022(April 1, 2022 March 31, 2023)¥
257

FY2021(April 1, 2021 March 31, 2022)¥
39

Thousands of
U.S. dollars
FY2022(April 1, 2022 March 31, 2023)$
1,927(6) Remeasurements of defined benefit plans
The components of items recorded in remeasurements of defined benefit plans, net of tax
included in accumulated other comprehensive income were as follows:
Millions of yen
Unrecognized actuarial gains or losses

As of March 31, 2023¥
(299)

As of March 31, 2022¥
(42)

Thousands of
U.S. dollars
As of March 31, 2023$
(2,245)(7) Plan assets
1)

Breakdown of plan assets
Ratio of each major component of plan assets was as follows:

Bonds
SharesCash and deposits
General account
Other

As of March 31, 2023
%
38
16
5
31
10

As of March 31, 2022
%
37
17
5
31
10

100

100

Total

Note: The total includes retirement benefits trust established for corporate pension plan at 4% in the fiscal year ended
March 31, 2023 and 4% in the fiscal year ended March 31, 2022.

2)

Estimation of expected long-term rate of return on plan assets
Expected long-term rate of return on plan assets is estimated based on current and expected
future distribution of plan assets as well as current and expected future long-term rate of returnon various components of plan assets.

(8) Basis for actuarial calculation
Major basis for actuarial calculation

Discount rate
Expected long-term rate of return
Expected increase in salary

As of March 31, 2023%
0.10 - 1.00
1.00 - 2.50
1.28 - 3.75

- 60 -

As of March 31, 2022%
0.10 - 1.00
1.00 - 2.50
1.28 - 3.75

3.

Defined-benefit pension plans using the simplified accounting methods(1) Reconciliation of retirement benefit liability for the pension plans using the simplified accounting
methods as of beginning of year and as of end of year
Thousands of
U.S. dollars

Millions of yen
FY2022(April 1, 2022 March 31, 2023)
Retirement benefit liability at beginning ofyear
Retirement benefit expenses
Retirement benefits paid
Increase by the new consolidated
subsidiary
Retirement benefit liability at end of year

¥

¥

1,438

FY2021(April 1, 2021 March 31, 2022)¥

752

FY2022(April 1, 2022 March 31, 2023)$

10,772

233
(170)

130
(87)

1,748
(1,280)

–

643

–

1,500

¥

1,438

$

11,239Note: Retirement benefit expenses are included in “Cost of sales” and “Selling, general and administrative expenses”
on the consolidated statement of income.

(2) Reconciliation of retirement benefit obligations and plan assets at end of fiscal year and retirement
benefit liability and retirement benefit asset recorded in the consolidated balance sheets
Thousands of
U.S. dollars

Millions of yen
Retirement benefit obligations for fundedpension plans
Plan assets

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

649

540

4,865

(166)

(165)

(1,248)

482

374

3,617

Retirement benefit obligations for unfundedpension plans

1,017

1,063

7,623

Net assets or liabilities recorded in the
consolidated balance sheets

1,500

1,438

11,239Retirement benefit liability

1,500

1,438

11,239Net assets or liabilities recorded in the
consolidated balance sheets

¥

1,500

¥

1,438

$

11,239(3) Retirement benefit expenses
Retirement benefit expenses calculated by simplified accounting method
FY2022 (April 1, 2022 - March 31, 2023): ¥233 million (U.S.$1,748 thousand)
FY2021 (April 1, 2021 - March 31, 2022): ¥130 million
Note: Retirement benefit expenses are included in “Cost of sales” and “Selling, general and administrative
expenses” on the consolidated statement of income.

4.

Defined contribution plan
In the fiscal years ended March 31, 2023 and 2022 the amount required to be contributed by theCompany and consolidated subsidiaries to the defined-contribution pension plan amounted to ¥198
million (U.S.$1,485 thousand) and ¥155 million, respectively.
Note: The amounts are included in “Cost of sales” and “Selling, general and administrative expenses” on the
consolidated statement of income.

- 61 -

5.

Multi-employer type of pension plan
In the fiscal years ended March 31, 2023 and 2022 the amount required to be contributed to thedefined-benefit corporate pension fund plan (established by the Company and Group companies) ofmulti-employer type of pension plan amounted to ¥253 million (U.S.$1,899 thousand) and ¥244
million, respectively. The contribution is accounted for in the same manner with a defined-contribution
pension plan.
(1) Most recent funded status of the multi-employer welfare pension plan
Thousands of
U.S. dollars

Millions of yen
As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

As of March 31, 2022

As of March 31, 2021

As of March 31, 2022

Amount of plan assets
Actuarial liability under pension funding
programs¥¥$

Difference¥

17,742
18,433(690)

16,327
17,759¥(1,431)

132,862
138,035$(5,173)(2) Premium contribution ratio for the Group’s contribution to multi-employer type of pension plan
FY2022: 14.869% (From April 1, 2022 to March 31, 2023)
FY2021: 14.624% (From April 1, 2021 to March 31, 2022)(3) Supplementary explanation
The main reasons for the difference in (1) above are the balance of prior service obligations underpension funding programs (¥6,235 million (U.S.$46,691 thousand) in the fiscal year ended March
31, 2023, ¥6,741 million in the fiscal year ended March 31, 2022) and general reserve (¥3,728
million (U.S.$27,922 thousand) in the fiscal year ended March 31, 2023, ¥3,728 million in thefiscal year ended March 31, 2022).
The amortization method for prior service obligations in this system is even amortization ofprincipal and interest over 20 years. Were for some, unlikely reason, a shortage to occur for thebalance brought forward, this would be dealt with through methods such as raising special
premiums as necessary based on the recalculation of the financial situation.
Since the amount of the special premiums is calculated by multiplying the amount of base salaryat the time of premium contribution by the premium rate prescribed in advance, the ratio in (2)above is not the same as the actual burden ratio.

- 62 -XVII.
1.

Stock options, etc.
Stock options-related expenses were recorded in the following accountNot applicable

2.

Gains on expiration of unexercised stock options
Thousands of
U.S. dollars

Millions of yen

Non-operating income (Other)

3.

FY2022(From April 1, 2022 toMarch 31, 2023)

FY2021(From April 1, 2021 toMarch 31, 2022)

FY2022(From April 1, 2022 toMarch 31, 2023)

¥

¥

$

–

12

–

Details, number and status of stock options(1) Details of stock options
Since the Company resolved at the 49th Annual General Meeting of Shareholders held on June 22,2018 to introduce the share-based payment plan or Board Benefit Trust (BBT) for its directors andexecutive officers and abolished the share-based payment-type stock options plan, there has been
no new granting of stock options.

Class and number of grantees(Note 1)
Number and type of stock
options (Note 2)
Grant date
Vesting conditions
Requisite service period
Exercise period

Class and number of grantees(Note 1)
Number and type of stock
options (Note 2)
Grant date

Stock options for 2008

Stock options for 2009

Stock options for 2010

Directors of the Company: 8
Executive officers of theCompany: 16

Directors of the Company: 8
Executive officers of theCompany: 15

Directors of the Company: 7
Executive officers of theCompany: 17

Common shares: 57,800
sharesCommon shares: 84,600
sharesCommon shares: 61,300
shares

October 15, 2008

October 15, 2009

October 15, 2010

(Note 3)(Note 3)(Note 3)(Note 4)(Note 4)(Note 4)

October 15, 2008 – October
14, 2038(Note 5)October 15, 2009 – October
14, 2039(Note 5)October 15, 2010 – October
14, 2040(Note 5)

Stock options for 2011

Stock options for 2012

Stock options for 2013

Directors of the Company: 7
Executive officers of theCompany: 16

Directors of the Company: 8
Executive officers of theCompany: 16

Directors of the Company: 8
Executive officers of theCompany: 18

Common shares: 54,800
sharesCommon shares: 73,000
sharesCommon shares: 42,000
shares

October 14, 2011

October 16, 2012

October 15, 2013

Vesting conditions(Note 3)(Note 3)(Note 3)Requisite service period(Note 4)(Note 4)(Note 4)

October 14, 2011 – October
13, 2041(Note 5)October 16, 2012 – October
15, 2042(Note 5)October 15, 2013 – October
14, 2043(Note 5)

Exercise period- 63 -

Class and number of grantees(Note 1)
Number and type of stock
options (Note 2)
Grant date
Vesting conditions
Requisite service period
Exercise period

Stock options for 2014

Stock options for 2015

Stock options for 2016

Directors of the Company: 7
Executive officers of theCompany: 18

Directors of the Company: 7
Executive officers of theCompany: 19

Directors of the Company: 7
Executive officers of theCompany: 21

Common shares: 35,500
sharesCommon shares: 28,600
sharesCommon shares: 34,700
shares

October 15, 2014

October 15, 2015

October 14, 2016

(Note 3)(Note 3)(Note 3)(Note 4)(Note 4)(Note 4)

October 15, 2014 – October
14, 2044(Note 5)October 15, 2015 – October
14, 2045(Note 5)October 14, 2016 – October
13, 2046(Note 5)

Stock options for 2017Class and number of grantees(Note 1)
Number and type of stock
options (Note 2)
Grant dateDirectors of the Company: 6
Executive officers of theCompany: 22
Common shares: 22,200
shares
October 16, 2017

Vesting conditions(Note 3)Requisite service period(Note 4)

Exercise period
Notes: 1.
2.
3.
4.
5.

October 16, 2017 – October
15, 2047(Note 5)
Excluding outside directors and outside corporate auditors
Converted to number of shares
No vesting conditions attached
No provision for requisite service period
Notwithstanding the above, if a share acquisition rights holder loses his/her position as director, corporate
auditor, or executive officer of the Company during the above term, he/she may exercise the rights withina period of five years beginning on the day that exactly one year has passed since the day immediately after
the day on which the holder loses his/her position.

- 64 -

(2) Movement in stock options
The number of stock options that existed during the fiscal year ended March 31, 2023 is translated
into the number of shares.
1)

Number of stock options
Stock options for 2008

Stock options for 2009

Stock options for 2010Pre-vesting (shares)
Previous fiscal year-end

–

–

–

Granted–––Expired–––

Vested–––Balance unvested

–

–

–

1,300

8,600

13,500

–

–

–
1,400

Post-vesting (shares)
Previous fiscal year-end
VestedExercised

1,300

1,800

Expired–––Balance unexercised

–

6,800

12,100Stock options for 2011

Stock options for 2012

Stock options for 2013

Pre-vesting (shares)
Previous fiscal year-end

–

–

–

Granted–––Expired–––

Vested–––Balance unvested

–

–

–

18,60026,90016,800

–

–

–

2,400

4,800

4,200

–

–

–

16,20022,10012,600Post-vesting (shares)
Previous fiscal year-end
VestedExercised
ExpiredBalance unexercised

Stock options for 2014

Stock options for 2015

Stock options for 2016Pre-vesting (shares)
Previous fiscal year-end

–

–

–

Granted–––Expired–––

Vested–––Balance unvested

–

–

–

22,50020,20029,400

–

–

–

3,300

3,200

6,700

–

–

–

19,20017,00022,700Post-vesting (shares)
Previous fiscal year-end
VestedExercised
ExpiredBalance unexercised- 65 -

Stock options for 2017Pre-vesting (shares)
Previous fiscal year-end–

Granted–Expired–

Vested–Balance unvested–

Post-vesting (shares)
Previous fiscal year-end

20,000

Vested–Exercised

1,900

Expired–Balance unexercised

2)

18,100

Unit price
Stock options for 2008
Yen

Exercise price¥1

Stock options for 2009
Yen
¥

1

Stock options for 2010
Yen
¥

1

Average price per share at
exercise

7,048

7,048

7,048

Fair value at grant date

1,610

1,668

2,218

Stock options for 2011
Yen
Exercise price¥1

Stock options for 2012
Yen
¥

1

Stock options for 2013
Yen
¥

1

Average price per share at
exercise

7,340

7,219

7,391

Fair value at grant date

2,449

1,943

3,556

Stock options for 2014
Yen
Exercise price¥1

Stock options for 2015
Yen
¥

1

Stock options for 2016
Yen
¥

1

Average price per share at
exercise

7,537

7,592

7,855

Fair value at grant date

3,584

4,653

4,606

Stock options for 2017
Yen
Exercise price¥1

Average price per share at
exercise

7,548

Fair value at grant date

6,840

4.

Estimation method for fair value of stock options
Not applicable

5.

Estimation method for the number of vested stock options
The Company generally uses the actual number of expired options to estimate the number of vested
options, because it is difficult to reasonably estimate how many options will expire in the future.

- 66 -XVIII. Tax effect accounting
1.

The respective breakdowns of deferred tax assets and deferred tax liabilities by major item
Thousands of
U.S. dollars

Millions of yen
As of March 31, 2023
Deferred tax assets
Enterprise taxes payable¥
Excess of allowance for doubtful accounts
Loss on valuation of investment securities,
etc.
Guarantee deposits received
Retirement benefit liability
Provision for bonuses
Accrued expenses
Asset retirement obligations
Loss on liquidation of subsidiaries andassociates
Non-deductible consumption tax
Revenue recognized for tax purposes
Prepaid expenses
Excess of depreciation
Gain on transfer of receivables
Tax loss carried forward
Share-based payment expenses
Other
Subtotal deferred tax assets
Valuation allowance related to total
deductible temporary differences
Subtotal valuation allowance (Note)
Total deferred tax assets
Deferred tax liabilities
Valuation difference on available-for-salesecurities
Depreciation
Foreign subsidiary’s unitary tax
Intangible assets
Gain on valuation of investment securities
Gain on transfer of receivables
Other

¥

Note:

2.

As of March 31, 2023¥$

21,44012,398

728

9,946

1,328
983
914
760
657

1,174
1,070
855
983
566

9,945
7,361
6,851
5,697
4,923

532

–

3,986

407
268
258
235
67
14
–
2,895

500
403
412
260
344
–
199
1,943

3,049
2,010
1,932
1,760
506
109
–
21,683

15,169

11,778113,596

(123)

(120)

(922)

(123)

(120)

(922)

15,046

11,657

112,675(17,859)¥(15,532)(16,997)$(2,081)(1,906)(1,545)(1,195)(942)(1,134)(30,579)
¥

554
1,779

1,328

(4,473)(2,814)(1,940)(1,148)(824)(1,518)

Total deferred tax liabilities
Net deferred tax liabilities

2,863
1,655

As of March 31, 2022

(33,498)(21,077)(14,531)(8,597)(6,172)(11,374)(25,803)¥(14,145)(133,740)(228,988)$(116,314)

The amount of valuation allowance increased by ¥2 million (U.S.$16 thousand) from the previous fiscal year. This
increase was mainly due to an increase of ¥1 million (U.S.$11 thousand) in valuation allowance for allowance for
doubtful accounts at a consolidated subsidiary.

The respective breakdowns of major items that constituted the material difference between thestatutory effective tax rate and the effective tax rate after adoption of tax effect accounting
As of March 31, 2023
The note is omitted, because the difference between the statutory effective tax rate and the effective
tax rate after adoption of tax effect accounting is less than 5% of statutory effective tax rate.

- 67 -

As of March 31, 2022
The note is omitted, because the difference between the statutory effective tax rate and the effective
tax rate after adoption of tax effect accounting is less than 5% of statutory effective tax rate.

- 68 -

XIX. Business combinations, etc.
Business combinations through acquisition
1.

Overview of the business combination(1) Names of acquired company and its business descriptions
Name of acquired company:

Human Centrix Co., Ltd. (hereinafter “HCX”)

Business description:

Business-use video production and distribution services
for business-to-business (BtoB) companies(2) Reasons for the business combinations
In addition to enhancement of the service menu for support to increase work efficiency in the BPO
services business, we are creating a high-value added new service menu by combining the Group’s
broad sales network and ability to propose solutions with HCX’s video production and distribution
services, to further support the solution of challenges in the increasingly sophisticated and complex
operation processes of customers.
(3) Date of the business combinations
October 5, 2022
(4) Legal form of the business combinations
Acquisition of shares by cash(5) Name of the companies after the business combination
No change(6) Ratio of voting rights acquired
Ratio of voting rights held before the business combination date:–%

Ratio of voting rights acquired on the business combination date:

100.00%

Ratio of voting rights held after the acquisition:

100.00%(7) Primary basis for the determination of the acquirer
It is because the Company acquired the shares in exchange for cash.
2.

Period for which operating results of the acquired company were included in the consolidated financial
statements
From October 1, 2022 to March 31, 2023

3.

Acquisition cost of the acquired company and breakdown by type of consideration
Acquisition price
Acquisition cost

4.

Cash and deposits¥2,418 million¥2,418 million

U.S.$18,107 thousand
U.S.$18,107 thousand

Details and amounts of main acquisition-related expenses
Compensation and fees, etc. to advisers, etc.: ¥141 million (U.S.$1,058 thousand)- 69 -

5.

Amount, cause, amortization method and period of goodwill recognized(1) Amount of goodwill recognized¥776 million (U.S.$5,816 thousand)(2) Cause of goodwill
Goodwill was recognized due to the future excess earning power expected based on businessexpansion going forward.
(3) Amortization method and period
Straight-line method over a period of 10 years

6.

Amount of assets received and liabilities assumed on the date of the business combination and theirmajor components

689
106

Thousands of
U.S. dollars
$
5,163
801

Total assets

796

5,964

Current liabilities
Non-current liabilities

102
–

768
–

Millions of yen
Current assets
Non-current assets

Total liabilities

7.

¥

¥

102

$

768

Pro forma amounts of impact of the consolidated statement of income for the fiscal year ended March
31, 2023 assuming that the business combination was completed at the beginning of the fiscal year,
and the calculation method thereof

622
113
129
225
98

Thousands of
U.S. dollars
$
4,665
852
973
1,689
734

3.27

$

Millions of yen
Net sales
Operating profit
Ordinary profit
Profit before income taxes
Profit attributable to owners of parent¥

Basic earnings per share¥

Yen

U.S. dollars
0.02

Method of calculating pro forma amountThe pro forma amount of the impact is the difference between net sales and profit or loss information
calculated assuming that the business combination had been completed at the beginning of the fiscal year
and net sales and profit or loss information in the consolidated statements of income of the acquirer.
Please be advised that the notes stated above have not obtained audit certification.
Business combinations through acquisition
1.

Overview of the business combination(1) Names of acquired company and its business descriptions
Name of acquired company:

Pacific Rim Capital, Inc.

Business description:

Operating lease business for material handling equipment(such as forklifts) for corporate customers- 70 -

(2) Reasons for the business combinations
For the purpose of expanding the revenue base in North America and opening new business fields
in the “Mobility” business domain(3) Date of the business combinations
January 6, 2023
(4) Legal form of the business combinations
Acquisition of shares by cash(5) Name of the companies after the business combination
No change(6) Ratio of voting rights acquired
Ratio of voting rights held before the business combination date:49.00%

Ratio of voting rights additionally acquired on the businesscombination date:

2.00%

Ratio of voting rights held after the acquisition:

51.00%(7) Primary basis for the determination of the acquirer
It is because the Company acquired the shares in exchange for cash.
2.

Period for which operating results of the acquired company were included in the consolidated financial
statements
Because March 31, 2023 is set as the deemed acquisition date, only the balance sheet has been
consolidated. Since the acquired company was an equity-method associate of the Company, its
operating results from April 1, 2022 to March 31, 2023 were recorded as “share of profit of entities
accounted for using equity method.”3.

Acquisition cost of the acquired company and breakdown by type of consideration
Fair value of shares held immediately
before the business combination as of¥8,312 million U.S.$62,247 thousand
the business combination date
Acquisition priceCash and deposits ¥2,503 million U.S.$18,749 thousand
Acquisition cost
¥10,816 million U.S.$80,996 thousand

4.

Details and amounts of main acquisition-related expenses
Compensation and fees, etc. to advisers, etc.: ¥102 million (U.S.$767 thousand)5.

Difference between the acquisition cost of the acquired company and the total amount of theacquisition costs of the respective transactions leading to the acquisition
Loss on step acquisitions: ¥85 million (U.S.$641 thousand)- 71 -

6.

Amount, cause, amortization method and period of goodwill recognized(1) Amount of goodwill recognized¥7,483 million (U.S.$56,042 thousand)
The amount of goodwill is the provisionally calculated amount, because the allocation of
acquisition cost was not completed as of March 31, 2023.
(2) Cause of goodwill
Goodwill was recognized due to the future excess earning power expected based on businessexpansion going forward.
(3) Amortization method and period
Amortized over a period during which the effects of goodwill will be realized, using the straightline method. The amortization period will be determined based on results of the allocation of theacquisition cost.

7.

Amount of assets received and liabilities assumed on the date of the business combination and theirmajor components

16,6395,121

Thousands of
U.S. dollars$
124,60238,355

Total assets

21,761

162,957

Current liabilities
Non-current liabilities

11,732
5,487

87,86041,096

Millions of yen
Current assets
Non-current assets

Total liabilities

8.

¥

¥

17,220$128,955

Allocation of acquisition cost
Because identification of identifiable assets and liabilities on the business combination date anddetermination of the fair value as well as the allocation of the acquisition cost were not completed asof March 31, 2023, provisional accounting treatment was conducted based on reasonable information
available at that time.

9.

Pro forma amounts of impact of the consolidated statement of income for the fiscal year ended March
31, 2023 assuming that the business combination was completed at the beginning of the fiscal year,
and the calculation method thereofMillions of yen
Net sales
Operating profit
Ordinary profit
Profit before income taxes
Profit attributable to owners of parent

¥

5,865
1,822
952
952
212

Thousands of
U.S. dollars$
43,922
13,646
7,134
7,134
1,589

Yen
Basic earnings per share¥

U.S. dollars
7.08

$

0.05

Method of calculating pro forma amountThe pro forma amount of the impact is the difference between net sales and profit or loss information
calculated assuming that the business combination had been completed at the beginning of the fiscal year
and net sales and profit or loss information in the consolidated statements of income of the acquirer. In- 72 -

addition, the calculation was made, net of “share of profit of entities accounted for using equity method”
of the acquired company that was recorded in the fiscal year ended March 31, 2023.
Please be advised that the notes stated above have not obtained audit certification.
Transactions under common control etc.
Additional acquisition of subsidiary shares
1.

Overview of the transaction(1) Name and business description of entity involved in business combination
Name of the entity:

Kabushiki Kaisha GI Holdings

Business description:

Acquisition, holding and disposal of shares, investments and other
equity and bonds of stock companies and other corporations, purchaseand sale of trust beneficiary rights, purchase of monetary claims, realestate investment, securities investment, asset management business,solutions business, and other businesses(2) Date of the business combinations
April 1, 2022
(3) Legal form of the business combinations
Acquisition of shares from a non-controlling shareholder(4) Name of the companies after the business combination
No change(5) Other matters related to overview of transaction
The Company additionally acquired all shares held by the non-controlling shareholder. As a resultof this additional acquisition of shares, the entity and its subsidiary, INVOICE INC., became
wholly owned subsidiaries of the Company.
2.

Overview of accounting treatment implemented
In accordance with the “Accounting Standard for Business Combinations” (ASBJ Statement No. 21,
January 16, 2019) and the “Implementation Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10, January
16, 2019), the Company treated the transaction as a transaction with a non-controlling shareholder
among transactions under common control, etc.

3.

Matters concerning the additional acquisition of subsidiary shares
Acquisition cost and breakdown by type of consideration
Acquisition price
Acquisition cost

4.

Cash and deposits¥6,869 million¥6,869 million

U.S.$51,442 thousand
U.S.$51,442 thousand

Matters concerning a change in equity of the Company related to transactions with non-controllingshareholders(1) Main reasons for the change in capital surplus
Additional acquisition of subsidiary shares(2) Amount of capital surplus reduced by transactions with non-controlling shareholders- 73 -

¥5,376 million (U.S.$40,258 thousand)Asset retirement obligations

XX.

This information has been omitted because of immateriality.

XXI.

Real estate leasing business

The Company and some of its consolidated subsidiaries own assets such as commercial facilities forlease and office buildings (including land) for lease in Tokyo and other regions. Net lease income fromthese assets amounted to ¥9,184 million (U.S.$68,775 thousand) and ¥6,307 million (lease income andlease cost were generally recorded as net sales and cost of sales, respectively) for the fiscal years ended
March 31, 2023 and 2022, respectively.
The book value on the consolidated balance sheets, net changes, and fair value of these assets are as
follows:
Thousands of
U.S. dollars

Millions of yen
FY2022(April 1, 2022 –March 31, 2023)

FY2021(April 1, 2021 –March 31, 2022)

FY2022(April 1, 2022 –March 31, 2023)

Book value
Beginning of year¥

Net change

397,170¥

344,843

103,446

End of year

500,617

Fair value at end of year¥

512,182$

2,974,171

52,326774,649

397,170¥3,748,821

409,458$

3,835,427

Notes: 1. The book value on the consolidated balance sheet is the amount after deduction of accumulated depreciationfrom acquisition cost.
2. The increase of book value is mainly attributable to the purchase of real estate of ¥200,716 million(U.S.$1,503,043 thousand) and ¥174,318 million, in the fiscal years ended March 31, 2023 and 2022,
respectively.
3. The fair value of properties is mainly estimated based on income approach in accordance with Real EstateAppraisal standards as of March 31, 2023. For other properties, the Company reasonably estimated the fairvalue based on income approach or market approach while the Company used their book value as the fairvalue for certain properties.

XXII. Revenue recognition
1.

Information on disaggregation of revenue from contracts with customers
FY2022 (From April 1, 2022 to March 31, 2023)
Millions of yen
Reportable segments
Lease andInstallment Sales

Financing

Other

Total

Revenue from contracts withcustomers
Revenue from sale of leased
properties¥

Provision of services, etc.

¥

3,232

Total
Other revenue
Revenues from external customers

181,659

¥

–

¥

–

¥

181,659

79

47,96851,280184,891

79

47,968232,939

426,972

26,1282,614

455,715

611,863¥- 74 -

26,208¥50,583¥

688,655

Thousands of U.S. dollars
Reportable segments
Lease andInstallment Sales

Financing

Other

Total

Revenue from contracts withcustomers
Revenue from sale of leased
properties$

Provision of services, etc.
Total
Other revenue
Revenues from external customers$

1,360,338

$

–

$

–

$

1,360,338

24,205593

359,207384,005

1,384,543

593

359,2071,744,343

3,197,334

195,664

19,5803,412,578

4,581,877$

196,257$

378,787$

5,156,921

FY2021 (From April 1, 2021 to March 31, 2022)
Millions of yen
Reportable segments
Lease andInstallment Sales

Financing

Other

Total

Revenue from contracts withcustomers
Revenue from sale of leased
properties¥

Provision of services, etc.
Total
Other revenue
Revenues from external customers

2.

118,898

¥

¥

–

¥

118,898

2,952

25

40,741

43,720121,851

25

40,741

162,618

470,334¥–

592,186

22,105¥

22,131

2,787¥

43,529495,228¥

657,847

Basic information for understanding revenue from contracts with customers
Basic information for understanding revenue from contracts with customers is described in “4. Summaryof significant accounting policies (6) Recognition of significant revenues and expenses” under “Basis ofpresentation.”- 75 -XXIII.

Segment information, etc.

Segment information
1.

Description of reportable segments
The Group’s reportable segments are components of the Group for which separate financial
information is available. These segments are subject to periodic examinations undertaken to enable
the Board of Directors of the Group to make decisions on allocating resources and to evaluate
performance.
The Group is primarily engaged in leasing and installment sales, and its operations are divided into
three reportable segments based on the major types of transactions handled, namely the Lease andInstallment Sales segment, the Financing segment, and the Other segment.
The Lease and Installment Sales segment conducts businesses including leasing of IT and officeequipment, industrial machinery, and other assets (includes the sale, etc. of off-lease assets upon lease
expiration or termination) and leasing of real estate, and sells commercial/service equipment,
production facilities, medical devices, and other assets on an installment basis. The Financing segment
is mainly engaged in operating loans, investment in marketable securities for financial income,forming tokumei-kumiai (silent partnership) arrangements, etc. The Other segment primarily engages
in environmental-related businesses, fee handling, and BPO and mobility business, etc.

2.

Explanation of measurements of sales, profit (loss), asset, liability, and other items for each reportablesegment
Measurements used in accounting for reportable segment are the same as those disclosed in “Basis ofpresentation.” Profit of reportable segment is based on operating profit. Transactions with othersegments are based on prevailing market prices.

3.

Disclosure of sales, profit (loss), asset, liability, and other items for each reportable segment
FY2022 (From April 1, 2022 to March 31, 2023)
Millions of yen
Lease andInstallment Sales

Sales
Revenues from externalcustomers
Transactions with other segments¥

Net sales

611,863

Financing

¥

Other

26,208¥

Total

50,583¥

688,655

741

3,584

2,742

7,069

612,605

29,79253,326

695,724

Segment profit¥

36,679¥18,605¥

10,106¥65,390

Segment assets¥

1,737,604¥

1,128,429¥

135,058¥

3,001,092

Other items
Depreciation
Amortization of goodwill
Investments in entities accounted
for using equity method
Increase in property, plant andequipment and intangible assets¥

40,595
49

–
324

3,138
1,246

43,734
1,619

–

–

–

–

216,032¥- 76 -

–

¥

6,244

¥

222,276

Thousands of U.S. dollars
Lease andInstallment Sales
Sales
Revenues from externalcustomers
Transactions with other segments$

4,581,877

Financing$

196,257

5,556

Net sales

Other

$

378,787

26,842

4,587,433

Total

$

20,540223,099

5,156,921
52,938399,327

5,209,859

Segment profit$

274,670$

139,324$

75,680$489,673

Segment assets$

13,011,865$

8,450,124$

1,011,373$

22,473,363

Other items
Depreciation
Amortization of goodwill
Investments in entities accounted
for using equity method
Increase in property, plant andequipment and intangible assets$

303,999
369

–
2,429

23,5009,331

327,499
12,129––––1,617,733$–$

46,762$

1,664,495

FY2021 (From April 1, 2021 to March 31, 2022)
Millions of yen
Lease andInstallment Sales
Sales
Revenues from externalcustomers
Transactions with other segments¥

Net sales

592,186

Financing

¥

Other

22,131¥

Total

43,529¥657,847

1,230

3,488

2,127

6,847

593,416

25,62045,657

664,694

Segment profit¥

32,751¥

16,523

¥

8,779

¥

58,053

Segment assets¥

1,764,861¥

967,301¥

126,186¥2,858,349

Other items
Depreciation
Amortization of goodwill
Investments in entities accounted
for using equity method
Increase in property, plant andequipment and intangible assets

4.

¥

46,175
70

–
324

3,069
1,010

49,244
1,405

–

–

–

–

220,598

¥

–

¥

4,821

¥

225,419

Description of nature of differences between amounts of reportable segments total and consolidated
financial statements
Thousands of
U.S. dollars

Millions of yen
Net sales

Reportable segments total
Eliminations
Net sales reported on the consolidated
statements of income

FY2022(April 1, 2022 –March 31, 2023)

FY2021(April 1, 2021 –March 31, 2022)

FY2022(April 1, 2022 –March 31, 2023)¥

695,724(7,069)¥664,694(6,847)$

5,209,859(52,938)¥

688,655¥

657,847$

5,156,921- 77 -

Thousands of
U.S. dollars

Millions of yen
ProfitReportable segments total
Eliminations
Corporate expenses (Note)
Operating profit reported on the consolidated
statements of income

FY2022(April 1, 2022 –March 31, 2023)

FY2021(April 1, 2021 –March 31, 2022)

FY2022(April 1, 2022 –March 31, 2023)¥

65,390(2,451)(11,377)¥

58,053(699)(11,319)$489,673(18,360)(85,202)¥51,561¥

46,034$

386,111

Note: Corporate expenses are mainly selling, general and administrative expenses that are not attributable to any reportablesegment.
Thousands of
U.S. dollars

Millions of yen
AssetsReportable segments total
Corporate assets (Note)
Total assets reported on the consolidatedbalance sheets

FY2022(April 1, 2022 –March 31, 2023)

FY2021(April 1, 2021 –March 31, 2022)

FY2022(April 1, 2022 –March 31, 2023)¥

3,001,092
148,647¥

2,858,349
91,354$22,473,363
1,113,135¥

3,149,740¥

2,949,704$

23,586,497

Note: Corporate assets include surplus funds (cash and deposits, etc.), long-term investment funds (investment securities) andassets related to administrative divisions that are not attributable to any reportable segment.
Thousands of
U.S. dollars

Millions of yen
Depreciation

Reportable segments total

FY2022(April 1, 2022 –March 31, 2023)¥

Adjustment
Amounts reported on the consolidated
financial statements

43,734FY2021(April 1, 2021 –March 31, 2022)¥

49,2442,161¥

45,895

FY2022(April 1, 2022 –March 31, 2023)
$

1,789
¥

51,034327,499
16,188$343,687

Note: Depreciation adjustments mainly represent depreciation on own-used assets.
Thousands of
U.S. dollars

Millions of yen
Amortization of goodwill

Reportable segments total

FY2022(April 1, 2022 –March 31, 2023)¥

Adjustment
Amounts reported on the consolidated
financial statements

1,619

FY2021(April 1, 2021 –March 31, 2022)
¥

1,405

–
¥

1,619

FY2022(April 1, 2022 –March 31, 2023)
$

–
¥

1,405

–
$

Reportable segments total

FY2022(April 1, 2022 –March 31, 2023)¥

Adjustment
Amounts reported on the consolidated
financial statements–

FY2021(April 1, 2021 –March 31, 2022)¥

45,804¥45,804- 78 -–FY2022(April 1, 2022 –March 31, 2023)$

42,075¥

12,129Thousands of
U.S. dollars

Millions of yen
Investments in entities accounted for using
equity method

12,12942,075–343,000$

343,000

Note: Adjustments for investments in entities accounted for using equity method mainly represent the amount of funds
invested in entities accounted for using equity method.
Thousands of
U.S. dollars

Millions of yen
Increase in property, plant and equipment andintangible assets
Reportable segments total

FY2022(April 1, 2022 –March 31, 2023)¥

Adjustment
Amounts reported on the consolidated
financial statements

222,276

FY2021(April 1, 2021 –March 31, 2022)
¥

2,676
¥

224,952

225,419

FY2022(April 1, 2022 –March 31, 2023)
$

2,179
¥

227,599

1,664,495
20,041$

1,684,536

Note: Adjustments on increase in property, plant and equipment and intangible assets mainly represent capital investment in
own-used assets.

- 79 -

Information associated with reportable segments
1.

Information for each product or service
FY2022 (From April 1, 2022 to March 31, 2023)
This information is omitted as it is identical to that in segment information.
FY2021 (From April 1, 2021 to March 31, 2022)
This information is omitted as it is identical to that in segment information.

2.

Information for each region
FY2022 (From April 1, 2022 to March 31, 2023)(1) Revenues from external customers
It is omitted since revenues from external customers in Japan exceeds 90% of net sales on the
consolidated statement of income.
(2) Property, plant and equipment
Millions of yenJapan¥673,796

North America
and Latin
America¥
28,076

EuropeIreland
¥

Asia

Other

139,830

¥

21

¥

Total
344

¥

842,070

Thousands of U.S. dollars
Japan$5,045,653

Notes:

1.
2.

North America
and Latin
America$
210,250

EuropeIreland
$

Asia

Other

1,047,106

$

162

$

Total

2,582

$

6,305,754

The figures shown are presented according to the respective countries and regions of theCompany and its consolidated subsidiaries.
The following geographic categories primarily include the respective countries and regions
shown below.
North America and Latin America: United States, Canada, Mexico
Europe: United Kingdom, Ireland
Asia: China, Taiwan, Singapore, Thailand

FY2021 (From April 1, 2021 to March 31, 2022)(1) Revenues from external customers
It is omitted since revenues from external customers in Japan exceeds 90% of net sales on the
consolidated statement of income.
(2) Property, plant and equipment
Millions of yen
Japan¥
Notes:

588,5091.
2.

North America
and Latin
America¥
21,895

EuropeIreland¥

116,431

Asia

Other
¥

27

¥

Total
121

¥

726,984

The figures shown are presented according to the respective countries and regions of theCompany and its consolidated subsidiaries.
The following geographic categories primarily include the respective countries and regions
shown below.
North America and Latin America: United States
Europe: United Kingdom, Ireland- 80 -

Asia: China, Taiwan, Singapore, Thailand

3.

Information for each of main customers

FY2022 (From April 1, 2022 to March 31, 2023)
It is omitted since among the revenues from external customers, there are no specific customers
accounting for 10% or more of net sales on the consolidated statement of income.
FY2021 (From April 1, 2021 to March 31, 2022)
It is omitted since among the revenues from external customers, there are no specific customers
accounting for 10% or more of net sales on the consolidated statement of income.

- 81 -

Disclosure of impairment losses on non-current assets for each reportable segment
FY2022 (From April 1, 2022 to March 31, 2023)
Millions of yen
Lease andInstallment Sales
Impairment losses¥–

Financing¥

Corporate/
Elimination

Other
–

¥

0

¥

Total
–

¥

0

Thousands of U.S. dollars
Lease andInstallment Sales
Impairment losses$–

Financing$

Corporate/
Elimination

Other
–

$

6

$

Total
–

$

6

FY2021 (From April 1, 2021 to March 31, 2022)
Millions of yen
Lease andInstallment Sales
Impairment losses
Note:

¥

2,048

Financing¥

Corporate/
Elimination

Other
–

¥

642

¥

Total
–

¥

2,690

The impairment losses on “Lease and Installment Sales” are recorded in cost of sales.

Amortization and unamortized balance of goodwill for each reportable segment
FY2022 (From April 1, 2022 to March 31, 2023)
Millions of yen
Lease andInstallment Sales
Balance at end of period

¥

7,631

Financing¥

4,460

Corporate/
Elimination

Other
¥

15,893

¥

Total
–

¥

27,986

Thousands of U.S. dollars
Lease andInstallment Sales
Balance at end of period
Note:

$

57,148Financing$

33,402

Corporate/
Elimination

Other
$

119,020

$

Total
–

$

209,571

The information about amortization of goodwill is omitted as it is identical to that in segment information.

FY2021 (From April 1, 2021 to March 31, 2022)
Millions of yen
Lease andInstallment Sales
Balance at end of period
Note:

¥

196

Financing¥

4,784

Corporate/
Elimination

Other
¥

16,252

¥

Total
–

¥

21,234The information about amortization of goodwill is omitted as it is identical to that in segment information.

Information about gain on bargain purchase for each reportable segment
FY2022 (From April 1, 2022 to March 31, 2023)
Not applicable
FY2021 (From April 1, 2021 to March 31, 2022)
Not applicable- 82 -

Related parties
1.

Related party transactions(1) Transactions of the company reporting the consolidated financial statements with related parties
Parent company of the company reporting the consolidated financial statements and major
shareholders (limited to companies, etc.), etc.
FY2022 (From April 1, 2022 to March 31, 2023)

Type

Name

Major
Hulic Co.,
shareholder
Ltd.

Type

Name

Major
Hulic Co.,
shareholder
Ltd.

CapitalBusiness or
Location (Millions ofoccupationyen)

Chuo-ku,Tokyo

Location

Chuo-ku,Tokyo¥111,609

Direct(Holdings)
Real estate
5.3
leasingbusiness
Direct(Held)
14.0

Capital(Thousands Business orof U.S.
occupation
dollars)$835,772

Percentage
Transactionof votingRelations
Transaction amountrightswith related
details (Millions ofholding
partiesyen)(held) (%)

Lease
transactions

Lease
payments
received

Purchase of Purchase ofoperatingoperatingassets¥67

Year-endbalance(Millionsof yen)Lease
receivables
andinvestments
in leases¥17,259

Account
title

Year-endbalance(Thousandsof U.S.
dollars)¥41,758

assetsSale ofoperatingassetsSale ofoperatingassets¥65,740

Percentage
Transactionof votingRelationsamountTransaction
rightswith related(Thousands
details
holding
partiesof U.S.
(held) (%)
dollars)

Direct(Holdings)
Real estate
5.3
leasingbusiness
Direct(Held)
14.0

Account
title

Lease
transactions

Lease
payments
received

Purchase of Purchase ofoperatingoperatingassets$508

Lease
receivables
and$129,246
investments
in leases$312,705

assetsSale ofoperatingassetsSale ofoperatingassets$492,287

Notes: 1. Lease transactions are concluded upon submission of estimates based on actual market conditions, and are subject
to the same terms and conditions as general transactions.
2. The purchase and sale of operating assets is determined based on the actual market price. The transaction amountrecords the total transaction amount that occurred in the fiscal year ended March 31, 2023.

- 83 -

FY2021 (From April 1, 2021 to March 31, 2022)
Type

Name

Major
Hulic Co.,
shareholder
Ltd.

CapitalBusiness or
Location (Millions ofoccupationyen)

Chuo-ku,Tokyo¥111,609

Percentage
Transactionof votingRelations
Transaction amountrightswith related
details (Millions ofholding
partiesyen)(held) (%)

Direct(Holdings)
Real estate
5.3
leasingbusiness
Direct(Held)
14.0

Lease
transactions

Lease
payments
received

Purchase of Purchase ofoperatingoperatingassets¥4,710Account
title

Year-endbalance(Millionsof yen)Lease
receivables
andinvestments
in leases¥63,012¥26,960

assetsSale ofoperatingassetsSale ofoperatingassets¥2,559Notes: 1. Lease transactions are concluded upon submission of estimates based on actual market conditions, and are subject
to the same terms and conditions as general transactions.
2. The purchase and sale of operating assets is determined based on the actual market price. The transaction amountrecords the total transaction amount that occurred in the fiscal year ended March 31, 2022.

(2) Transactions of consolidated subsidiaries of the company reporting the consolidated financial
statements with related parties
Parent company of the company reporting the consolidated financial statements and major
shareholders (limited to companies, etc.), etc.
FY2022 (From April 1, 2022 to March 31, 2023)
Not applicable
FY2021 (From April 1, 2021 to March 31, 2022)
Not applicable2.

Notes to parent company and significant associates(1) Parent company’s information
There is no parent company.
(2) Summary financial information for significant associates
There are no significant associates.

- 84 -

XXIV.
1.

Information on special purpose entities

Overview of special purpose entities subject to disclosure and of transactions using special purpose
entities subject to disclosure
For the diversification of funding sources and stable financing, the Company promotes securitizationof lease receivables, etc. The Company use stock companies as special purpose entities.
When performing the securitization, the Company transfers the lease receivables, etc. to special
purpose entities and receives the funds as proceeds from the transfer of the assets to the special purpose
entity through a loan, etc.
As a result of the securitization, the Company has transactions outstanding with the following special
purpose entities. The Company owns shares, etc. with voting rights of the special purpose entities andthe employees of the Company concurrently are assigned as corporate officer positions by the entities.
Thousands of
U.S. dollars

Millions of yen
As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

Three companies

Two companies

Three companies

Number of special purpose entities
Total value of assets as of the latest balance
sheet (without elimination of inter-company
transactions)¥

Total value of liabilities as of the latest
balance sheet (without elimination ofintercompany transactions)2.

21,557

21,550¥19,608$161,428

19,603

161,378

Amount of transactions, etc. with special purpose entities subject to disclosure
FY2022 (From April 1, 2022 to March 31, 2023)
Amount of majortransactions or thebalance as of the end of
the fiscal year
(Millions of yen)Transferred assets (Note 1)
Lease receivables and investments inleases¥2,817

Amount of majortransactions or thebalance as of the end of
the fiscal year
(Thousands of
U.S. dollars)
Transferred assets (Note 1)
Lease receivables and investments inleases$21,095Major gain or loss
Amount(Millions of yen)

Item

Gain on transfer(Note 2)¥

76

Major gain or loss
Amount(Thousands of
U.S. dollars)

Item

Gain on transfer(Note 2)$

Notes: 1. The amount of transactions related to transferred assets is the book value as of the time of transfer.
2. Gain on transfer related to transferred assets is presented in net sales.

- 85 -

574

FY2021 (From April 1, 2021 to March 31, 2022)
Amount of majortransactions or thebalance as of the end of
the fiscal year
(Millions of yen)Transferred assets (Note 1)
Lease receivables and investments inleases¥15,996

Major gain or loss
Amount(Millions of yen)

Item

Gain on transfer(Note 2)¥

Notes: 1. The amount of transactions related to transferred assets is the book value as of the time of transfer.
2. Gain on transfer related to transferred assets is presented in net sales.

- 86 -141

XXV.

Per share information
Yen

U.S. dollars

FY2022(April 1, 2022 –March 31, 2023)
Net assets per share¥

12,227.88

FY2021(April 1, 2021 –March 31, 2022)¥

11,121.96

FY2022(April 1, 2022 –March 31, 2023)
$

91.57

Basic earnings per share

1,299.27

1,130.52

9.73

Diluted earnings per share

1,292.42

1,123.38

9.68

Notes: 1. Treasury shares are deducted when calculating the number of common shares as of the fiscal year-end, used in
the computation of the net assets per share and includes the Company’s shares owned by the Board Benefit Trust(BBT). The number of treasury shares owned by the Board Benefit Trust (BBT) as of the fiscal year-end is149,800 shares for the fiscal year ended March 31, 2023 and 177,100 shares for the fiscal year ended March 31,
2022.
2. Treasury shares are deducted when calculating the average number of shares during the period, used in thecomputation of the basic earnings per share and includes the Company’s shares owned by the Board Benefit
Trust (BBT). The average number of treasury shares owned by the Board Benefit Trust (BBT) during the period
is 151,368 shares for the fiscal year ended March 31, 2023 and 121,150 shares for the fiscal year ended March
31, 2022.
3. Calculation basis of net assets per share is as follows.
Thousands of
U.S. dollars

Millions of yen

Total net assets

As of March 31, 2023

As of March 31, 2022

As of March 31, 2023

¥

¥

$

Amounts excluded from total net assets

409,437

374,239

42,79541,405

3,066,031
320,467

Of which, share acquisition rights

541

650

4,058

Of which, non-controlling interests

42,25340,754316,409

Net assets attributable to common shares

366,642

332,834

2,745,565

Number of common shares as of the fiscal
year-end used in the calculation of net assets
per share (thousands shares)

29,98429,92529,984

4. Calculation basis of basic earnings per share and diluted earnings per share is as follows
Thousands of
U.S. dollars

Millions of yen
FY2022(April 1, 2022 –March 31, 2023)

FY2021(April 1, 2021 –March 31, 2022)

FY2022(April 1, 2022 –March 31, 2023)

Basic earnings per share
Profit attributable to owners of parent¥

38,939¥33,886$

291,597

Amount not attributable to commonshareholders

–

–

–

Profit attributable to owners of parent
attributable to common shares

38,93933,886

291,597

Average number of shares during theperiod (thousands shares)

29,97029,97429,970

Diluted earnings per share
Adjustments to profit attributable toowners of parent
Increase in the number of common shares(thousands shares)
Residual securities that are not dilutive andnot included in the calculation of diluted
earnings per share

¥

–
158
──────

- 87 -

¥

–

$

–

190

158

──────

──────XXVI. Subsequent events
Corporate bond issuance
The Company issued straight bonds as follows:
1. Fuyo General Lease Co., Ltd., No. 36 unsecured straight bond
(1) Issue name:
Fuyo General Lease Co., Ltd., No. 36 unsecured straight bond(2) Issuance amount:¥20,000 million (U.S.$149,768 thousand)(3) Issuance date:June 7, 2023

(4) Issue price:¥100 per ¥100 of face value(5) Coupon rate:

0.270% per year(6) Redemption date:June 5, 2026

(7) Use of proceeds:

To fund capital investments

2. Fuyo General Lease Co., Ltd., No. 37 unsecured straight bond
(1) Issue name:
Fuyo General Lease Co., Ltd., No. 37 unsecured straight bond(2) Issuance amount:¥20,000 million (U.S.$149,768 thousand)(3) Issuance date:June 7, 2023

(4) Issue price:¥100 per ¥100 of face value(5) Coupon rate:

0.435% per year(6) Redemption date:June 7, 2028

(7) Use of proceeds:

To fund capital investments- 88 -