Fuyo Lease Group Integrated Report2022

Contents

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

Fuyo Lease Group’s Mission, Vision and Values

Expand business domains and promote further evolution in ourrelentless attempt to create new value, which in turn contributes torealizing a prosperous society and sustainable growth.

MissionOur
responsibilities
and raison d’etre

The group that anticipates social changes and takes on thechallenge of yet unseen issues

VisionWhat we want to become

Value
Guiding principles

T h e g ro u p t h a t i s t r u s t e d b y c u s t o m e r s a n d w o r k s
together to solve social issues
The group that grows with employees by supportingthe challenges and growth of each employee“Go Where No One Has
Gone Before.”

CONTENTS
About usManagement

01 CONTENTS

35 CSV Promotion System

03 Corporate History

37 Human Investment

05 Introduction of Fuyo Lease Group

40 Human Rights Policy

Editorial Policy

Purpose of thisReportFrom fiscal year 2018, Fuyo Lease Group has integrated its CSR Report and Annual
Report into an Integrated Report. This report is designed to provide information on our
financial and non-financial activities in an integrated manner to help our shareholders,investors, and other stakeholders assess the Group’s value comprehensively. We also
aim to showcase the foundation of all our activities for value creation which will help
stakeholders better understand our future corporate values.

About Integrated
Report 2022

The New Medium-Term Management Plan, “Fuyo Shared Value 2026,” is composed sothat it can be comprehended as a medium- to long-term growth strategy based on theconcept of CSV (creating share value between society and companies), as well as striving
to enhance descriptions of financial strategies. In addition, there is enhanced disclosure ofsustainability-related policies and systems, including disclosure of information on multiple
fronts, including investment in human resources, human rights policies and disclosure of
information based on TCFD recommendations, as well as governance-related disclosure,
such as initiatives to improve the effectiveness of the Board of Directors.

Reporting Period

Fiscal year 2021 (April 2021 - March 2022)*The report also includes some information pertaining to fiscal year 2022.

Scope of Reporting

Fuyo General Lease Co., Ltd., its 59 consolidated subsidiaries and 13 affiliatecompanies

Reference Guidelines

International Financial Reporting Standards Foundation“International Integrated Reporting Framework” (published in January 2021)

Date of Issuance

September 2022

Note on ForwardLooking Statements

This report contains forward-looking statements, such as future plans and strategies,that are based on currently available information. These expectations and projections
are subject to a number of risks and uncertainties that could cause actual results
to differ materially from those anticipated. These uncertainties include, but are notlimited to social and economic conditions, market demand and competition, laws andregulations, interest rates, and currency exchange rates.

Independent
Assurance

Fuyo General Lease Co., Ltd. has engaged KPMG AZSA Sustainability Co., Ltd. toperform assurance of selected environmental and social data in order to assure credibilityof reported figures. The data subject to the third-party assurance is indicated with .

41 DX Strategy
Fuyo Shared Value
07 Message from the President

11 Medium-Term Management Plan
15 Materiality
17 Financial and Non-Financial Highlights
CSV Highlight42	Information Disclosure Based on TCFD
Recommendations

45 Community Contribution
Corporate Governance

47 Board Members
49 Message from an Outside Director
51 Corporate Governance

19 CSV1 : Energy and Environment

56 Risk Management

21 CSV2 : Circular Economy

58 Compliance System

23 CSV3 : BPO/ICT

59 Independent Assurance Report

25 CSV4 : Mobility Business
27 CSV5 : Medical & Welfare

Financial Section / Corporate Data

29 Real Estate/Aircraft

61 Message from Senior Financial Officer

31 Business Segments Overview

63 Financial Section
125 Stock Information / Participation in Initiatives

01

Fuyo Lease Group Integrated Report 202202

Corporate History

About Us

Fuyo Lease Group History

Fuyo Shared ValueCSV Highlight

Management

Financial Section/
Corporate Data

Corporate Governance

Strategy History
2014

2016

2017

2021

2022

2026

Value Creation 300

Frontier Expansion 2021

Fuyo Shared Value 2026

Strengthening Profitability throughValue Creation for Customers

Expanding the Frontier Beyond theBoundaries of Traditional Finance Leasing

Aim to Solve Social Issues and Simultaneously Create
Economic Value through the CSV Strategy

The Fuyo Lease Group has evolved and advanced theleasing business from the standpoint of “value creation
by solving customers problems” under the key conceptsof solutions and value creation. In addition, we haveshifted to non-finance leasing by developing Strategic
Areas such as Aircraft and Real Estate to build a profitablebusiness portfolio.

Real Estate, Energy & Environment, Medical & Welfare, Aircraft andOverseas were positioned as Strategic Areas, and we concentrated
and strengthened our management resources while promoting
the expansion of new business areas such as business process
outsourcing (BPO) and Mobility through proactive M&A strategies. We
also worked to strengthen collaboration among Group companies toutilize synergies across the entire Group, which had acquired various
functions through M&A.

Under the Medium-Term Management Plan that began this fiscal year, we will focus
on the concept of CSV (Creating Shared Value), which we have emphasized up
until now, and aim to simultaneously achieve social value (solving social issues)and corporate value (economic value). By allocating management resources in linewith changes in society within our diverse business portfolio, we aim to achievesustainable and stable profit growth while solving social issues. In addition, we will
move forward on creating shared value by investing in human resources and DX andsignificantly strengthening initiatives.

2020
Made YAMATO LEASE CO., LTD.a consolidated subsidiary
Established Fuyo General Lease (Taiwan) Co., Ltd.

2021
Established a directly controlled base in Thailand Fuyo
General Lease (Thailand) Co., Ltd.

2019

2021

Made NOC Outsourcing & Consulting
Inc. a consolidated subsidiary

Made WorkVision Corporation a
consolidated subsidiary

2018

¥

Made INVOICE INC. aconsolidated subsidiary
Otemachi Building (1969)

Established Fuyo Auto Lease Co., Ltd. (1987)

Listed on the First Section of the Tokyo
Stock Exchange (2004)

billion2017

Namie Sakai Solar Power Plant 1 and 2 (Fukushima, Namie)(2020)

75.0

Made Accretive Co., Ltd.
a consolidated subsidiary¥billion2,565.9
2,555.9

2014
Made Aircraft Leasing andManagement Limited (ALM) a
consolidated subsidiary

1996
Established Fuyo Lease Sales Co., Ltd.

2,384.0
2,262.8
2,172.6

1995
Established Fuyo Network Service Co., Ltd.

1988

1,410.4
1,396.2

Listed on theFirst Section of
the Tokyo Stock
Exchange

2000

Established Fuyo
Auto Lease Co., Ltd.

Non-consolidated figures for the fiscal year ended March 2001 and earlier, consolidated
figures for the fiscal year ended March 2002 and later.

1,867.2

1,599.2
1,495.9
1,432.9
1,423.5
1,440.9
1,407.4

December

Launched building
leases1,166.3

1,135.9
1,038.1
976.8

928.3

2,047.4

1,730.5

2004

Established Fuyo General Lease (USA) Inc.

1987

Started commercial
operation of solar
power plants

Conclusion of the firstdeal of ESCO business

1994

Operating assets: Consolidated (billions of yen)
Ordinary profit (billions of yen)

2012

2006

Established Aqua Art Co., Ltd.

1,177.3

3,000.0931.2 933.1
863.6

829.1

870.3

917.8
836.4 843.9 857.3

766.4
694.8

643.5
578.3
479.1

1969

1978

Established Fuyo General
Lease Co., Ltd.

Launched aircraft leases

2.9

17.8

New Medium-Term
Management Plan

220.9

30.7 20.1 38.2 47.8

1970
Ordinary profit -0.023 0.007 -0.064 0.3

399.6
332.3

52.5 56.5 59.2

69.9

1975
0.3

-0.1

112.1 134.4
86.2 96.7

1980
0.3

1.3

1.6

2.8

0.3

1985
0.8

1.5

1.7

2.0

0.9

1990
1.9

2.2

2.5

3.1

3.3

1995
1.5

2.0

1.2

0.3

0.5

2000
-7.4

0.9

3.8

0.6

1.4

2005
4.1

4.5

5.9

9.8

16.5

2010
18.3

18.0

17.9

17.4

23.6

2015
27.1

32.1

26.4

25.4

26.5

2020
29.2

31.4

35.2

39.1

44.0

2022
48.0

2027

Fiscal years
ended March

52.7*1 Figures before listing are for reference only.
*2 Operating assets for the fiscal year ended March 1999 and earlier are calculated by totaling lease assets, installment receivables, loans, etc.
*3 Due to a change in the method of presentation in the fiscal year ended March 31, 2019, the figures after reclassification reflecting the change have been presented since the fiscal year ended March 31, 2015.

03

Fuyo Lease Group Integrated Report 2022

04

Introduction of Fuyo Lease Group

About Us

Overview of Fuyo Lease GroupThe Fuyo Lease Group is working to identify risks and opportunities presented by societal
changes and issues, and offering diverse solutions that lead to resolving them.

Fuyo Shared ValueCSV Highlight

Overview of Fuyo General Lease Co., Ltd.

Mobility
Business

Circular
EconomyEnergy &Environment

BPO/ICT

Medical &WelfareReal Estate

Aircraft

General leaseand financing

Domestic Group Companies

Management

Corporate Governance

Financial Section/
Corporate Data

Company name
Headquarters
Established
Paid-in capital
Shares listed on
Number of employees
Operation

Fuyo General Lease Co., Ltd.
Kojimachi Garden Tower, 5-1-1, Kojimachi, Chiyoda-ku, Tokyo 102-0083, JapanMay 1, 1969
¥10,532 million (Number of shares outstanding: 30,288,000 shares)
Prime Market of the Tokyo Stock Exchange (ticker: 8424)
Consolidated: 3,189/Non-consolidated: 798 (as of March 31, 2022)
Domestic: Head office sales department and 14 regional sales offices (nonconsolidated) 16 domestic group companies/11 overseas group companies
Line of business	Leasing and installment sales of IT equipment, office equipment, industrial
machinery/machine tools, commercial/service equipment, medical
devices, transportation equipment (ships, aircraft, automobiles, etc.), civilengineering and construction machinery, etc., commercial loans and otherfinancial services Leasing of real estate and consultative services, etc.

Overseas Group Companies

Fuyo Auto Lease Co., Ltd.

Sharp Finance Co., Ltd.

Fuyo General Lease (USA) Inc.

Fuyo General Lease (China) Co., Ltd.

Through auto leasing, Fuyo Auto Lease streamlines complicatedoperations relating to customers’ vehicles and provides total support
for rationalizing management.

As a good partner of sales companies, Sharp Finance offers financial
services solutions, which include leasing items for sales promotions.

Based in New York and Los Angeles, Fuyo General Lease (USA) Inc.
provides financial services to customers located in the Americas.

Based in Shanghai, Fuyo General Lease (China) Co., Ltd. offers
leases to companies expanding their businesses into China.

Accretive Co., Ltd.

INVOICE INC.

Fuyo General Lease (HK) Limited

Fuyo General Lease (Asia) Pte. Ltd.

Accretive provides highly convenient financial services, focusing
mainly on factoring busine ss for nursing care and medical
receivables.

INVOICE’s offering includes business customers combined billing
services that help reduce costs and improve productivity, andInternet services for residential buildings for individual customers.

Fuyo General Lease (HK) Limited provides financial services tocompanies expanding into East Asia except for Japan.

Fuyo General Lease (Asia) Pte. Ltd. provides financial services tocompanies expanding into Southeast Asia.

NOC Outsourcing & Consulting Inc.

YAMATO LEASE CO., LTD.

Fuyo General Lease (Taiwan) Co., Ltd.

Fuyo General Lease (Thailand) Co., Ltd.

NOC Outsourcing & Consulting offers high quality business process
outsourcing (BPO) services to customers. The Company provides
customers with support to increase their work efficiency and to
reduce costs in human resources, accounting, administrative, backoffice, and IT operations.

In addition to aiding in new and used truck leasing, procurement
and sales, the company also offers services to assist transportcompanies with management issues, including succession problems
and driver shortages.

Fuyo General Lease (Taiwan) Co., Ltd. provides financial services tocompanies expanding into Taiwan.

Fuyo General Lease (Thailand) Co., Ltd. provides financial services tocompanies expanding into Thailand.

FGL Aircraft Ireland Limited

Aircraft Leasing and Management Limited

WorkVision Corporation

FUJITA Co., Ltd.

WorkVision provides a full range of IT solutions centered on cloudservice and package service that covers planning, development andsales to operation, maintenance and other services.

FUJITA specializes in replacing medical equipment in addition tobuying and removing second-hand medical equipment. FUJITA also
assists hospitals and clinics close medical practices.

Based in Dublin, FGL Aircraft Ireland Limited offers aircraft leases toairlines in Europe and Asia.

Aircraft Leasing and Management Limited provides comprehensive
aircraf t ser vices including aircraf t lease marketing, aircraf t
management, post-lease aircraft sales, and advisory service.

Aqua Art Co., Ltd.

FGL Techno-Solutions Co., Ltd.

TDF Group Inc.

Pacific Rim Capital, Inc.

Aqua Art operates a rental business for tropical fish tanks, which
replicate the natural environment. Aquariums with tropical fish andaquatic plants are offered under a comprehensive maintenance system.

FGL Techno-Solutions Co., Ltd provides equipment sales, outsourcing
helpdesk services, kitting and construction and other technical services
in ICT-related fields.

Based in Canada, TDF Group Inc. engages in rental, leasing, andsales of pickup trucks in North America.

Pacific Rim Capital, Inc. handles operating leases for material
handling equipment in the US, Canada, Mexico, and Europe.

FGL Circular Network Co., Ltd.

PLIC Corp., Ltd.
FGL LeaseUp Business Service Co., Ltd.

FGL Circular Network engages in recycling resources by buying
and selling Fuyo Lease’s properties with expired leases and usedproperties owned by customers.

FGL LeaseUp Business Service handles the paperwork for Fuyo
Lease’s lease expiration projects on behalf of Fuyo Lease.

FGL Group Business Service Co., Ltd.

FGL Group Management Service Co., Ltd.

FGL Group Business Service handles shared services related tothe sales administration of each Fuyo Lease Group and non-life
insurance agency business.

FGL Group Management Service handles shared services related tohuman resources and administrative work for each Fuyo Lease Group.

Yokogawa Rental & Lease Corporation

Merry Biz Inc.

Yokogawa Rental & Lease Corporation offers multi-vendor rental
services for measuring instruments and IT equipment. Because it
is one of the companies with the largest stock of equipment in theindustry, it can respond quickly to the needs of customers.

Merry Biz offers professional accountants from across Japan
who handle accounting tasks remotely and online as “vir tualaccounting assistants.”

PLIC Corp. provide logistics solutions in Thailand, including forklift
rental with maintenance and automated warehousing system
implementation consultations, sales and installations.

FGL Aircraft Ireland Limited

05

Fuyo General Lease (HK) Limited

Aircraft Leasing and Management Limited
TDF Group Inc.
Pacific Rim Capital, Inc.

Fuyo General Lease (USA) Inc.

Fuyo General Lease (Thailand) Co., Ltd.
PLIC Corp., Ltd.

Fuyo General Lease (China) Co., Ltd.

Fuyo General Lease (Asia) Pte. Ltd.

Fuyo General Lease (Taiwan) Co., Ltd.

Fuyo Lease Group Integrated Report 2022

06

Message from the President

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

Top Message

In anticipation of what society will be in 10
years, we aim to achieve sustainable growthby simultaneously solving social issues andenhancing corporate value.
Review of the Previous Medium-Term
Management Plan
My name is Hiroaki Oda, and I’m honored to be appointed
president & CEO of Fuyo General Lease Co., Ltd.
The Fuyo Lease Group’s five-year Medium-term Management
Plan, Frontier Expansion 2021, marked its final year in fiscal
2021 (the fiscal year ended March 31, 2022). During this time,
we achieved all of the plan’s key management goals (ordinary
profit, return on assets (ROA), and operating assets). Notably,ordinary profit showed a high average annual growth rate ofover 10%. These results were made possible by achieving
improved ROA while also accumulating operating assets. This
achievement, in turn, reflected growth in businesses in New
Domains such as non-asset businesses like business process
outsourcing (BPO) and the Mobility Business, coupled with the
expansion of businesses focused on Strategic Areas, which
serve as our growth drivers. Moreover, I believe that the past five
years marked a period in which our full-scale launch of inorganic
strategies to maximize group synergies and CSV management
to create shared value between society and companies enabled
us to demonstrate, through our track record, that we could
achieve sustainable growth even in the financial industry, which
has traditionally been regarded as a stable, low growth sector.

MissionOur
responsibilities
and raison d’etre

Moving to a New Era by Aligning Directors’
and Employees’ Values, Judgment, andActions in the Same Direction
The Fuyo Lease Group’s corporate slogan is “Go Where No One
Has Gone Before.” The Group has consistently encouraged
employees to embrace challenges under this slogan. Thisencouragement has grown into a powerful driving force, resulting
in the Group’s impressive results. We used the launch of our new
medium-term management plan to chart a course to “Go Where
No One Has Gone Before.” In order to share with all executives
and employees, and to provide a guide for moving forward, we
have created our “Mission,” “Vision,” and “Values” as a newstatement after reviewing our past actions and experiences.
Our Vision, or in other words our description of “What wewant to become,” states that we will become a group that
anticipates social changes and takes on the challenge of yet
unseen issues; a group that is trusted by customers and works
together to solve social issues; and a group that grows with
employees by supporting the challenges and growth of each
employee. While realizing this Vision will take time, I’m confident
that if every employee combines their individual aspirations with
the Vision, we will get closer to realizing it little by little.
The new Medium-Term Management Plan, which I will
now describe, will signal the start of this Vision. Through thisplan, we will make steady strides toward realizing “what wewant to become.”

Hiroaki Oda
President & Chief Executive Officer

Expand business domains and promote further evolution in ourrelentless attempt to create new value, which in turn contributes torealizing a prosperous society and sustainable growth.

The group that anticipates social changes and takes on
the challenge of yet unseen issues

VisionWhat we want to become

Value
Guiding principles

07

The group that is trusted by customers and works
together to solve social issues
The group that grows with employees by supportingthe challenges and growth of each employee“Go Where No One Has
Gone Before.”

Fuyo Lease Group Integrated Report 2022

08

Message from the President

About Us

Fuyo Shared Value 2026 –A Medium- to Long-Term Growth Strategy
Based on CSV
Our new Medium-Term Management Plan, Fuyo Shared
Value 2026, fully embraces the Creating Shared Value (CSV)
approach, which aims to solve social issues through businesswhile also enhancing corporate value. Fuyo Shared Value 2026
is Fuyo Lease Group’s new growth strategy – one that aims toachieve sustainable profit growth through the balanced pursuitof financial goals (corporate value) and non-financial goals(social value).
In anticipation of what the world will be in 10 years, weconstantly consider what we will need to accomplish as acompany to solve social issues. We developed strategies foreach business domain using a backcasting approach that
focuses on what we will need to have accomplished five years
from now, which is at the midway point of our 10-year timeframe. We set up two fields that represent the social valuethat we should realize as we enhance our corporate value
through our businesses. The two fields are “Environment” and“Society and People.”
Environment
In the environment field, the most important issue is therealization of a decarbonized society, so massive investment,
including the development of renewable energy, is expected. In
the U.S., investments between several ¥10 trillion and ¥100
trillion are anticipated over the next 10 years, whereas in Europe
investments to double the renewable energy ratio (on a powermix basis) from its current level to 65% will be needed in 2030.

Even in Japan, the public and private sectors are expected
to invest around ¥150 trillion yen over 10 years to achievegreenhouse gas emissions targets,*1 and it is uncommon
for a single theme to drive the economy on such a vastscale. Furthermore, initiatives will be accelerated, such as thoseto store electricity in order to use renewable energy effectively
and efficiently. The Group sees this external environment as abusiness opportunity and will invest more than ¥300.0 billion in
the promotion of decarbonization over 5 years. We will advancethe renewable energy power business worldwide, increasing
our renewable energy power generation capacity by morethan 3 times the current level to 1,000 MW. Moreover, in thefield of energy management, we will work intensively on priorities
such as promoting the widespread adoption of electric vehicles(EVs) by developing package solutions that encompass
chargers and storage batteries. Naturally, we will also continue
to advance the Group’s carbon neutrality efforts (achieve carbon
neutrality and RE100*2 in 2030).
Furthermore, we will increase our efforts to realize a circularsociety in order to build a sustainable world. The Group, as
the owner of numerous lease assets, connects the forward
logistics of economic supply responsible for the production
and sale of products, and the reverse logistics of economic
collection that recycle and reuse products after they havebeen used. In collaboration with partner companies, we will
strive to realize a circular society by launching a circular
economy platform that generates economic benefits byfacilitating the circulation of resources.

Vision for Society and Companies in

2030

Backcasting

Fuyo Shared Value 2026
Achieving sustainable growth by resolving social issues through human growth and dialog while at the same time delivering economic value

Financial: Corporate Value

Simultaneously
Realize CSV

Enhancing
Corporate Value

Transformation Zone
Energy & Environment
Circular Economy
BPO/ICT
Mobility
Medical & Welfare

Non-Financial: Social Value

Growth Drivers
Solving Social Issues
Environment
Society and People

Performance Zone

Organization and structure that support sustainable value creation
Investment in human resources & DX

Fuyo Shared ValueCSV Highlight

Society and People
In the field of Society and People, addressing the shrinking
labor force and improving productivity are important themes tosociety. We always hear about problems in this area when we
speak with our customers. In fact, the COVID-19 pandemic
has altered work styles and demand for business process
outsourcing (BPO) has been increasing. Customers will needto address issues such as the so-called 2024 problem*3 in thelogistics industry. Therefore, demand for solutions to improvebusiness efficiency will only continue to increase. The Group will
promote a total solution that it has named a business processservice (BPS), which links BPO and information and communication
technology (ICT). In addition to BPO, the Group will offer
proposals for fundamentally improving business efficiency
through the replacement of whole business systems. Moreover,the Group intends to provide Environmental BPS as a service.
This service will use BPS to support companies’ decarbonization
initiatives and disclosure of related information.
In the Medical & Welfare field, one priority is that as society
continues to age, it will be absolutely critical to maintain andimprove the community healthcare system. The Group will provide
Healthcare BPS, which will combine traditional healthcare and
BPS, by offering BPO services for medical office work and bypromoting improved efficiency using ICT. The Group will support
the effective utilization of management resources by healthcare
providers to contribute to the development of a dependable
community healthcare system.
Additionally, the Group has supported the advancement ofinnovation by investing in more than 20 startups to date. In the
future, the Group will continue to collaborate with startups thatwill play a key role in solving edgy social issues.
The Group will continuously meet the expectations of society,customers, and business partners by providing solutions to theimportant social issues described above. Concurrently, these
efforts will also present the Group with major earnings
opportunities, so we have positioned these business domains
as growth drivers and will intensively allocate management
resources to each of these growth drivers.
Throughout the process of formulating the Medium-Term
Management Plan, we held many discussions with outside
directors and we gained insights from their many and varied
opinions and viewpoints. In addition, the entire Board of
Directors agreed on a shared medium- to long-term strategy
based on CSV, and non-financial indicators were developed
and adopted as evaluation criteria for directors’ performancelinked remuneration from the current fiscal year. The Group’s
directors and employees will work as one to meet both financial
and non-financial targets.

Nurture People Who Create Sustainable Valueand Foster Relationships with Customers
People are crucial to creating sustainable value. The Fuyo Lease

Partnerships

Customers

09

Management

Corporate Governance

Financial Section/
Corporate Data

Group is a non-manufacturing business, so it doesn’t necessarily
possess cutting-edge technologies or game-changing products.
The main thrust of its value creation process is for employees tolisten carefully to customers and obtain hints from such dialog,
identify customers’ true needs, and then create and provide
solutions. It is crucial that employees ensure that the first instanceof value creation builds the relationship with the customer andearns their trust, and thus leads to the next instance of value
creation, thereby generating a positive cycle. By repeating thisprocess, the customer relationship will evolve into an evenstronger partnership.
To make this happen, we will focus on investment in humanresources and work in earnest to support the growth of
employees. We will provide as many opportunities as possible
for training so that employees can identify and solve the issues
they need to overcome to attain personal growth. To do so, theCompany will prepare the necessary training program andcreate a framework that facilitates participation in the training.
The sub-heading of our Medium-Term Management Plan
contains the phrase “through human growth and dialog.” In
keeping with this phrase, we will support human growth,
while further deepening our customer relationships throughdialog with customers. Through these efforts, we will strive tocreate sustainable value.
Another key is digital transformation (DX). DX is mosteffective when it visualizes issues and harnesses data. We will
strive to raise the sophistication of business processes using
digital technologies to rapidly propose solutions that better fit
customer needs. We will supply valuable solutions that combine
the capabilities of people and DX, with a view to fosteringstrong relationships with customers.

Towards Achieving Sustainable Corporate
GrowthIn these times of major upheaval, we have not only seen theemergence of the COVID-19 pandemic and geopolitical risks,
but we could also experience events that are even more
unexpected in the near future. The path to realizing our vision
for “what we want to become” is by no means smooth andstraight. It is essential that we constantly overcome newproblems that will arise along the way by constantly formulating
hypotheses, taking action and verifying those actions, as we
continually anticipate social changes and refine our problemsolving skills. The Fuyo Lease Group is determined to ceaselessly
come up with ways to deliver value, with a view to creating aneven better society. Through these efforts, we aim to achievesustainable growth as an enterprise, and we will constantly
enhance our capabilities so that we can serve society as areliable and trusted partner.
Looking ahead, we will continue to ambitiously expand new
business domains and create value as we endeavor to realizea prosperous society and sustainable growth.

*1 To achieve carbon neutrality by 2050, the Japanese government announced in April 2021 a target for a 46% reduction in greenhouse gas emissions by fiscal 2030 (compared to fiscal 2013).
*2 RE100 is an abbreviation comprised of the initial letters of “Renewable Energy 100%.” It is an international corporate partnership whose members intend to procure all of the electricity they need for theirbusiness operations from renewable sources.
The Company joined in 2018 and aims to achieve RE100 and become carbon neutral by 2030 for the Group.
*3 The 2024 problem refers to a wide range of issues that are expected to arise in the logistics industry when work style reform laws, such as regulations limiting overtime work, go into effect. Transportationcompanies will need to limit truck drivers’ extended overtime hours and implement measures to improve productivity by improving business processes even more than before.

Fuyo Lease Group Integrated Report 2022

10Medium-Term Management Plan

Overview ofFuyo Shared Value 2026
Our new medium-term management plan Fuyo Shared Value 2026 was formulated based on our coremanagement principle of Creating Shared Value (CSV) and takes an approach that weighs financial (corporate
value) and non-financial (social value) equally. Under the plan, we will pursue sustainable growth as a corporategroup by resolving social issues while at the same time delivering economic value.

New Medium-termManagement Plan Vision

Financial goals

Corporate value

Fuyo Shared Value

About Us

Fuyo Shared Value 2026
Achieving sustainable growth by resolving social issues through human growthand dialog while at the same time delivering economic value

Business domains (growth drivers)Non-financial goals

Social value

Environment

Enhancing corporate value

RT

Sustainable profit growthBalanced business bases
Improved financial health
Maintaining of capital efficiency
Stable shareholder returns

Rising Transformation
Mobility, Circular Economy

AT

Accelerating Transformation
Energy & Environment, BPO/ICT,
Medical & WelfareGP

Growing Performance
Real Estate, Aircraft ontribution to the realization of aC
decarbonized society
Contribution to the realization of a circular society

Society and People
 ringing of wellbeing and convenience to social life
B
Creating new value creation timeDelivery of reassurance through ensured healthand welfare

CSV Highlight

Strategy Formulation
To encourage a major transformation of our business portfolio,
we formulated our five-year medium-term management planusing a backcasting approach in which we envisioned how
we want the Group to be in 10 years’ time and then worked
out what needs to be done to achieve this, while also
considering significant paradigm shifts, such as businesstrends and changes in customer behaviors.
For each individual business, we used current businessstrategy as a base and analyzed what would give each businessan advantage over competitors in the business environmentsof five years’ time and 10 years’ time. We then factored in a
CSV perspective to create the outline of a strategy.
Growth Drivers
Based on a zone management approach under which wehave divided our business areas into four zones, we carriedout a comprehensive evaluation that took into account factors
such as the growth potential and profitability of eachbusiness, and the Group’s strengths. Based on the results,
we selected seven business areas out of the Group’s multiple
business areas and organized them into three types of growth
driver. We plan to intensively invest management resources inbusiness areas where market growth and the creation of new

Management

Corporate Governance

Financial Section/
Corporate Datamarkets is expected, and thoroughly differentiate andr a t i o n a l i z e i n m a t u re b u s i n e s s a re a s w h e re m a r k e t
c ompe t it ion is fie rc e . This s hift in the allocation ofmanagement resources will advance business diversification
as we transition to a revenue structure that resembles amountain range with multiple peaks under a free andunrestricted management environment.
At the same time, under our CSV approach in which we work
to solve social issues through our business, we haveconnected each of the seven business areas to the domains of“Environment,” in which it will aim to contribute to realizing asustainable global environment, and “Society and People,” inwhich it will aim to contribute to realizing a prosperous society
and a healthy life for all people. In this way, we will advance avariety of initiatives that create both social and economic value.
Structures that Support Sustainable Value Creation
We will support sustainable value creation through ahuman resources strategy that strengthens thedevelopment of high added value human resources who
can undertake the diversification and advancement ofbusiness areas to drive sustainable growth and a DX
s t r a t e g y t h a t e ff e c t i v e l y u s e s d i g i t a l t e c h n o l o g y t ocontinually adapt to changes in the external environment.

Management Goals
Transformation
Intensive investment ofmanagement resources

Actively invest management
resources to accelerate businessexpansion and profit generation

Drivers (i)Drivers (ii)

Rising
RT
Transformation

Drivers (iii)

Accelerating
AT
Transformation

GP Growing Performance

Energy &Environment

Real Estate

P19

Circular Economy

P21

P27

P30

General Leasingand Financing

1¥52.7 billion

FY2026 Target¥

75.0 billion*A general term used to refer to planning and administrative divisions, sales
administration department, etc.

Productivity

Improve added value from middle- andback-office departments and adapt to achanging business landscape

Organizational and structural support for sustainable value creation

DX

Provision of advanced services,business process streamlining
P41

Ratio of ordinary profit
to operating assets

Shareholders’equity ratio

ROE

2.06%

11.3%

10.6%

2.5%
13 15%-

10% or more

*1 We have set an interim goal for ordinary profit in FY 2024 of ¥64.0 to 66.0 billion.

11

Circularsociety

Extensively explore potential markets
that may boom in the future, as well as
potential issues for our customers

ROA

Environment

Human resources, digital transformation (DX),Group governance, etc.

Smart cities, energy management (VPP),
alternative fuels (SAF), recurring business, etc.

Strategic human resources development
Diversity and inclusion,
health and productivity management
P37

FY2021 Result

Corporate Department*

New domains

Investment
in human
resources

Item

Ordinary profit*(such as investment in R&D-focused start-up companies)

Incubation

Non-financial goals (excerpts)

Decarbonizedsociety

Fuyo
Shared Value

2026

Key
concepts

For financial goals, we will aim for sustainable profit growth by further enhancing profitability, and we will respond todiversifying risks by improving financial health and by maintaining and improving capital efficiency.
For non-financial goals, we have set targets focused on initiatives related to “Environment” and “Society and People,” which
are domains that are closely linked to the Group’s business areas, in order to enhance corporate value by solving social issues.
For all non-financial goals, please see the Materiality pages (p.15-16).

Financial Goals

Aircraft

P23
Medical& WelfareP25

We have set financial and non-financial goals for fiscal 2026 to balance the realization of corporate and social value.

P29

BPO/ICT

Mobility

Maintain and improve profitability
through differentiation andrationalization

Performance

Item

FY2026 Target

Contribution to CO2 reduction

500,000 t-CO2

Amount invested in promoting decarbonization(sum total for five years)¥300.0 billion

Renewable energy power generation capacity*

1,000 MW

Percentage of Group vehicles that are EVs or
FCVs (percentage held by Fuyo Auto Lease)30%

Percentage of returned PCs that are reusedor recycled

100%

Percentage of materials/chemicals containedin waste plastics (from returned items) thatare recycled100%

Society and Work hours saved by our customers(creation of new value creation time throughpeopleBPO/ICT services)
Investment
in human
resources

2

1 million hours(compared to FY2021)

Human resources development-related expenses
300%(non-consolidated)(compared to FY2021)*2 Applicable investments made in the Renewable Energy Generation Business, project financing,etc. (power generation capacity is calculated based on ownership ratio or share)

Fuyo Lease Group Integrated Report 2022

12

Medium-Term Management Plan

Fuyo Shared Value

About Us

CSV Highlight

Corporate value

Solving Important Social Issues and Establishing Organizationaland Structural Support for Sustainable Value Creation
Percentage of ordinary profit
derived from each growth driver
FY2021 FY2026 (planned)

RT

Mobility

Circular Economy

6%

Rising Transformation

Strategic growth enabled by capturing
tectonic social changes
AT

BPO/ICT

Energy & Environment

Real Estate

Environment

We will contribute to the realization of a sustainable global environment by addressing theurgent international issues of realizing a decarbonized society and realizing a circular society
as key issues.

Society and Peoplei)	We will bring wellbeing and convenience to social life by maintaining social infrastructuresuch as real estate and transportation.
ii)	We will create new value creation time by providing services that can make operations
more efficient in areas such as BPO/ICT.
iii)	We will deliver reassurance by ensuring health and welfare through solutions that resolve
the management issues faced by medical welfare providers. By tackling this as a key
issue, we will contribute to the sustainable realization of a prosperous society and ahealthy life for all people.

Organizational andstructural support forsustainable value creation

We will encourage employees to keep taking on challenges and growing by advancing
efforts addressing the key issues of investment in human resources, diversity andinclusion, health and productivity management, and ensuring work-life balances.

Medical & Welfare

Accelerating Transformation
Accelerated growth enabled by capturingmarket trends
GP9%

We will address social issues that are considered a priority under our CSV approach (creating corporate value by solvingsocial issues through our business) and issues concerning the establishment of organizational and structural support forsustainable value creation.

Aircraft

Growing Performance
Stable growth in core areas

13%

24%

41%

40%

Realizing a prosperous society andcontributing to sustainable growth

Investing Management Resources in Growth Drivers
Operating lease rate** T he percentage of leased
assets (which constitute partof operating assets) that are
categorized as operating leases

RT

Mobility,
Circular Economy

AT

Energy & Environment,
BPO/ICT,
Medical & Welfare

GP

50%

40%

5-yearcumulative
investment in ¥3 trillion level
ROA 2.5%
growth areas
Approx.
¥2.5 trillion
ROA 2.06%¥ trillion¥700.0 billion

1¥400.0 billion
ROA approx. 2.5%

Improvement inboth ROA andasset balance¥100.0 billion¥1.3 trillion

Further
improvement
in ROA

Decrease in asset
balance andimprovement
in ROA

Real Estate, Aircraft¥1.1 trillion
ROA
approx. 2.0%

General Leasingand Financing¥1.0trillion
ROA
approx. 1.9%

¥0.9 trillion

FY2021 (results)

FY2026 (planned)

In the RT and AT areas, where we are aiming for dramatic profit
growth, we will invest a total of around ¥1 trillion over five years,
primarily in Energy & Environment and Mobility. We will raise
ROA while at the same time doubling the balance of operating
assets from around ¥400 billion to ¥800 billion.
In core areas, including the GP area, we will further improve
profitability by advancing differentiation and rationalization.
In addition to existing business areas, we will also expand
into new businesses. This will enable us to handle even more
operating leases and raise the percentage of operating leases
within our leased assets.

Expand business domains and promote further evolution in our relentless attempt to create new value
Anticipate social changes and take on the challenge of yet unseen social issues.

Environment

Society and people

Contribute to the realizationof a sustainable global
environment

Contribute to the sustainablerealization of a prosperous society
and a healthy life for all people

Contribute to the realizationof a decarbonized society

500,000

Transitioning to a Mountain Range Revenue Structure

Zero disposal
Recycling of waste plastics
from returned items*

Circular Economy

Drivers (ii)
Accelerating
Transformation

13%

Ordinary
profit¥75.0
billionOrdinary
profit¥52.7
billion40%
FY2021 (results)

FY2026 (planned)

1 million

Real Estate

BPO/ICT

Medical & Welfare

Aircraft

27%

40%

Creation ofhours

Provide solutions that
resolve customers’
m a n a g e m e n t
issues to deliver
reassurance throughensured health andwelfareMobility

9%
6%

100%

Provide services thatdeliver new value
creation time

Energy & Environment

Mobility, Circular Economy

General Leasing and Financing

of returned items

Provide social
i n f r a s t r u c t u re t h a tbrings wellbeing
and convenience tosocial life

Mobility

Drivers (i)Rising Transformation

41%

13

Contribute to the realizationof a circular society

Contribute to at-CO2 emissions reduction
Carbon neutrality in 2030

We will actively develop businesses in the business areasthat we have positioned as growth drivers to further advance“non-finance leasing” and “non-financial services” efforts.
This bold shift in management resource allocation will
facilitate a transition to a revenue structure that resembles amountain range with multiple peaks, comprising a diverse
portfolio of businesses.

Financial Section/
Corporate Data

Social value

Three Growth Drivers

Operating Asset Composition

Corporate GovernanceNonfinancial
Goals

Financial
Goals

We have established three growth driver areas. Each of theseareas is defined in the chart to the right.
Mobility and Circular Economy have been positioned in
the RT area and Energy & Environment, BPO/ICT, andMedical & Welfare have been positioned in the AT area.
These are areas where market growth and the creation of
new markets is anticipated, so we will intensively invest
management resources in these two areas with the aim ofrealizing dramatic growth in profits.
Real Estate and Aircraft have been positioned in the GP area,
where we are aiming for stable growth in core areas. We will
maintain and improve profitability through differentiation, even
within fiercely competitive market environments.

Management

Venture investment and incubation

Energy & Environment,
BPO/ICT, Medical & Welfare
24%

Drivers (iii)
Growing
Performance
Real Estate, Aircraft

Partnership

Structures that support sustainable value creation

Gain the trust of customers and work together
with them to create value

Encourage employees to keep taking on challenges andgrowing so that the Group can grow together with employees*Material and Chemical Recycling

Fuyo Lease Group Integrated Report 2022

14

Materiality

Fuyo Shared Value

About Us

CSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

Materiality
We used the launch of our new medium-term management plan Fuyo Shared Value 2026 as an opportunity
to redefine our material issues, which are important issues to be addressed to create social value throughour business.
Important issues
to be addressed up to 2026

Material Issue Definition Process
STEP

1

STEP

2

STEP

Considering important issues

Deciding on non-financial KPI

Based on our CSV approach, we discussed
and determined a vision of how we wanteach business area in each domain to be in
2030, taking into account what the world
will be in 10 years’ time.

We then backcasted from our vision of 2030
to identify the greatest social value creationneeds and determine whether there were any
areas in which the Group can create business
opportunities by responding to these needs.
This enabled us to define the important issues(material issues) to be addressed throughFuyo Shared Value 2026.

After determining specific material issues,
workplaces and members of upper
management discussed which non-financial
KPI are the most appropriate for monitoring
progress on addressing them. The Board of
Directors then decided which KPI will be used.

Environment

2022

Contribute to the realization of a decarbonized society
and circular economy
Innovate mobility and respond to the aging of society
Advance digital transformation (DX)

Non-Financial KPI

FY2026 Targets

Contribution to CO2 emissions reduction

500,000 t-CO

1,000MW30%

Society and people
Creation of new value creation time
Value creation through partnerships
Strategic human resources
development

Diversity and inclusion
Organizational andstructural support
for sustainable value
creation
Health and productivity management,
work-life balance

10.0 billion over five years

Total of ¥Relevant SDGs

The estimated reduction in CO2 emissions achieved through the provision of facilities and services
that contribute to decarbonization.
The total of capital expenditure related to the provision of facilities and services that contributeto decarbonization as well as investment in and loans to businesses that contribute todecarbonization, etc.
FY2021 result was 318 MW.
Percentage owned by Fuyo Auto Lease.
The cumulative result for FY2019-2021 was ¥6,460 million.
¥10.0 billion is a cumulative target for the five-year period from FY2022-2026.

Percentage of returned items that are reused or recycled

100%

FY2021 results were 100% for PCs and 95% for other items. Under the new medium-term
management plan, the target covers all returned items.

Percentage of materials/chemicals contained in waste plastics (fromreturned items) that are recycled*3

100%

Excludes thermal recovery* 4. The percentage of Material and chemical recycling* 3 that willcontribute to a reduction in CO2 emissions or resource recycling.

Number of new rooms provided at elderly care homes
Delivery of reassurance by ensuring
health and welfare

2

300.0 billion over five years

Percentage of Group vehicles that are EVs or FCVs

Contribution to the realization of acircular society

Supplemental

Total of ¥Renewable energy generation capacity*1

Amount of financing handled for the promotion of decarbonization*2

Total of1,000 rooms over five years

The number of rooms created through building leases for elderly care homes.

56.0 billion

The balance of operating assets for financing related to FPS Medical (factoring for medical andnursing care receivables by Accretive) and business succession. The FY2021 balance related to
FPS Medical was ¥23.3 billion.

Work hours saved by our customers+1 million hours compared to FY2021

In FY2021, we provided BPO services to 20,134 companies.
Under the new medium-term management plan, hours saved at customer companies through theprovision of services will count toward the target.

Investment in venture companies that have technologies and services
that will create new social value

No quantitative target

Investment in start-up companies that are working to solve social issues, primarily in businessareas positioned as growth drivers.

Human resource development-related expenses (non-consolidated)

300% compared to FY2021

Percentage of female employees in management positions(non-consolidated)

35%

FY2021 result was 29.5%.

Percentage of eligible male employees who have taken childcare leave(non-consolidated)

100%

FY2021 result was 110%.

Percentage of employees aged 35 or over
who have had a health examination (non-consolidated)

100%

FY2021 result was 86%.

Rate of taking annual paid leave (non-consolidated)

90%

FY2021 result was 82.3%.

Rate of taking the +Friday system (non-consolidated)

No quantitative target

A system enabling employees to select one Friday of each month to work only a half day.

Percentage of improvement in engagement indicators (consolidated)*5

No quantitative target

In FY2021, the percentage of employee satisfaction toward work*5 was 85.9%.

Management support-related financing in medical and welfare markets*1 Covers investments made in the Renewable Energy Generation Business, project financing, etc. (power generation capacity is calculated based on ownership ratio or share)*2 Covers the Fuyo Zero Carbon City Support Program and the Fuyo 100% Renewable Electricity Declaration Support Program*3 Material recycling: Waste that is reused as a raw material. Chemical recycling: Used resources that have their compositions altered through chemical reactions and are then recycled.
*4 The recovery and reuse of thermal energy generated by burning waste.
*5 Percentage of employees who rated at least one out of six job satisfaction questions as four or above (on a scale of one to five) in the Employee Satisfaction Survey

15

Realize a prosperous society andcontribute to sustainable growth(Individual themes are explained in the sections on CSV1-5)

Amount invested in promoting decarbonization
Contribution to the realization of adecarbonized society

Materiality

3

Determining a vision for 2030

Creating Social Value Through the Execution of Business (Materiality)

Vision for
2030

2026

¥

FY2021 result was ¥74.0 million.

To see fiscal 2021 materiality and KPI results and targets, please visit our website.

Fuyo Lease Group Integrated Report 2022

16

Financial and Non-Financial Highlights

Financial Highlights
Ordinary profit / Profit attributable to owners of parent

Figures in () are results under the previous accounting standard

657.8 billion-11.1% year on year

Ordinary profit¥(¥798.8 billion +7.9% year on year)

52.7 billion

Installment sales

LeasesFinancing and other

60.0

798.8

618.1

590.3
30.0
49.1

198.5

200.0

479.6

494.6

(t-CO2)

11.00

2,500

CO2 emissions (Scope 1) (left axis)
CO2 emissions*3 (Scope 2) (left axis)(t-CO2/100 millions of yen)
CO2 emission intensity (right axis)

0.5

2,043

2,000
0.36

0.29
1,197

2020/32022/32021/3(FY)

Although the value of net sales decreased due to the application of therevised Accounting Standard for Revenue Recognition and associatedguidance, the application of said standard has not affected actual
revenues. Additionally, the amount of net sales recognized under theprevious accounting standard was ¥798.8 billion (up 7.9% year onyear), primarily due to growth in strategic areas.

2018/3

2019/32020/32021/32022/3

0.1

The revised Accounting Standard for Revenue Recognition and associated guidance has been
applied from the start of fiscal 2021 and the net sales for fiscal 2021 shown here is the figure after
the application of said standard.

Operating assets/ROA

Annual dividend/Payout ratio¥

ROA

Annual dividend

2,565.9 billion

2.06%(+0.4% year on year)(+0.12 points from the end of previous FY)

Leases (left axis)
Installment sales (left axis)
Financing and other (left axis)
ROA (right axis)(Billions of yen)

3,000.0

¥
(yen)

2.5

300

688

603

2019/32020/32021/32022/32,400.0
2,172.6
1,800.0

1.67%
583.1
115.1

2,384.01.94%
2,262.81.90%

1.76%

602.0
96.0

691.9
78.4

2,565.9808.3

240*1 Scope 1: Direct emissions from the use of fuel for company vehicles, natural gas, etc. Scope 2:
Indirect emissions from the use of purchased electricity, etc.
*2 Covers Fuyo General Lease and consolidated subsidiaries (To see all companies covered,please refer to footnote 5 on p.44)*3 Up to fiscal 2020, Scope 2 emissions were calculated based on standard emission factors,
but from fiscal 2021 onward, they are calculated based on emissions factors after adjustment.
Results for past years have been revised accordingly.

23.5%
20.1%

1.5

(%)

Payout ratio (right axis)

30.0(Employees)

Percentage of female employees
in management positions

29.5%

150

(%)

50

240

120

18.0

90

40

113

180

205
188

30
79

12.0

120

29.5

27.5

60

20
21.1

600.0

1,474.4

1,564.8

1,613.6

1,713.3

1,691.6

0.5

6.0

60

30

36

32

10

11.5

9.9

0

0
2018/3

2019/32020/32021/32022/3(FY)

The balance of operating assets was ¥2,565.9 billion (up 0.4% year
on year) and ROA was 2.06% (up 0.12 points from the end of previous
fiscal year) due to the accumulation of operating assets, particularly
in strategic areas, and the advancement of asset controls that takeprofitability into account. The results for both operating assets and
ROA surpassed the targets of the previous medium-term management
plan (¥2,500.0 billion for operating assets and 2.0% for ROA).

17

40,00000
2018/3

2019/32020/300
2018/3

2019/32020/32021/32022/3(FY)

The Fuyo Lease Group has a basic policy of working to distributeprofits to shareholders by continuing to pay stable dividends overthe long term. The annual dividend for fiscal 2021 was ¥285. This
continues the trend of dividend increases every year since thecompany went public in 2004. The payout ratio also increased for aseventh consecutive year, reaching a record high of 25.2%.

002018/3

2019/32020/3*1,* 2

2021/3* 2

2022/32021/32022/3(FY)

The renewable energy business is making steady progress. In fiscal
2021, in Japan, we expanded efforts focused on solar and wind powerin particular, as well as hydro, biomass, and thermal power generation,and overseas, we joined a solar power generation business in the U.S.
Total output was 318 MW.
* Figure covers Group businesses and partner businesses adjusted in accordance with equity
investment share

82.3%

(%)

60

68.0

68.4

66.3*

2018/3

2019/32020/3

72.0

82.3

40

130

25.2% 24.0

146

1.0

48,258100

Number of female employees in management positions (left axis)
Percentage of female employees in management positions (right axis)

66.1

1,200.0

149

Rate of taking annual paid leave (non-consolidated)

22.3%

2.06%

759.0
83.5

2.0

100

111

80,00085,57769,514(FY)

In fiscal 2021, we reduced CO2 emissions using non-fossil fuel energy
certificates received for generating solar electricity and by switching to
renewable energy for our head office building, which also houses ourGroup companies. CO2 emission intensity also continued to decrease.

130

120,000

584

285

2,555.9

160,000229

0
2018/3

Number of female employees inmanagement positions

25.2%

Annual dividend (left axis)

153,442

283

80

(%)

2

(t-CO2)318

300

Number and percentage of female employees
in management positions (non-consolidated)

Payout ratio

285

707

0

(FY)

Ordinary profit was ¥52.7 billion (up 9.8% year on year) and profit
attributable to owners of parent was ¥33.9 billion (up 14.6% year onyear). This represents another consecutive year of record highs forboth types of profit and ordinary profit also surpassed the target of theprevious medium-term management plan (¥50.0 billion). Contributing
factors included growth in gross profit before interest expenses due tobusiness expansion in strategic areas and increases in non-operating
income items such as the share of profit of entities accounted for using
equity method.

Operating assets

400

Green energy supply (output) (left axis)
Reduction in CO2 emissions due to renewable energy power
generation (estimated) (right axis)

0.22 0.2500

002019/3

(MW)

200

1,414
872

770

2018/3

153,442 t-CO

0.3

1,455

0.28

1,283

1,000
2.75

0.4

2,016

1,971

1,904
0.36

1,273

5.50

26.2

15.0

0

318 MW*

2

1,500

21.9

558.6

500.1

(%)

8.25

29.6
25.5

Reduction in CO2 emissions(estimated)

147,574

33.9

30.0

511.2

2

39.1
35.2

400.0

Renewable energy power
generation capacity (output)

52.7

44.0

41.6

34.2

CO2 emission intensity

10.2%

9.7%

48.0

45.0

33.6

100.4
38.2

9.2%

657.8
183.5

Financial Section/
Corporate Data

Corporate Governance

Renewable energy power generation capacity (output) /reduction in CO2 emissions (estimated)

1,455 t-CO 0.22 t-CO / 100 millions of yen(+14.6% year on year)

10.0%

65.7

CO2 emissions (Scope 1, 2)

33.9 billion
10.6%

740.3

712.3

¥

Ordinary profit (left axis)
Profit attributable to owners of parent (left axis)
ROE (right axis)(Billions of yen)

800.0

600.0

Management

CO2 emissions (Scope 1, 2)*1*2 /CO2 emission intensity

Profit attributable to owners of parent(+9.8% year on year)

Net sales recognized under theprevious accounting standard(Billions of yen)

CSV Highlight

Non-Financial Highlights

Net sales¥

Fuyo Shared Value

About Us(FY)

We have positioned empowering women in the workplace as animportant management issue and in fiscal 2021, we advanced
initiatives to enable women to fully demonstrate their capabilities, suchas informal exchanges with executives.
*1 Regarding the result for fiscal 2019, we revised human resources systems in July 2019.
This included reclassifying senior leaders (a position equivalent to the position of section
chief) as managers. As a result, the number and percentage of female employees inmanagement positions increased year on year.
*2 Until Integrated Report 2021, the results for fiscal 2019 and 2020 included reemployed workers,
but in this year's report, the figures do not include reemployed workers.

2002021/32022/3(FY)

We aim to provide workplaces that take employees’ health andlifestyles into account and that can accommodate diverse work styles
and we are working to make improvements that will facilitate more
efficient and productive ways of working.
* Due to restrictions on the number of employees coming to work accompanying the spreadof COVID-19, actual data on paid leave for eight Fuyo General Lease (USA) Inc. employees
is not included.

Employee satisfaction survey (consolidated)
Implemented in August 2021

Percentage of employees who felt
satisfaction in their work*

85.9%* P ercentage of employees who rated at least one out of six job satisfaction questions asfour or above (on a scale of one to five) in the Employee Satisfaction Survey

Fuyo Lease Group Integrated Report 2022

18

CSV1: Energy and Environment

About Us

CSV

1

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

TOPICS

Energy & Environment
Left to right

Helping to Achieve a
Decarbonized Society by
Resolving Social Issues throughthe Energy & Environment
Business

Yasushi Sekihara, General Manager of Renewable Energy Business Division
Hideki Oka, General Manager of Energy & Environment Business Division

TOPIC

1

At the end of May 2022, the Company became involved in an
offshore wind power generation project in the United
Kingdom for the first time through investment in the “Equitix
MA 21 LP” investment fund targeting offshore wind farmprojects in the United Kingdom.
Our participation in the UK offshore wind power generation
business through investment in the fund enables us to gain
expertise in terms of the latest industry trends and theoffshore wind power generation business in the United
Kingdom. This in turn makes it possible for us to help bringabout development of the energy industry, which is likely toManaging Executive Officer

Miki Sasaki

Growth Strategies

2030
Goals

Fuyo
Shared Value

2026

Participating in Offshore Wind Power Generation Project Overseas erve as a global company that helps give rise to a decarbonized societyS
by engaging in energy-related business domestically and overseas erve as a frontrunner that contributes to resolving environmental issues
Sin breaking ground in the new Energy & Environment business domain

We seek to help resolve social issues and contribute to decarbonization with respect tosociety overall and our customers by actively promoting energy conservation, renewableenergy, and newly created forms of energy going forward.

encounter major changes going forward, and contribute toachieving a decarbonized society.

TOPIC

2

Participating in Large Power Grid Storage Battery Project Overseas

The Company has taken part in a project involving large
storage batteries for an approximately 100 MW power gridin the United Kingdom, led by Nippon Koei Energy Europe
B.V., a wholly owned subsidiary of Japan’s largest general
construction consultancy Nippon Koei Co., Ltd.
The project will contribute to power grid stabilization by
providing the power grid operator with power grid stabilization
services using storage batteries in connecting to the powertransmission and distribution network operated by National Grid,a major power transmission company in the United Kingdom.
In addition to investing in the project, the Company will

engage in financing as a senior lender, which will involve arranging
project finance using the operating revenue generated by thelarge power grid storage battery project as the source of
repayment. This constitutes the first time the Company has
ever taken part in a large storage battery project.
In Japan as well, we will engage in initiatives looking toward
the successively expanding supply-demand adjustment market
as we continue to extend our business domain in conjunction
with our alliance partners, drawing on knowledge we gain
through our participation in the project under the leadershipof Nippon Koei, which has an extensive track record.

TOPIC

Fuyo Shared Value 2026 Strategies for Achieving Our Goals

19

01

02

03

¥300.0 billion investment inpromoting decarbonization

Expansion of renewableenergy supply

Challenges in new domains

We aim to invest a cumulative total of¥300.0 billion over the five years of themedium-term management plan in the
Energy & Environment domain in helping toachieve a decarbonized society particularly
with respect to renewable energy andenergy conservation.

We will strive to expand the supply of
renewable energy available to society bypromoting renewable energy development
and renewable energy generation businesson a global scale through coordination
with strategic partners both in Japanand overseas. In so doing, we aim tocontribute to climate change initiatives
targeting 1,000 MW of renewable energy
power generation capacity.

We will take on challenges enlisting our
new business model geared to seeking
expansion and creation amid structuraltransformation in the energy industry.
This will involve initiatives that include
developing the storage battery businessand participating in the supply-demand
adjustment market.

3

Facilitating Decarbonization of Companies and Other Organizations in the Zero Carbon City

In 2020, we launched the “Fuyo Zero Carbon City Support
Program” to facilitate decarbonization efforts of municipalities
that serve as zero-carbon cities in having declared their intent
to achieve “net zero CO2 emissions by 2050.” Thus far, ourzero carbon city support program has been used by customers
representing more than 250 organizations located in 31
prefectures and other municipalities throughout Japan.
We have been making use of green bonds and other sourcesof funds raised by the Company to provide financial support tocustomers who are introducing properties that contribute to
renewable energy and energy conservation. Moreover, we havebeen taking a multifaceted approach to addressing climatechange also by contributing the equivalent of 0.2% the value ofcontracts jointly with our customers to public interest incorporated
foundations, NPOs, and other such entities.
Green Bonds
Zero Carbon City
Declaration

Municipalities

Financial support for
decarbonization

Companies

Fuyo Lease Group Integrated Report 2022

20

CSV2 : Circular Economy

About Us

CSV

2

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

TOPICS

Circular Economy
Left to rightYasushi Mizuta, Executive Officer and General Manager of Circular Economy Promotion Division

Contributing to Society asa Whole by Becoming a
Circular Economy Platformer
Managing Executive Officer

Hiroaki Ando

Growth Strategies
 erve as a Circular Economy infrastructure companies that transcends theSleasing business2030

 ontribute to achievement of Japan as a recycling-oriented nation throughC
our Circular Economy business

Goals

Fuyo
Shared Value

2026

We believe that “the leasing business connects the forward logistics and reverse logistics
value chains of resources and is a core domain for the realization of the circular economy.”
Given that the notion of achieving a circular economy approach hinges on building various
networks, we create opportunities for customers to readily take part in resource recycling
through our leasing network. We seek to engage in Creating Shared Value (CSV) businesspractices by creating new value through a circular economy approach.

Fuyo Shared Value 2026 Strategies for Achieving Our Goals

01

02

100% reuse and recycling of lease assets
upon its return

100% recycling of waste plastics

We aim to achieve 100% reuse and recycling of lease assets
returned to the Company’s business locations in order topromote resource recycling initiatives through our leasing
business. With the aim of achieving advanced resource recycling,
we also engage in efforts that involve maintaining various forms
of infrastructure related to reuse and recycling and developing
channels for resource recovery.

21

Waste plastics constitute one form of waste that adversely affects
society given the substantial emissions volume attributable to such
waste and difficulty in recycling it. Thermal recovery (conversion
to fuel) serves as the primary method of recycling such waste
in Japan, but the method poses cause for concern given that
it is not regarded as means of recycling under global standards
because it yields CO2 emissions during the combustion phase.
To achieve a 100% recycling rate of waste plastic from returned
properties through "material recycling" and "chemical recycling,
we repeatedly perform proof-of-concept testing on a daily basis.

Yumiko Yoshihara, President & Chief Executive Officer, FGL LeaseUp Business Service Co., Ltd.
Takashi Nakamura, President & Chief Executive Officer, FGL Circular Network Co., Ltd.

TOPIC

1

Launch of New Organization to Help Achieve a Circular Economy Approach

A circular economy is an economic system whereby thegeneration of waste is minimized by preserving andmaintaining the value of products and resources for as longas possible. We are accordingly building a new businessmodel geared to enabling a circular economy approachthrough our leasing business, serving as a leasing company
that handles various types of tangible property.
In April 2022, the Fuyo Lease Group substantiallyrestructured the organization with the aim of further
accelerating its Circular Economy initiatives. This involved
launches of the Circular Economy Promotion Division totake on the planning function of the head office , FGL
LeaseUp Business Service Co., Ltd. for the purpose ofpromoting advancement of lease expiration affairs andresource recovery, and FGL Circular Network Co., Ltd. asa functional subsidiary responsible for our Circular
Economy operations.
The Fuyo Lease Group will work in conjunction with thethree units in carrying out our Circular Economy businessand creating new value.

Circular Economy
Butterfly Diagram

Copyright © Ellen MacArthur Foundation, (Circular economy system diagram, 2019)

TOPIC

2

Providing Services That Enable Customers to Participate
in the Circular Economy through Leasing

The notion of the circular economy is often discussed from a
corporate social responsibility perspective and is still not often
talked about in terms of serving as a business. Commercialization
hinges on creating mechanisms for promoting resource
circulation and simultaneously producing economic benefits.
Fuyo Lease Group seeks to achieve extended product life andbetter resource recycling, which are cornerstones of its Circular
Economy business. This will involve prompting more widespread
availability of mechanisms for leases with return conditions(return conditions that take effect upon lease expiration).
Specifically, we are developing and expanding our range oflease products (lifecycle management services) encompassing
services under contract involving lifecycle management (LCM)
of repair, reuse, and recycling.
Although it tends to be difficult for a company to engage inthe circular economy on its own, our customers are able totake part in product lifecycle management aligned with Circular
Economy aims by using such lease products. We willencourage our customers to use such services given that they
are highly beneficial to society.
First, we have launched our PC Lifecycle Management (PCLCM) Service equipped with such features with respect topersonal computer operations. Going forward, we will consider
the option of more widely providing the service with respect toapplications that include forklifts and medical equipment. We
are enlisting the cooperation of our customers in making
steady progress with respect
to developing infrastructure
and building networks forachieving a circular economy
approach.

Fuyo Lease Group Integrated Report 2022

22

CSV3 : BPO/ICT

About UsCSV

3

CSV Highlight

Fuyo Shared ValueManagement

Financial Section/
Corporate Data

Corporate Governance

TOPICS

BPO/ICT
Left to right

Yuji Kawasaki, General Manager of BPO Service Promotion Division

Promotion of Business
Process Services (BPS) throughOperational Outsourcing
Combined with Digital
Transformation (DX)

Kiyoshi Nii, General Manager of ICT Solution Business Division

TOPIC

1

Providing Business Process Service (BPS)
Total solutions through “Outsourcing + DX” of business operations DX

Outsourcing (Business Consulting and Solutions)
Our BPO services that make up our BPS encompass a wide
range of services that meet diverse needs of general affairs,
accounting, personnel, and information system departments.
Meanwhile, we have been building a framework that enables
us to provide such services working in partnership with INVOICE,
NOC, and other Group companies. Our total solutions based on
consulting provide a means of addressing the labor shortage andcontending with work-style reforms.

Growth Strategies

Outsourcing: Business consulting and solutions

 erve as the most trusted company for customers struggling to addressSthe serious shortage of IT professionals

Goals

2026

Corporate management is being called on to increase operational productivity byoverhauling non-core operations and undertaking DX of tasks against a backdrop ofcompanies enterprises encountering the need to address intensifying labor shortages andimplement work-style reforms. Fuyo Lease Group accordingly helps customers transformtheir operations in terms of both their operations and systems by providing total solutionsin the form of BPS that enlist operational outsourcing and DX.

Fuyo Shared Value 2026 Strategies for Achieving Our Goals

01

02

03

Making Time for Customers toCreate New Value

Providing BPS linking BPO
and ICT

Digital Transformation of customers
supported by Fuyo Lease Group
Companies with Strengths in DX

By providing business process outsourcing(BPO) services and facilitating DX, we aim toachieve a reduction in customer workloads
in terms of work hours by a cumulative
total of one million hours in the final fiscal
year of the medium-term management plan
relative to actual work hours in FY 2021.
We will help our customers make time forcreating new value, thereby helping themincrease productivity while also contributing
to corporate work-style reforms and greater
job satisfaction among all employees.

We provide total solutions with respect
to BPS ranging from upstream todownstream by combining productswith operational outsourcing andconsulting related to DX. By expanding
the BPO service menu and providing
services tailored to the corporate scaleof the client, we will realize benefits
such as increased operational efficiency
and focus on core businesses.

Having become a subsidiary of Fuyo Lease Groupin October 2021, WorkVision serves as a DXaccredited enterprise that proposes solutions tocustomers tailored to their needs involving use of
packaged cloud products, based on its in-house
experience developing DX initiatives. It accordingly
resolves management challenges encountered bycustomers, including the shortage of IT professionals
and transformation of their business models.

Business consulting

23

ICT

NOC Outsourcing & Consulting

Integrated billing (telecommunications
and public utility bills)

INVOICE

Healthcare BPO

Accretive*1

Cloud solutions

WorkVision

ICT outsourcing

FGL Techno-Solutions*2

Interconnection

TOPIC

2

Providing Solutions through Alliances

Fuyo Lease Group and NTT Communications Corporation

Fuyo Lease Group and Dynabook

We offer comprehensive services that entail undertaking awhole series of billing operations by combining the BConnection
Digital Trade cloud-based invoice digitization service provided
by NTT Communications with the digitized BPO and accounting
BPO services provided by NOC.

Our dynabook Package personal computer lifecycle management(LCM) package-based service, offered in partnership with
Dynabook, provides one-stop services available for a fixedmonthly fee encompassing everything from PC installation tooperations management, maintenance, and replacement.

Seamless payment by NOC and NTT Communications
Vendor, etc.
Electronic invoice

No ne e d f or troub le some P C
arrangements or high initial costs.
Select from three formats tailored
to intended applications (one A4
notebook model, two B5 notebook
models).

Digitized BPO

Paper
invoice

PDF invoice

1Open

T h e m a n u f a c t u re r D y n a b o o khandles laborious installation andsetup upon installation of PCs.
Available for use immediately after
installation.

Procurement
Operations

Invoice digitization
platform
Accounting BPO

2
PDF

Scan andcorrect

High-speed document
readers and AI-OCR

3

4

Confirmationof deficiencies
and inquiries

Journal entry

Confirmation& approval

CustomerElectric billing also available(Note) DX Certification logo: WorkVision obtained Digital Transformation Certification in December 2021.

DX: Systems consulting and IT solutions

BPO

Comprehensive BPO

Fuyo
Shared Value*1 A ccretive belongs to the Medical & Welfare
business domain.
*2 FGL Techno-Solutions was established in April
2022 as a company within which all of theGroup’s ICT functions are concentrated.

Business Process Services (BPS)
Total solution by “Outsourcing + DX” of business operations

Become a leading company in Business Process Service (BPS)

2030

DX (Systems Consulting and IT Solutions)
We have assembled a menu of options for taking an informationand communications technology (ICT) perspective in addressing
management challenges such as the shortage of corporate IT
professionals. Through our comprehensive ICT outsourcing
company FGL Techno-Solutions Co., Ltd., we undertake noncore operations involving our customers’ personal computersand provide support for having information system departments
place their focus on core operations.

5
Entry and
input ofinvoice data

Return &upgradeMaintenanceAccounting system

Invoiceissuance
Invoice recipient

Receive new replacement PC
when contract expires.
Data is erased from old PCs undera robust security environment.

We are able to offer premium-quality,
speedy service because we handle
everything from manufacturing tomaintenance and repair.
We provide pre-configured
replacement equipment in theevent of malfunction or breakdown.

Fuyo Lease Group Integrated Report 2022

24

CSV4 : Mobility Busines

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

CSV

4

Mobility Business
Left to right

Yoshinobu Nagano, President & Chief Executive Officer, Fuyo Auto Lease Co., Ltd.
Hirotoshi Tadokoro, General Manager of Mobility Business Promotion Division

Contributing to Solving Issues
and Creating Social Value
Through the Mobility Business

Naomi Ogata, President & Chief Executive Officer, YAMATO LEASE CO., LTD.

Fuyo Lease
Group’s Mobility
Business

Managing Executive Officer

Atsushi Mizuguchi

RenewableenergySelf-driving vehicles

Logistics warehouses

Growth Strategies

2030

Storage batteriesEV mobility solutions provider that solves social issues, including climateAchange issues, in the areas of general vehicles and logistics

Goals

TOPICS
TOPIC

Fuyo
Shared Value

2026

In the general vehicles area, we will contribute to solving social issues, including climatechange issues, by promoting the introduction of electric vehicles (EV) and fuel cellvehicles (FCV), which are expected to rapidly become widely used, and by realizing social
application of technological innovations such as CASE and MaaS.
In the logistics area, we will utilize Group synergies to provide solutions for a wide variety
of issues facing customers, including the need for more efficient distribution accompanying
increases in cargo volumes, as well as personnel shortages.

Fuyo Shared Value 2026 Strategies for Achieving Our Goals

25

01

02

03

Electrification of general vehicles andadvancement of next-generation mobility

Total support for the logistics
industry

Business collaboration
with the Yamato GroupIn addition to introducing EV leases, we will also
provide one-stop EV services that offer total support
for addressing the various management andoperational issues that accompany these leases.
This will encourage customers to choose EV for theirlease vehicles. We will contribute to the realization of adecarbonized society by aiming to have EV and FCV
account for 30% of the operating assets (vehicles)
owned by Fuyo Auto Lease by the end of fiscal 2026.
We will also actively engage the next-generation mobility
field, which includes autonomous driving, by advancing
the realization of next-generation transportation options
together with partner companies.

We will leverage the transportation and logistics
industry knowledge possessed by YAMATO
LEASE to advance various initiatives, including
providing diverse support concerning theremedying of long working hours for drivers andpromotion of workstyle reforms, and addressing
customer’s business succession needs. We
will also contribute to solving logistics industry
issues by providing consulting services
covering the building of new warehouses andthe installation of logistics equipment during
new renovations of existing warehouses, aswell as various financing schemes.

We are working through YAMATO
LEASE to establish a businesscollaboration with the YamatoGroup. This will include leveraging
our expertise to develop anddeliver a range of solutions toa wide range of supply chain
issues.

1

Contributing to the Realization of Decarbonized Society
Solving social issues associated with EV

When a company decides to introduce EV, it has to addressa variety of issues, from the lifecycle management of its
current gasoline-based vehicles to the establishment ofrecharging infrastructure, review of power supply agreements,and energy management. We are working with partnercompanies to establish a framework for providing one-stop
solutions to these diverse issues (one-stop EV services), withthe aim of supporting companies that want to introduce EV.

Consulting forcompanies
considering the
introduction ofEV
Consulting andinstallation regarding
recharging equipment

Secondary use ofstorage batteries

Energymanagement

Financingand vehicle
management

TOPIC

2

Autonomous Driving Participating in three proof-of-concept tests

Japan is seeing changes in its social structure—including adeclining birthrate, aging population and the concentration of
population in urban areas— which is leading to the emergenceof a variety of social issues related to mobility, such as ensuring
freedom of movement, revitalizing local communities, andreducing environmental impact. Expectations are focused on
autonomous driving as one means of solving these kinds ofissues and in order to facilitate its early implementation, in June
2021, the Group entered into a business alliance with MACNICA,
Inc. to advance social applications of autonomous driving. Since

then, we have participated in proof-of-concept tests that have trialed
different applications. These were 1) the testing of “Healthcare
MaaS” at Shonan Health Innovation Park, 2) the testing of aself-driving bus service at Mibu Highway Park (part of Tochigi
Prefecture’s ABC Project), and 3) the second round of the municipal
testing of next-generation mobility in Yokkaichi, Mie Prefecture,
which aimed to test new transportation applications. Going forward,
we will continue to deepen our relationships with MACNICA andother partner companies to contribute to the implementation ofautonomous driving through self-driving testing programs.
Fuyo Lease Group Integrated Report 2022

26

CSV5 : Medical & Welfare

About Us

CSV

5

Fuyo Shared ValueCSV Highlight

Management

Financial Section/
Corporate Data

Corporate Governance

TOPICS

Medical & Welfare
Left to rightShuji Furuta, Representative Director , FUJITA Co., Ltd.
Eiki Koseki, General Manager of Healthcare Business Promotion Division

Contributing to Solving theIssues of Both Businesses
and Society Through Support
for Medical and Nursing Care
Providers and Dispensing
Pharmacies

Takeshi Sugahara, President & Chief Executive Officer, Accretive Co., Ltd.

TOPIC

1

 rovision of new services that address changes in the businessP
environment driven by the advancement of DX in the healthcare field

Goals

Fuyo
Shared Value

2026

In addition to management issues such as reduced income from medical practices, labor
shortages, and a lack of successors, the 2025 problem* is expected to make medical andwelfare needs even greater and more complex. We will contribute to businesses in the
medical and welfare market, such as medical and nursing care providers and pharmacists,
who are facing these challenges. For businesses with business restructuring andsuccession needs, we will provide financing services in collaboration with regional financial
institutions and professional consulting companies, as well as solutions that leverage thevarious functions possessed by our Group companies.

Fuyo Shared Value 2026 Strategies for Achieving Our Goals

27

01

02

03

Providing services tailored
to a super-aged society

Supporting the enhancement ofregional healthcare and welfare

Responding to the super-aging ofsociety is an urgent issue and weare developing partnerships withnursing care providers to support
the creation of 1,000 new rooms
at elderly care facilities over a fiveyear period. We are also working
with various alliance partners
to expand initiatives in related
business areas.

We are addressing the management issues
facing medical and nursing care providers anddispensing pharmacies, such as opening or closing
hospitals, reorganizing and restructuring, businesssuccession, and M&A, by establishing a healthcare
fund and providing solutions that include financing
for hospital real estate and financing for businessrestructuring and succession. We are also engaging
in the medical DX field, including anticipated growthareas such as remote healthcare, by leveraging
synergies between WorkVision and startups wehave invested in to support the enhancement ofessential regional medical and welfare providers.

Providing medical and nursing
care businesses with useful
information
We h a v e e s t a b l i s h e d F u y o M e d i w e l
Support, a Group-wide website thatprovides clinic (medical and dental) andnursing care provider customers with awide range of information that is usefulfor solving management issues. We alsooffer specific solutions such as factoring
for medical and nursing care receivables
by Accretive, financial support for businesslaunches and building leases by Sharp
Finance, and BPO services from various
Group companies.

Large- and mediumsized companies

Businesses withmanagement issues
such as restructuring
and succession

Clinics (medical anddental)Nursing care providers

Solutions for nursing carefacilities and pharmacies locatedwithin hospital premises

Financing for hospital real estate(rebuilding of facilities, etc.)

Real estate leases (Sharp
Finance)

Energy saving and renewableenergyFinancing for corporate
restructuring and businesssuccession

FPS Medical (Accretive)

Consulting services forbusiness improvement andstreamlining

Healthcare fundBPO (Accretive)

Provision of one-stop services
Platforms

Management
solutions

Functions and structures

2030

Main solutions

 company that offers solutions to the management issues faced byAbusinesses engaged in the health market of a super-aged society

We are working on expanding the Fuyo Lease Platform
to respond to the various management challenges
facing medical and nursing care providers and dispensing
pharmacies with one-stop solutions.
Up to now, we have been bringing companies withstrengths in the medical field into the Group, including
Accretive, which carries out factoring for medical andnursing care receivables, and FUJITA, which specializes
in buying and removing second-hand medical
equipment. We have also been growing businesscollaborations in new business areas with partners
such as CB Holdings, which carries out M&A operations
for medical businesses and dispensing pharmacies,
RIVERFIELD, a joint academic-industrial joint venturecompany originating from a university, and Lily MedTech.
Going forward, we will continue to contribute to solving
various issues by enhancing the platforms’ various
functions to deliver solutions covering areas such as
consulting on business succession and support for
hospital business restructuring, as well as the financing
needed to establish and maintain elderly care facilities.

MarketGrowth Strategies

Expanding the Fuyo Lease Platform Concept

Japanese
Organization for
Medical Device
Development

Equipment andfacilities

Financing(including facility
ownership)

Removal,transportation,
disposal, andpurchase and sale ofused equipment

BPO, energysaving, andamenities

FGL Circular
Network

NOC Outsourcing& Consulting

WorkVision

Fuyo Lease

RIVERFIELD

Sharp Finance

CB Holdings

CREWT Medical
Systems

Fuyo Auto Lease

Consulting firms

Lily MedTech

Medicalinformation
providers

Medical System
Network
THINKCYTE

Subsidiaries and equitymethod affiliates
Other investments

Medical equipment
trading companies
Medical equipment
manufacturers

Accretive
Yokogawa Rental& Lease

FUJITAINVOICE

Officebusters

Merry Biz

Logistics
companies
Waste disposal
contractors

Aqua Art
Energy service
companies
Building managementcompanies
Water supply
companies
BCP productsuppliers

TOPIC

2

Launch of Fuyo Mediwel Support

Clinics (medical and dental) and nursing care providers face awide range of challenges, including securing personnel such as
doctors, nurses, and nursing care staff, implementing work
style reforms, and coping with the COVID-19 pandemic.
Through Fuyo Mediwel Support, a Group-wide website, we
provide these clinics and nursing care providers with a wide
range of specialized information tailored to diverse management
environments and challenges, as well as various services. In thisway, we are providing support for solving management issues,
including by enhancing the productivity of medical institutions
and nursing care providers, as well as contributing to therealization of sustainable regional healthcare and nursing careframeworks. We are also implementing CSV by working withpartner companies on the creation of joint content that leverages
both parties’ expertise to provide added-value information that
goes beyond the Group’s knowledge base.

Launch of a Group-wide website in the medical and welfare business area
Implementation of efficient inbound marketing

Fuyo Mediwel Support: www.fuyo-mediwel-support.jp/*Various challenges that are expected to manifest in 2025, when the baby boomer generation born between 1947 and 1949 reach the latter-stage elderly ageof 75 and above. These challenges include a rapid increase in social security costs and shortages of healthcare and nursing care personnel and facilities.

Fuyo Lease Group Integrated Report 202228

Real Estate/Aircraft

About Us

Real EstateFuyo Shared ValueCSV Highlight

Management

Growth Strategies

We launched our aircraft business in theearly days of the aircraft leasing industry andhave arranged a cumulative total of over
300 leases for airlines around the world.
Going forward, we plan to expand into
new business areas by promoting leasesof aircraft that we own and providing new
aircraft-related services.

Growth Strategies

 table profit growth realized by enhancing profitability through theSdifferentiation and sophistication of the real estate business ustainable growth by providing strategic solutions to social issues andS
CRE needs*

Goals

Fuyo
Shared Value
2026

Factors such as the weakening of the yen, the inflow of investment money from overseas, anda steep rise in construction costs are making the environment around the real estate businessincreasingly fierce. Within this, we are working to differentiate the business and make it moreadvanced in order to realize stable profit growth without increasing assets. We will achieve
this through the following measures: 1) Further expand and deepen efforts in the businessdomain, 2) strengthen relationships with partner companies, 3) engage in asset turnover-typebusiness and effectively utilize assets by advancing asset liquidations, and 4) make Group-led
lease and financing projects the norm by strengthening arrangement functions and developing
new schemes and domains. We will also work to implement CSV, including by dealing withenvironmentally friendly real estate that contributes to the realization of a decarbonized society.

2030
Goals

Further expand and deepen efforts
in the business domain

Strengthen relationships withpartner companies

We will develop new areas and schemes
within the real estate business, such as
adaption to renewable energy and energy
saving, logistics facility reorganization,
optimized location of data centers,
redevelopment business, and project
formation premised on liquidation, as well as
strengthen the exploration of new products
through cooperation with dedicated divisions
within the Company to further expand anddeepen efforts within the business domain.

We will grow collaborative relationships
with partner companies by expanding
and deepening efforts in the businessdomain. Additionally, we will add newalliance partners, such as regional
financial institutions, and collaborate
with asset management companies tofurther enhance our pipeline.

TOPIC

SEVEN PARK
AMAMI

29

02

 eeping aircraft operating leases as the core of our business, we will expandK
our product lineup through alliances in peripheral businesses and other new
fields and grow the resulting synergistic effects
 e will contribute to solving social issues by actively engaging new technologies
W
related to aircraft, such as sustainable aviation fuels (SAF) and air mobility

Fuyo
Shared Value
2026

Fuyo Shared Value 2026 Strategies for Achieving Our Goals

01

Financial Section/
Corporate Data

Aircraft
Fuyo Lease Group offer a wide range of realestate-related financial services, including
Real Estate Leases for a broad range ofassets such as commercial, distribution, andnursing care facilities, as well as Real Estate
Financing, in which we have a strong trackrecord in loans, investments, and acquiring
trust beneficiary rights.

2030

Corporate GovernanceIn our aircraft operating lease business, we established a new U.S. business location inJune 2022 and going forward, we will further strengthen the implementation framework
to increase our aircraft portfolio to around 60 aircraft by the final year of the medium-term
management plan. We aim to both record stable profits and maintain a healthy financial
position by advancing asset turnover-type business. At the same time, we will aim toenhance the lineup of the business through methods such as alliances and investments inareas that are peripheral to aviation, and to grow the resulting synergistic effects. We will
also actively engage new technological fields that contribute to solving social issues, suchas sustainable aviation fuels (SAF) and air mobility.

Fuyo Shared Value 2026 Strategies for Achieving Our Goals

03
Implement CSVWhile implementing the strategies to the left,
we will also contribute to the realization of aprosperous society by reusing leased assets
after their leases expire, utilizing sustainable
operating assets, handling renovations,advancing initiatives involving environmentallyfriendly real estate, effectively using idle
real estate, handling medical, nursing care,childcare, and educational facilities, handlingsocial infrastructure, and advancing PPP and
PFI initiatives.

Using our building lease scheme, we collaborated with the city of Matsubara in
Osaka Prefecture to open a mixed-use complex combining commerce andentertainment that aims to provide convenience and communicate the appeal of thelocal area. We also introduced advanced CO2 emissions-cutting equipment and abiogas power generation system among other efforts to make it into an
environmentally friendly shopping center. As a result, it has been selected as a
Sustainable Building Leadership Project (as a CO2 emissions reduction leader) undera subsidy program by the Ministry of Land, Infrastructure, Transport and Tourism.

01

02

Advancing asset turnover-typebusiness

Developing and selling operatinglease products

We will advance asset tur nover-typebusiness by flexibly selling our aircraft
under operating leases in accordance
w i t h t h e a i rc r a f t m a r k e t c y c l e . O u rstrategy is to realize a balance between
stable lease revenues and gains fromsales of aircraft to minimize risk andmaintain a healthy portfolio.

In addition to JOLCO (Japanese Operating
Lease with Call Option) and JOL (JapaneseOperating Lease), we are working todevelop and sell new operating leaseproducts. In April 2022, we establishedthe Aircraft Marketing Office to strengthen
sales activities targeting investors.

TOPIC

Conclusion of alease contract for
freighters (dedicatedcargo flights) with
Yamato Transport

03

Strengthening engagementin areas that are peripheral toaviation
We are expanding the business domain
by investing in new areas, including
peripheral areas such as spare engine
leases and a part out (sales of parts)business, and in venture companies thatare developing electric and hydrogentechnologies. Going forward, we will
enhance our product lineup in accordancewith aircraft lifecycles and strengthen
engagement of new technological fields.

We have concluded a lease contract for freighters (dedicated cargo flights)
with the Yamato Transport Company, Ltd. This project is our firstpassenger-to-freighter (P2F) conversion business, which involves
purchasing passenger aircraft, converting them into freighter aircraft, andthen leasing them. Our objectives for this business are to accumulateknowledge in peripheral fields to aviation that can be used to expand ourefforts in this business domain, and to contribute to the further developmentof the logistics industry by diversifying transportation functions.

* Needs and issues related to corporate value enhancing strategies that effectively use the client’s real estate, such as finding effective uses for idle land and making
assets into off-balance sheet items through sales and leasebacks.

Fuyo Lease Group Integrated Report 2022

30

Business Segments Overview

About Us

Business Segments Overview
Transformation
Drivers (ii)

Drivers (iii)

Rising Transformation

Accelerating Transformation

Growing Performance

Zone Management

Mobility

Medical & BPO/ICT
WelfareCircular Economy

Energy &Environment

Energy &Environment

Main Services
Real Estate Aircraft

Green electricity supply (PPA)
services

General Leasingand Financing

ESCO business
Energy-saving facilities /subsidized leases

BPO/ICT

Rising Transformation

Main Services
Auto leases
One-stop EV services
Leasing of logistics and material
handling equipment
Management support solutions
for transportation companies

Circular Economy

Main Services
Used asset buying service
Used PC buying service
Residual value-set-type leases

31

Overview of FY2021 and Outlook
In the general vehicles sector, we are the only leasing
company participating in proof-of-concept tests of social
applications for autonomous driving technology byproviding self-driving vehicles, and we are also working
with partner companies to build a one-stop platform ofservices that can provide solutions to issues hindering thewidespread use of EV as part of efforts to realize adecarbonized society. Going forward, we will work tostrengthen and expand these initiatives.
In the logistics sector, we recognize that the 2024
problem is approaching, so we have been enhancing ourlineup of services that contribute solutions to the various
issues facing logistics companies. These efforts havebeen centered on the expertise provided by YAMATO
LEASE, which has been integrated into the Group, andour overseas business. In the new medium-term
management plan, we will expand the business with aview to solving social issues on a global scale.

Financial Section/
Corporate Data

In fiscal 2021, we actively expanded overseas, including
joining a solar power generation business in Texas,
USA, a PPA business in Thailand, and an electric power
supply and investing in a demand adjustment businessin the UK. In Japan, we accelerated investment that
contributes to decarbonization, including starting
construction of a new solar power plant at a subsidiary,investing in renewable energy-related funds, andconcluding multiple PPA agreements.
Going forward, we will expand the renewable energy
business globally and launch new businesses in thesecondary energy sector (such as storage battery andelectric power supply and demand adjustment
businesses).

Ordinary Profit and ROA in the Energy &Environment Business
Ordinary profit (billions of yen)

ROA (%)

2.0

1.8(Plan targets)

5.0(Plan targets)

1.6

2022/32027/3(FY)

Plan targets

Corporate Department

Incubation

Mobility BusinessCorporate Governance

Overview of FY2021 and Outlook

Agribusiness2026

New domains

Management

Renewable energy businesses
financing

Fuyo
Shared Value(such as investment in R&D-focusedstart-up companies)

CSV Highlight

Accelerating Transformation

Performance

Drivers (i)Fuyo Shared Value

Main Services
Ordinary Profit and ROA in the Mobility Business
Ordinary profit (billions of yen)

ROA (%)

Business process consulting
Integrated billing (communications
and public utility charges)

2.5(Plan targets)

PC-LCM services

Overview of FY2021 and Outlook
In fiscal 2021, efforts to offer solutions through alliances
included releasing “a total solution for accounting andinvoicing” in partnership with NTT Communications
Corporation and NOC Outsourcing & Consulting Inc. in
the BPO sector, and Dynabook Package in partnershipwith Dynabook Inc. in the ICT sector.
The decline of the working-age population in recent
years has made enhancing productivity and advancing
DX into extremely pressing issues. Following the
integration of WorkVision into the Group, we will work
to solve the management issues facing customers byfurther expanding our business process services (BPS)t h a t t a k e a n “ o u t s o u rc i n g a n d D X ” a p p ro a c h t obusiness processes.

Ordinary profit (billions of yen)

ROA (%)

5.4(Plan targets)

8.5(Plan targets)

1.5
3.4

ICT outsourcing

1.9
7.0

2022/3(Plan targets)

Medical & Welfare

2027/32027/3(FY)

Plan targets

3.3

2022/3

Ordinary Profit and ROA in the BPO/ICT Business(FY)

Plan targets

Overview of FY2021 and Outlook
In July 2021, we joined the Japan Circular Economy Partnership (J-CEP) as a supervising company and in
September, we joined the Japan Partnership for Circular Economy (J4CE) led by the Ministry of theEnvironment, the Ministry of Economy, Trade and Industry, and the Japanese Business Federation(Keidanren). As a member, we have carried out activities that deepen our knowledge, including information
sharing and participating in resource recycling trials. From this fiscal year, we are advancing the full-scalebuilding of the various types of infrastructure needed to realize a circular economy and we are working toadvance the reuse and recycling of returned items as a non-financial target in our new medium-term
management plan. Through these initiatives, we will create easy opportunities for customers to participate
in the circular economy through leases.

Main Services

Medical and nursing careequipment and building leases
Medical and nursing carereceivables factoring
Business succession financing
Purchase and disposal of used
medical equipment
Administrative consulting and BPO
for hospitals and nursing carefacilities

Overview of FY2021 and Outlook
We successfully closed agreements based on proposals
that meet customers’ needs, including for theestablishment of a pharmacy within the premises of a large
hospital and consulting for hospital business process
improvements. Our used medical equipment-related
business, which is centered on CT equipment, saw adecline in demand as a reaction to COVID-19 relief
subsidies handed out in fiscal 2020, so it concentrated on
capturing the most profitable orders. Within an environment
where the government continued to provide businesses
with monetary subsidies due to the pandemic, the medical
and nursing care receivables factoring business was able
to realize year on year growth in the balance of receivables.
Toward the end of the previous fiscal year, we establishedFuyo Mediwel Support, a dedicated website for healthcare
and nursing care business operators. Going forward, we
will provide these business operators with useful
information and deliver various types of support.

Ordinary Profit and ROA in the Medical &Welfare Business
Ordinary profit (billions of yen)

ROA (%)

3.3(Plan targets)

2.0

4.5

(Plan targets)

1.8

2022/32027/3(FY)

Plan targets

Fuyo Lease Group Integrated Report 2022

32

Business Segments Overview

About Us

Growing Performance

Real Estate

Main Services
Real estate leases
Real estate-related financial
services

Aircraft

Main Services
Aircraft leases / financing
Aircraft part-out businessJapanese operating leases

CSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

New Domains and Incubation
We will thoroughly explore markets that might emerge in the future and potential customer issues and then advance M&A andcapital and business alliances with companies that have unique technologies and expertise.

Overview of FY2021 and Outlook
In fiscal 2021, we established the Real Estate Solution
Business Division and advanced development related toreal estate in new sectors and business areas, and we
also carried out activities covering a wide range of assets,
schemes, and domains. These included 1) developing acommercial facility in collaboration with the city ofMatsubara in Osaka Prefecture to provide convenienceand communicate the appeal of the local area, 2) investingin a private investment fund specializing in the ownershipand operation of nursery schools with the aim of reducing
childcare waiting lists, 3) participating in an ESG-friendly
multi-family housing property development project throughinvestment in U.S. real estate private investment fund,and 4) providing our first real estate leases in Taiwan.
Going forward, we will continue to raise profitability byadvancing and differentiating our real estate businessthrough business domain expansion and theimplementation of CSV.

Ordinary Profit and ROA in the Real EstateBusiness
Ordinary profit (billions of yen)

2.3

Investment
RecordROA (%)

2.3(Plan targets)

23.0

20.3

Partner

Description

Jan. 2017

Subsidiary

Accretive

Acquired the company, which mainly provides factoring business for medical and nursing
care receivables, to strengthen BPO services.

Jun. 2018

Investment

Merry Biz

Invested in the company, which provides the accounting administrative service Virtual
accounting assistants”.

Oct. 2018

Subsidiary

INVOICEAcquired the company, which provides integrated billing services, as a consolidated
subsidiary to expand services that contribute to improving our clients’ productivity.

Aug. 2019

SubsidiaryNOC Outsourcing &Consulting

Acquired the company, which offers a broad range of outsourcing services and has high-level
consultancy functions, as a consolidated subsidiary to accelerate the expansion of BPO services.

Jun. 2021

Investment

HmcommInvested in the company, which provides voice recognition technology services and anomaly
sound detection services that utilize AI.

Oct. 2021

Subsidiary

WorkVision

Acquired the company, which provides a wide range of IT solutions, primarily cloud
packages, and are integrating it into BPO services to build a framework for responding toincreasingly advanced and complex customer needs.

Aug. 2017

Investment

RIVERFIELD

Invested in the company, which develops robotic surgical assistant systems in Japan.

Feb. 2018

Investment

CREWT Medical Systems

Invested in the company, which developed Aimo, the world’s first head mounted visual
field inspection device.

Mar. 2018

Investment

Lily MedTech

Invested in the company, which is developing a breast cancer inspection system using
medical ultrasound technology.

Apr. 2018

Subsidiary

FUJITA

Mar. 2019

Investment

Japanese Organization for
Medical Device Development

Apr. 2020

Investment

THINKCYTE

Invested in the company, which conducts research and development for a nextgeneration cell isolation system using AI.

Jan. 2021

Investment

CB Holdings

Invested in the company, which engages in M&A in the medical, welfare, and dispensing
pharmacy industries, and provides opening support, management consulting, and news
distribution services.

Jun. 2022

Investment

JSH

Invested in the company, which provides employment support services for people withdisabilities and at-home psychiatric healthcare services.

Jun. 2018

Investment

Exergy Power Systems

Invested in the company, which develops and manufactures next-generation energy
storage systems.

Mar. 2019

Investment

NExT-e Solutions

Invested in the company, which provides cutting-edge battery control devices andmanagement systems.

Feb. 2020

Investment

Girasol Energy

Invested in the company, which develops maintenance management platforms forphotovoltaic power generation equipment.

Oct. 2020

Investment

Tsubame BHB

Invested in the company, launched out of the Tokyo Institute of Technology, which isdeveloping manufacturing technology for the distributed production of ammonia under
low-temperature, low-pressure conditions.

Jul. 2021

Investment

S-Solar Generation(Thailand) Co., Ltd.

Established a joint venture with the Thai subsidiary of Sharp Energy Solutions Corporation
to sell electricity in Thailand under a PPA.

Mar. 2018

Investment

TDF Group Inc.

Invested in the company, which operates a rental, leasing, sales, and dealership businessfor pickup trucks in North America.

Jan. 2019

Investment

Pacific Rim
Capital, Inc.

Invested in the company, which handles operating leases for material handling equipmentin North America.

Mar. 2020

Investment

HiBot

Apr. 2020

Subsidiary

YAMATO LEASE

Acquired the company, which mainly provides truck leasing and other financing services
to transportation companies, to expand the business domains of logistics, transportation
and used vehicles.

Nov. 2020

Investment

A.L.I. Technologies

Invested in the company, which develops and is expanding an industrial drone services
and air mobility business.

Apr. 2021

Investment

3D Printing Corporation

Invested in the company, which provides various product services utilizing 3D printing
technology.

Aug. 2021

Investment

REXEV EV

Invested in the company, which is building car sharing and EV management systems.

Jan. 2022

Investment

PLIC Corp., Ltd.

Invested in the company, which provides logistics solutions in Thailand, including a forklift
rental service and consultation on the introduction of automated warehouse systems.

Jul. 2022

Investment

Japan Wind Tunnel
Manufacturing Inc.

Invested in the company, which manufactures and sells compact, low-cost wind tunnel
testing equipment.

Aug. 2020

Investment

Airbus Ventures Fund III LP

Oct. 2017

Establishment

GAP FundEstablished Japan’s first industry-academia collaborative GAP Fund in cooperation with
the Tokyo Institute of Technology and Innovations and Future Creation Inc.

May 2019

Investment

Synspective

Invested in the company, which offers one-stop solutions using satellite-based
observation data.

Dec. 2020

Investment

TELEXISTENCE

BPO(Plan targets)

2022/32027/3(FY)

Plan targets

Overview of FY2021 and Outlook
In fiscal 2021, in addition to purchasing three newaircraft for aircraft operating leases, we also sold threeaircraft as part of portfolio management efforts. As aresult, we currently possess 44 aircraft. Going forward,
we will continue to build our fleet of aircraft while also
advancing asset turnover-type business by flexiblys e l l i n g a p o r t i o n o f o w n e d a i rc r a f t f o r p u r p o s e sincluding dispersing risk, so that we can achieve stableprofits while also reducing market fluctuation risk. In
addition to offering spare engine leases and operating abusiness for parting out decommissioned aircraft, we
also worked on expanding the business domain to
include peripheral areas, including entering the P2F
business, which involves converting passenger aircraft
into freighter aircraft.

Investment Business
TimingForm

ICTOrdinary Profit and ROA in the Aircraft Business
Ordinary profit (billions of yen)

Medical &WelfareROA (%)

2.4(Plan targets)

0.7

7.0

(Plan targets)

Energy &Environment
1.52022/32027/3(FY)

Plan targets

Mobility

Aircraft

Other

33

Fuyo Shared Value

Acquired the company, which is capable of providing one-stop services, including
everything from the disposal to buying of used medical equipment, to enable thedevelopment of new products and services.
Invested in the company, which provides support for the commercialization of state-ofthe-art medical technologies.

Invested in the company, which develops robotics technologies used in extreme
environments for infrastructure maintenance, piping inspections, etc.

Invested in this fund, established to invest in start-up companies with innovativetechnology in the aerospace field.

Invested in the company, which develops and is expanding a remote operated, artificial
intelligence robot business.

Fuyo Lease Group Integrated Report 2022

34

CSV Promotion System

About Us

CSV Highlight

Major Matters Discussed in the
CSV Promotion Committee

CSV Promotion System
The Fuyo Lease Group will strive to meet the expectations of society and its stakeholders and to resolve social issues
exemplified by the SDGs by helping build a sustainable society through its businesses,
while working to achieve sustainable growth as a corporate group.
To that end, the Group has introduced the concept of CSV (creating shared value) into its management principles andstrengthening CSV is a long-term strategy of the Group.

CSV Promotion System
To facilitate cross-functional efforts to promote CSV andsustainability, the Group established a CSV Promotion
Committee in 2020. The members of the CSV Promotion
Committee are heads of major departments in the Corporate
Division and heads of departments responsible for eachbusiness domain. The results of discussions in the committee
and matters reported to the committee are submitted to the

Fuyo Shared Value

Executive Committee for discussion and reflected in strategies
if approved by the Executive Committee. Policies on, andprogress in, CSV for the overall Group are reported to theBoard of Directors at least once a year to make CSV more
effective. The Group has developed a basic policy on
systems that support sustainable value creation, making
clear its sustainability policy.

In addition to discussing and reporting matters important forthe promotion of CSV, the CSV Promotion Committee
produces non-financial targets and plans and monitors
progress against those targets and plans. In fiscal 2021, theCSV Promotion Committee held three meetings. At themeetings, the development of a basic policy on systems that
support sustainable value creation, progress against nonfinancial targets and environmental targets, and the settingof non-financial targets in the new Medium-term Management
Plan, among other items, were discussed and reported.

Management

Corporate Governance

Financial Section/
Corporate Data

Major discussions and reports in fiscal 2021
2nd

Development of the value creation story
Organization of a set of material issues
Reports on progress against non-financial targets
and environmental targets

3rd

Development of a basic policy on systems that
support sustainable value creation

4th

Setting of non-financial targets in the new
Medium-term Management Plan (Fuyo Shared
Value 2026)
Review of progress against non-financial targets
and environmental targets

A CSV Promotion Committee meeting

CSV Promotion Structure
Board of Directors
Report (at least once a year)

Oversight

President & CEO
Deliberation and report

Approval

CSV Promotion Office(secretariat)

Executive Committee
Discussion

Deliberation and approval

Understanding of CSV in the GroupCSV Promotion Committee(Chairman: Executive Officer, Head of Management Departments)

Corporate
Division

General Manager ofCorporate Planning
Division

General Manager of
Human Resources
Division

Real Estate
General Manager of Real
Estate Planning Division
Sales
Division

General Manager ofGeneral Affairs Division

Energy & Environment
General Manager ofEnergy & Environment
Business Division

General Manager ofRenewable Energy
Business Division

General Manager ofGroup Legal &Compliance Division

Medical & Welfare

Aircraft

General Manager of
Healthcare Business
Promotion Division

General Manager ofAviation and Shipping
Business Division

ICT

BPO

Mobility

Circular economy

General Manager of
ICT Solutions Business
Division

General Manager of
BPO Service Promotion
Division

General Manager ofMobility Business
Promotion Division

General Manager ofCircular Economy
Promotion Division

Report on initiatives
and progress

General Manager ofFinancial Planning
Division

To create shared value, all employees of the Group need tounderstand the concept of CSV, support the concept, andput it into practice. In fiscal 2020, Fuyo General Lease helda series of CSV training programs (“Let’s CSV!”) for all
employees. In fiscal 2021, the Group held the series for all
employees of the Group. In the series, all employees of theGroup took an e-learning course and then participated in a“workshop to think about connections between your work
and CSV.” In the workshop, heads of departments, offices
and branch offices acted as instructors. In the CSV training,
employees became aware of what kinds of value they canprovide to customers and communities through their work.
Certain Group companies posted images of internal
workshops on the intranet. Interest in CSV has increased inGroup companies.

Reflection in the business strategies of eachdivision and company (CSV promotion)

Departments, offices, branch offices and group companies

Cooperation

Images of a workshop at NOC were posted on the company intranet.

35

Fuyo Lease Group Integrated Report 2022

36

Investment in Human Resources

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

Investment in Human Resources
The Fuyo Lease Group believes that people
are its greatest asset and that it is importantto respect each individual and their individuality
and to enable them to work, feeling job
satisfaction and perceiving the significance ofwork. We aspire to enable our employees to grow through theirwork and to live an emotionally and physically fulfilling life.
We believe the Group will be able to achieve sustainablegrowth by facilitating the growth of each employee andenabling them to perform to the best of their talent and ability.
The Group encourages all employees to think for themselves,act proactively, and to be an autonomous employee with acommitment to personal growth. The Group will actively
Basic
Approach

Strategic human resources development
Fuyo General Lease believes that it is essential to cultivate
human resources who can help address increasingly complex
social issues, such as the realization of a carbon-free society,and that it needs to actively cultivate human resources withtechniques that are very different from conventional approaches.
The Company thus plans to increase human resource development
expenses 300% during the period of the new Medium-termManagement Plan (Fuyo Shared Value 2026).
In addition to training for acquiring knowledge aboutaccounting, tax practice, and legal affairs that are necessary
for leasing and finance and acquiring common businessskills, including communication and thinking skills, we are
expanding training programs intended to increase added
value in individual business areas, including languages, digitaltransformation, and progressive finance. For language
acquisition, we started for young employees a training program

Skills composition of human resources capable ofresponding to the diversification and sophistication ofbusiness domains

EnergyExpansion

Languages

Traditional
skills37

DX

where employees remotely cooperate with business persons
overseas to do tasks.
To develop expertise in individual business areas, we haveintroduced a cafeteria plan in our self-development system.
We annually grant self-development points equivalent to
300,000 yen maximum to mid-level employees, and they canchoose from an extensive menu, including attending language
school and computer school and participating in externalseminars.
Non-financial KPI target
Human resource development-related
expenses (non-consolidated)
Compared to FY2021

300%

Continuous production of high-valueadded human resources

ICT

Healthcare

High levels of expertise ineach business domain

Seconding employees tocompanies with which wehave close ties

Cutting-edge
financing

Ability toresolve social
issuesIntelligenceandcreativity

Promoting the creationof added value in eachdomainCreating a variety of new
programs

Basic skills required toperform work at ourcompany

Further enhancement ofexisting programs

Human skills

Human Resources Division
General Manager, Diversity Planning & Promotion OfficeNami Tsujimoto

The Fuyo Lease Group believes that diversity is a key growth
driver. Bringing together different strengths, viewpoints andvalues generates the innovation that creates new value, andleads to sustainable growth for the Group. To accomplish that,
we are working to promote diversity and inclusion with thegoal of creating a workplace where every employee in theGroup can maximize their full potential, increase their expertise,
and work comfortably and feel job satisfaction regardless ofage, sex, nationality, sexual orientation, gender identity, race,
ethnicity or disability.
To facilitate active participation for women, we strive toboost their motivation and create a corporate culture where
they can participate by allowing female students have aninternship, hiring more female students by expanding
seminars at women’s colleges, providing follow-up support
to women on managerial career tracks, and providing womenwith opportunities to interact with executives and division
heads and interact with many different role models at career
lectures by female executives and meetings with them.
Thanks to these initiatives, the Company achieved
Platinum Kurumin certification in fiscal 2017 and two-star(second highest level) Eruboshi certification in fiscal 2021
from the Minister of Health, Labour and Welfare.
The Group also provides e-learning about LGBTQ anddisabilities to all employees of the Group and provides grouptraining to heads of departments and branch offices topromote understanding about those issues.
At the start of the new Medium-term Management Plan in
April 2022, the Company set numerical targets to create aworkplace where every employee can work comfortably andfeel job satisfaction: a ratio of women in new graduates hired of
40%, a ratio of female managers of 35%, a ratio of annual paid
leave taken of 90%, and a ratio of paternity leave taken of
100%. We will focus on further enhancing and strengthening
the various measures we have taken to date.

An exchange meeting between officers and female employees

A career lecture by Yamato Lease President Naomi Ogata

Platinum Kurumin

Eruboshi Certification

Strategic human resource development program

BPO

Solutions, leasing and financing

Initiatives to Promote
Diversity andInclusion

Promoting Diversity and Inclusion(FY2026)

Intermittent investment and support for
education and training

Diversity & Inclusion

invest in human resources to cultivate “high value-added”
human resources who will focus on CSV and facilitatesustainable growth.
Investing in human resources, the Group will focus ondeveloping an organization and systems that will underpin
sustainable value creation, particularly the diversification ofbusiness domains, the strategic development of humanresources in response to advances in technology, diversity
and inclusion, and health and productivity management. The
Group aims to be a corporate group that supports each
employee’s endeavors and growth and that grows together
with its employees.

Fuyo Lease Group Integrated Report 2022

38

Investment in Human Resources / Human Rights Policy

About Us

Fuyo Shared Value

work, maintaining and improving their health, expanding theirknowledge, and pursuing personal development.
Systems to create an employee-friendly workplace include
Refresh Days (each employee can designate one day every
week when they can leave early) and flexible work hours that
employees can choose (employees can flexibly choose astarting time and a closing time other than the usual time).
These systems correct long working hours and create anenvironment that allows employees to work according totheir own lifestyles, regardless of reasons such as childcare
or nursing care. We have also introduced unique initiatives,
including +Friday (Plus Friday) such as a half-day workday
once a month on one of the Fridays of the month, and we
encourage employees to take advantage of this policy.

29.5%(FY2021)35%

or more(FY2026)

Rate of taking paid leave (non-consolidated)

82.3%(FY2021)90%

or more(FY2026)

Percentage of childcare leave taken by male
employees (non-consolidated)

110%(FY2021)100% or more(FY2026)

Rate of those who receive a complete medical checkupof employees aged 35 or older (non-consolidated)

86%(FY2021)100%(FY2026)

Ratio of women in new graduates hired

52.6%(FY2021)40%

or more(FY2026)

39

Financial Section/
Corporate Data

Rika Ayano

1. Scope of application
This Policy applies to officers and employees of Fuyo Lease Group(including temporary employees and contract employees; collectively the“Employees”). We also expect that our customers, partner companies,
and all other stakeholders of Fuyo Lease Group will respect this Policy.
2. Upholding international standards
Fuyo Lease Group will uphold international standards on human rights,
such as the “International Bill of Human Rights (Universal Declarationof Human Rights and International Covenants on Human Rights)” andthe “ILO Declaration on Fundamental Principles and Rights at Work,”
and will also fulfill our responsibility to respect human rights under the“Guiding Principles on Business and Human Rights” and “Children’s
Rights and Business Principles.”In addition, Fuyo Lease has endorsed and signed the “United Nations
Global Compact (UNGC).” We also support the UNGC’s 10 principles
related to the 4 areas of “ensuring human rights,” “eliminating unfair
labor,” “addressing environmental issues,” and “preventing corruption”
and will continue striving to realize the principals.
3.	Compliance with laws and regulations
	
F uyo Lease Group complies with the laws and regulations applicablein each country and region where we conduct business activities. If
the laws and regulations in a country or region differ from the humanrights standards recognized internationally, we pursue means to respect
internationally recognized human rights standards.

Engagement
The Fuyo Lease Group defines engagement as “a relationshipin which each employee links the growth of the company
with his or her own growth, and contributes to their mutual
growth.” Indicators of engagement are measured throughemployee satisfaction surveys.
Considering increasing engagement to be important for
creating social value and corporate value, we implemented the
Job FA System to increase engagement through communication
with employees. Meanwhile, we will expand systems andenvironments where older employees can actively participate.

Corporate Governance

General Manager of Group
Legal & Compliance Division

The Fuyo Lease Group addresses the “business and humanrights” issue and it is one of the major initiatives in its CSV
management.
We are aware that our business activities could haveadverse effects on human rights. Considering that, we haveadopted a human rights policy that makes clear our stanceNon-financial KPI target
Percentage of female employees in management
positions (Fuyo General Lease; hereinafter “non-consolidated”)

Management

Human Rights Policy

Health and productivity management and work-life balance
The Group believes that providing a healthy and safe work
environment where employees can work energetically will
invigorate the organization and increase productivity.
We consider investment in the health of our employees (efforts
to maintain their health) and human resources development as
investment in human capital. Consequently, we promote healthand productivity management, considering it strategic healthmanagement from a management perspective.
We announced a Health Declaration in fiscal 2021. Considering
employee disease prevention and early detection of disease apriority issue, we have lowered the age at which employees
can receive a complete medical checkup with no out-of-pocket
expenses from 40 to 35, and made receiving a complete medical
checkup mandatory. Due to these and other initiatives, theCompany has been certified as a 2022 Health and Productivity
Management Outstanding Organization (large enterprise category).
We strive to build an employee-friendly working environment
where all employees can autonomously strive to maintain awork-life balance and enhance the quality of both life andCSV Highlight

Contributing to
growthEngagement
Company

Employees
Contributing to
growth

4. Human rights issues in business activities
1) Forced labor and child labor
Fuyo Lease Group does not tolerate forced labor or child labor or
any form of modern slavery.
2) Discrimination
Fuyo Lease Group respects the diversity of individuals and all basic
human rights. We do not engage in any action that violates humanrights, and we do not tolerate discrimination based on race, religion,
gender, age, nationality, sexual orientation, disability, or other factors.
3) Labor
Fuyo Lease Group respects the freedom of association and the rightto collective bargaining that Employees hold in labor-management
relations. We will protect labor rights, reduce excessive working

as a company that respects human rights. Under the policy,
the Fuyo Lease Group will contribute to realizing a society
where human rights are respected in its business activities.
The policy was discussed at the Executive Committee,
and the Board of Directors has passed a resolution
supporting the policy.

hours, and implement other necessary measures in accordance withapplicable laws and regulations. We will establish a work environment
where Employees can continue to work healthily, safely, andcomfortably in an atmosphere of mutual respect without harassment orexcessive work, and we will seek to create a corporate culture in which
a diversity of personnel can thrive.
5. Human rights due diligence
Fuyo Lease Group recognizes the possibility that the business activities
we conduct and the services we provide could potentially cause orcontribute to an adverse impact on human rights or become linked tosuch an impact. Fuyo Lease Group will conduct appropriate human rights
due diligence to identify and assess any actual or potential adverse impact
on human rights in relation to our business activities and to prevent andmitigate any such impact.
6. Grievance Mechanisms and Remedies
Fuyo Lease Group will strive to establish a mechanism for receiving requests
for consultation and reports regarding human rights and for remediating andrectifying such pertinent issues in order to deal with human rights issues
in our business activities. If it is found that our business activities could
potentially cause or contribute to any adverse impact on human rights, or if it
becomes evident that our business activities are linked to such an impact, we
will promptly take remedial measures and strive to remedy the issues.
7. Dialogues with stakeholders
Fuyo Lease Group recognizes the importance of understanding any
adverse impacts on human rights from the perspective of the affected
people and taking appropriate measures to correct them. We willseek to advance and improve measures for human rights throughengagement and dialogue with stakeholders.
8. Education and training
Fuyo Lease Group will distribute this Policy to all Employees and provide
continued training to ensure that everyone understands this Policy andcan act in accordance with this Policy in their own individual duties.
9. Information disclosure
Fuyo Lease Group will disclose information on our website and via
other appropriate means regarding the initiatives based on this Policy.

Fuyo Lease Group Integrated Report 2022

40

Digital Transformation Strategy/Disclosure Based on TCFD Recommendations

About Us

Introduce digital technologies and strive to solve social issues
spur society’s shift to digitalization, we introduce digitaltechnologies and the value we provide to society continues
to adapt to the changing external environment. In this way,
we aim to create shared value over the long term.

Four DX strategies
Fuyo General Lease developed four strategies to create shared value through DX.
Strategy1Strategy

Strategic
Targets

Support recurring and subscription businessmodels and other means of businessdevelopment

Strategy

Strategic
Targets

3

4

Drastically streamline and sophisticate ourbusiness operations, encourage flexible workstyles
and reform our operational processes

Sophisticate the sales support system
Sophisticate marketing through data
coordination and analysis

Strategic
Targets

Streamline internal operational processes
using digital means and reskill IT and DX
human resources

In April 2022, we established the DX and Marketing Strategy
Div. and the DX Strategy Promotion Committee. The former
engages in the promotion of our DX strategies and the latter ischaired by the president. With the DX and Marketing Strategy
Div. serving as the Committee’s administrative body, theCommittee deliberates and reports on (1) the development of
the organization and structure necessary for the promotion of
DX strategies, (2) the promotion of sales DX strategies and (3)the development of environments for the utilization of IT systems
and digital technologies to support our DX strategies.

DX Strategy Promotion Committee (chairperson: President, secretariat: DX and Marketing Strategy Div.)
Operating Process Working Group

Customer Service Working Group

Systems Working Group

Promotion of sales DX

Development of the utilization of IT systems
and digital technologies

General Manager of Corporate Planning Division

General manager of the DX and Marketing Strategy Div.
General manager of the Administrative Planning Div.
General Manager of ICT Solutions
Business Division
General Manager of BPO Service
Promotion Division
General manager of the E-Business
Marketing Div.

41

Financial Section/
Corporate Data

Fuyo Lease Group’s initiatives for the pursuit of decarbonized society
In 2018, we became the first general lease company in Japan toparticipate in RE100. Our goal is to achieve RE100 and carbon
neutrality (Scopes 1 and 2) throughout the Group by 2030.
Operating in extensive areas of business and having an
extensive customer base, the Fuyo Lease Group believes that
contributing to the decarbonization of society as a wholethrough its business activities to be an important commitment
and actively pushes forward with initiatives based on thefollowing three pillars: (1) the renewable energy generation
business, (2) the promotion of renewable energy-related
infrastructure and (3) investment in and commercialization
support for renewable energy-related technologies.

Overall picture of initiatives for the shift to renewable energy
Participate in RE100 and encourage
the shift to renewable energy
1

Use of renewable

2

Renewable energy business

100% of Group power consumption isrenewable

2024 target: 50%, 2030 target: 100% electric power

Contributing to the promotion of a decarbonized society through business (three pillars)

Renewable energy generation business

Promotion of renewableenergy-related infrastructure

Investment in and commercialization support for
renewable energy-related technologies

Contributing to local communities through thedevelopment of renewable energy power plants

Promotion of renewable energy-related
infrastructure through a broad customer base

Seeking investments and business allianceapproaches to create new business opportunities

Fuyo Lease Group builds a CSV Promotion System (pages
35 and 36) and engages in initiatives for the achievement ofa sustainable society. The Creating Shared Value Promotion
Office identifies risks and opportunities concerning climatechange. Non-financial goals are set for the opportunities
related to climate change that are recognized as particularly

important. Progress is managed by the CSV Promotion
Committee and reported at Board of Directors meetings at
least once a year.
We build a system for the management of climate changerisks and manage climate change risks using a group-widerisk management system.

Strategy
To quantitatively measure the impact of climate change on
our financial affairs, we performed a scenario analysis basedon two climate change scenarios, the 1.5 °C scenario andthe 4 °C scenario. (See page 43 for the results of the analysis.)

Impact on our business operations and measures to address the risks

General manager of the Systems Planning Div.

General Manager of Human
Resources DivisionCorporate Governance

Governance

DX Promotion System

Development oforganization and structureManagement

Fuyo Lease Group is committed to the mitigation of climate change by reducing the GHG emissions of its business operations.
At the same time, the Group’s business activities are based on the consideration of the risks and opportunities that climate change
brings to the Group’s business environment.
Aware of the importance of correctly communicating to our stakeholders the impact of climate change on us, we expressed support
for the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) in 2019.

Develop and expand cloud solutions
Support our partner companies developing
DX products

Strategy

Provide digital support for sales activities
Strategic
Targets

2

Increase the value we provide through advanced
products and services

Efforts to expand new business areas

CSV Highlight

Information disclosure based on the TCFD recommendations

DX Strategy
Under the philosophy of Creating Shared Value (CSV), theFuyo Lease Group simultaneously pursues the resolution ofdiverse social issues and the provision of economic value
through its business operations. As technological advances

Fuyo Shared Value

General manager of the Systems
Promotion Div.

The results of the scenario analysis show that the impact ofclimate change risks on the Group’s business operations arelimited in both the 1.5 °C and 4 °C scenarios and opportunities
outweigh risks. In both scenarios, an increase of consolidated
gross profit can be expected and we found that there is morepotential for the increase of profit in the 1.5 °C scenario.
To address climate change risks while maximizing
opportunities, the results of the analysis are reflected in the

non-financial goals (pages 15 and 16) of our Medium-termManagement Plan, Fuyo Shared Value 2026. The Mediumterm Management Plan was written on the assumption thatthe society would aim to limit global warming to 1.5 °C. By
concentrating our management resources on decarbonization,
we intend to profit through, for example, the expansion of ourrenewable energy power generation business and greater
financing for EV and FCV.
Fuyo Lease Group Integrated Report 2022

42

Information Disclosure Based on TCFD Recommendations

Key risks and opportunities related to climate change (excerpt)*1

Business summary

Impact by scenario

Time span

1.5°C

4°C

Medium term
to long term

Minor

Minor

Short term tolong term

Minor

Minor

Company-wide
Transition
risks

Introduction of a carbon tax(policies and legal regulations)

Risk of increase of costs for the achievement of RE100 and carbon neutrality
due to the introduction of a carbon tax

Real EstatePhysicalrisks

Increasingly serious natural
disasters (acute)

Risks of rise in insurance premiums after increase and intensification of natural
disasters

Energy & Environment
Transition
risks

Opportunities

Institutional changes of energy
purchase systems (FIT, FIP), etc.
(policy and legal restrictions)Risks of decrease in revenue from electric power sales, increase in operationalcosts, etc. in the event of unexpected institutional changes

Rise in demand for renewableenergy (products, services andmarkets)

Short term tolong term
Short term tolong term
Short term tolong term

Increase of initiatives for domestic renewable energy projects
Increase of initiatives for overseas renewable energy projects

Business opportunities brought by
new technologies, new systems, etc.
(products, services and markets)

Increase of initiatives for new areas of business such as secondary energy

Stricter regulation of CO2 emissions(policy and legal restrictions)Risks of decrease in demand for the lease of conventional diesel and gasolinepowered vehicles due to a decrease in demand for gasoline-powered vehicles
following the tightening of CO2 emissions regulations, etc.

Short term tolong term

MediumMedium

Major

Major

Major

MediumMajor

MediumThe Fuyo Lease Group believes that climate change risks are acategory of managerial risks that should be managed, and it
manages these risks using an integrated risk management
system. More specifically, the Corporate Planning Div. is the risk
management department that directs the Creating Shared
Value Promotion Office, which is the department in charge ofrisks

Opportunities

Rise in demand for electric vehicles(markets)

Fuyo Lease joined RE100 in 2018 and the Group set mediumand long-term environmental targets for the shift of all of theelectric power it uses in its business operations to renewableenergy and also achieving carbon neutrality (Scopes 1 and 2)
by 2030.
In fiscal 2021, all of the electric power used at the Group’s head
office building was shifted to RE100-compliant electricity and ouroverseas affiliates were also encouraged to use renewable

Medium term
to long term

Mediumrisks

Opportunities

Short term tolong term

MediumMediumCO2 emissions*2, *3Compared to
FY2020(Scope 1 and 2)

 eceiving inquiries regarding existing products and increasing profitability throughR
investment in and cooperation and synergy with peripheral businesses
Venture capital investment and cooperation in new areas of technology(sustainable aviation fuel (SAF), hydrogen/electric/eVTOL (electric vertical takeoff
and landing) aircraft, etc.)

Introduction of new technologies
related to aircraft and the formation ofa new market (products and services)

Percentage ofenergy used that isrenewable energy

RE100 target* 2

Risks of decrease in profit resulting from the resale prices of old model aircraft
after the termination of the lease period alongside the shift to fuel-efficient
aircraft

Changes in the businessenvironment (market)

risks, regarding risk management whenever appropriate. The
Creating Shared Value Promotion Office monitors major risks
related to climate change that may affect the Fuyo Lease Groupand reports any risks that have occurred immediately to the risk
management department, receives guidance and takes
appropriate action.

energy. Consequently, the percentage of power consumed by
the entire Group that is renewable energy rose to 44%.
This led to a significant reduction of CO2 emissions (Scopes 1
and 2) to 1,455 t-CO2 in fiscal 2021, down 28% YoY. Goingforward, we will stay committed to the decarbonization of ourbusiness operations by, for example, encouraging all of ouroffices and affiliates to shift to renewable energy and replacing
our company vehicles with EVs or FCVs.

2024

Small tomediumAircraft
Transition

Medium term
to long term

Medium2030
Percentage ofenergy used that isrenewable energy

50%*2 Applicable to both Fuyo General Lease and its consolidated subsidiaries.
*3 Scope 1: direct emissions from the use of fuel in company vehicle, city gas, etc.; Scope 2: indirect emissions accompanying the use of purchased electric power, etc.

Minor

CO2 emissions (Scope 1 and 2) *4, *5
Medium term tolong term

MediumMediumDefinition of timeline [Short term]: present - 2025 [Medium term]: 2026 - 2030 [Long term]: 2031 - 2050
Definition of impact (monetary impact on our consolidated gross profit in 2030) [Major]: greater than 3 billion yen[Moderate]: 100 million - 3 billion yen [Minor]: Smaller than 100 million yen

Perspective under 1.5 °C scenario
Naturalenvironment

Scope 1(t-CO2)

Electricity used *5

Scope 2 *6

General electric power

(MWh)

3,000

Renewable energy

4,500
3,625

Introduction of policies and legal restrictions
for decarbonization

Governmental
and legal
restrictions

Real Estate
Promotion of
decarbonization businessand creating synergy
beyond the barriers between
domains
Mobility
Diffusion of EVs and related infrastructure (+)
Increase of opportunities for offering newservices (+)

Evaluation of efforts toachieve RE100 and carbon
neutrality

43

Insurance premiums rise as
natural disasters increase (-)

Mobility
Diffusion of EVs and related
infrastructure is limited (-)
Opportunities to offer new services do
not increase (-)

Introduction of new technologies
and formation of a new market (+)

Opportunities

1,273

Risks

1,197

1,000

2,016

3,000

1,283

1,414

Initiatives for achieving RE100
and carbon neutrality may bepoorly evaluated

2,599

1,596

1,500

872

3,249
2,599

2,884
2,030

770

707

688

0

Energy & theenvironment

Decarbonization businessstagnate

2,884

2,658

Conventional consumption andeconomic activities

Real Estate

Aircraft

1,971

1,455

2018/3Society andcustomers

Establishing renewable energy as the main
source of power (+)
Rise in demand for corporate PPA, etc. (+)

1,904

3,249
2,658

No major changes in policies orlegal restrictions

Governmental
and legal
restrictions

Energy & theenvironment

2,043

Rise in average temperatures andintensification of wind and water damage

Promote decarbonization throughout society

Society andcustomers

2,000Perspective under 4 °C scenario
Naturalenvironment

100%

Achievement of carbon
neutrality

30%

reduction*1 In analyzing the 1.5 °C scenario, there were some items where outside information was insufficient, and data from the 2 °C scenario was used.

Natural disasters intensify to a certain
extent but are contained

Financial Section/
Corporate Data

Corporate GovernanceFuyo Lease Group’s mid- and long-term environmental targets

Promotion of one-stop services with electric vehicles
Promotion of partnership with car manufacturers and dealers and alliancestrategies with power companies, trading firms, etc.
Building a maintenance network
Promoting FCV before other companies do

Rise in demand for services related
to electric vehicles (products andservices)Management

Indicators and Targets

Mobility
Transition

CSV Highlight

Risk Management

Effect on our operations
Category

Fuyo Shared Value

About Us

Thermal power generation is the main sourceof power and the expansion of renewableenergy power sources is limited (-)
Risks of damage to renewable energy power
stations we own or invest in and insurance
premiums for them increase (-)

2019/32020/3603
2021/3584
2022/30(FY)

2018/3

2019/32020/32021/32022/3(FY)*4 CO2 emissions are calculated using the emission coefficient specified in the Ministerial Ordinance on Calculation of Greenhouse Gas Emissions Emitted by Specified Emitters. (Calculations concerning
domestic electric power use the annual adjusted emission coefficients for general power transmission and distribution businesses that supply power in the regions where the offices to which thecalculations apply operate. Calculations concerning overseas electric power use the emission coefficients of the specific country published by the International Energy Agency (IEA)) However, Fuyo General
Lease and companies of the Fuyo Lease Group are not considered to be specified emitters.
*5 The statistics are collected from all domestic offices of Fuyo General Lease Co., Ltd., Fuyo Auto Lease Co., Ltd., FGL Group Business Service Co., Ltd., FGL Group Management Service Co., Ltd., FGL
Circular Network Co., Ltd., FGL LeaseUp Business Service Co., Ltd., Aqua Art Co., Ltd., FGL Techno-Solutions Co., Ltd., Sharp Finance Co., Ltd., Accreative Co., Ltd., INVOICE Inc., FUJITA Co., Ltd.,NOC Outsourcing & Consulting Inc., YAMATO LEASE CO., LTD. and WorkVision Corporation as well as overseas affiliates and subsidiaries including Fuyo General Lease (USA) Inc., Fuyo General Lease(China) Co., Ltd., Fuyo General Lease (HK) Limited, Fuyo General Lease (Asia) Pte. Ltd., Fuyo General Lease (Taiwan) Co., Ltd., Fuyo General Lease (Thailand) Co., Ltd. and FGL Aircraft Ireland Limitedand Aircraft Leasing and Management Limited. For the Fuyo Lease Group companies, figures from before the figures began to be recorded are not indicated.
*6 Up to fiscal 2020, Scope 2 emissions were calculated based on standard emission factors, but from fiscal 2021 onward, they are calculated based on emissions factors after adjustment. Results of past
years have been revised accordingly.

Aircraft

See our website for the full text of the information disclosed based on the TCFD recommendations.

Demand for aircraft is higher (+)
Introduction of new technologies
is limited (-)

Opportunities

Risks

Fuyo Lease Group Integrated Report 2022

44

Community Engagement

About Us

Basic
ApproachManagement

CSV Highlight

Corporate Governance

Financial Section/
Corporate Data

Contribution to academia and researchCommunity Engagement
Recognizing close ties with its neighbors,
the Fuyo Lease Group hopes to growtogether with them, while being a good
corporate citizen who contributes tothe development of local communities.

Fuyo Shared ValueT h e G ro u p h a s f o r m u l a t e d a C S R p o l i c y a n d i s
conducting CSR activities that make best use of its
knowhow, products, and services focusing on theenvironment, community engagement, academia andresearch, and assistance to disaster-affected areas.

contributed by universities are limited to academic purposes,
there is a “GAP” in funding between basic research andcommercialization. The GAP Fund is intended to fill this funding
gap and support commercialization of research results. Fuyo
Lease continues to provide funding for the GAP Fund, participate
in the selection of eligible projects, and support thecommercialization of advanced technology.

In October 2017, Fuyo Lease established Japan’s first industryacademia collaborative GAP Fund in cooperation with the Tokyo
Institute of Technology and Innovations and Future Creation Inc.
In general, commercializing the results of university researchrequires additional costs outside of research expenses, including
the cost of additional testing, creation of prototypes and customer
interviews. However, since the research expenses and subsidies

GAP Fund

Venture Companies
External licensing
Joint development of products and services

GAP

A fund intended to fill the “GAP” to commercialization

Number of selected
projects: 15

Commercialization

Aqua Art Co., Ltd.
President & Chief Executive Officer

Laboratory/
researchers

Development of products and services using the technology

Research
results

Funding(for creation of prototypes, etc.)

Yukari Ueno

Joint research agreement

Innovations andFuture Creation Inc.

Office ofTokyo Instituteof Technology

45

Innovation

Funding
AdviceContributions to Culture and the Arts

Environmental and Community Engagement
Aqua Art, a group company, provides decorative interioraquariums for rent. Replicating a natural ecosystem in thesetanks promotes purification of the water and minimizes wateruse. To minimize the impact on the environment andecosystems, Aqua Art procures fish and waterweed via
aquaculture farms and established the SDG-Related Project in2020 to breed fish. The company succeeded in breeding theJapanese rosy bitterling, an endangered species of freshwater
fish indigenous to Japan, and the platy, a tropical fish. Thiseffort and the aquariums are described in the special edition of
the Yomiuri SDGs Newspaper: Life and the SDGs (first issue
published in July 2021). In Japanese, the article was titled“Learning about ecosystems from a water tank.”
Fuyo Lease and Aqua Art also hold an annual aquarium
design contest jointly with TOKYO DOME HOTELCORPORATION. Students majoring in art and design at
Tokyo Metropolitan Kogei High School and Tokyo Designer
Gakuin College, as well as students studying to becomeaquarists at TCA Tokyo College of ECO & Animals, designand decorate aquariums which are then exhibited at theentrance and lobby of the Tokyo Dome Hotel. During theexhibition period, a contest is held in which visitors to thehotel vote for their favorite.
In 2021, a miniature aquarium was opened as a summer
event at Nagareyama Otakanomori S.C. The entertaining
exhibition enabled children to create fond memories of

Research andsummer. As the theme of the exhibition was learning, theaquarium posted a panel on fish trivia and communicatedthe fun of seeing and the fun of learning at the same time.
Besides the attractiveness of the aquarium, it offeredchildren an opportunity to think about the environment of theworld inhabited by fish.
A panel about the platy
bred by Aqua Art

Japanese rosy bitterling laying eggs

In June 2021, we established the Fuyo Joshibi Venus Fund with
Joshibi University of Art and Design to support students aiming tobecome artists.
Students at art colleges who seek to enter society as artists,
designers and creators need opportunities for more people tolearn about their work. Through ongoing funding provided to thisfund over a period of ten years, Fuyo Lease will purchase works
created by students at Joshibi University of Art and Design, while
also working to provide numerous venues for the works to be
exhibited by leveraging our relationships with our customers andmany other companies. Extensively sharing with the world, theworks that have been kept by individuals or exhibited only within
the campus will hopefully serve as opportunities for the students
to take a step closer to their dreams.

The university has set up a foundation operation committee
as it starts to exhibit student works in the 2022 school year. A
resolution regarding the committee's operation policy has been
passed and we are preparing for an exhibition.
Our goal is to contribute to the advancement of art andculture in Japan by actively supporting students seeking tobecome artists through promotion of this fund, and by giving
new art back to society.
Photo taken in front of theWinged Victory of Samothrace
statue(The "Venus" of the Fuyo Joshibi
Venus Fund is derived from theWinged Victory statue)

Fuyo-Joshibi Venus Fund
Joshibi University of
Art and Design
Supervision and selection of works

Fuyo-Joshibi Venus Fund
Purchase of works

Contribution tofund management
Solicitation
Provide works

Works
Students
The miniature aquarium at Nagareyama Otakanomori S.C.

Provide exhibition
venuesCompanies(Left) Yasunori Tsujita, Chairmanof Fuyo Lease(Middle) Ms. Ogura, presidentof Joshibi University of Art and
Design(Right) Mr. Fukushita, chairmanof Joshibi University of Art and
DesignFuyo Lease Group Integrated Report 2022

46

Board Members

Board Members

About Us

4

As of June 23, 2022

Fuyo Shared Value

Keiji Takada

CSV Highlight5

Corporate
GovernanceManagement

Yusuke Kishida

6

Senior Managing Director
Apr. 1986 Joined Fuji Bank, Limited

Director Outside Independent
Apr. 1972 Joined Nippon Oil Corporation

May 2010 General Manager of Corporate Banking

Apr. 2012 Deputy General Manager, Financial Planning

Apr. 2008 Representative Director of ENEOS Celltech

7

Hideo Ichikawa

Department, Mizuho Financial Group, Inc.
D e p u t y G e n e r a l M a n a g e r, P l a n n i n g
Administration Department, Mizuho Bank, Ltd.
Deputy General Manager, Financial Planning
Department, Mizuho Corporate Bank, Ltd.
July 2013 General Manager, Internal Audit Department,
Mizuho Financial Group, Inc. (leaves office inMarch 2016)
Apr. 2016 Director, General Affairs Div., Fuyo Lease
Group
Apr.2018 Executive Officer and General Manager,
Financial Planning Div.
Apr.2021 Managing Executive Officer
Apr.2022 Senior Managing Executive Officer
June 2022 Senior Managing Director and Senior Managing
Executive Officer (current position)
8

Masayuki Yamamura

9

Apr. 1975 Joined Showa Denko K.K.

Apr. 1978 Joined Nippon Telegraph and Telephone

Apr. 1983 Joined Toshiba Corporation

10

Yoshito Tsuruta

Sep. 1988 Joined the Company

Public Corporation
June 2008 Executive Vice President, General Manager ofTokyo Branch of NIPPON TELEGRAPH AND
TELEPHONE EAST CORPORATION
June 2009 Executive Vice President, Senior Executive
Manager of Network Business Headquarters
June 2012 President, Representative Director
June 2018 Counselor to the President (current position)
June 2019 Director of the Company (current position)
To present

11

Masaharu Nakamura

12

Apr. 1982 Joined Yasuda Fire and Marine Insurance Co.,

Ltd. (currently Sompo Japan Insurance Inc.)

Apr. 2015 E x e c u t i v e O ff i c e r, G e n e r a l M a n a g e r o f

Oct. 2012 Deputy General Manager, Credit Div.

June 2020 Full-time Audit & Supervisory Board Member

Apr. 2019 Executive Officer and General Manager, Real

Apr. 2016 Director, Managing Executive Officer, Head ofApr. 2017 Director and General Manager, Credit Div.

Estate Planning Div.

Apr. 2021 Executive Officer and General Manager,

Group Internal Audit Div.

June 2022 Full-time Audit & Supervisory Board Member of

the Company (current position)

Soichi Hosoi

Apr. 1981 Joined The Fuji Bank, Limited
June 2013 Deputy President-Executive Officer, Member ofApr. 1986 Joined The Fuji Bank, Limited

Apr. 1983 Joined The Fuji Bank, Limited

May 2009 General Manager of Kanda Corporate Division

Apr. 2013 Executive Officer, General Manager of Financial

the Board of Directors (Representative Director)of Mizuho Financial Group, Inc. (until June
2014)
Nov. 2013 Deputy President-Executive Officer, Memberof the Board of Directors of Mizuho Bank, Ltd.
(until March 2015)
June 2014 Member of the Board of Directors and Deputy
President and Executive Officer (Representative
Executive Officer) of Mizuho Financial Group,
Inc. (until March 2015)
Apr. 2015 Member of the Board of Directors (retired inJune 2015)
May 2015 Deputy President and Executive Officer of theCompany
June 2015 Director and Deputy President Deputy President
and Executive Officer Representative Director
Apr. 2016 P re s i d e n t a n d C h i e f E x e c u t i v e O ff i c e r
President and Executive Officer
Apr. 2022 Director and Chairman (current position)
To present

473

Director and Deputy President (Representative Director)of Kanda Branch of Mizuho Bank, Ltd.
June 2011 General Manager of Kudan Division No.1 ofKudan Branch
Apr. 2013 General Manager of Corporate Banking Division
No.11 of Mizuho Corporate Bank, Ltd.
Apr. 2014 E x e c u t i v e O ff i c e r, G e n e r a l M a n a g e r o f
Corporate Banking Division No.11 of Mizuho
Bank, Ltd. (retired in April 2016)
May 2016 Managing Executive Officer of the Company
Apr.2021 Deputy President and Executive Officer
June 2021 Director and Deputy President
Deputy President and Executive Officer
Representative Director
Apr. 2022 President and Chief Executive Officer
President and Executive Officer (current
position)
To present

Planning Division of Mizuho Financial Group,
Inc. (retired in April 2014)
Executive Officer, General Manager of Financial
Planning Division of Mizuho Bank, Ltd. (retiredin April 2014)
Executive Officer, General Manager of Financial
Planning Division of Mizuho Corporate Bank,
Ltd. (until July 2013)
Apr. 2014 Managing Executive Officer of the Company
June 2014 Managing Director and Managing Executive
OfficerApr.2020 S e n i o r M a n a g i n g D i r e c t o r a n d S e n i o r
Managing Executive Officer
Apr.2022 Director and Deputy President
Deputy President and Executive Officer
Representative Director (current position)

13

Takashi Yonekawa

Apr. 1985 Joined the Company

Apr. 2022 Counselor of the Company

Hiroaki Oda

Design Center (retired in March 2014)
Specially appointed professor at Joshibi
University of Art and Design
Apr. 2014 Professor (current position)
June 2015 Director of Aisys, Inc. (retired in May 2019)
June 2017 Head of Career Support Center of Joshibi
University of Art and Design (retired in May
2019)
June 2019 Head of College of Art and Design (retired in
May 2021)
Administrator (current position)
June 2021 Vice-President (current position)
Head of Research Institute (current position)
Director of the Company (current position)
To present

Audit & Supervisory Board Member Outside IndependentOct. 2001 Inspector of Credit Division, Credit Div.

(current position)
To present

Apr. 2012 Head of Strategic Design Promotion Division of

Full-time Audit & Supervisory Board Member

Apr. 2008 General Manager of Finance Division

Finance Division

2

Hiroko Matsumoto

Director Outside Independent

Full-time Audit & Supervisory Board Member

President and Chief Executive Officer (Representative Director)

Nippon Oil & Energy Corporation (currently
ENEOS Corporation)
Director of JX Holdings, Inc. (currently ENEOS
Holdings, Inc.)
June 2014 Advisor of JX Nippon Oil & Energy Corporation(currently ENEOS Corporation) (retired in June
2016)
June 2015 Director of the Company (current position)
To present

Director Outside Independent

Officer and Chief Executive Officer (CEO)Jan. 2017 Representative Director, Chairman of the
Board
June 2018 Director of the Company (current position)
Mar. 2020 Chairman of the Board, SHOWA DENKO K.K.
Jan. 2022 Director of the company
Mar. 2022 Corporate advisor (current position)

Yasunori TsujitaCo., Ltd.

June 2012 Representative Director, President of JX

Director Outside Independent
Jan. 2011 Representative Director, President, Corporate

1

Seiichi Isshiki

Director and Deputy President (Representative Director)
Apr. 1984 Joined The Fuji Bank, Limited

Division No.13 of Mizuho Corporate Bank, Ltd.
(retired in March 2012)
Apr. 2012 General Manager of Corporate Business Divisionof the Company
Apr. 2014 Executive Officer, General Manager of Corporate
Business Division
Apr. 2016 Managing Executive Officer
Apr. 2020 Senior Managing Executive Officer
June 2020 Senior Managing Director and Senior Managing
Executive Officer
Apr. 2022 Director and Deputy President
Deputy President and Executive Officer
Representative Director (current position)

Director and Chairman

Financial Section/
Corporate Data

Kansai Division I of Sompo Japan Nipponkoa
Insurance Services Inc. (currently Sompo
Japan Insurance Inc.)
Apr. 2018 Senior Executive Officer, Head of Kansai
Division I
Apr. 2020 Vice-President and Executive Officer, Sompo
Japan Insurance Inc. (retired in June 2020)
June 2020 Audit & Supervisory Board Member of TPR
Co., Ltd. (current position)
July 2020 Presid ent of Yasud a Nip p onkoa Health
Insurance Union (current position)
Chairman of Tokyo Federation of National
Federation of Health Insurance Societies(current position)
June 2021 Outside Audit & Supervisory Board Memberof the Company (current position)
To present

Hiroshi Imoto

Audit & Supervisory Board Member Outside Independent
Apr. 1981 Joined the Export-Import Bank of Japan(currently the Japan Bank for International
Cooperation)
Oct. 2008 General Manager of International Management
and Planning Division and Manager ofInter national Management and Planning
Division’s Management and Planning Office ofJapan Bank for International Cooperation
Jan. 2011 Director General for Western Japan
July 2011 Western Japan Representative for Industry
Finance Department
Apr. 2012 Full-time Corporate Auditor of Japan Bankfor International Cooperation (retired in June
2016)
June 2021 Outside Audit & Supervisory Board Member of
the Company (current position)
To present

9

12
6

8

10

4

1

7

2

13

3

11

5

Fuyo Lease Group Integrated Report 2022

48

Message from an Outside Director

About Us

We will increase the effectivenessof the Board of Directors towardachieving the new Medium-termManagement Plan.
Seiichi Isshiki
Outside Director

During the establishing process of the new Mediumterm Management Plan, I participated in the planning
strategies
I took an Outside Director’s position in June 2015 and havebeen participating in this company as a director longer thanany of other current directors. During establishing the new
Medium-term Management Plan, I joined several discussions.
Compared with the establishment of the previous Mediumterm Management Plan, I had many more opportunities toparticipate in. My participation in this process was a very
impressive experience for me.
When I first heard about the original draft, I was puzzled
by the ambitious plan. It is true that the previous Mediumterm Management Plan aggressively expanded the areas ofour business operations and led us to achieve steady growth
and there are good reasons for the new plan being very
ambitious. As an Outside Director, I had to solve issues
through in-depth and straightforward dialogue to convince
myself about the plan. For example, I questioned thebusiness strategy that would support the achievement of49

the ambitious plan, to ensure it was specific and wellgrounded and to understand the depth of the executives’
understanding of business operations.
The Outside Directors discussed and provided
recommendations based on their expertise and experiencein business management. For example, I have led theoutsourcing of indirect departments in the management ofan energy business, and from this experience I confirmed
management's awareness of the issues involved in
expanding the BPO business.
In pushing forward with the strategy, the company
significantly needed to improve in terms of the developmentof human resources and in other areas. We asked manyquestions and gave a lot of advice regarding these issues.
I heard that there was considerable discussion within thecompany in response to our questions, but I am convincedthat the results of this sincere dialogue were reflected in theplan, and that it has resulted in positive outcomes.
Improvement of the effectiveness of the Board of
Directors and future issues

Fuyo Shared ValueCSV Highlight

I can feel that the company isengaged in lively discussion and
that
this
is
reflected
inmanagement strategies. This is
attributable to the many different
efforts to continue substantive,
lively discussion in pursuit of thegreater effectiveness of the Boardof Directors.
The existence of the Outside
Directors is particularly important.
All the outside directors of theFuyo General Lease Group are
appointed from a wide range ofindustries and backgrounds,
while all having a base ofknowledge related to business
management, including a female
executive and the composition isvery well-balanced in deepening
multifaceted discussions.
A
preliminary
explanatory
session precedes every board
meeting so we can directly talkwith the general managers anddeputy general managers about specific topics. By obtaining
information about the issues discussed in in-house meetingsand expected risks, we have in-depth discussion in
preparation for board meetings. This is enough as far as
giving advice and recommendations on the formulation andimplementation of a strategy. However, we still have some
improvements that are needed in terms of the monitoring
function.
Current and future activities of the Nomination andCompensation Advisory Committee
Four of the five members of the Nomination andCompensation Advisory Committee are Outside Directors. It
is safe to say the Committee remains independent and also
maintains objectivity in its supervisory duties. Working forthe company on a part-time basis inevitably limits theavailability of the information we get. Despite this, we needto establish a process for properly developing and selecting
executives and to improve discussion regarding a successor
development plan.
We openly discuss compensation and try to keep our
perspectives objective. Recently, we advanced thediscussion regarding the introduction of non-financial
indicators to the evaluations for performance-based
compensation. To our understanding, this has been a very
challenging task for a financial institution. The decision wasvery important for enabling our officers and employees towork together on the core theme of the new Medium-termManagement Plan, which are pursuing both social value andManagement

Corporate
Governance

Financial Section/
Corporate Data

corporate value to achieve sustained growth. We hope wewill increasingly find that the decision has been effective.
The supervisory function that the Board of Directors
should perform
The Outside Directors should demonstrate the supervisory
function they are expected to perform in the process forachieving the new Medium-term Management Plan.
Importantly, the executive division and the Board of Directors
should maintain their moderately intense relationship while we
provide recommendations based on an appropriate amount of
information and communicate them from broad perspectives
that only people outside the company could have.
The company's executives have a solid view that, morethan anything else, they need to invest in human resourcesin order to achieve sustained growth in accordance with the
new Medium-term Management Plan by solving problems
related to social value while at the same time achieving
economic value. Another important point is how the Fuyo
Lease Group and everyone within the entire Group can work
together to achieve the same goal. We will also provide
support with the goal of improving the Group’s governanceas the Group consolidates while ensuring the diversity of thedifferent companies remains intact.
It is wonderful to see that our stance in working on ourbusinesses, aiming to create corporate value compatible ofpursuing social value, has been taking root as a part of ourcorporate culture. I would definitely like to participate in andcontribute to the efforts to make this happen.
Fuyo Lease Group Integrated Report 2022

50

Corporate GovernanceFuyo Shared Value

About Us

CSV Highlight

Management

Corporate
Governance

Financial Section/
Corporate Data

Corporate Governance
Our Approach to Corporate GovernanceCorporate Governance Structure1

Appointment and Dismissal

Appointment and Dismissal

3(Cooperation)

Board of Corporate Auditors:

Audit

4 Corporate Auditors(including 2 Independent
Outside Corporate Auditors)(Cooperation)

Appointment and Dismissal

1

ReportBoard of Directors:
9 Directors (including
4 Independent
Outside Directors)

Audit

Report2
Consultation Nomination and Compensation
Advisory Committee:
Recommendation

Group Internal Audit Division

Report5 members (consisting of
Directors excluding Executive
D i re c t o r s a n d i n c l u d i n g 4
Independent Outside Directors)

Board of Directors
Operations Office(Cooperation)

President & CEO

Business
Execution Function

Internal Committees
Compliance Committee
CSV Promotion Committee
DX Strategy Promotion Committee

Executive Committee

ALM Committee

Funds Investment Council
New Business Council

Operational execution units (executive officers,

Internal Committees

Nomination and Compensation Advisory Committee:

Strengthening Corporate GovernanceFuyo Lease has implemented various initiatives aimed at strengthening corporate governance. Initiatives since 2015 are as shown below.

Compliance Committee

The Compliance Committee discusses matters related
to the promotion of compliance systems and theformulation of compliance programs (annual plan).

CSV Promotion Committee

The CSV Promotion Committee directs CSV promotion
and deliberates on materiality planning, etc.

DX Strategy Promotion
Committee

The DX Strategy Committee directs overall DX strategies
and deliberates on the development of frameworks
for the promotion of the strategies and necessary IT
systems and the formulation of sales strategies.

Business Risk Review
Committee

Business Risk Review Committee deliberates on projects
that have a significant influence on management andpolicies for initiatives regarding business models, andmonitors the status of business risk, including credit risk.

ALM Committee

ALM Committee deliberates on specific measures formarket risk management, including interest rates, foreignexchange and price fluctuations, and monitors market
risk situations.

System Strategy Committee

System Strategy Committee discusses and promotes
overall strategies for the Company’s IT systems.

Funds Investment Council

The Funds Investment Council deliberates on theestablishment of investment limits regarding investment
projects related to funds and monitors management status.

New Business Council

New Business Council deliberates on new projects
that may generate new business fields.

departments, offices, branch offices, group companies)

Board of Directors

The Company has set up Nomination and Compensation Advisory Committee as an advisory body of the Board of Directors to ensure objectivity andindependence in the process for determining nomination of officers, remuneration, etc. The Committee deliberates mainly on the nomination of candidates for
Directors and Corporate Auditors or removal thereof, remuneration for Directors, succession plans for President & CEO, and the analysis and evaluation of
overall effectiveness of the Board of Directors. The Committee then reports its findings to the Board of Directors. The Committee consists of five members,
including four Independent Outside Directors and an internal Director. The content of such reporting is determined based on the consent of all members present
at the meeting, in principle, or when such consent may not be obtained, on the consent of a majority of the members present at the meeting. Moreover, approval
and resolution of the Board of Directors are made by respecting the content of such reporting.

Attendance at Board and Committee meetings(attendance in FY 2021 by board members, as of June 23, 2022)
Name
Yasunori Tsujita
Hiroaki Oda

Position
Director and Chairman, Chairman of the Nomination andCompensation Advisory Committee
President and Chief Executive Officer(Representative Director)

Attendance at Board meetings, etc.
12/12

Nomination and Compensation Advisory Committee: 6/6

10/10(Elected in June 23, 2021)

Initiative

Objective

Soichi Hosoi

Director and Deputy President (Representative Director)

12/12

Increased the number of Independent Outside Directors from one to two
Established the Corporate Governance Guidelines
Set up the Nomination and Compensation Advisory Committee

To strengthen the management oversight structure
To comply with Japan’s Corporate Governance CodeTo ensure independence and objectivity in the decision-making process formatters such as nomination and remuneration

Keiji Takada

Director and Deputy President (Representative Director)

12/12

Yusuke Kishida

Senior Managing Director-(Elected in June 23, 2022)

12/12

Nomination and Compensation Advisory Committee: 6/6

Started analyzing and evaluating the overall effectiveness of the Boardof Directors

To verify the effectiveness of the roles, functions, etc. of the Board of
Directors and to make ongoing improvements

12/12

Nomination and Compensation Advisory Committee: 6/6

2018

Increased the number of Independent Outside Directors from two to three
Introduced a new stock compensation plan (Board Benefit Trust (BBT))

To strengthen the management oversight structure
To strengthen links among officers’ remuneration, shareholder value, andprogress towards the medium-term management plan

12/12

Nomination and Compensation Advisory Committee: 6/6

Released an English version of the Corporate Governance Report
Began reporting annual internal audit results and annual plans andpolicies to the Board of Directors

To enhance external disclosure related to corporate governanceTo expand reporting lines for internal audits

10/10

2019

Nomination and Compensation Advisory Committee: 4/4(Elected in June 23, 2021)

2021

Increased the number of Independent Outside Directors from three to four
Revised Corporate Governance Guidelines

To strengthen the management oversight structure
Response to the revised Corporate Governance Code2022

Regarding indicators used for the calculation of performance-linked
compensation based on the new medium-term management plan,changes were made to financial items and non-financial items were added.

To ensure the achievement of financial and non-financial targets in the new
medium-term management plan

Year
2015

2016

51

Internal audit
Internal audit functions are administered by Group Internal Audit Division (staffed by 12
employees). The Group Internal Audit Division conducts operational audits of all departments,
offices, branch offices, and major subsidiaries, and plays a part in ensuring that internal
controls are functioning in addition to examining their effectiveness. The results of these
operational audits are reported to the President & CEO and Corporate Auditors each time,
and to the Board of Directors and the Executive Committee on a periodic basis.
Financial audit
In accordance with the provisions of the Financial Instruments and Exchange Act, Fuyo
Lease entrusts audits of consolidated and non-consolidated financial statements toErnst & Young ShinNihon LLC.

System Strategy Committee

Internal audit

The Company’s Board of Directors consists of nine Directors, including five internal Directors and four Independent Outside Directors, with Independent Outside
Directors accounting for more than one third of the Board of Directors. Independent Outside Directors provide advice and supervision from a perspective
independent from business execution, ensuring enhanced objectivity, transparency and supervisory functions of the Board. In addition, an internal Director who is
not an Executive Director is selected to chair meetings of the Board.
The Board of Directors deliberates and makes decisions on important management issues, and matters specified in laws and regulations, the Articles ofIncorporation, or the Board of Directors Rules. Based on regular reporting, etc., the Board also oversees the execution of duties by Directors and Executive Officers.
Starting in fiscal year 2022, Board of Directors Operations Office was established as the secretariat for the Board of Directors to enhance the governance functions.

2

Corporate Auditing System

Board of Corporate Auditors
The Company’s Board of Corporate Auditors consists of four Corporate Auditors,
including two full-time and two part-time Corporate Auditors. The part-time Corporate
Auditors are Independent Outside Corporate Auditors. According to an audit plan
prepared by the Board of Corporate Auditors, each Corporate Auditor audits the executionof duties by Directors by attending important meetings, inspecting important documents,
examining operations and assets, and by hearing the audit findings of the accounting
auditor and the internal audit department, among other relevant activities. Corporate
Auditors work closely with the internal audit and internal control departments to conduct
audits to enhance audit quality. At the request of the Corporate Auditors, an employee (astaff member from the Board of Directors’ Office) has been appointed to assist them.

Business Risk Review Committee

Group Internal Audit
Division Meeting
Financial
audit

Fuyo General Lease Co., Ltd. (“Fuyo Lease” or the “Company”) has
adopted the Company with Board of Corporate Auditors system and has
appointed four Outside Directors and two Outside Corporate Auditors who
are Independent from the Company. As the table on the right shows, we
are working to ensure that corporate governance functions effectively by
establishing and operating relevant systems, in order to improve corporate
value over the medium to long term.
Furthermore, to improve management efficiency and expedite decisionmaking by separating the management oversight function from theexecution of operations, we have adopted the executive officer system.

3

General Meeting of Shareholders

Accounting Auditor

The Fuyo Lease Group places strong emphasis on creating andmaintaining relationships with various stakeholders, including
shareholders, customers, employees, and local communities. We
believe that the fundamental and most important objective of corporate
governance is to perform business activities with sincerity and fairness
in line with the Group’s mission, vision and value and to achieve themanagement targets outlined in the Group’s fiscal year 2022-2026
medium-term management plan, Fuyo Shared Value 2026.
To achieve sustainable growth and increase corporate value overthe medium to long term, we have established our own Corporate
Governance Guidelines which align with the purpose and spirit of theJapan’s Corporate Governance Code. These Guidelines serve as thefoundation for our corporate governance framework, operating policies
and other management policies, to which we adhere in everything we do.

Corporate Governance Structure

Seiichi Isshiki
Hideo Ichikawa
Masayuki Yamamura
Hiroko Matsumoto

Director (Independent Outside Director), Member of theNomination and Compensation Advisory Committee
Director (Independent Outside Director), Member of theNomination and Compensation Advisory Committee
Director (Independent Outside Director), Member of theNomination and Compensation Advisory Committee
Director (Independent Outside Director), Member of theNomination and Compensation Advisory Committee

Yoshito Tsuruta

Full-time Audit & Supervisory Board Member

12/12

Board of Corporate Auditors: 12/12

Masaharu Nakamura

Full-time Audit & Supervisory Board Member-(Elected in June 23, 2022)

10/10

Board of Corporate Auditors: 9/9 (Elected in June 23, 2021)

10/10

Board of Corporate Auditors: 9/9 (Elected in June 23, 2021)

Takashi Yonekawa
Hiroshi Imoto

Outside Audit & Supervisory Board Member(Independent Director)
Outside Audit & Supervisory Board Member(Independent Director)

Fuyo Lease Group Integrated Report 2022

52

Corporate GovernanceInitiatives to Improve the Effectiveness of the Board of

CSV Highlight

Corporate
GovernanceManagement

Financial Section/
Corporate Data

Director Qualifications and Nomination Procedures

Directors

1 Policy and procedures for nominating and removing Director

candidates for Directors and Corporate Auditors is finalized by

Fuyo Lease is engaged in a number of initiatives to ensure

necessary. After deliberations and reporting by the Nomination

active and substantial discussions at its Board of Directors’

and Compensation Advisory Committee (the Company’s

Our Corporate Governance Guidelines set forth procedures

and Compensation Advisory Committee, which is comprised ofmeetings. Regarding the analysis and evaluation of thecorporate lawyers assists the secretariat for the Committee),for nominating and removing directors in addition to themajority Independent Outside Directors. Selection of Corporate

overall effectiveness of the Board of Directors, the Companyof which independent Outside Directors comprise the majority,

qualifications of Corporate Auditors and procedures for

Auditor candidates is finalized by the Board of Directors upon

conducted a questionnaire with all Directors and Corporate

the results of the analysis and evaluation were resolved by thenominating Corporate Auditor candidates. Under these

consent of the Board of Corporate Auditors.

Auditors as the target audience and held interviews asBoard of Directors.

guidelines, a Director or Corporate Auditor candidate must

2 Independence standards for Outside Directors and Outside

Assessment Criteria

Survey to all directors
and corporate auditors

1
5

PDCA cycle

Formulation andimplementation of response
policies based on evaluation
results

2
Interviews
conducted asnecessary

PDCA cycle

43

Analysis andevaluation by the
Board of Directors

Deliberation
and report by the
Nomination andCompensation
Advisory Committee

Issues in Previous Fiscal Year

Further improvement of
the Board of Directors’
functions

Further deepening of CSV
management

Further enhancement of
information provision tooutside officers

and nominating candidates for Corporate Auditor

the Board of Directors following a discussion by the Nomination

possess an outstanding personality, a wide breadth of

Evaluation process (corporate lawyer assists the secretariat)

1 Composition, etc. of the Board of Directors
2	Roles of the Board of Directors
3	Operation of the Board of Directors
4	Frameworks for supporting Outside Officers
5 Summary
FY2021 Evaluation Results
The effectiveness of the Board of Directors was
confirmed as its size, composition, functions, roles,
operation, and all other evaluation items wererecognized to be appropriate. It is necessary tocontinue to steadily promote and further establish
measures to improve the functions of the Boardof Directors and to constantly review the Board of
Directors in response to changes in the internal andexternal environment.

FY2021 Initiatives

 ne female director was appointed at the Annual General Meeting of Shareholders inO
June 2021
Skill matrix of the Board of Directors was developedIn the process of establishing the current Medium-Term Management Plan, a forum fordiscussion with Outside Directors was set up (four times in total), in addition to
discussions at the Board of Directors' meetings
Reviewed the criteria for items to be submitted for discussion at the Board of Directors
meetings, focusing on strategic importance and expanding the scope of delegation to
the Executive Committee
 et CSV practice as the management theme in the current medium-term management
Splan
D evelopment, examination and formulation of strategies for each business segment,
incorporating CSV perspectives
 rovision of opportunities to attend meetings of managers of departments and offices,P
etc. in addition to the provision of materials and minutes of Executive Committee, which
was already being implemented

Future Issues and Initiatives

53

Fuyo Shared Value

About Us

We recognize the need to further improve the function ofdeliberations and reporting by the Board of Directors to

the Board of Directors by having a director other than an

steadily promote the medium-term management plan andexecutive director chair the Board of Directors meetings, as

further deepen CSV management, and to further enhance thea general rule. We further recognize the need to enhanceprovision of information to Outside Directors.

Corporate Auditors

knowledge, abilities, experience, and high ethical standards.

Independence standards for Outside Directors and

The guidelines also specifies that candidates be nominatedOutside Corporate Auditors are stipulated in the Corporate

regardless of factors such as sex, age, and nationality, with

Gover nance Guidelines in line with the independence

the aim of achieving greater diversity. To ensure fairness andstandards prescribed in the Guidelines Concerning Listingtransparency in the nomination process, the selection ofManagement, etc. established by the Tokyo Stock Exchange.

The Board of Directors Skills Matrix
Areas of Particular Interest
Name

Position, etc. and status ofexecution of duties

Director and Chairman

Yasunori Tsujita Chair of the Board of Directors

Nomination andCompensation
Term of office
Advisory
Committee:
Chair

7 years

Hiroaki Oda

President and Chief Executive
Officer (Representative Director)
President and Executive Officer

1 years

Soichi Hosoi

Director and Deputy President(Representative Director)
Vice President and Executive
Officer

8 years

Keiji Takada

Director and Deputy President(Representative Director)
Vice President and Executive
Officer

2 years

Yusuke Kishida

Senior Managing Director
Senior Managing Executive
Officer(Newlyappointed)

Directors

Seiichi Isshiki

OutsideHideo Ichikawa

OutsideMasayuki
Yamamura

OutsideHirokoMatsumotoOutsideIndependent

Directors
Independent

Directors
Independent

Directors
Independent

Members

7 years

Members

4 years

Members

3 years

Members

1 years

Yoshito Tsuruta

Full-time Audit & Supervisory
Board Member

2 years

Masaharu
Nakamura

Full-time Audit & Supervisory
Board Member(Newlyappointed)

Takashi
Yonekawa

OutsideHiroshi Imoto

OutsideCorporate Auditors
Independent

Corporate Auditors
Independent

1 years

1 years

Corporate
management(industry)

Finance andaccounting

Globalbusiness

IT andtechnology

HumanInternal
resources
control anddevelopment management

Finance (bank/leasing)

Finance (bank/leasing)

Finance (bank/leasing)

Finance (leasing)

Finance (leasing)Resources and energy

Chemical manufacturing

Telecommunications/
technology

University education/industry-governmentacademia partnership/
product design

Finance (leasing)

Finance (leasing)

Finance (insurance)

Finance(international finance)

Fuyo Lease Group Integrated Report 2022

54

Corporate Governance / Risk Management

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate
Governance

Financial Section/
Corporate Data

Risk Management

Board Remuneration
Fuyo Lease has established "decision policy regarding theand the value of the Company’s shares and to further raisecontent of individual remuneration of directors" by resolution of

officers’ awareness of contributing to improving businessthe Board of Directors. Believing that enhancing the link between

performance and increasing corporate value over the medium toshareholder value and officers’ remuneration will boost theirlong term. Under this compensation plan, the Company’s shares

morale and motivate them to improve the Company’s financial

are acquired by a trust using funds contributed by the Company,

performance and share price and lead the way toward the goals

and officers are provided, on their retirement, with the Company’sof ensuring stable performance and growth, while enhancing

shares (in lieu of the provision of the Company’s shares, ancorporate value, the Company has introduced performance-

amount equivalent to the market value of the Company’s shareslinked compensation and stock-based compensation as variable

for a specified proportion, on the condition that requirementscompensation systems, in addition to base salary provided as

specified in the Officers Stock Benefit Rules are met), in principle,
in accordance with the Officers Stock Benefit Rules resolved by

fixed compensation.

the Board of Directors.

Base salaries are determined with reference to our employee

The ratio between base salary and variable compensation is set

salaries, generally prevailing officers’ compensation levels, ourat 1 to 0.7 based on average compensation ratios used by listed

financial standing, etc.
Performance-linked compensation is determined according

companies. Variable compensation consists of performance-

to consolidated business performance and contribution madebased compensation and stock compensation, and the ratioby each officer to the performance. In addition, indicators

between the two is set at 5 to 7 to provide higher incentives overfor performance-based compensation are established by

the medium to long term.

categorizing them into financial items, which are key performance

Directors’ compensation is discussed by the Nomination

indicators for the medium-term management plan, and non-and Compensation Advisory Committee in order to ensure

financial items, which include the environment and investment

transparency and objectivity in determining the amounts.

in human capital. Financial items are ordinary profit, ROA,

Compensation for Outside Directors who have supervisory

shareholders’ equity ratio, and ROE on a consolidated basis.

functions and Corporate Auditors consists only of fixed

Non-financial items are amounts of capital invested in expenses

compensation because the concept of performance-based

related to decarbonization and human resources related oncompensation and stock compensation is not suitable.

a non-consolidated basis. The President & Chief Executive

The Company stipulates in its internal rules that if a Director

Officer is delegated by resolution of the Board of Directors tocauses significant damage to the Company or engages indetermine details regarding the amounts and timing of payment

inappropriate conduct, etc., the Director will be subject to aof performance-based compensation.

reduction or non-payment of his/her base salary or performancebased compensation, or cancelation of his/her right to receive

The stock compensation plan (Board Benefit Trust (BBT)) isstock compensation.

designed to further clarify the link between officers’ compensation

As stipulated in the Fuyo Lease Group risk management
regulations, we have established a risk management systemat our locations across the globe to manage risks based on
their particular risk characteristics and importance. Risks to
be managed are categorized into credit, market (such as
interest rate fluctuation risk), liquidity (such as cash flowrisk), administrative, system, legal, human, reputation, andother risks. Each type of risk is managed by a designateddepartment.
The Board of Directors and the Executive Committee
receives updates on risk management, discusses risk
management policies according to the characteristics andimportance of each risk, and evaluates the effectiveness ofrisk management. The Asset and Liability Management (ALM)
Committee meets on a regular basis to appropriately manage
and control market and liquidity risks. These efforts enable us
to continually improve our risk management system.
For risk events that may affect the Group’ business, theGroup has sought to comprehensively identify risks facing
each Group business, considered the scale and characteristicsof the identified risks while making sure to include risks in eachbusiness domain, such as economic downturns, market

fluctuations, and downturns in individual markets.
In addition, as a risk governance system for the entire
group, we have established a "Three-Line Defense System"
based on risk management by each business unit (first line),risk management by the risk control department and thedepartment in charge of risk (second line), and verificationby the internal audit department (third line).
The designated risk management division formulates abasic policy for managing risks identified as targets, andconducts an appropriate analysis, evaluation andmeasurement of risks according to the size andcharacteristics of the relevant business and risk profiles. In
addition, the designated risk management division monitors
the status of risks held from an independent perspective,
reports the results of monitoring to the Executive Committee,etc., and implements supervision of sales and marketing
divisions with an approach geared to the situation.
Moreover, the risk control division has establishedintegrated risk management systems to promote risk
management by comprehensively identifying and evaluating
risks by risk category, and to control risks with the scope ofmanagement capabilities.

Risk Management System
Board of Directors
ALM Committee
Executive Committee
New Business Council
Compliance Committee

Business Risk Review Committee
Funds Investment Council

Board Remunerations (FY 2021)

System Strategy Committee
Officer classification

Total amount(millions of yen)

Breakdown of remunerations (millions of yen)
Basic remuneration

Performance-linked
remuneration

Non-monetary
remuneration

Number of
Directors

247

68

78

10

45

45

-

-

4

66

66

-

-

6

21

21

-

-

4

Risk Management Departments

Directors
Outside Directors

Corporate
Auditors Outside Corporate
Auditors(Note) 1 . The above performance-linked compensation indicates amounts to be recorded as expenses in fiscal 2021.
2. Non-monetary compensation, etc. is a stock benefit trust (BBT). The amounts of the BBT denote amounts to be recorded
as expenses in the fiscal year under review based on the actual number of points accumulated for stock grants or the
expected number of points to be accumulated in the fiscal year under review.

55

Operational Risks

CreditRisks

MarketRisks

Liquidity
Risks

Administrative
Risks

System Risks

Human Risks

Reputation Risks

Other Risks

Residual Value
Risks

Legal Risks

Climate changerisksGroup Internal Audit Division

393

Departments, Offices, Branch Offices, and Group Companies

Fuyo Lease Group Integrated Report 2022

56

Risk Management / Compliance

About Us

Fuyo Shared ValueCSV Highlight

Corporate
GovernanceManagement

Financial Section/
Corporate Data

Compliance System
Risks in Business Operations
Listed below are the main factors that could pose risks to thedevelopment of the Group’s business and have a significant
impact on the decisions of investors. The forward-looking
statements here represent the judgment of the Group’s

management as of the date that its annual securities report
was submitted (June 27, 2022). The following is not an
exhaustive list of all the risks that could affect investment in the
Company’s shares.

Risk Factors in Business Development
Risks relating to changes in capital expenditure trends
and other factors
Risks relating to changes in factors such as interest rates,
exchange rates, share prices and financing

Risks relating to changes in regulatory systems

Risks relating to business strategies
Decline in the value of assets in Real Estate, Aircraft, and Mobility businesses
Changes in the amount of power generated in the solar power generation business
Delays in delivery and deterioration of business quality in BPO services
Changes in overseas political and economic conditions in overseas business

Compliance Training

At the Fuyo Lease Group, ensuring compliance is a fundamental

The Fuyo Lease Group emphasizes employee training programs

principle of management. We work to strengthen and enhancethat are designed to ensure compliance. Our training programs

our compliance system, which enables us to operate withinclude workplace compliance training and e-learning on insider

integrity and fairness by conforming to relevant social norms,

trading regulations for all Group employees, as well as groupwhile strictly complying with all laws and regulations.

training conducted by external instructors for directors, heads

We promote compliance throughout the Group by stipulating
Credit Risks

Risks relating to strategic partnerships and corporate acquisitions

Our Approach to Compliance and Compliance Systemcompanies, and departmental compliance officers.*

compliance education, and enhancing the whistleblower system* A compliance officer is appointed for each department or company to raise complianceawareness and ensure compliance.

on the basis of the Fuyo General Lease Group’s Code ofCorporate Conduct. In order to maintain and further improve ourCompliance Training (FY 2021)

Risks from natural disasters or other causes

compliance systems, we implement and carry out compliance

Risks relating to overall business operations

programs every fiscal year. Issues associated with the compliance

Administrative Risks
System Risks
Risks relating to information security
Human risks relating to developing and securing human resources
Compliance risks

programs are discussed at the Compliance Committee and theGroup training and workplace training
Participant
Subject# of session
Introduction to compliance, Fuyo
General Lease Group Code of Corporate
1
New employee
Conduct, Unreasonable demand

Other risks

Executive Committee before being submitted to the Board of
Directors for approval. Findings and progress of the programs
are reported to the Board of Directors on a semi-annual basis.
We will continue our group-wide activities including conducting

Climate change risks

compliance* Please refer to our annual securities report for details on each section.

practicesandcomplianceeducation,andstreamlining our compliance systems across the Group to
improve their effectiveness.

Response to Risks
The Fuyo Lease Group assumes various risks that may arisein the course of business development and is implementing
measures to counter these risks. Details of the businessrisks for the Group are disclosed in our annual securities
report, and major countermeasures are described below.
COVID-19
Against the backdrop of the spread of COVID-19, the Group’s
Board of Directors and Executive Committee are discussing
ways to deal with infection risks in business activities and theimpact of these risks on business performance. To deal withthe risk of infection in our business activities, we established
the COVID-19 emergency response task force under the
direction of the President, and we are engaging in initiatives
based on the Group’s Basic BCP Principles. We ensure that all
employees and directors understand and adhere to rules forpreventing infection, such as mobile working, working from
home, flexible working hours, reducing overtime, monitoring
health and avoiding commutes when unwell. If we found theevent of a confirmed or suspected COVID-19 case in theGroup, we also report promptly the incident within thecompany, respond by consulting and receiving medical
examinations from medical institutions, and giving instructions
to remain at home, perform required cleaning and disinfection.
These initiatives ensure that we prevent the spread of
COVID-19 and do our utmost to keep our employees and theirfamilies healthy, as well as prioritizing prevention of negative
effects on the business continuity of our customers.
Information Security
With unauthorized access to information via the Internet as well57

of departments, offices and branch offices, presidents of groupvarious regulations, procedures, and manuals, conducting

as cyber-attacks increasing daily and becoming moresophisticated, the Group recognizes that information security
risks are an important management issue. In order to establish astrict information management system for the entire Group, datais strictly controlled by our information security manager inaccordance with detailed rules, including the Confidential
Information Management Rule. Additionally, each employee isthoroughly informed of the Appropriate Information Management
section included in the Code of Corporate Conduct as well as thePrivacy Policy, and we have implemented level-specificinformation security training programs. In fiscal 2021, we provided
training on confidential information management and personal
data protection to 1st year employees (Generalist track).

Fuyo General Lease Group Code of Corporate Conduct
The Fuyo Lease Group has formulated the Fuyo General Lease
Group Code of Corporate Conduct, which specifies the basic
policies and position of the entire group as well as behavioral
guidelines for the employees of the Group. We conduct various
training activities including e-learning programs to increase theeffectiveness of the Code and instill the Code among our employees.
Furthermore, the Code strictly prohibits the forging of collusive
ties with political and administrative authorities and business
partners, and the private use of the company’s assets. In fiscal
2021, no infringements related to corruption were found in theGroup. Additionally, no employees were dismissed or subjected
to disciplinary action due to corruption.

Confidential information management,
1st year employee Personal information protection,(Generalist track) Prevention of harassment, Insider trading
regulations
4th year employee(Generalist track)
Newly appointed
head ofdepartment/
branch office
Newly appointed
assistantmanager/ section
chief
All employees

1

Response to accidents and troubles

1

Issues to be understood as responsible
officers to ensure compliance

1Prevention of power harassment, sexualand maternity harassment

2

Information Security

1

Directors and head The latest developments regarding
business and human rights and theof department/
office/branch office response required of Japanese companies

1

E-Learning
Participant
Directors, head of
department/ office/ branch
office, compliance officer,
entry level
All employees

Subject# of session

Regulation for Insider Trading(e-learning material of theJapan Exchange Group)

2

General issues on compliance

1

Whistleblower Hotline
The Fuyo Lease Group operates whistleblower hotlines.
In addition to the in-house compliance hotline, we provide a

Large-Scale Disaster
The Fuyo Lease Group has developed a system for responding
to emergencies. In the event of a large-scale disaster or
emergency, the emergency response task force under the
direction of the president will take measures necessary forensuring safety and continuity of our operations in accordancewith the BCP Fundamental Principle and the Emergency
Preparedness Regulations. We also conduct regular drills to
promote the minimization of damage and ensure business
continuity. Moreover, in fiscal 2020, we standardized disasterstockpiles at all Group companies following the relocation of
our headquarters and identified the highest priority business
operations in our Group companies. In fiscal 2021, we
strengthened collaboration for disaster response within theGroup, including the launch of a liaison meeting for information
sharing with the persons in charge of disaster prevention at
our Group companies.

Fuyo General Lease Group Code of Corporate Conduct
Chapter

1

Chapter2

Chapter3

Basic Policy of Fuyo General Lease Group
1. Social Responsibilities and Public Missions
2. Implementation of Customer First Principles
3. Compliance with Laws and Rules
4. Respect for Human Rights
5. Blocking Relationships with Anti-social Forces

Basic Attitude of Fuyo General Lease Group
1. Basic Attitude Toward Customers
2. Basic Attitude Toward Shareholders
3. Basic Attitude Toward Local Communities
4. Basic Attitude Toward Employees
5. Basic Attitude Toward Suppliers and Competitors
6. Basic Attitude Toward Politics and Government

Action Guidelines for All Members of the Fuyo
Lease Group
1. Maintaining Order in the Workplace
2. No Personal Use of Company Assets
3. Appropriate Information Management
4. No Conflicts of Interest
5. Appropriate Personal Conduct
6. Social Media Policy (Appropriate Personal Conduct 2)* Please refer to our website for detailed contents.

consultation service desk through a cooperating law firm. These
services are available on a regular basis and guidance to these
services is always posted on the company’s intranet bulletinboard. Concerned individuals can immediately seek consultation
or report whenever they detect any violations of the law, theCode of Corporate Conduct and other corporate regulations,harassment cases, misconduct in information management orother potential infringements. The whistleblower systems accept
anonymous reports to protect whistleblowers. At Fuyo Lease,full-time corporate auditors are appointed to accept reports fromthe group companies, and the cooperating law firm is available
for reports from the overseas affiliated companies.
In fiscal 2021, eleven reports were received through the hotline.
In each case, we contacted the relevant parties to confirm thefacts, conducted investigations promptly with due care to protect
whistleblowers from detrimental treatment, and handled the cases
appropriately by means such as seeking advice from lawyers.
Fuyo Lease Group Integrated Report 2022

58

Independent Assurance Report / Financial Section

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

Independent Assurance Report
Fuyo General Lease Co., Ltd. has engaged KPMG AZSA Sustainability Co., Ltd. to perform assurance of selectedenvironmental and social data in order to assure credibility of reported figures. The data subject to the third-party assurance
is indicated with .

Financial Section
Financial Information
Message from Senior Financial Officer

P61

Financial & Non-Financial Data (10 years)

P63

Consolidated Financial Statements
Consolidated Balance Sheets

P65

Consolidated Statements of Income and Statements of Comprehensive Income

P67

Consolidated Statements of Changes in Equity

P69

Consolidated Statements of Cash Flows

P72

Notes to Consolidated Financial Statements

P74

Independent Auditor’s Report

P119

The consolidated financial statements on page 65 to page 118 and the independent auditor’s report on the financial statements on page 119 topage 123 were first published on the Company's website on September 12, 2022 and are republished in this document.

59

Fuyo Lease Group Integrated Report 2022

60

Message from Senior Financial Officer

About Us

Fuyo Shared ValueCSV Highlight

Management

Financial Indicators

Corporate Governance

Financial Section/
Corporate Data

Dividend Payout Ratio
13%-15%

Supporting sustainablegrowth through improvement
and expansion of our
financial base

Equity ratio

11.3%
30% or more

10% or more

9.9%
10.6%
9.2%

25.2%

ROE
2.5%

Senior Managing Director

Yusuke Kishida

ROA

2.1%

19.6%

1.6%

Under Fuyo Shared Value 2026, the new Medium-term Management Plan started in the fiscal year under review, we willseek to expand our business and achieve sustainable growth through proactive investment in growth areas that reflectchanges in social structure and market trends, while addressing social issues through the implementation of CSV andsimultaneously realizing economic value. In the process of creating new value through business expansion and further
evolution based on this direction, we may be exposed to a variety of risks more than before, so the basic policy of our
financial strategy is to further expand our financial base.

Improving shareholders’ equity andmaintaining ROE level
In the new Medium-term Management Plan, shareholders’equity and maintaining ROE (return on equity) are establishedas new financial targets. By ensuring a lasting improvement
in ROA (return on assets) through increases in profitability
based on the continuous replacement of existing assets,
and by improving shareholders’ equity ratio from the current
level of approximately 11% to 13-15% over the next 5 years,
we will strengthen our ability to withstand changes in thebusiness environment and business risks. In addition, we
will operate with full attention to the balance between capitalefficiency by maintaining a stable ROE of 10% or more.
In our efforts to increase shareholders’ equity, we are not
only seeking to steadily generate higher income through thepromotion of business strategies, but are also examining
and planning, in our capital policy, to issue hybrid securities(unsecured bond with subordination agreement) within thePlan period. Through efforts to maintain and improveexternal ratings while working to substantially enhanceshareholders’ equity and resistance against risks without

61

share dilution, we will support the Group’s growth strategies
and achieve stable procurement of funds.
In addition, we plan to invest a total of approximately 1
trillion yen over the next 5 years in growth areas, such as
Energy & Environment Business and Mobility Business.
We will implement shareholders’ equity management withfull awareness of capital cost, with the aim to improveshareholders’ equity and maintain ROE level throughrisk-taking activities and ensure return commensuratewith the risks.

Improvement of funding structure stability
and diversification of funding methods
Regarding initiatives for fund procurement, we will raise
the stability of procurement structure by curtailing thedependence on short term funding through CPs, etc.
and increasing long term funding through corporate
bonds, etc. In addition, based on efforts to promotebusiness strategies and accumulate quality operating
assets, we will pursue further diversification in
procurement methods in terms of bank borrowings,
corporate bonds, asset liquidation, etc.

FY2017

FY2021

Previous Medium-term Management Plan

Frontier Expansion 2021

FY2026targets
New Medium-Term Management Plan

Fuyo Shared Value 2026

The Group has been proactively implementing funding
through the use of various ESG finance initiatives, in tandemwith the promotion of CSV management. In fiscal 2021, theCompany won Special Prize in the ESG Finance Awards
Japan hosted by the Ministry of the Environment. We willcontinue to expand and enhance methods of raising capital,
including sustainability linked bonds and loans, and positive
impact finance, based on proactive initiatives for CSV on agroup-wide basis without limiting purpose of funding.
Moreover, in line with our plan to expand overseas operations
in business fields that are positioned as a Transformation
Zone, we will work to stabilize foreign currency funding, thedemand for which is expected to increase in the future,through flexible foreign bond issuance using the Euro MTN
Program* that has already been established.

FY2017

FY2021

Previous Medium-term Management Plan

Frontier Expansion 2021

FY2026targets
New Medium-Term Management Plan

Fuyo Shared Value 2026

higher growth of the Group’s business.
In the five-year period under the previous Medium-termManagement Plan, annual dividends per share wereincreased every fiscal year, from 130 yen to 285 yen, while
the dividend payout ratio improved from 19.6% to 25.2%. In
the future, we plan a dividend of 316 yen per share and adividend payout ratio of 26.3%, which are above the previous
fiscal year’s levels, based on the performance forecast for
the fiscal year ending March 31, 2023. We will endeavor tosteadily improve the dividend payout ratio throughout the
new Medium-term Management Plan period, and aim toachieve more than 30% by the final year of the plan.

Dividend policy
Under the new Medium-term Management Plan, we aim tosimultaneously achieve financial and non-financial targets
through business portfolio restructuring and intense
investment in business fields with growth potential. It is ourpolicy to increase dividend payment to shareholders with

*A scheme that enables flexible issuance of individual bonds at any time within the issue limit
by concluding a basic agreement on bond issuance with multiple dealers in advance andcomprehensively defining the relationship with the parties involved in the bond issuance.

Fuyo Lease Group Integrated Report 2022

62

Financial Section

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

Financial and Non-Financial Data (10 years)
Financial Data (consolidated)
2013/3

2014/3

2015/3

2016/32017/3

2018/3

2019/32020/32021/32022/3

Net sales (billions of yen)

442.6

441.7

472.3

493.8

507.2

590.3

618.1

712.3

740.3

657.8

Cost of sales (billions of yen)

393.2

394.5

423.7

442.6

451.9

529.8

551.4

636.0

657.5

569.0

Gross profit (billions of yen)

49.3

47.2

48.6

51.2

55.3

60.5

66.7

76.3

82.7

88.9

Selling, general and administrative expenses (billions of yen)

24.5

24.0

24.0

26.7

26.5

27.8

31.0

34.9

38.2

42.8

Operating profit (billions of yen)

24.8

23.2

24.6

24.5

28.8

32.7

35.7

41.4

44.6

46.0

Ordinary profit (billions of yen)

26.4

25.4

26.5

29.2

31.4

35.2

39.1

44.0

48.0

52.7

Profit attributable to owners of parent (billions of yen)

15.6

13.0

14.2

17.5

20.0

21.9

25.5

26.2

29.6

33.9

Total assets (billions of yen)

1,764.3

1,851.9

1,986.8

2,113.1

2,300.1

2,430.5

2,593.0

2,752.6

2,979.3

2,949.7

Operating assets (billions of yen)

1,495.9

1,599.2

1,730.5

1,867.2

2,047.4

2,172.6

2,262.8

2,384.0

2,555.9

2,565.9

Interest-bearing debt (billions of yen)

1,473.4

1,500.1

1,629.8

1,750.3

1,900.7

2,000.3

2,122.7

2,251.7

2,446.7

2,377.6

173.8

202.6

222.5

232.5

259.2

282.6

295.0

311.8

344.8

374.2

8.8

9.8

10.1

9.9

9.9

10.2

10.1

10.0

10.2

11.3

547.2

594.8

666.9

703.8

834.2

1,105.1

1,187.2

1,359.7

1,343.9

1,384.4

ROA (Ratio of ordinary profit to operating assets) (%)

1.80

1.64

1.59

1.62

1.60

1.67

1.76

1.90

1.94

2.06

OHR (%)

47.8

49.8

48.7

51.2

47.1

45.2

45.3

44.0

43.9

44.8

Cash flows from operating activities (billions of yen)

(55.5)(85.2)(165.4)(151.5)(154.3)(104.4)(80.0)(108.8)(35.1)

89.0

Cash flows from investing activities (billions of yen)

8.2

(1.1)

(1.1)

(1.2)

(4.6)

(5.7)

(9.4)

(11.2)(6.0)(15.7)Cash flows from financing activities (billions of yen)

98.2

62.6

147.3

150.3

157.7

113.5

105.5

127.8

63.4

(101.5)

Cash and cash equivalents at end of period (billions of yen)

95.2

72.3

54.0

51.4

50.6

54.1

69.9

77.4

98.8

72.0

518.21429.49470.14579.17661.80726.41

844.69871.95986.181,130.52

70

74

80

100

130

146

188

205

240

285

2013/3

2014/3

2015/3

2016/32017/3

2018/3

2019/32020/32021/32022/3

1,267

1,148

1,269

1,199

1,253

2,043

1,904

1,971

2,016

1,455

Scope1 (t-CO2)*1

202

192

159

153

163

770

707

688

603

584

Scope2 (t-CO2)*1

1,065

956

1,110

1,045

1,089

1,273

1,197

1,283

1,414

872

CO2 emission intensity (Scope1,2) (t-CO2 / 100 millions of yen)*

0.34

0.31

0.33

0.30

0.32

0.36

0.36

0.29

0.28

0.22

8

23

58

86

86

111

149

229

283

318

1,500

1,521

1,542

1,559

1,703

1,715

1,960

2,416

2,637

3,189

Retention rate of employees after 3 years(non-consolidated) (%)

94.4

87.5

94.7

100

85.7

100

94.3

89.7

—

—

Number of employees (non-consolidated) (Employees)

658

660

669

670

689

689

704

715

759

798

Turnover rate* (non-consolidated) (%)

1.4

1.3

1.1

0.8

1.0

1.9

1.9

1.8

1.7

1.9

Number of female employees in management positions(non-consolidated) (Employees)

26

25

25

27

29

32

36

79*4,*5

113*5

130

Percentage of female employees in management
positions (non-consolidated) (%)

8.8

7.9

8.1

9.0

9.1

9.9

11.5

21.1*4,*5

27.5*529.5

Employment rate of the disabled (non-consolidated) (%)

2.0

2.0

2.0

1.8

2.2

2.3

2.3

2.1

2.4

2.2

Rate of taking annual paid leave (non-consolidated) (%)

60.9

59.1

58.5

61.9

68.9

68.0

68.4

66.3*

72.0

82.3

Net assets (billions of yen)
Equity ratio (%)
Executed contract volume (billions of yen)

Basic earnings per share (yen)Dividends per share (yen)Non-Financial Data (consolidated)
CO2 emissions (Scope1,2) (t-CO2)*

1

1

Green energy supply* (Output) (MW)2

Number of employees (Employees)

3*1 Up to fiscal 2020, Scope 2 emissions were calculated based on standard emission factors, but from fiscal 2021 onward, they are calculated based on emissions factors after adjustment. Results ofpast years have been revised accordingly.
*2 Total of figures of own group business and those corresponding to equity investment share.
*3 Turnover rate includes separations due to personal reasons, reaching retirement age, and other reasons including transfer. This does not include rehired employees who left the company due toexpiration of their contracts.

63

6*4 In July 2019, our human resources system was revised to classify senior leaders (a position equivalent to the position of section chief) as managers. As a result, the number of female managers and thepercentage of female employees in management positions increased year on year for the fiscal year ended March 31, 2020.
*5 Figures for rehired workers in the fiscal year ended March 31, 2020 and the fiscal year ended March 31, 2021 were included in the Integrated Report 2021, but excluded in the Integrated Report 2022.
*6 Due to restrictions on the number of employees coming to work in conjunction with the spread of COVID-19, actual data on paid leave for eight Fuyo General Lease (USA) Inc. employees is not included.

Fuyo Lease Group Integrated Report 2022

64

Financial Section

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

Consolidated financial statements
Consolidated balance sheets
Thousands of U.S. dollars(Note I)

Millions of yen
Notes

As of March 31, 2022

As of March 31, 2021

Thousands of U.S. dollars(Note I)

Millions of yen

As of March 31, 2022

Notes

As of March 31, 2022

As of March 31, 2021

As of March 31, 2022

¥

¥

$

Liabilities

AssetsCurrent liabilities

Current assets
Cash and deposits

3

Installment receivables

3

Lease receivables and investments in leases

3¥

Operating loans
Accounts receivable - other loans to customers

3, 7

Operational investment securities

2

Other operating assets
Accounts receivable - lease

3

Other
Allowance for doubtful accounts
Total current assets

72,157
66,877
1,019,764
316,633
114,443
323,021
23,34424,80766,556(2,717)2,024,888¥

98,92684,5451,080,797
306,635
117,660
283,209
19,011
29,60491,294(3,047)2,108,637$

589,476
546,341
8,330,725
2,586,665
934,917
2,638,852
190,706
202,657
543,721(22,203)
16,541,857

1,3,7

Advances for purchase of assets for lease
Total assets for lease
1,3

Construction in progress
1

Total property, plant and equipment

671,643
15,111
686,754
31,801
4,673
3,754
726,984

632,299
8,140
640,440
33,276–
3,662
677,379

5,486,832
123,452
5,610,284
259,799
38,17730,674
5,938,934

195

240

1,595

21,234
9,367
30,60230,797

20,718
7,741
28,45928,699173,472
76,527
249,999
251,594

Intangible assets
Assets for lease
Other intangible assets
Other
Total other intangible assets
Total intangible assets
2,3Distressed receivables
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets

120,259
539
88
2,976
42,554(331)
166,087
923,869

112,838
558
64
2,620
47,450(287)
163,244869,323

982,432
4,410
720
24,319347,636(2,706)
1,356,811
7,547,339

1
944
945
2,949,704

1
1,322
1,323
2,979,285

10
7,717
7,727
24,096,923

Deferred assets
Organization expenses
Business commencement expenses
Total deferred assets
The accompanying notes are an integral part of these statements.

Payables under securitization of lease receivables
8
Current portion of long-term payables under securitization
3, 8
of lease receivables
Lease liabilities
Income taxes payable
Deferred profit on installment sales
Provision for bonuses

Provision for loss on guarantees
Asset retirement obligations
Other

3

Total current liabilities

¥

¥

$

35,441
568,563
30,000328,958
371,000
29,40033,027564,585
30,000308,274
470,200
30,100289,529
4,644,751
245,078
2,687,350
3,030,798
240,176

16,50832,117

134,866

10,827
8,145
810
2,811
200
205
3
31
1
48,564
1,451,473

14,977
9,974
1,046
2,265
180
49
3
39
90
41,157
1,538,089

88,451
66,546
6,619
22,970
1,636
1,680
28
254
8
396,734
11,857,476

227,137
779,458
15,197
530
17,122
2,974
160
410
476
440
3,825
76,256
1,123,990
2,575,464

191,072
766,003
38,640755
20,772
1,302
129
388
570
554
2,568
73,639
1,096,398
2,634,488

1,855,546
6,367,603
124,153
4,332
139,881
24,301
1,309
3,351
3,895
3,600
31,254
622,957
9,182,181
21,039,657

10,532
7,278
277,361(2,463)292,709

10,532
6,197
251,320(1,912)
266,138

86,04059,4642,265,841(20,124)
2,391,221

38,547(3,932)5,509(0)40,124650
40,754374,2392,949,704

44,833(2,656)(3,698)(50)
38,427704
39,527344,796
2,979,285

314,906(32,125)
45,011(1)
327,791
5,316
332,937
3,057,265
24,096,923

Non-current liabilities
Bonds payable
Long-term borrowings
Long-term payables under securitization of lease receivables

3, 7
3, 8

Lease liabilities
Deferred tax liabilities
Provision for retirement benefits for directors (and other officers)
Provision for share awards for directors (and other officers)
Provision for maintenance costs
Provision for loss on guarantees
Asset retirement obligations

Investments and other assets

Total assets

3, 7Commercial papers

Retirement benefit liability

Goodwill

Investment securities

Current portion of long-term borrowings

Provision for future lease payments

Assets for leaseOwn-used assets

Current portion of bonds payable

Provision for share awards for directors (and other officers)

Property, plant and equipment

Other operating assets

Short-term borrowings

Provision for bonuses for directors (and other officers)

Non-current assets

Assets for lease

Notes and accounts payable - trade

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

¥

¥

$

The accompanying notes are an integral part of these statements.

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

Thousands of U.S. dollars(Note I)

Millions of yen

Consolidated statements of comprehensive income

FY2021
FY2020
FY2021
Notes (April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

Net sales

1

Cost of sales

3¥

Gross profit
Selling, general and administrative expenses

2

Operating profit

657,847
568,988
88,85842,82446,034¥740,263
657,519
82,74438,18844,555$5,374,129
4,648,222
725,908
349,841
376,067

Non-operating income

FY2021
FY2020
FY2021
Notes (April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)¥

ProfitDividend income
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

13
2,332
268
3,293
1,743
121
514
8,289

38
2,009
249
1,684
96
187
468
4,734

113
19,051
2,197
26,90814,243996
4,207
67,715

775
34
430
40
266
52
1,600
52,723

677
33
93
163
281
43
1,292
47,996

6,337
281
3,515
333
2,178
427
13,071
430,711

840
10
–
73
924

2
–
727
–
730

6,868
83
–
603
7,554

357
2
642
40
–
9
1,052
52,595
17,052(933)
16,11936,4762,589
33,886

1
–
1
35
727
–
765
47,96015,216(130)
15,08632,874
3,307
29,566

2,924
23
5,246
331
–
74
8,599
429,666
139,310(7,628)
131,682
297,984
21,156
276,828

36,476¥32,874$297,984

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

Interest income

Thousands of U.S. dollars(Note I)

Millions of yen

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

1¥(6,297)
(742)
7,910
26

12,494(1,829)(3,593)
124(51,448)(6,067)64,623
216

808

1,023

6,607

1,705
38,181¥

8,218
41,092$

13,931
311,915

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests¥

35,583
2,597¥

37,7403,352$

290,695
21,220

The accompanying notes are an integral part of these statements.

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
Subsidy income
Other
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Loss on step acquisitions
Impairment losses

3

Loss on disposal of non-current assets

4

Loss on tax purpose reduction entry 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

¥

¥

$

The accompanying notes are an integral part of these statements.

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Corporate GovernanceConsolidated statements of changes in equity
FY2021 (From April 1, 2021 to March 31, 2022)(Millions of yen)

FY2020 (From April 1, 2020 to March 31, 2021)(Millions of yen)

Shareholders’ equity
Share capital

Balance at beginning of period ¥Capital surplus

10,532¥

6,197

Shareholders’ equity

Retained earnings¥

251,320

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

Share capital

266,138

Balance at beginning of period ¥Changes during period

Capital surplus

10,532¥

8,873

Retained earnings¥

228,285

Total shareholders’equityTreasury shares¥(2,075)¥

Changes during period

Dividends of surplus(7,824)(7,824)

Dividends of surplus(6,466)(6,466)

Profit attributable to ownersof parent

33,88633,886

Profit attributable to ownersof parent

29,56629,566

(646)

(646)

Purchase of treasury shares

95

74

Disposal of treasury shares–

Purchase of shares of
consolidated subsidiaries

Purchase of treasury shares(20)

Disposal of treasury shares
Purchase of shares of
consolidated subsidiaries
Change in ownership interestof parent due to transactions
with non-controlling interests

1,081

(0)

163

98

(2,676)(2,676)–

Net changes in items otherthan shareholders’ equity–

Total changes during period
Balance at end of period

(64)

(0)

Change in ownership interestof parent due to transactions
with non-controlling interests

1,081

Net changes in items otherthan shareholders’ equity¥

10,532

1,081
¥

7,278

26,041¥

277,361(551)¥(2,463)¥

26,571

Total changes during period

292,709

Balance at end of period–¥

10,532(2,676)¥

6,197

23,035¥

251,320163¥(1,912)

20,522¥(Millions of yen)

Valuationdifference on
available-forsale securities

Balance at beginning of period

Deferred
gains orlosses onhedges

Accumulated other comprehensive income

Total
Foreign
Remeasureaccumulated
currency
ments ofothertranslation defined benefit
comprehenadjustment
plans
sive income¥ 44,833 ¥ (2,656) ¥ (3,698) ¥266,138(Millions of yen)

Accumulated other comprehensive income
Shareacquisitionrights(50) ¥ 38,427 ¥Noncontrollinginterests

Valuationdifference on
available-forsale securities

Total net
assets704 ¥ 39,527 ¥ 344,796

Balance at beginning of period¥

Deferred
gains orlosses onhedges31,650 ¥Total
Foreign
Remeasureaccumulated
currency
ments ofothertranslation defined benefit
comprehenadjustment
plans
sive income(798) ¥

(435) ¥

(163) ¥

Share
acquisitionrights30,253 ¥Noncontrollinginterests

764 ¥Total net
assets35,186 ¥ 311,819

Changes during period

Changes during period(7,824)

Dividends of surplus(6,466)

Profit attributable to ownersof parent

33,886

Profit attributable to ownersof parent

29,566

Purchase of treasury shares(646)

Purchase of treasury shares(0)

Disposal of treasury shares

74

Disposal of treasury shares

98

Purchase of shares of
consolidated subsidiaries–

Purchase of shares of
consolidated subsidiaries

Dividends of surplus

Change in ownership interestof parent due to transactions
with non-controlling interests

1,081

Change in ownership interestof parent due to transactions
with non-controlling interests(2,676)–

Net changes in items otherthan shareholders’ equity(6,285)(1,276)

9,208

50

1,697

(53)

1,227

2,871

Net changes in items otherthan shareholders’ equity

13,182(1,857)(3,263)

112

8,173

(60)

4,341

12,454

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

9,208

50

1,697

(53)

1,227

29,442

Total changes during period

13,182(1,857)(3,263)

112

8,173

(60)

4,341

32,977

5,509 ¥

(0) ¥ 40,124 ¥

44,833 ¥(2,656) ¥(3,698) ¥(50) ¥

38,427 ¥704 ¥39,527 ¥ 344,796

Balance at end of period

69

245,615¥ 38,547 ¥ (3,932) ¥650 ¥ 40,754 ¥ 374,239

Balance at end of period¥

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Consolidated statements of cash flows
FY2021 (From April 1, 2021 to March 31, 2022)(Thousands of U.S. dollars) (Note I)

Share capital

Balance at beginning of period $Capital surplus

86,040$Retained earnings

50,630$2,053,105$(15,622)

FY2021
FY2020
FY2021
Notes (April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

Total shareholders’equityTreasury shares$

Cash flows from operating activities

2,174,153

Profit before income taxes
Depreciation of assets for lease
Loss on retirement of assets for lease and cost of property forlease sales
Depreciation of other operating assets

Changes during period
Dividends of surplus(63,920)(63,920)

Profit attributable to ownersof parent

276,828

276,828

Purchase of treasury shares(172)

Disposal of treasury shares(5,281)(5,281)

779

607

Purchase of shares of
consolidated subsidiaries

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

Change in ownership interestof parent due to transactions
with non-controlling interests

8,834

8,834

Net changes in items otherthan shareholders’ equity–

Total changes during period
Balance at end of period$

86,0408,834$

212,736

59,464$2,265,841(4,502)$(20,124)

217,068$

2,391,221

Increase (decrease) in provision for loss on guarantees(Thousands of U.S. dollars) (Note I)
Accumulated other comprehensive income
Valuationdifference on
available-forsale securities

Balance at beginning of period

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasurements of defined benefit
plans$ 366,255 $ (21,699) $ (30,218) $Total
accumulated
othercomprehensive income

Shareacquisitionrights(414) $ 313,924 $Noncontrollinginterests

Total net
assets5,752 $ 322,910 $ 2,816,738

Changes during period
Dividends of surplus(63,920)

Profit attributable to ownersof parent

276,828

Purchase of treasury shares(5,281)

Disposal of treasury shares

607

Purchase of shares of
consolidated subsidiaries–

Change in ownership interestof parent due to transactions
with non-controlling interests

8,834

Increase (decrease) in retirement benefit liability
Loss (gain) on valuation of short-term and long-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 for using
equity method
Loss (gain) on sale of short-term and long-term investment
securities
Loss (gain) on disposal of non-current assets
Subsidy income
Loss on tax purpose reduction entry of non-current assets
Decrease (increase) in installment receivables
Net decrease (increase) in lease receivables and investments inleasesDecrease (increase) in accounts receivable - lease
Decrease (increase) in operating loans
Decrease (increase) in accounts receivable - other loans tocustomers
Decrease (increase) in investment securities for sale
Purchase of assets for lease

Net changes in items otherthan shareholders’ equity(51,348)(10,427)

75,228414

13,867(435)

10,02723,459Total changes during period(51,348)(10,427)

75,228414

13,867(435)

10,027

240,527

Balance at end of period$ 314,906 $ (32,125) $ 45,011 $The accompanying notes are an integral part of these statements.

(1) $ 327,791 $

5,316 $ 332,937 $ 3,057,265

Purchase of other operating assets
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
SubtotalInterest and dividends received
Interest paid

Income taxes refund (paid)
Subsidies received
Net cash provided by (used in) operating activities

71

Thousands of U.S. dollars(Note I)

Millions of yen

Shareholders’ equity¥

52,595
46,175¥47,96041,128$429,666
377,219

152,268

26,442

1,243,922

2,522
2,336
1,405
642
(406)

2,623
2,398
1,326
1
(128)

20,607
19,08911,4805,246(3,325)

8

(24)

70

0

0

1

5

(2)

44

177

125

1,448

(94)
(121)
46

(6)
(187)
(750)

(769)
(996)
377

357

1

2,924

(2,345)
10,155(2,047)
10,432(19,164)
82,960

(228)

(85)

(1,864)(3,293)(1,684)(26,908)

(840)

(2)

(6,868)40––
17,555

35
(727)
727
19,027331––
143,414

90,527

69,314

739,542

7,307(3,678)(1,747)(3,007)

59,698(30,049)

3,449(7,436)28,177(39,812)(220,598)(4,821)
(23)
18
4,302
1,265
(3,873)3,420(1,315)
115,128
2,706(10,209)(18,650)–
88,974(48,372)(145,886)
(317)
3
43
(198)
(15,551)(8,225)
4,018(7,996)(18,776)
2,332(10,086)(9,277)727(35,080)(325,237)(1,802,128)(39,386)(192)
151
35,145
10,339(31,643)
27,940(10,746)
940,514
22,112(83,408)(152,364)–
726,854

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Notes to consolidated financial statements
Thousands of U.S. dollars(Note I)

Millions of yen

FY2021
FY2020
FY2021
Notes (April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

Cash flows from investing activities(2,179)(12,163)1,543(4,177)(2,222)
194(17,804)(99,369)
12,612

2(3,589)–(29,321)

2

–

302

–

718
(15,669)(67)(5,970)5,871(128,010)(1,850)–(99,200)
353,067(336,531)

35,384(54,272)
19,500390,069(342,902)(15,113)–(810,391)
2,884,304(2,749,213)

(700)

1,200

(5,718)42

20,672349(42,054)(46,180)(343,555)

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

70,405(20,000)(0)
98

527,166(245,078)(5,281)607–(3,440)–(7,824)(288)(154)(101,534)
1,433(26,796)
98,753(6,466)(366)(296)
63,405(484)
21,86977,416(63,920)(2,354)(1,266)(829,465)
11,714(218,906)
806,743

–

(532)

–

Purchase of own-used assets
Purchase of investment securities
Proceeds from sale and redemption of investment securities
Purchase of shares of subsidiaries resulting in change in scopeof consolidation
Proceeds from purchase of shares of subsidiaries resulting inchange in scope of consolidation
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of short-term borrowings
Net increase (decrease) in commercial papers
Proceeds from long-term borrowings
Repayments of long-term borrowings
Net increase (decrease) in payables under securitization oflease receivables
Proceeds from securitization of lease receivables
Repayments of payables under securitization of leasereceivables
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 inscope of consolidation
Dividends paid
Dividends paid to non-controlling interests
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting fromchange in scope of consolidation
Cash and cash equivalents at end of period
The accompanying notes are an integral part of these statements.

1¥

71,957¥98,753$587,837

I. Basis of presentation
Fuyo General Lease Co., Ltd. (the “Company”) and its domestic consolidated subsidiaries maintain their books of account in conformity withgenerally accepted accounting principles in Japan, and its foreign consolidated subsidiaries maintain their books of account in conformity withthose of their countries of domicile.
The accompanying consolidated financial statements have been compiled from the consolidated financial statements prepared by theCompany as required under the Financial Instruments and Exchange Act of Japan and 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 ¥122.41 to US$1.00, in effect at March 31, 2022, solely
for the convenience 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: 59 companies
Names of significant consolidated subsidiaries:
Fuyo Auto Lease Co., Ltd.
YAMATO LEASE CO., LTD.
Sharp Finance Co., Ltd.
Accretive Co., Ltd.
INVOICE INC.
FGL Group Business Service Co., Ltd.
FGL Group Management Service Co., Ltd.
Fuyo Lease Sales 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, 2022, the Company made additional acquisitions of shares in NIHON CREDIT LEASE CORPORATION
and excluded it from the scope of application of the equity method, while including it in the scope of consolidation. However, due to anabsorption-type merger with the Company as the surviving company, NIHON CREDIT LEASE CORPORATION is excluded from the scope of
consolidation. WorkVision Corporation is included in the scope of consolidation due to the acquisition of 100.00% of its issued shares.

(2) Non-consolidated subsidiaries
Reason for exclusion from the scope of consolidation
Among the non-consolidated subsidiaries, 147 companies including FK Ignicion Leasing Ltd. are mainly 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.

(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: 13 associates
Names of significant associates:
Yokogawa Rental & Lease Corporation
Marubeni Fuyo Auto Investment (CANADA) Inc.
Pacific Rim Capital, Inc.
In the fiscal year ended March 31, 2022, the Company made additional acquisitions of shares in NIHON CREDIT LEASE CORPORATION
and excluded it from the scope of application of the equity method, while including it in the scope of consolidation. However, due toan absorption-type merger with the Company as the surviving company, NIHON CREDIT LEASE CORPORATION is excluded from thescope 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, 147 companies including FK Ignicion Leasing Ltd. are mainly business operators, etc. ofleasing 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 inthese companies are valued at cost.

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Financial Section(3) With regard to the entities accounted for using equity method whose balance sheet dates differ from the consolidatedbalance sheet date, the financial statements of these companies for their respective fiscal years have been applied.

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2) Provision for bonuses
To prepare for payment of bonuses to employees, a provision for the estimated payment amount borne in the fiscal year is recorded.

3) Provision for bonuses for directors (and other officers)

3. Fiscal year ends of consolidated subsidiaries
Among the consolidated subsidiaries, 19 overseas consolidated subsidiaries including Fuyo General Lease (USA) Inc. have balance sheet datesof 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 for the respective fiscal years, with necessary adjustments with regard tomaterial activities transactions during the periods up to the consolidated balance sheet date, have been reflected in the consolidation.
The financial statements of F.C. Initial Leasing Ltd. and four other companies are based on the provisional 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) Provision for future lease payments

4. Summary of significant accounting policies

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.

(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.
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 the amount of bonds where interest rateadjustment 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 berealized 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 tocancellation 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 to buildings) acquired since April 1, 1998 andfacilities attached to buildings and structures acquired since 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 the estimated 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 of founding.

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.

(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 estimated amount 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
doubtful receivables, distressed receivables, etc.
With respect to the bankruptcy claims, etc., an estimated uncollectible amount is calculated by directly deducting amounts expected to be
recovered from the amount of claims. The direct deduction totaled ¥5,393 million (U.S.$44,059 thousand) in the fiscal year ended March 31, 2022
and ¥3,098 million in the fiscal year ended March 31, 2021.

75

To prepare for payment of bonuses to directors, a provision for the estimated payment amount borne in the fiscal year is recorded.
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 historical default rates for normal claims, the analysis of individual receivables withrespect 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)

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 the Company based on the Regulations for
Provision of Shares to Officers, the Company posts the estimated 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 and maintenance 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 theperiod 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 the Company’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 of recognition, starting from the fiscal year of occurrence.
With respect to actuarial differences, the Company expenses the entire amount of them in the fiscal year of occurrence, but three of theCompany’s domestic consolidated subsidiaries amortize them by the straight-line method over a period (5 to 11 years) within the averageremaining service years for employees at the time of recognition, starting from the fiscal year following the fiscal year of occurrence.

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 ofdefined benefit plans classified in accumulated other comprehensive income of net assets.

4) Simplified accounting method by small-scale businesses, etc.
Certain domestic consolidated subsidiaries use simplified accounting methods in relation to the calculation of the retirement benefit liability
and the retirement benefit expenses. In the case of the termination allowance plan, retirement benefit obligations are recorded as theamount to be paid for voluntary retirement as of fiscal year-end. In the case of the corporate pension plan, retirement benefit obligations arerecorded 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 based on 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 the performance obligation is satisfied.

(7) Standard for translation of significant foreign-currency-denominated assets or liabilities into Japanese yen
Foreign 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 treated as gains or losses.
Meanwhile, the assets, liabilities, income and expenses of overseas subsidiaries, etc. are mainly translated into Japanese yen at the spot
exchange rate on the consolidated balance sheet date, and exchange differences are recorded as foreign currency translation adjustment or
non-controlling interests 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 toaccounting under exceptional treatment.

2) Hedge instruments and hedged items(a) Hedging instruments(b) Hedged items

Interest rate swaps, currency swaps and forward exchange contracts
Borrowings and forecast transactions in foreign currencies, etc.

3) Hedging policies
The Company uses derivatives, in accordance with its internal “Basic Policy for Managing Market and Liquidity Risks,” for the purpose ofhedging risks associated with interest-rate and foreign currency fluctuations arising from its sales and financial operations.
Fuyo Lease Group Integrated Report 2022

76

Financial Section4) Assessing hedge effectivenessThe assessment of hedge effectiveness of interest rate swaps is by the correlation between the change in aggregated amount of cash flowof the hedging instruments and the change in aggregated amount of cash flow of the hedged items and other factors.
With regard to forward exchange contracts, when the principal terms for the hedged items and hedging instruments are substantially thesame, the hedge relationship is considered highly effective.
With regard to interest rate swaps subject to accounting under exceptional treatment an assessment of hedge effectiveness is omitted.

(9) Amortization method and period of goodwill
Apart from immaterial amounts, evenly amortized over a period not exceeding 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 havean 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, 2022, the items that may
have a significant impact on the consolidated financial statements for the following fiscal year are “Assets for lease (property, plant and equipment).”(1) Amount recorded in the consolidated financial statements
FY2021:
FY2020:¥671,643 million (U.S.$5,486,832 thousand)¥632,299 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 lease agreement period as the depreciation period and the estimated disposal
amount at the end of the lease 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 tocancellation of lease agreements or customer insolvency, etc.
In assessing impairment of assets for lease, the Company groups assets, and for asset groups whose profitability has declined significantly, thebook value of the assets for lease is written down to the recoverable 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 of each project. The “future cash flows” foreach individual lease contract are established based on external factors such as the economic environment, interest rate fluctuations, andcompetition in the market.
The Group recognizes that the spread of the novel coronavirus disease (COVID-19) will have a certain impact on cash flows derived mainly
from leased properties. The Group expects that the impact of COVID-19 will continue to cause restrictions and uncertainty in economic
activities, and that it will take time for the situation to subside. Although this situation is subject to uncertainty, the Group has madeestimates 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 high degree of estimation uncertainty, andany 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.
In addition, if the impact of COVID-19 on economic and corporate activities changes, it may affect the cash flow from leased properties,
which may have a significant impact on the valuation of assets for lease in the consolidated financial statements for the following fiscal year.

III. Change in accounting policy
Application of Accounting Standard for Revenue Recognition
The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020, hereinafter, “Revenue Recognition AccountingStandard”), has been applied from the beginning of the fiscal year ended March 31, 2022, and revenue is recognized when control of apromised goods or services is transferred to the customer, in the amount expected to be received in exchange for the goods or services. As
a result, for some transactions, the total amount of the consideration received from customers was previously recognized as revenue, but
for transactions in which the Group acts as an agent in providing goods or services to customers, revenue is recognized as a net amountobtained by deducting the amount paid to the supplier from the amount received from the customer.
The application of the Revenue Recognition Accounting Standard follows the transitional treatment stipulated in the proviso to paragraph
84 of the Revenue Recognition Accounting Standard, and the cumulative effect of retroactively applying the new accounting policy prior to thebeginning of the fiscal year ended March 31, 2022, is treated as an adjustment to retained earnings at the beginning of the fiscal year ended
March 31, 2022, and thus the new accounting policy is applied from such beginning balance.

77

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

As a result, net sales and cost of sales for the fiscal year ended March 31, 2022 each decreased by ¥140,931 million (U.S.$1,151,304 thousand).
Additionally, there is no effect on the beginning balance of retained earnings.
Note that in accordance with the transitional treatment as prescribed in paragraph 89-3 of the Revenue Recognition Accounting Standard, notes
on “Revenue Recognition” for the previous fiscal year have not been stated.

Application of Accounting Standard for Fair Value Measurement, other standards and related implementation guidances
The “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019, hereinafter, “Fair Value Measurement
Accounting Standard”) has been applied from the beginning of the fiscal year ended March 31, 2022, and in accordance with the transitional
treatment stipulated in paragraph 19 of Fair Value Measurement Accounting Standard and paragraph 44-2 of “Accounting Standard for
Financial Instruments” (ASBJ Statement No. 10, July 4, 2019). The new accounting policy stipulated by the Fair Value Measurement
Accounting Standard has been applied prospectively. As a result, for available-for-sale securities whose market value is used as thebalance sheet amount, the Company previously used the value calculated based on the average market price during one month before theconsolidated balance sheet date, but has changed to using the market price on the consolidated balance sheet date.
In addition, the notes on “Financial instruments” include notes on matters concerning the breakdown of financial instruments by fair value level andother matters. However, in accordance with the transitional treatment provided for in paragraph 7-4 of the “Implementation Guidance on Disclosuresabout Fair Value of Financial Instruments” (ASBJ Guidance No. 19, July 4, 2019) such notes for the previous fiscal year have not been stated.

IV. New accounting standards and implementation guidances not yet applied
New accounting standards and implementation guidances not yet applied• Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31, June 17, 2021)(1) Overview
The “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, Accounting Standards Boardof Japan) was revised on June 17, 2021. When the Guidance was first announced on July 4, 2019, as the review of “fair value measurementof investment trusts” was considered to take a certain period of time for the deliberation with related parties and as the notes on fair valuesof “investments in partnerships for which an amount equivalent to the interest is carried on the balance sheet at net amount” required acertain review, the Guidance mentioned that those reviews would be implemented for approximately one year after the announcement of the“Accounting Standard for Fair Value Measurement.” Now those points for review were amended and the revised Guidance was announced.

(2) Scheduled date of adoption
Effective from the beginning of the fiscal year ending March 31, 2023.

(3) Impact of adoption of such accounting standards and implementation guidances
The amounts that affect the consolidated financial statements by adopting the “Implementation Guidance on Accounting Standard for Fair
Value Measurement” are insignificant.

V. 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 thePlan is referred to hereinafter as the “Trust”) using funds that the Company will contribute, and the Company’s shares and cash equivalent to
the market price of the Company’s shares (the “Company’s share, etc.”) will be provided to the Eligible Directors from the Trust in accordancewith the Regulations for Provision of Shares to Officers established by the Company. In principle, the Company’s shares, etc. will be provided
to the Eligible Directors on their retirement.

(2) Treasury shares remaining in trust
The shares of the Company remaining in trust are recorded as treasury shares under net assets based on the book value in trust (excluding
the amount of incidental costs). The book value and the number of shares of treasury shares under the Plan are ¥1,254 million (U.S.$10,248
thousand) and 177,100 shares as of March 31, 2022 and ¥642 million and 96,700 shares as of March 31, 2021.

(3) Book value of borrowings recorded based on the gross method
Not applicable

Impact of the spread of the Novel Coronavirus Disease (COVID-19) on accounting estimates
As of March 31, 2022, the Group calculated and considered reasonable amounts based on the information available at the time of preparing
the consolidated financial statements for the collectability of lease receivables, etc., the profitability of assets for lease, etc., held by theGroup, and determination of impairment of goodwill, etc.
With regard to the future economic outlook, although a gradual recovery is expected as economic and social activities move towardnormalization, we anticipate that the situation will remain highly uncertain and it will take time for the situation to subside. Although thissituation is subject to uncertainty, we have made estimates based on available information.
Fuyo Lease Group Integrated Report 2022

78

Financial Section

About Us

Items and events that may have a significant impact on the consolidated financial statements as they pertain to the spread of COVID-19 are
as follows:

Fuyo Shared ValueCSV Highlight

Millions of yen

In assessing the recoverability of impairment of non-current assets, the Group groups assets by company, and for asset groups whose
profitability has declined significantly, the book value of non-current assets is written down to the recoverable amount, and the amount of thedecrease is recorded as an impairment loss.
The recoverable amount of non-current assets is calculated based on the assumptions of future cash flows, discount rates, net sales
value, etc. Therefore, if it becomes difficult to achieve the initial expected revenue due to the impact of the spread of COVID-19, or if theassumptions such as future cash flows change, an impairment loss on non-current assets may be recorded.

c. Impairment of goodwill

VI. Notes for consolidated balance sheets*1 Accumulated depreciation for property, plant and equipment
Millions of yen
As of March 31, 2022¥

Other operating assets
Own-used assets

167,973
12,423
2,620

Thousands of U.S. dollars

As of March 31, 2021¥

199,960
10,072
1,985

1,372,217
101,492
21,406

Thousands of U.S. dollars

As of March 31, 2021

As of March 31, 2022

¥

¥

$

Long-term borrowings(current portion included)Long-term payables under securitization of lease receivables(current portion included)

¥

6

19

56

70,40480,752575,150

68

109

559

70,479¥80,881$

575,766*4 Loan commitments in lending operations (as lender)
The unused credit balance, etc. in relation to loan commitment in lending operations was as follows:
Millions of yen

Total loan commitments
Difference

Thousands of U.S. dollars

As of March 31, 2022

As of March 31, 2021

¥

¥

3,055

2,915

1,450
¥

1,605

As of March 31, 2022

$

1,295
1,620

¥

24,957
11,845$

13,112

Note 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 ofloans 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. (74 in
the fiscal year ended March 31, 2021) for the efficient procurement of working capital. The unused balance, etc. at the end of the fiscal years
ended March 31, 2022 and 2021 based on these agreements was as follows:
Millions of yen

As of March 31, 2022$

Financial Section/
Corporate Data

As of March 31, 2022

Balance of loans extended

The Group estimates the effective period of goodwill and amortizes the goodwill over such period using the straight-line method. In addition,
the Group is considering the economic benefits of goodwill based on the operating results of subsidiaries and business plans, etc. Due to theimpact of the spread of COVID-19, if it becomes difficult to achieve the initial expected revenue in the future, and if the Group recognizes theneed for impairment, it may record an impairment loss on goodwill in the future.

Assets for lease

Other (current liabilities)

Total

b. Impairment of non-current assets (assets for lease, etc.)

Corporate Governance(2) Liabilities secured by collaterala. Allowance for doubtful accounts
The Group records an allowance for doubtful accounts for the estimated amount of losses incurred in the event of uncollectible receivables.
Allowance for doubtful accounts is recorded at an amount estimated to be uncollectible based on the historical default rates for general receivables,
and on the basis of the collectability of doubtful receivables, distressed receivables, etc. on a case-by-case basis. Allowance for doubtful accounts
may require additional allowances due to changes in the historical default rates and the judgment of the collectability of individual receivables,
depending on the occurrence of bad debts, the status of collection of individual receivables, etc., after the spread of COVID-19.

Management

Upper limit on overdrafts and total loan commitments

As of March 31, 2021

As of March 31, 2022

¥

¥

$

Balance of borrowings drawn
Difference

Thousands of U.S. dollars

As of March 31, 2022¥

1,033,097
522,819
510,278

1,003,822
508,983
494,839¥$8,439,645
4,271,048
4,168,597*2 Investment securities in non-consolidated subsidiaries and associates were as follows:
Millions of yen

Operational investment securities (other)

Thousands of U.S. dollars

As of March 31, 2022

As of March 31, 2021

As of March 31, 2022

¥

¥

$

1,300

500

*6 Contingent liabilities(1) Guarantees provided on borrowings, etc. of business partners, etc.

10,620Millions of yen

Investment securities (shares)

29,09525,531

237,687(of which investment in joint ventures)(27,874)(24,347)(227,715)

Mizuho Bank, Ltd. (Note)

109,370

Pacific Rim Capital, Inc.

13,388Investment securities (other)

3,802

As of March 31, 2021

As of March 31, 2022

¥

¥

$

IBM Japan, Ltd. (Note)*3 Assets pledged as collateral and liabilities secured by collateral

Sumitomo Realty & Development Co., Ltd. (Note)(1) Assets pledged as collateral

AEON Mall Co., Ltd.
Millions of yen

Cash and deposits

As of March 31, 2022

As of March 31, 2021

As of March 31, 2022

¥

¥

$

Installment receivables
Lease receivables and investments in leases
Accounts receivable - other loans to customers
Accounts receivable - lease
Operating lease and other contract receivables
Assets for lease (property, plant and equipment)
Other operating assets (property, plant and equipment)
Total

Thousands of U.S. dollars

¥

3,122
555
13,7703,427
106
10,021
52,327
18,565
101,897

¥

3,084
678
15,133
3,519
92
2,163
65,306
19,746
109,725$

25,512
4,535
112,494
27,997873
81,872427,476
151,665
832,425

Note: Besides the above assets pledged as collateral, the Company provided investment securities (¥602 million (U.S.$4,919 thousand) in the fiscal year ended March 31, 2022, ¥612 million in
the fiscal year ended March 31, 2021) as third party security for bank loans taken out by business partners. The Company maintains deposits of investment securities (¥3 million (U.S.$25
thousand) and ¥3 million as of March 31, 2022 and March 31, 2021, respectively) for the purpose of sales transactions.

JAPAN SECURITIZATION CORPORATION (Note)
MaruzenJunkudo Bookstores Co., Ltd. (Note)XYMAX TOKAI Corporation (Note)
AEON RETAIL CO., LTD.
Sumitomo Mitsui Trust Bank, Limited (Note)XYMAX Corporation (Note)Marubeni Fuyo Auto Investment (CANADA)FANTASTIC FUNDING CORPORATION (Note)
MONEY PARTNERS CO., LTD.
Employees (funds for purchasing housing)
Others(830 in the fiscal year ended March 31, 2022, 870 in the fiscal year
ended March 31, 2021)
Total

Thousands of U.S. dollars

As of March 31, 2022

41,895
4,957
1,625
1,272
1,100
1,006
767
673
570
499
224
–
–
–
3
24,303¥78,90016,898
2,863
3,629
1,272
1,152
943
307
–
681
499
588
1,975
1,551
399
8
27,839¥60,611

342,258
40,497
13,277
10,394
8,992
8,219
6,269
5,501
4,659
4,084
1,838
–
–
–
32
198,541$644,562

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

79

Fuyo Lease Group Integrated Report 2022

80

Financial Section

About Us(2) O ne of the Company’s domestic consolidated subsidiaries engaged in business guarantee operations and the balance ofguarantees for borrowings of general customers and other entities was ¥31,777 million (U.S.$259,597 thousand) as of March
31, 2022 and ¥39,296 million as of March 31, 2021.

Current portion of long-term non-recourse borrowings

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

Ireland

Assets for lease

Transportation equipment(aircraft)

25,948

Chiyoda-ku, Tokyo

Other intangible assets

Customer-related assets

641

5,239

256,029

Minato-ku, Tokyo

Idle assets

Telephone subscription
rights

0

7

¥

¥

$

Total

¥

34,516

29,630¥39,126$

281,977

The assets corresponding to the non-recourse debt were as follows:
Millions of yen

Accounts receivable - other loans to customers
Total

Thousands of U.S. dollars

As of March 31, 2022

As of March 31, 2021

As of March 31, 2022

¥

¥

$

Assets for lease (property, plant and equipment)¥

35,077–35,077¥34,9285,674
40,603$

286,554–
286,554*8 Payables under securitization of lease receivables, long-term payables under securitization of lease receivables
Payables under securitization of lease receivables and long-term payables under securitization of lease receivables include the amount offunds raised through securitization of lease agreement receivables, etc.
Note that the balance of lease agreement receivables, etc. transferred through this was ¥76,934 million (U.S.$628,502 thousand) in the fiscal
year ended March 31, 2022 and ¥121,497 million in the fiscal year ended March 31, 2021.

*1 Revenue from contracts with customers
Net sales are not categorized separately and stated as revenue from contracts with customers and revenue from other sources. The
amount of revenue from contracts with customers is disclosed in the consolidated financial statements in Note XXI. “Revenue recognition, 1.
Information on disaggregation of revenue from contracts with customers.”*2 M ajor components of selling, general and administrative expenses for the fiscal years ended March 31, 2022 and 2021,
were as follows:

FY2021Thousands of U.S. dollars
FY2020

FY2021(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

Provision of allowance for doubtful accounts
Bad debts expenses
Employees’ salaries, allowances and bonuses
Provision for bonuses
Provision for bonuses for directors (and other officers)
Retirement benefit expenses
Provision for retirement benefits for directors (and other officers)
Provision for share awards for directors (and other officers)
Welfare expenses
Rent expenses
Depreciation
Amortization of goodwill

81

¥

2,620
378
14,949
2,802
200
975
43
229
3,425
2,384
2,336
1,405

¥

1,355
474
14,102
2,261
181
165
36
178
3,219
2,151
2,398
1,326

$

21,405
3,092
122,128
22,897
1,636
7,965
358
1,874
27,984
19,47919,08911,480(Millions of yen)¥(Thousands of U.S. dollars)

2,048

$

16,734The Group classifies its asset groups based on offices, etc., as the minimum unit for generating cash flows. In addition, idle assets aregrouped individually.
In regard to the above transportation equipment (aircraft), the expected future cash flow 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 caseof 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 some existing customers that were anticipatedat the time of acquisition of shares for one domestic consolidated subsidiary, so the value in use is evaluated at zero and deducted from thebook 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 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 amount of the book value of telephone subscription rights classified as idle with a memorandum value of ¥1 anda market value of zero in extraordinary losses.
FY2020 (From April 1, 2020 to March 31, 2021)
AmountLocation

Use

Type

Minato-ku, Tokyo

Idle assets

Telephone subscription
rightsVII. Notes for consolidated statements of income

Millions of yen

AmountAmountType

As of March 31, 2022

31,340Financial Section/
Corporate Data

Use

As of March 31, 2021

Long-term non-recourse borrowings

Corporate Governance

The Group recorded impairment losses for the following asset groups:

Thousands of U.S. dollars

9,496Management

Location

As of March 31, 2022

3,176

CSV Highlight*3 Impairment losses*7 Non-recourse debt included in borrowings were as follows:
Millions of yen

Fuyo Shared Value(Millions of yen)¥

1

The Group classifies its asset groups based on offices, etc., as the minimum unit for generating cash flows. In addition, idle assets aregrouped 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 amount of the book value of telephone subscription rights classified as idle with a memorandum 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
Millions of yen
FY2021Thousands of U.S. dollars
FY2020

FY2021(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

Buildings¥

Equipment
Leased assets
Software
Total

¥

11
13
9
6
40

¥

¥

7
13
8
7
35

$

$

90
110
81
50
331

Fuyo Lease Group Integrated Report 2022

82

Financial Section

About Us

Fuyo Shared ValueCSV Highlight

Management

VIII. Notes for consolidated statements of comprehensive income

IX. Notes for consolidated statements of changes in equity*1 Reclassification adjustments and income tax effect relating to other comprehensive income

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

Millions of yen
FY2021Thousands of U.S. dollars
FY2020Gains or losses arising during the year¥¥

(8,355)(717)(9,073)
2,775(6,297)¥(1,449)415(1,034)
291
(742)

¥

7,910
7,910

Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Valuation difference on available-for-sale securities¥

FY2021¥

18,434(414)
18,020(5,525)
12,494¥(2,236)313(1,923)94(1,829)¥(3,593)(3,593)$$(68,262)(5,859)(74,121)
22,673(51,448)$(11,839)3,390(8,448)2,381(6,067)$64,62364,623

Deferred gains or losses on hedges:
Gains or losses arising during the year
Reclassification adjustments to profit or loss
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

Number of shares at the
beginning of the year

Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectRemeasurements of defined benefit plans, net of tax

¥

44
(5)
39
(13)
26

¥

140
38
179
(55)
124

$

368
(42)
326
(110)
216

Share of other comprehensive income of entities accounted forusing equity method:

771
37

Reclassification adjustments to profit or loss

Total other comprehensive income

Number of shares at theend of the year

Decrease(Shares)(Shares)(Shares)Issued shares
Common shares
Total

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

Treasury shares
Common shares (Note)
Total

Notes: 1
 . 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).
2. The 85,572 increase in the number of common shares in treasury shares is due to an increase of 85,500 shares through the acquisition of treasury shares by the Board Benefit Trust(BBT) and an increase of 72 shares through the acquisition of fractional unit shares.
3. The 14,500 decrease in the number of common shares in treasury shares was a 9,400 decrease due to the exercise of stock options and a 5,100 decrease due to provision to the Board
Benefit Trust (BBT).

2. Share acquisition rights and treasury shares acquisition rights
Componentof shareacquisitionrightsCategory

Reportingcompany(parent
company)

Number of shares to be issued upon exercise of share
Type of sharesacquisition rights
to be issued(Shares)
upon exercise ofshare acquisition Beginning of the
Increase
Decrease
End of the year
rightsyear

Shareacquisitionrights as
stock options

–

–

–

–

–

Balance at the Balance at theof the year
end of the year end(Thousands of(Millions of yen)¥

650

U.S. dollars)

$

5,316

3. Dividends(1) Dividends paid

Gains or losses arising during the year
Share of other comprehensive income of entities accounted forusing equity method

Increase(Shares)

Remeasurements of defined benefit plans, net of tax:
Gains or losses arising during the year

Financial Section/
Corporate Data

1. Type and total number of shares issued, and type and number of treasury shares(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

Valuation difference on available-for-sale securities:

Corporate Governance

1,018
4

6,299
308

(Resolution)

June 23, 2021
Annual General Meeting of Shareholders

Common shares

November 5, 2021
Board of Directors

Common shares

¥

808

¥

1,023

$

6,607

¥

1,705

¥

8,218

$

13,931

Type of shares

Total amount ofcash dividends

Dividend per share(Yen)(Millions of yen)

¥

3,912

¥

3,912

130
130

Record date

Effective date

March 31, 2021

June 24, 2021

September 30, 2021 December 6, 2021

Notes:	1. 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).
2. 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).

(2) Dividends for which record date is in this fiscal year but the effective date for the dividends is in the following fiscal year
(Resolution)

Type of shares

Total amount ofcash dividends(Millions of yen)

June 23, 2022
Annual General
Meeting of
Shareholders

Common shares(Resolution)

Type of shares

¥

4,665

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

June 23, 2022
Annual General
Meeting of
Shareholders

Common shares$

38,117

Source ofdividends

Retained earnings

Source ofdividends

Retained earnings

Dividend per share
(Yen)

¥

155

Dividend per share(U.S. dollars)

$

1.27

Record date

Effective date

March 31, 2022

June 24, 2022

Record date

Effective date

March 31, 2022

June 24, 2022

Note: Total amount of cash dividends include cash dividends of ¥27 million (U.S.$224 thousand) for the Company’s shares held by Board Benefit Trust (BBT).

83

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84

Financial Section

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

FY2020 (From April 1, 2020 to March 31, 2021)

X. Notes for consolidated statements of cash flows

1. Type and total number of shares issued, and type and number of treasury shares*1 Relationship between cash and cash equivalents at end of period and cash and deposits stated on the consolidated balance sheets

Number of shares at the
beginning of the year

Increase

Issued shares
Common shares
Total
Treasury shares
Common shares (Note)
Total

Millions of yen

Number of shares at theend of the year

Decrease(Shares)(Shares)(Shares)

FY2021(Shares)––––

30,287,810
30,287,810

315,734
315,734

51
51

24,90024,900290,885
290,885

Notes: 1. The number of common shares in treasury shares at the end of the year includes the 96,700 of the Company’s shares held by the Board Benefit Trust (BBT).
2. The 51 increase in the number of common shares in treasury shares is due to an increase of the acquisition of fractional unit shares.
3. The 24,900 decrease in the number of common shares in treasury shares was a 19,100 decrease due to the exercise of stock options and a 5,800 decrease due to provision to theBoard Benefit Trust (BBT).

Cash and deposits¥

Time deposits with maturity of over three months
Cash and cash equivalents¥

Componentof shareacquisitionrightsType of shares tobe issued upon
exercise of shareacquisition rights

Share
acquisitionrights as stock
options

Reporting company(parent company)

Balance at the endof the year

Beginningof the year

Increase––

Decrease

End of the year

(Millions of yen)

Current assets¥

Non-current assets
Goodwill
Current liabilities

–

–

¥

704

Non-current liabilities
Valuation difference
Acquisition cost of shares
Acquisition cost up until the time control was obtained

3. Dividends

Loss on step acquisitions(1) Dividends paid

Acquisition cost of additionally acquired shares(Resolution)

Type of shares

Total amount ofcash dividends

Dividend per share(Yen)(Millions of yen)

June 23, 2020
Annual General Meeting of Shareholders

Common shares

November 6, 2020
Board of Directors

Common shares

¥

3,157

¥

3,308

105
110

Record date

Effective date

March 31, 2020

June 24, 2020

September 30,2020 December 2, 2020

Notes: 1. Total amount of cash dividends which resolved at Annual General Meeting of Shareholders held on June 23, 2020, include cash dividends of ¥10 million for the Company’s shares held
by Board Benefit Trust (BBT).
2. Total amount of cash dividends which resolved at Board of Directors held on November 6, 2020, include cash dividends of ¥10 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
(Resolution)

Type of shares

Total amount ofcash dividends(Millions of yen)

June 23, 2021
Annual General
Meeting of
Shareholders

Source ofdividends

Dividend per share(Yen)

Record date

Effective dateCash and cash equivalents
Difference: net consideration paid for acquisition

¥

¥

3,912

Retained earnings¥

130

June 24, 2021

9,829
9
21
(8,416)
(1)
(21)
1,420
(429)
2
994
(39)
955

Millions of yen

Current assets¥

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

March 31, 2021¥

98,926(172)
98,753$$

589,476(1,639)587,837

Thousands of U.S. dollars$$

80,30077
175(68,758)(13)(175)
11,606(3,505)
23
8,124
(321)
7,803

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

Acquisition cost of shares
Common shares¥

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 sharesof NIHON CREDIT LEASE CORPORATION which had been an entity accounted for using equity method, and the relation between theacquisition cost of shares and net consideration paid for the acquisition (net price).
Millions of yen(Shares)–

72,157(200)
71,957*2 Major components of assets and liabilities of a newly consolidated subsidiary due to acquisition of shares

2. Share acquisition rights and treasury shares acquisition rights

Category

FY2021(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

30,287,810
30,287,810

Number of shares to be issued upon exercise ofshare acquisition rights

Thousands of U.S. dollars
FY2020Cash and cash equivalents
Difference: net consideration paid for acquisition

¥

5,328
1,427
1,900
(2,662)(2,267)971
4,700(2,066)
2,633

Thousands of U.S. dollars$$

43,534
11,664
15,526(21,748)(18,521)
7,940
38,396(16,878)
21,517

Note: Total amount of cash dividends include cash dividends of ¥12 million for the Company’s shares held by Board Benefit Trust (BBT).

FY2020 (From April 1, 2020 to March 31, 2021)
The following includes the breakdown of assets and liabilities at the time of acquisition and consolidation of YAMATO LEASE CO., LTD., andthe relation between the acquisition cost of shares and proceeds for the acquisition (net price).
Millions of yen

Current assets¥

Non-current assets
Goodwill
Current liabilities
Non-current liabilities
Non-controlling interests
Acquisition cost of shares
Cash and cash equivalents
Difference: net consideration provided for acquisition

85¥

93,16814,054295(102,087)(7)(2,122)
3,300(3,602)(302)

Fuyo Lease Group Integrated Report 2022

86

Financial Section

About Us

CSV Highlight

XI. Lease transactions

2. Operating leases

As lessee
1. Finance leases (including intangible assets)

Future lease payments required under non-cancellable operating leases

Future lease payments required under non-cancellable operating leases
Millions of yen
As of March 31, 2022¥

Within one year

610
959
1,569

Over one year

¥

Total

Within one year
Total

Thousands of U.S. dollars

As of March 31, 2021

As of March 31, 2022

¥

¥

$

¥

60,926296,322357,248

58,140268,800
326,941¥$

497,7222,420,738
2,918,460

Thousands of U.S. dollars

As of March 31, 2021

¥

550
1,412
1,962

¥

Lease receivables and investments in leases, and lease obligations under sublease transactions on the consolidated balance sheets are
before interest deductions
Millions of yen

As of March 31, 2022

$

4,985
7,840
12,825$

Lease receivables and investments in leases
Lease liabilities (current liabilities)

XII. Financial instruments(1) Breakdown of investments in leases

1. Status of financial instruments
Millions of yen

Lease receivables

As of March 31, 2022

As of March 31, 2021

As of March 31, 2022¥$

Future interest income¥

Investments in leases

Thousands of U.S. dollars¥

Estimated residual value

938,940
18,216(108,680)
848,475¥

991,818
19,389(114,018)
897,190

7,670,454
148,812(887,844)
6,931,421$(2) Estimated collectible amount of portion of lease receivables arising from lease receivables and investments in leases after the consolidatedbalance sheet date(Millions of yen)
As of March 31, 2022
Within one year

Over one year andwithin two years

Over two years andwithin three years

¥

¥

¥

49,858296,135

45,367
189,019

26,268Over three years andwithin four years¥

132,196

18,502

Over four years andwithin five years

Over five years¥¥

97,78815,88955,352

28,465
168,447(Thousands of U.S. dollars)
As of March 31, 2022
Within one year

Over one year andwithin two years

Over two years andwithin three years

$

$

$

407,3092,419,211

370,615
1,544,155

214,595

Over three years andwithin four years$

1,079,950

151,156

Over four years andwithin five years

Over five years$$

798,859

129,807452,186

232,540

As of March 31, 2021
Within one year

Over one year andwithin two years

Over two years andwithin three years

¥

¥

¥

47,085
283,648

46,682
218,393

43,610
153,987

Over three years andwithin four years¥

20,123
99,952

Over four years andwithin five years

Over five years¥¥

10,44561,038

Thousands of U.S. dollars

As of March 31, 2022

As of March 31, 2021

As of March 31, 2022

¥

¥

$

7,463
9,888

12,243
14,60060,97580,784(1) Policy on financial instruments
The Group is engaged in leasing and installment transactions for machinery, equipment, etc. and financial transactions such as the provisionof operating loans. The Group uses direct and indirect financing to procure funds for purchasing assets to lease or to sell through installment
sales and for providing operating loans to customers. The Group’s indirect financing mainly consists of loans from financial institutions, andits 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 currency-denominated 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 affect borrowings. 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.

1,376,093(Millions of yen)

Lease receivables
Investments inleasesFinancial Section/
Corporate Data

As of March 31, 2022

Over one year

As lessor
1. Finance leases

Lease receivables
Investments inleasesCorporate Governance

3. Sublease transactions

2. Operating leases

Lease receivables
Investments inleasesManagement

Millions of yen

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.”

30,317
174,798(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 theinvestments in leases at the beginning of the fiscal year.
In addition, the straight-line method is used for allocating to each period the equivalent amount of interest for such investments in leases forthe period remaining after the application of the accounting standards, etc.
Note that the consequent impact is omitted for both the fiscal years ended March 31, 2022 and 2021 because of immateriality.

87

Fuyo Shared Value(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 and purchasing, 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 monitoring of the effectiveness of the credit risk
management system, 2) screening and management of credit transactions involving business partners, 3) maintenance and enhancementof risk asset soundness, 4) enhancement of protection against doubtful receivables and implementation of measures related to collectionof those receivables, and 5) guidance, support, etc. for the Company’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 recognition of adequate credit allowances, etc. based on the self-assessments. Furthermore, the department regularly monitors thestatus of the Company’s main business partners, manages payment-due dates and credit balances on a customer-by-customer basis, andclosely monitors customers to identify potential impediments to the collectability of receivables (e.g., due to worsening financial condition) andtakes steps to mitigate such impediments.
The effectiveness and appropriateness of credit risk management are examined through internal audits.

Fuyo Lease Group Integrated Report 2022

88

Financial Section2) 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 practicalmeasures related to market risk management and to monitor 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 for Managing 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 thestatus 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 thesesecurities as well as the financial status of issuers and 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 purpose of 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, in accordance with internal regulations and individuals
authorized on job responsibilities and pursuant to the approval of the Company’s president (CEO) or officer in charge of the finance division.
The Company’s consolidated subsidiaries’ derivative-related transactions are subject to the Company’s internal regulations “Basic
Policy for Managing Market and Liquidity Risks.” In accordance with the Company’s “Regulations on Managing Subsidiaries andAssociates,” the Company’s consolidated subsidiaries report to the Company on derivative-related transactions. 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,” “Long-term payables under securitization of lease receivables,”and interest rate swaps contracts included in “Derivatives.” The Group performs quantitative analysis in managing the risk of interest
rate fluctuations. This quantitative analysis incorporates the potential change in value of these financial assets and liabilities based on areasonable 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, the Company 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 ¥4,042 million (U.S.$33,022 thousand) for the fiscal year ended March 31, 2022 anda change of ¥3,892 million for the fiscal year ended March 31, 2021 in the fair value of these financial assets and liabilities. This potentialchange in value is based on the assumption that all risk factors other than interest rates remain constant and does not incorporate theeffects 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 each division to determine the impact on the Company’s funding activities. The
division also adequately controls liquidity, enhances capital efficiency, and optimizes liquidity risks and funding 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 based on predetermined response policies and implementation standards for each category.
The Company’s finance division also monitors consolidated subsidiaries’ funding status and takes appropriate action as necessary based on that status.

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

As of March 31, 2022
Millions of yen
Book value (A)(1) Installment receivables*1,2¥(2) Lease receivables and investments in leases*2(3) Operating loans*2

65,802
1,018,101
315,915

Fair value (B)¥66,3581,063,189
317,850

Difference (B) - (A)¥556
45,0881,935(4) Operational investment securities and investment securities
Other securities
Total assets(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 securitization of lease receivables(current portion included)
Total liabilities

252,407
1,652,226
11,357257,137
1,108,416¥¥

31,706

252,407
1,699,806
11,357
255,693
1,116,617¥¥

31,695–47,580–(1,443)
8,200
(10)

¥

1,408,618¥

1,415,365

¥

6,746

¥

–
(380)
(380)

¥

–
963
963

¥

–
1,343
1,343

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

¥

¥

¥

Thousands of U.S. dollars
Book value (A)(1) Installment receivables*1,2$

Fair value (B)$2,061,983
13,497,481
92,7832,100,624
9,054,953

2,061,983$ 13,886,175$
92,783
2,088,832
9,121,949

259,018

258,932$

11,507,378$ 11,562,496$

55,117$–(3,107)(3,107)$$–
10,974
10,974(2) Lease receivables and investments in leases*2(3) Operating loans*2

542,1028,685,482
2,596,609

Difference (B) - (A)537,556
8,317,143
2,580,799$

4,546
368,339
15,809(4) Operational investment securities and investment securities
Other securities
Total assets(1) Lease liabilities (current liabilities and non-current liabilities)$$(2) Bonds payable (current portion included)(3) Long-term borrowings (current portion included)(4) Long-term payables under securitization of lease receivables(current portion included)
Total liabilities$$–
388,694–(11,792)
66,996(87)

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

$

$

–
7,868
7,868

$

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

(4) Supplementary explanation related to fair values, etc. of financial instruments
Because calculations of fair values of financial instruments involve variable inputs, the results of calculations may vary depending on what
premises and assumptions are used. Contract amounts and other derivatives data presented in “Derivatives” are nominal contract amounts ornotional amounts used in calculations and do not indicate the amount of exposure.
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 inpartnerships, 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 their book value due tobeing settled in a short period of time.

89

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Financial Section

About Us

As of March 31, 2021
Millions of yen
Book value (A)(1) Installment receivables*1,2¥(2) Lease receivables and investments in leases*2(3) Operating loans*2

83,386
1,079,217
305,953

Fair value (B)¥84,536
1,138,436
310,558

Difference (B) - (A)

¥

1,149
59,2194,604(4) Operational investment securities and investment securities
Other securities
Total assets(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 securitization of lease receivables(current portion included)
Total liabilities¥¥

248,6711,717,229
15,733221,072¥¥

1,074,278

248,671
1,782,202
15,733
221,570¥¥

1,083,061

70,757–64,973–498

70,766

Total derivatives

1,381,841¥

1,391,132

¥

9,291

¥

–
(582)
(582)

¥

–
(704)
(704)

¥

–
(122)
(122)

¥

¥

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

Thousands of
U.S. dollars

As of March 31, 2022

As of March 31, 2021

As of March 31, 2022

¥

¥

$

Investments in limited partnerships, etc.*2
Total

If multiple inputs that materially affect the measurement of fair value are used, the fair value is categorized into the lowest priority level in fairvalue 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, 2022
Millions of yen
Category¥

10,05842,483
138,332
190,874¥

7,271
29,333
110,771
147,376

Fair value
Level 1

Level 2

Level 3

Total

Operational investment securities¥–

Preferred securities / beneficial interest in
trusts, etc.
Investment securities
SharesInterest rate-related

Millions of yen

Subsidiary’s shares / associates’ shares*1

Financial Section/
Corporate Data¥

108,665

¥

5,836

¥

114,501

–

–

5,597

5,597

68,358––68,358–68,358

97
108,762–
11,434

97
188,555

Derivatives

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

Unlisted shares*1

Corporate Governance

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 other than Level 1 inputs
Level 3 fair value: Fair value calculated using significant unobservable inputs

Bonds payable¥

Management

3. 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 the observability and materiality of inputs usedin calculating fair value.

9¥(ii) Hedge accounting applied

CSV Highlight

8,783

Derivatives*3(i) Hedge accounting not applied

Fuyo Shared Value$

82,171
347,057
1,130,073
1,559,301*1. This equates to shares without a market price, etc., and is not subject to fair value disclosure in accordance with paragraph 5 of the “Implementation Guidance on Disclosures about Fair Valueof Financial Instruments” (ASBJ Guidance No. 19, July 4, 2019).
*2. 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, July 4, 2019).

¥¥

Total assets
Derivatives–––

Interest rate-related
Foreign currency-related derivatives¥

Total liabilities

¥
¥

452
25
478

¥

¥
¥

–
–
–

¥

¥
¥

452
25
478

¥

Thousands of U.S. dollars
Category

Fair value
Level 1

Level 2

Level 3

Total

Operational investment securities
Bonds payable$

Preferred securities / beneficial interest in
trusts, etc.
Investment securities
Shares–$887,715$

47,683$935,397––

45,72645,726558,436––

558,436

Derivatives
Interest rate-related
Total assets
Derivatives$$

Interest rate-related
Foreign currency-related derivatives
Total liabilities$–
558,436
–
–
–

$
$

$

799
888,513
3,698
207
3,905

$
$

$

–
93,409
–
–
–

$
$

$

799
1,540,359
3,698
207
3,905

(*) 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 ofinvestment trusts, etc. on the consolidated balance sheet is ¥63,949 million (U.S.$522,423 thousand).

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About Us

Millions of yen
Fair value
Level 1

Installment receivables¥

Level 2–––

Lease receivables and investments in leases
Operating loans¥

Level 3

–
–
–

¥

Total

66,3581,063,189
317,850¥

66,3581,063,189
317,850

Derivatives

–
–
–
–
–

Interest rate-related¥¥

Total assets
Lease liabilities
Bonds payable
Long-term borrowings
Long-term payables under securitization oflease receivables
Derivatives–––

Interest rate-related¥

Total liabilities

¥
¥

1,343
1,343
11,357
255,693
1,116,617¥¥–
1,447,399–––

31,695¥0
1,415,365

¥
¥

–
–
–

¥

1,343
1,448,742
11,357
255,693
1,116,617
31,695¥0
1,415,365

Thousands of U.S. dollars
Category

Fair value
Level 1

Installment receivables$

Lease receivables and investments in leases
Operating loans

Level 2–––$

Level 3

–
–
–

$

Total

542,1028,685,482
2,596,609$

542,1028,685,482
2,596,609

Derivatives
Interest rate-related
Total assets
Lease liabilities$$

Bonds payable
Long-term borrowings
Long-term payables under securitization oflease receivables
Derivatives
Interest rate-related
Total liabilities

$

–
–
–
–
–

92,783–$ 11,824,192–$

2,088,832–

2,088,832

9,121,949–

9,121,949–

258,932–

258,932

–
–

1

–

1

$
$

$

10,976
10,976

11,562,497$

CSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

Notes:
1. Explanation of evaluation techniques and inputs used in calculating fair value(2) Financial assets and financial liabilities not recorded on the consolidated balance sheet at fair value
As of March 31, 2022

Category

Fuyo Shared Value

–

$
$

$

10,976
11,835,168
92,783

11,562,497

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 or information vendors, where the unadjusted market prices in active markets can be used, are categorized
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.
Investment trusts are not classified by level due to the transitional measures in accordance with paragraph 26 of the Implementation Guidance on
Accounting Standard for Fair Value Measurement, and the published standard price and price indicated by relevant financial and other institutions aretaken to be the fair value.
If the market price cannot be obtained, fair value is calculated by discounting total principal and interest, etc. by a rate calculated based on aninternal rating. Since significant unobservable inputs are used in the calculation, these are categorized as Level 3 fair value.
Installment receivables
Fair values are calculated by discounting uncollected receivables at the rate applied to new contracts. The Company calculates the fair valuesof 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 based on estimatedcash flows or estimated net realizable value, etc. covered by collateral or guaranty.
Since the impact on the inputs that cannot be observed 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 major administrative and maintenance expenses fromthe total of uncollected lease receivables and lease payment. 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 based on estimated cash flows or estimated net realizablevalue, 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.
Operating loans
Fair values of floating-rate operating loans are based on their book value. Market rates are reflected in the rates on floating-rate operatingloans in a short period of time, so their book value closely approximate their fair values as long as the borrower credit status does not changematerially after loan issuance. Fair values of fixed-rate operating loans are calculated by discounting total principal and interest for eachborrower 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 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.
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 andinterest 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-term payables under securitization oflease 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 onthese loans and payables in a short period of time, and the Company’s credit status has not changed materially since issuance, so their bookvalue are deemed to closely approximate to their fair values. To calculate the fair values of fixed-rate loans and payables in these categories,
the instruments are first allocated to categories according to maturity terms. Total principal and interest for each category is discounted at anotional 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 by relevant 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 fairvalue is categorized as Level 2 fair value.

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About Us

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

Fuyo Shared ValueCSV HighlightCategory

Evaluation techniqueSignificant unobservable inputs

Millions of yen

Scope of inputs
Within one year

Bonds payable

Discounted present value method

Discount rate

Preferred securities / beneficial
interest in trusts, etc.

Discounted present value method

Discount rate

2.00%

Cash and deposits

5.60% - 11.49%

Lease receivables and investments in leases
Operating loans
Operational investment securities andinvestment securities
Other securities with maturities

As of March 31, 2022

Bonds (government bonds)
Bonds (corporate bonds)

Millions of yen

Beginningof yearProfit and loss or othercomprehensive income
Net amounts
for the periodof purchase, Transfers toTransfers
sale,Level 3 fair from Level 3 End of year
Recorded invalue (*2) fair value (*3)
Recorded in other compre- issuance andprofit and loss hensive income settlement(*1)

Unrealized gains and losses
on financial assets andfinancial liabilities held on the
consolidated balance sheet
date among the amountrecorded to gains and losses
for the period

Operational
investment
securities

Bonds (other)
Other
Total

¥

72,15729,304
314,971
67,514–––
22,437506,386

Cash and deposits¥ 5,000

¥

– ¥

36 ¥

800 ¥

– ¥

– ¥ 5,836¥–$

Installment receivables
Lease receivables and investments in leases

3,403¥ 8,403

¥

–

437

1,756

–

–

5,597

– ¥

474 ¥

2,556 ¥

– ¥– ¥ 11,434–¥–

Beginningof yearOperating loans
Operational investment securities andinvestment securities
Other securities with maturities
Bonds (government bonds)

Profit and loss or othercomprehensive income
Net amounts
for the periodof purchase, Transfers toTransfers
sale,Level 3 fair from Level 3 End of year
Recorded invalue (*2) fair value (*3)
Recorded in other compre- issuance andprofit and loss hensive income settlement(*1)

Unrealized gains and losses
on financial assets andfinancial liabilities held on the
consolidated balance sheet
date among the amountrecorded to gains and losses
for the period

Operational
investment
securities

Over one year andwithin five years

Over five years andwithin ten years

¥

¥

¥

–
33,073534,633
211,312–28,415–
107,518
914,953–
2,609
115,684
33,559–25,893–23,652
201,399¥

Over ten years

¥

¥

–
1,890
54,474
4,246–
17,327–
18,967
96,906

Thousands of U.S. dollars
Within one year

Thousands of U.S. dollars

Bonds (corporate bonds)
Bonds (other)
Other
Total

$

589,476
239,398
2,573,087
551,547–––
183,299
4,136,807

Over one year andwithin five years

Over five years andwithin ten years

$

$

$

–
270,186
4,367,563
1,726,270–
232,134–
878,3477,474,499–
21,315945,056
274,157–
211,531–
193,227
1,645,286$

Over ten years$$–
15,441445,020
34,691–
141,551–
154,948
791,652

As of March 31, 2021
Millions of yen

Bonds payable$ 40,846 $Preferred
securities /
beneficial interestin trusts, etc.

27,803

Total¥

Installment receivables(2) Reconciliation from the balance at beginning of year to the balance at end of year, unrealized gain and loss recognized in profit andloss for the period

Total

Financial Section/
Corporate Data

4. R edemption schedule by term for monetary receivables and securities with maturity after the consolidatedbalance sheet dates

Operational investment securities

Preferred
securities /
beneficial interestin trusts, etc.

Corporate Governance

As of March 31, 2022

As of March 31, 2022

Bonds payable

Management$ 68,650 $

– $

301 $

6,535 $

– $– $ 47,683

14,346––– $– $ 93,409

–

3,577

– $

3,878 $ 20,882 $$––

45,726$–*1. Included in “valuation difference on available-for-sale securities” under “other comprehensive income” in the consolidated statement of comprehensive income.
*2. There were no transfers from Level 2 fair value to Level 3 fair value during the fiscal year. Note that in the case of a transfer, such transfer occurs on the final day of the accounting period.
*3. There were no transfers from Level 3 fair value to Level 2 fair value during the fiscal year. Note that in the case of 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 divisionin line with such policies and procedures. The calculated fair value is verified at the accounting division or the stand-alone finance division on thevalidity 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 a market price obtained from a third-party, the evaluation technique and inputs used are confirmed andthe validity of the price is verified by appropriate methods such as monthly trends analysis.

Within one year

Cash and deposits¥

Installment receivables
Lease receivables and investments in leases
Operating loans

98,92633,740302,286
52,752

Over one year andwithin five years

Over five years andwithin ten years¥¥–
45,926
601,362
223,130–
2,585
127,095
25,935

Over ten years

¥

–
2,293
50,053
4,817

Operational investment securities andinvestment securities
Other securities with maturities
Bonds (government bonds)
Bonds (corporate bonds)
Bonds (other)
Other
Total

¥

–
4,804
–
7,712
500,222¥–
19,751–
99,649989,819¥–
31,855–32,686
220,157¥–––
11,73068,894(4) Explanation concerning the impact on fair value if the significant unobservable inputs are changed
The discount rate, which is a significant unobservable inputs used in calculating fair value of items such as corporate bonds, is anadjustment 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 from financial instruments derived from credit risk. In general,a pronounced rise (fall) in the discount rate causes a pronounced fall (rise) in fair value.

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5. 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, 2022

Fuyo Shared Value¥

Commercial papers
Payables under
securitization of leasereceivables
Lease liabilities

568,563
371,000

Over two years
and within
three years

Over three years
and withinfour years

Over four years
and within
five years

Over five years

¥

¥

¥

¥

¥

–
–
–

–
–

–
–

–

–

–
–
–

–
–
–

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¥

239,447¥

164,810¥

110,515

Within one year

$ 4,644,751
3,030,798¥

163,103

Securities whosebook value exceeds
their acquisition cost

Bonds payable
Long-term borrowings
Long-term payables under
securitization of leasereceivables
Total

Over three years
and withinfour years

Over four years
and within
five years

Over five years

$

$

$

$

$

–
–

–
–

–
–

–

–

–

–

–

35,264
245,078
2,687,350

24,862367,617
2,421,318

13,394285,924
1,631,768

6,125
345,078
961,630

4,735
326,771566,2028,404
530,156
786,685

134,866

53,26825,02733,548

5,121

7,189

$ 2,867,065$ 1,956,113$ 1,346,381$

902,829(1) Shares

Securities whose bookvalue does not exceed
their acquisition costCommercial papers
Payables under
securitization of leasereceivables
Lease liabilities
Bonds payable
Long-term borrowings
Long-term payables under
securitization of leasereceivables
Total

97

¥

564,585
470,200

Over two years
and within
three years

Over three years
and withinfour years

Over four years
and within
five years

Over five years

¥

¥

¥

¥

¥

–
–

–
–

–
–

–
–

–
–

30,100

–

–

–

–

–

5,364
30,000308,274

3,895
30,000252,597

2,800
45,000215,279

1,584
35,000116,210689
31,072
71,911

1,398
50,000110,005

32,117

20,650

6,923

7,354

3,587

124

¥ 1,440,641¥

307,143¥

270,004¥

1) Government bonds and local government bonds, etc.
2) Corporate bonds3) Other

160,149¥

107,260

¥

Total

¥

15,346

Difference¥

50,498–97,338–35,213
198,396
2,513–
95,700–31,636142,683
2,864

–
1,638
–
3,576
55,713(351)–
17,163–34,33354,010252,407–
17,400–35,16755,432
198,115

–
(236)
–
(833)
(1,421)54,291(1) Shares¥¥

Thousands of U.S. dollars

TypeBook value$

537,902

Acquisition cost$

125,370

Difference$

412,532(2) Bonds
Securities whosebook value exceeds
their acquisition cost1) Government bonds and local government bonds, etc.
2) Corporate bonds3) Other(3) Other
Subtotal
1) Shares–
795,185–
287,667
1,620,754
20,534–
781,799–
258,450
1,165,619
23,402–
13,387–
29,217455,135(2,868)–140,212–280,483
441,229
2,061,983–
142,145–
287,293452,841
1,618,460–(1,933)–(6,810)(11,612)443,523(2) Bonds
1) Government bonds and local government bonds, etc.
2) Corporate bonds3) Other(3) Other

Over one year
and within
two years¥(2) Bonds

Securities whose bookvalue does not exceed
their acquisition cost

Millions of yen

Short-term borrowings3) Other
Subtotal$ 1,332,434

As of March 31, 2021

Within one year2) Corporate bonds(3) Other––

240,176$ 11,018,282

1) Government bonds and local government bonds, etc.

SubtotalOver two years
and within
three years

65,844

Acquisition cost(2) Bonds(3) Other

Over one year
and within
two years––

Millions of yen
Book value¥(1) Shares

Thousands of U.S. dollars

Commercial papers
Payables under
securitization of leasereceivables
Lease liabilities

Financial Section/
Corporate Data

1. Other securities

Type

Over one year
and within
two years

29,400Bonds payable

Short-term borrowings

Corporate Governance

As of March 31, 2022

Within one year

Long-term borrowings
Long-term payables under
securitization of leasereceivables
TotalManagement

XIII. Securities

Millions of yen

Short-term borrowings

CSV Highlight

Subtotal
Total

$

$

$

Note: Unlisted shares, etc. (Book value ¥148,390 million (U.S.$1,212,244 thousand)) are not included in the above “Other securities” because their market values are not available.

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Fuyo Shared ValueCSV Highlight

Management

3.Impairment losses on securities

As of March 31, 2021
Millions of yen

TypeBook value¥(1) Shares

74,966

Acquisition cost¥

15,983Difference¥

58,982(2) Bonds
1) Government bonds and local government bonds, etc.

Securities whosebook value exceeds
their acquisition cost2) Corporate bonds3) Other(3) Other
Subtotal(1) Shares–
91,975–
59,109226,051
1,815–
90,300–55,071
161,354
2,145

–
1,675
–
4,038
64,696
(330)

–
7,999
–
12,80522,620248,671–
8,000–
12,92823,074
184,429

–
(0)
–
(123)
(454)
64,241(2) Bonds
1) Government bonds and local government bonds, etc.

Securities whose bookvalue does not exceed
their acquisition cost2) Corporate bonds3) Other(3) Other
Subtotal

¥

Total

¥

¥

Note:Unlisted shares, etc. (Book value ¥118,042 million) are not included in the above “Other securities” because their market values are not available.

2. Other securities sold

Sales proceeds

¥

1,160

¥

–
–
–
2,480
3,640

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

1. Derivatives to which hedge accounting is not applied(1) Foreign currency-related derivatives
As of March 31, 2022
Not applicable
As of March 31, 2021
Not applicable(2) Interest rate-related
As of March 31, 2022
Not applicable
As of March 31, 2021
Not applicable

Total loss

840

¥

–
–
–
481
1,322

Sales proceeds

$

9,479

$

–
–
–
20,26429,743(2) Bonds
1) Government bonds and local government bonds, etc.
2) Corporate bonds3) Other(3) Other
Total

Total gain¥

Millions of yen

¥

–

¥

–
–
–
–
–

Thousands of U.S. dollars

Type(1) Shares

XIV. Derivatives(1) Foreign currency-related derivatives
As of March 31, 2022

Millions of yen

Type(1) Shares

During the fiscal year ended March 31, 2022, impairment loss recorded on securities amounted to ¥544 million (U.S.$4,448 thousand) (securities
classified as other securities, etc.: ¥544 million (U.S.$4,448 thousand)) and during the fiscal year ended March 31, 2021, impairment loss
recorded on securities amounted to ¥1 million (securities classified as other securities: ¥1 million).
The Company recognizes the impairment losses where the decline in the price at year end is greater than or equal to 50% of the acquisitioncost. Where the decline in the price is between 30% and less than 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., aswell 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, 2022 and 2021.

2. Derivatives to which hedge accounting is applied

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

Total gain

6,868

$

–
–
–
3,934
10,802

Principle treatment

$

–

$

–
–
–
–
–

Type of contracts

Hedged item

Receive yen,pay Thai baht

Borrowings ¥¥Millions of yen(1) Shares

Sales proceeds

Type of contracts

¥

7

¥

–
–
–
–
7

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

Total loss

¥

2

¥

–
–
–
–
2

¥

–

¥

–
–
–
–
–

Hedged item

Receive yen,pay Thai baht

519
519

Contract amount,etc.

Borrowings $

Total

¥
¥

–
–

¥
¥

(25)
(25)

Contract amount,etc. of over one year

Fair value

$

4,246
4,246

$
$

–
–

$
$

(207)
(207)

As of March 31, 2021
Not applicable(2) Interest rate-related
As of March 31, 2022
Millions of yen
Type of contracts

Interest rate swap contracts:
Fixed rate payment, floating rate receipt
Exceptional treatment of Interest rate swap contracts:
interest rate swaps
Fixed rate payment, floating rate receipt
Total

Hedged item

Contract amount,etc.

Borrowings ¥79,840Borrowings

15,637¥

95,478Contract amount,etc. of over one year¥

42,480Fair value

¥

8,037
¥

50,518

(354)
1,343

¥

988

Thousands of U.S. dollars
Hedge accounting

Type of contracts

Interest rate swap contracts:
Fixed rate payment, floating rate receipt
Exceptional treatment of Interest rate swap contracts:
interest rate swaps
Fixed rate payment, floating rate receipt
Principle treatment

Total

99

Fair value

Currency swap contracts

Principle treatment

Total gainContract amount,etc. of over one year

Thousands of U.S. dollars
Hedge accounting

FY2020 (From April 1, 2020 to March 31, 2021)
Type

Contract amount,
etc.

Currency swap contracts

Total

Principle treatment

Total loss$

Hedge accounting

Hedge accounting

Total

Financial Section/
Corporate Data

Corporate Governance

Hedged item

Contract amount,etc.

Borrowings $652,242

Borrowings

127,751$

779,992

Contract amount,etc. of over one year$

347,035

Fair value$

65,664$

412,699(2,900)10,974$

8,075

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100

Financial Section

About Us

Fuyo Shared ValueCSV Highlight

Management

Millions of yen

Millions of yen
Type of contracts

Interest rate swap contracts:
Fixed rate payment, floating rate receipt
Exceptional treatment of Interest rate swap contracts:
interest rate swaps
Fixed rate payment, floating rate receipt
Total

Principle treatment

Hedged item

Contract amount,etc.

Borrowings ¥86,031

Borrowings

23,212
109,243¥

Contract amount,etc. of over one year¥

70,750Fair value¥

15,822¥

86,572¥(582)

Plan assets at beginning of year

FY2020

FY2021(April 1, 2021 - March 31, 2022)(April 1, 2020 - March 31, 2021)(April 1, 2021 - March 31, 2022)

¥

¥

$

Expected return on plan assets(122)

Actuarial gains or losses(704)

Contribution from employer
Decrease due to the transition to the defined-contribution pension plan
Increase by the new consolidated subsidiary

XV. Retirement benefits

Plan assets at end of year

1. Overview of the Group’s retirement benefits plan
The Company has a defined-benefit corporate pension fund plan (established by the Company and Group 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 defined-contribution pension plan because it is not possible to reasonably estimate thevalue 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 a termination 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 the corporate 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 (U.S.$74 thousand) loss on revision of retirement benefit plan as a result of a change inthe termination allowance plan of one domestic consolidated subsidiary was recorded in extraordinary losses. In addition, due to the transition
from the defined-benefit corporate pension plan to the defined contribution plan a ¥10 million (U.S.$83 thousand) gain was recorded in
extraordinary income.
The Company and some of its domestic consolidated subsidiaries may make lump-sum payments of premium retirement benefits to some
employees at their retirement and certain situation.

(1) Reconciliation of retirement benefit obligations as of beginning of year and as of end of year
Millions of yen

Retirement benefit obligations at beginning of year

FY2020(April 1, 2021 - March 31, 2022)(April 1, 2020 - March 31, 2021)(April 1, 2021 - March 31, 2022)

¥

¥

$

Service cost
Interest cost
Actuarial gains or losses
Retirement benefits paid
Decrease due to the transition to the defined-contribution pension plan
Increase by the new consolidated subsidiary
Retirement benefit obligations at end of year

Thousands of U.S. dollars

FY2021¥

12,217
574
65
46
(535)
(52)
1,023
13,337¥

11,841
558
59
(121)
(452)
–
331
12,217

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

¥

FY2021$99,805
4,690
531
380
(4,373)(431)
8,358
108,960

11,731
212
(55)
480
(476)
(3)
–
11,88910,360
207
734
477
(440)
–
391
11,731¥$

95,841
1,738
(452)
3,926
(3,894)(30)–
97,129(3) R econciliation of retirement benefit obligations and plan assets at end of fiscal year and retirement benefit liability andretirement benefit asset recorded in the consolidated balance sheets
Millions of yen

Retirement benefit obligations for funded pension plans

Thousands of U.S. dollars

As of March 31, 2022

As of March 31, 2021

As of March 31, 2022

¥

¥

$

Plan assets
Net assets or liabilities recorded in the consolidated balance sheets
Retirement benefit liability
Retirement benefit asset
Net assets or liabilities recorded in the consolidated balance sheets ¥13,337(11,889)
1,448
1,536
(88)
1,448

12,217(11,731)
485
549
(64)
485

¥

$

108,960(97,129)
11,83012,550(720)
11,830(4) Breakdown of retirement benefit expenses
Millions of yen

Thousands of U.S. dollars

FY2021

FY2020

FY2021(April 1, 2021 - March 31, 2022)(April 1, 2020 - March 31, 2021)(April 1, 2021 - March 31, 2022)

¥

¥

$

Expected return on plan assets

574
65
(212)

Amortization of actuarial loss

135

(668)

Other

(66)
495

(37)
(295)

Service cost
Interest cost

2. Defined-benefit pension plan (excluding pension plans using the simplified accounting methods)

Thousands of U.S. dollars

FY2021Retirement benefits paid

Retirement benefit expenses for defined-benefit pension plan

¥

558
59
(207)

¥

4,690
531
(1,738)

1,109
$

(542)
4,050

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

(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

Thousands of U.S. dollars

FY2021

FY2020

FY2021(April 1, 2021 - March 31, 2022)(April 1, 2020 - March 31, 2021)(April 1, 2021 - March 31, 2022)

¥

¥

$

39

179

326

(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

101

Financial Section/
Corporate Data

(2) Reconciliation of plan assets as of beginning of year and as of end of year

As of March 31, 2021
Hedge accounting

Corporate GovernanceThousands of U.S. dollars

As of March 31, 2022

As of March 31, 2021

As of March 31, 2022

¥

¥

$

(42)

(2)

(347)

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Financial Section

About Us

(7) Plan assets
1) Breakdown of plan assets
Ratio of each major component of plan assets was as follows:
As of March 31, 2022

As of March 31, 2021

%

%

37
17
5
31
10
100

35
21
4
30
10
100

Bonds
SharesCash and deposits
General account
Other
Total

Note: The total includes retirement benefits trust established for corporate pension plan at 4% in the fiscal year ended March 31, 2022 and 5% in the fiscal year ended March 31, 2021.

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 return on various components of plan assets.
(8) Basis for actuarial calculation
Major basis for actuarial calculation
As of March 31, 2022

As of March 31, 2021%%

0.10 - 1.00
1.00 - 2.50
1.28 - 3.75

0.10 - 0.98
1.00 - 2.50
1.28 - 3.75

Expected long-term rate of return
Expected increase in salary

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 ofyear and as of end of year
Millions of yen
FY2021Thousands of U.S. dollars
FY2020

FY2021(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)¥

Retirement benefit expenses
Retirement benefits paid
Increase by the new consolidated subsidiary
Retirement benefit liability at end of year

CSV Highlight

¥

752
130
(87)
643
1,438

¥

¥

696
142
(87)
–
752

$

$

6,147
1,068
(717)
5,254
11,751

Management

Corporate Governance

Financial Section/
Corporate Data

(3) Retirement benefit expenses
Retirement benefit expenses calculated by simplified accounting method
FY2021 (April 1, 2021 - March 31, 2022): ¥130 million (U.S.$1,068 thousand)
FY2020 (April 1, 2020 - March 31, 2021): ¥142 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, 2022 and 2021 the amount required to be contributed by the Company and consolidated subsidiaries tothe defined-contribution pension plan amounted to ¥155 million (U.S.$1,270 thousand) and ¥82 million, respectively.
Note: The amounts are included in “Cost of sales” and “Selling, general and administrative expenses” on the consolidated statement of income.

5. Multi-employer type of pension plan
In the fiscal years ended March 31, 2022 and 2021 the amount required to be contributed to the defined-benefit corporate pension fund plan(established by the Company and Group companies) of multi-employer type of pension plan amounted to ¥244 million (U.S.$1,997 thousand)and ¥236 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
Millions of yen

Amount of plan assets

Discount rate

Retirement benefit liability at beginning of year

Fuyo Shared Value

As of March 31, 2021

As of March 31, 2021

As of March 31, 2020

As of March 31, 2021

¥

¥

$

Actuarial liability under pension funding programs
Difference

Thousands of U.S. dollars

As of March 31, 2022¥

16,327
17,759(1,431)¥

13,756
17,526(3,769)As of March 31, 2022$

133,384
145,079(11,695)(2) Premium contribution ratio for the Group’s contribution to multi-employer type of pension plan
FY2021: 14.624% (From April 1, 2021 to March 31, 2022)
FY2020: 14.395% (From April 1, 2020 to March 31, 2021)(3) Supplementary explanation
The main reasons for the difference in (1) above are the balance of prior service obligations under pension funding programs (¥6,741 million(U.S.$55,069 thousand) in the fiscal year ended March 31, 2022, ¥7,498 million in the fiscal year ended March 31, 2021), General reserve(¥3,728 million (U.S.$30,460 thousand) in the fiscal year ended March 31, 2022, ¥3,927 million in the fiscal year ended March 31, 2021) anddeductions for asset valuation adjustments due to the use of actuarial valuation methods for asset valuations under pension funding (¥– million in
the fiscal year ended March 31, 2022, ¥– million in the fiscal year ended March 31, 2021).
The amortization method for prior service obligations in this system is even amortization of principal and interest over 20 years. Were forsome, unlikely reason, a shortage to occur for the balance 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 salary at the time of premium contribution by thepremium rate prescribed in advance, the ratio in (2) above is not the same as the actual burden ratio.

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

(2) R econciliation of retirement benefit obligations and plan assets at end of fiscal year and retirement benefit liability andretirement benefit asset recorded in the consolidated balance sheets
Millions of yen

Retirement benefit obligations for funded pension plans

As of March 31, 2021

As of March 31, 2022

¥

¥

$

Plan assets
Retirement benefit obligations for unfunded pension plans
Net assets or liabilities recorded in the consolidated balance sheets
Retirement benefit liability
Net assets or liabilities recorded in the consolidated balance sheets103

Thousands of U.S. dollars

As of March 31, 2022

¥

540
(165)
374
1,063
1,438
1,438
1,438

¥

514
(156)
358
394
752
752
752

$

4,416
(1,355)
3,062
8,689
11,751
11,751
11,751

Fuyo Lease Group Integrated Report 2022

104

Financial Section

About Us

XVI. Stock options, etc.

Management

Financial Section/
Corporate Data

Corporate Governance

The number of stock options that existed during the fiscal year ended March 31, 2022 is translated into the number of shares.
1) Number of stock options

Not applicable

Millions of yen

Non-operating income (Other)

Thousands of U.S. dollars

FY2021

FY2020

FY2021(From April 1, 2021 toMarch 31, 2022)(From April 1, 2020 toMarch 31, 2021)(From April 1, 2021 toMarch 31, 2022)

¥

12

¥

–

$

105

Stock options for 2009

Stock options for 2010

Stock options for 2011

Stock options for 2012

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

1,300
–
–
–
1,300

8,600
–
–
–
8,600

14,900–1,400–
13,50018,600–––18,60030,200––3,300
26,900Stock options for 2013

Stock options for 2014

Stock options for 2015

Stock options for 2016

Stock options for 2017

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

19,400–800
1,800
16,80024,100–1,600–
22,50022,000–1,800–
20,20031,900–2,500–
29,40021,300–1,300–
20,000Stock options for 2008

Stock options for 2009

Stock options for 2010

Stock options for 2011

Stock options for 2012

Yen

Yen

Yen

Yen

Yen

Previous fiscal year-end
GrantedExpired
VestedBalance unvested
Post-vesting (shares)

3. 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 and executive officers and abolished the share-based payment-type stock options plan, there
has been no new granting of stock options.
Stock options for 2008

Stock options for 2008

Pre-vesting (shares)

2. Gains on expiration of unexercised stock options

Stock options for 2009

Stock options for 2010

Directors of the Company: 8
Directors of the Company: 8
Directors of the Company: 7
Executive officers of the Company: 16 Executive officers of the Company: 15 Executive officers of the Company: 17

Number and type of stock options
Common shares: 57,800 shares(Note 2)

Common shares: 84,600 shares

Grant date

October 15, 2008

October 15, 2009

October 15, 2010

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

Exercise period

October 15, 2008
– October 14, 2038 (Note 5)

October 15, 2009
– October 14, 2039 (Note 5)

October 15, 2010
– October 14, 2040 (Note 5)

Common shares: 61,300 shares

Previous fiscal year-end
VestedExercised
ExpiredBalance unexercised

Pre-vesting (shares)
Previous fiscal year-end
GrantedExpired
VestedBalance unvested
Post-vesting (shares)
Previous fiscal year-end

Stock options for 2011

Class and number of grantees(Note 1)

CSV Highlight(2) Movement in stock options

1. Stock options-related expenses were recorded in the following accountClass and number of grantees(Note 1)

Fuyo Shared Value

Stock options for 2012

Stock options for 2013

Directors of the Company: 7
Directors of the Company: 8
Directors of the Company: 8
Executive officers of the Company: 16 Executive officers of the Company: 16 Executive officers of the Company: 18

Number and type of stock options
Common shares: 54,800 shares(Note 2)

Common shares: 73,000 shares

Common shares: 42,000 shares

Grant date

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)

Exercise period

October 14, 2011
– October 13, 2041 (Note 5)

October 16, 2012
– October 15, 2042 (Note 5)

October 15, 2013
– October 14, 2043 (Note 5)

Stock options for 2014

Stock options for 2015

Stock options for 2016

VestedExercised
ExpiredBalance unexercised2) Unit price

Exercise price
Average price per share at
exercise
Fair value at grant date

Class and number of grantees(Note 1)

Directors of the Company: 7
Directors of the Company: 7
Directors of the Company: 7
Executive officers of the Company: 18 Executive officers of the Company: 19 Executive officers of the Company: 21

Number and type of stock
options (Note 2)

Common shares: 35,500 shares

Common shares: 28,600 shares

Common shares: 34,700 shares

Grant date

October 15, 2014

October 15, 2015

October 14, 2016

Exercise price

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

Exercise period

October 15, 2014
– October 14, 2044 (Note 5)

October 15, 2015
– October 14, 2045 (Note 5)

October 14, 2016
– October 13, 2046 (Note 5)

Average price per share at
exercise
Fair value at grant date

1 ¥

1

7,511

–

–

1,668

2,218

2,449

1,943

Stock options for 2013

Stock options for 2014

Stock options for 2015

Stock options for 2016

Stock options for 2017

Yen

Yen

Yen

Yen

Yen

¥

¥

1 ¥

1 ¥

–

–

1,610

1 ¥

1 ¥

1 ¥

1 ¥

1 ¥

1

7,438

7,387

7,480

7,494

7,506

3,556

3,584

4,653

4,606

6,840

4. Estimation method for fair value of stock options
Stock options for 2017

105

Class and number of grantees(Note 1)

Directors of the Company: 6
Executive officers of the Company: 22

Number and type of stock
options (Note 2)

Common shares: 22,200 shares

Grant date

October 16, 2017

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

Exercise period

October 16, 2017– October 15, 2047 (Note 5)

Not applicable

5. Estimation method for the number of vested stock options
Notes: 1. Excluding outside directors and outside corporate auditors
2. Converted to number of shares
3. No vesting conditions attached
4. No provision for requisite service period
5. 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 within a period offive years beginning on the day that exactly one year has passed since theday immediately after the day on which the holder loses his/her position.

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

Fuyo Lease Group Integrated Report 2022

106

Financial Section

About Us

Fuyo Shared ValueXVII. Tax effect accounting

XVIII. Business combinations, etc.

1. The respective breakdowns of deferred tax assets and deferred tax liabilities by major item

Business combinations through acquisition
1. Overview of the business combination

Millions of yen

Thousands of U.S. dollars

As of March 31, 2022

As of March 31, 2021

As of March 31, 2022

¥

1,779
1,174
1,070
983
855
728
566
554
500
412
403
344
260
199
1,943
11,778(120)(120)
11,657

¥

1,421
1,050
478
593
675
690
508
626
570
393
348
208
336
215
1,071
9,191
(90)
(90)
9,100

$

(16,997)(2,081)(1,906)(1,545)(1,195)(942)(1,134)(25,803)(14,145)¥(19,783)(1,791)(1,467)(1,414)(1,291)(595)(908)(27,253)(18,152)$

Deferred tax assets
Excess of allowance for doubtful accounts
Guarantee deposits received
Retirement benefit liability
Accrued expenses
Provision for bonuses
Loss on valuation of investment securities, etc.
Asset retirement obligations
Enterprise taxes payableNon-deductible consumption tax
Prepaid expenses
Revenue recognized for tax purposes
Gain on transfer of receivables
Excess of depreciation
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

14,541
9,596
8,749
8,038
6,987
5,948
4,629
4,532
4,088
3,367
3,295
2,816
2,130
1,628
15,87496,219(988)(988)
95,231

Deferred tax liabilities
Valuation difference on available-for-sale securities¥

Depreciation
Foreign subsidiary’s unitary tax
Intangible assets
Gain on valuation of investment securities
Gain on transfer of receivables
Other
Total deferred tax liabilities
Net deferred tax liabilities

¥

¥

$

(138,855)(17,005)(15,571)(12,626)(9,769)(7,697)(9,271)(210,793)(115,562)

Note: T he amount of valuation allowance increased by ¥30 million (U.S.$251 thousand) from the previous fiscal year. This increase was mainly due to an increase of ¥24 million (U.S.$202
thousand) in valuation allowance for asset retirement obligations at a consolidated subsidiary.

2. The respective breakdowns of major items that constituted the material difference between the statutory effective
tax rate and the effective tax rate after adoption of tax effect accounting
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 effectaccounting is less than 5% of statutory effective tax rate.
As of March 31, 2021
The note is omitted, because the difference between the statutory effective tax rate and the effective tax rate after adoption of tax effectaccounting is less than 5% of statutory effective tax rate.

CSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

(1) Names of acquired company and its business descriptions
Name of acquired company:
WorkVision Corporation (hereinafter “WorkVision”)
Business description:
The development, sales, operation and maintenance of cloud package focused IT solutions, etc.
(2) Reasons for the business combinations
Because while utilizing the corporation network and sales capabilities of the Company, we are building a structure that can develop business asa “Business Process Service” to realize the business reforms of our customers in terms of both “systems” and “operations” by combining “ICT
Solutions” and “BPO Services” with WorkVision at the core, to meet the increasingly sophisticated and complex needs of our customers.
(3) Date of the business combinations
October 15, 2021
(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 100.00% of the issued shares of WorkVision.

2. Period for which operating results of the acquired company was included in the consolidated financial statements
From October 1, 2021 to March 31, 2022

3. Acquisition cost of the acquired company and breakdown by type of consideration
Acquisition priceCash and deposits

Acquisition cost

¥4,700 million

U.S.$38,396 thousand¥4,700 million

U.S.$38,396 thousand

4. Details and amounts of main acquisition-related expenses
Compensation and fees, etc. from advisers, etc. ¥261 million (U.S.$2,136 thousand)

5. Amount, cause, amortization method and period of goodwill recognized(1) Amount of goodwill recognized¥1,900 million (U.S.$15,526 thousand)(2) Cause of goodwill
Goodwill was recognized due to the future excess earning power expected based on business expansion going forward.

(3) Amortization method and period
Straight-line method over a period of 11 years

6. Amount of assets received and liabilities assumed on the date of the business combination and their major components
Millions of yen

Current assets¥

Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities

107

¥

5,328
1,427
6,756
2,662
2,267
4,929

Thousands of U.S. dollars$$

43,534
11,66455,19821,74818,521
40,269Fuyo Lease Group Integrated Report 2022

108

Financial Section

About Us

7. Pro forma amounts of impact of the consolidated statement of income for the fiscal year ended March 31, 2022 assumingthat the business combination was completed at the beginning of the fiscal year, and the calculation method thereofMillions of yen

Net sales

¥

5,864
260
260
260
167

Operating profit
Ordinary profit
Profit before income taxes
Profit attributable to owners of parent

Thousands of U.S. dollars$

Yen

Basic earnings per share¥

47,910
2,132
2,126
2,126
1,370

Fuyo Shared ValueCSV Highlight

$

0.05

The pro forma amount of the impact is the difference between net sales and profit or loss information calculated assuming that the businesscombination 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 acquired company.
Please be advised that the notes stated above have not obtained audit certification.

Financial Section/
Corporate Data

The Company and some of its consolidated subsidiaries own assets such as commercial facilities for lease and office buildings (including land)
for lease in Tokyo and other regions. Net lease income from these assets amounted to ¥6,307 million (U.S.$51,532 thousand) and ¥6,256
million (lease income and lease cost were generally recorded as net sales and cost of sales, respectively) for the fiscal years ended March 31,
2022 and 2021, respectively.
The book value on the consolidated balance sheets, net changes, and fair value of these assets are as follows:
Millions of yen

Thousands of U.S. dollars(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021)

FY2021(April 1, 2021 - March 31, 2022)¥$

FY2021

FY2020Book value
Beginning of year

Method of calculating pro forma amountCorporate Governance

XX. Real estate leasing business

U.S. dollars

5.59Management344,843¥

246,8442,817,122

Net change

52,32697,998427,472

End of year

397,170

344,8433,244,595¥

Fair value at end of year

409,458¥$

357,015

3,344,973

Notes: 1. The book value on the consolidated balance sheet is the amount after deduction of accumulated depreciation from acquisition cost.
2. The increase of book value is mainly attributable to the purchase of real estate of ¥174,318 million (U.S.$1,424,058 thousand) and ¥127,180 million, in the fiscal years ended March 31,
2022 and 2021, respectively.
3. The fair value of properties is mainly estimated based on income approach in accordance with Real Estate Appraisal standards as of March 31, 2022. For other properties, the Company
reasonably estimated the fair value based on income approach or market approach while the Company used their book value as the fair value for certain properties.

Absorption-type merger of consolidated subsidiary
The Company conducted an absorption-type merger of NIHON CREDIT LEASE CORPORATION (hereinafter “NCL”), a consolidated subsidiaryof the Company, dated January 1, 2022 based on a resolution of the Board of Directors held on November 5, 2021.

XXI. Revenue recognition

1. Overview of the business combination

1. Information on disaggregation of revenue from contracts with customers(1) Name and business description of entity involved in business combination

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

Name:
NIHON CREDIT LEASE CORPORATIONBusiness description:
Leasing and installment sales of nursing care and welfare equipment, medical equipment, and information equipment

Millions of yen
Reportable segments
Lease andInstallment Sales

Financing

Other

Total

Revenue from contracts with customers(2) Date of the business combinations

Revenue from sale of leased properties

January 1, 2022

Provision of services, etc.

(3) Legal form of the business combinations
Absorption-type merger with the Company as the surviving company and NCL as the absorbed company

¥

Total
Other revenue
Revenues from external customers¥

118,898
2,952
121,851
470,334
592,186¥¥(4) Name of the companies after the business combination–
25
25
22,105
22,131¥–40,74140,741
2,787
43,529¥¥¥118,898
43,720162,618
495,228
657,847

Thousands of U.S. dollars

Fuyo General Lease Co., Ltd.,

Reportable segments(5) Other matters related to overview of transaction
NCL became a wholly-owned consolidated subsidiary of the Company in April 2021, but NCL has been absorbed through a merger for theeffective use of management resources and to improve the efficiency of business operations.

Lease andInstallment Sales

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 treats the transaction as a transaction under common control.

109

Other

Total

Revenue from contracts with customers
Revenue from sale of leased properties

2. Overview of accounting treatment

Financing$

Provision of services, etc.
Total

$

$

–

$

–

$

971,315

24,121

212

332,829

357,162

995,436212

332,829

1,328,477

3,842,290

Other revenue
Revenues from external customers

971,315

4,837,726

180,586$

180,798

22,776$355,605

4,045,652$

5,374,129

XIX. Asset retirement obligations

2. Basic information for understanding revenue from contracts with customers

This information has been omitted because of immateriality.

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

Fuyo Lease Group Integrated Report 2022

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About Us

XXII. Segment information, etc.

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

FY2020 (From April 1, 2020 to March 31, 2021)

Segment information
1. Description of reportable segments

Millions of yen

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 toevaluate 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 and Installment Sales segment, the Financing segment, and the Other segment.
The Lease and Installment Sales segment conducts businesses including leasing of IT and office equipment, industrial machinery, and otherassets (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 inoperating 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 reportable segment
Measurements used in accounting for reportable segment are the same as those disclosed in “Basis of presentation.” Profit of reportablesegment is based on operating profit. Transactions with other segments are based on prevailing market prices.

Lease andInstallment Sales

Financing

Other

Total

Sales
Revenues from external customers¥

541,718

Net sales¥

20,588¥

177,956¥

740,263

1,282

3,454

1,995

6,732

543,000

24,043179,951

746,996

Transactions with other segments
Segment profit¥

33,303¥

15,303

¥

8,786

¥

57,392

Segment assets¥

1,849,658¥

932,383¥

120,917¥

2,902,959

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

41,128
49

–
324

3,114
952

44,243
1,326

–

–

–

–

144,656

–

¥

317

¥

¥

144,974

3. Disclosure of sales, profit (loss), asset, liability, and other items for each reportable segment
FY2021 (From April 1, 2021 to March 31, 2022)

4. Description of nature of differences between amounts of reportable segments total and consolidated financial statements

Millions of yen
Lease andInstallment Sales

Financing

Other

Net sales

Total

Sales
Revenues from external customers¥

Net sales
Segment assets¥¥

592,186
1,230
593,416
32,751
1,764,861¥¥¥

22,131
3,488
25,62016,523
967,301¥¥¥

43,5292,127
45,657
8,779
126,186¥¥¥

657,847
6,847
664,694
58,0532,858,349

Reportable segments total

Net sales reported on the consolidated statements of income

Amortization of goodwill

ProfitFY2021¥

746,996(6,732)740,263¥

Millions of yen

¥

–
324

3,069
1,010

49,244
1,405

Reportable segments total

–

–

–

–

Corporate expenses (Note)

220,598

–

¥

4,821

¥

¥

225,419

Thousands of U.S. dollars
FinancingTransactions with other segments
Net sales

4,837,726$

180,798$

355,605$

5,374,129

10,05528,502

17,38155,937

4,847,781

209,300

372,9865,430,067$

267,552$

134,987$

71,718$474,257$

14,417,623$

7,902,144$

1,030,855$

23,350,621

Other items

377,219–

25,075402,294

577

2,650

8,253

11,480––––1,802,128

FY2021

Operating profit reported on the consolidated statements of income ¥58,053(699)(11,319)46,034¥57,392(3,206)(9,630)44,555¥$$474,257(5,718)(92,473)
376,067

Millions of yen

Thousands of U.S. dollars
FY2020

FY2021(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

Segment assets$

Thousands of U.S. dollars
FY2020

FY2021

Segment profit

Depreciation$

5,430,067(55,937)5,374,129

Note: Corporate expenses are mainly selling, general and administrative expenses that are not attributable to any reportable segment.

Total

Sales

$

¥

Eliminations

AssetsOther$(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

46,17570

Lease andInstallment Sales

Amortization of goodwill
Investments in entities accounted for using
equity method
Increase in property, plant and equipment
and intangible assets¥

664,694(6,847)
657,847

FY2021

Depreciation

Revenues from external customers¥

Eliminations

Other items

Investments in entities accounted for using
equity method
Increase in property, plant and equipment
and intangible assets

Thousands of U.S. dollars
FY2020(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

Transactions with other segments
Segment profit

Millions of yen
FY2021$–$

39,386$

1,841,513

Reportable segments total¥

Total assets reported on the consolidated balance sheets

2,858,349¥

2,902,959

91,354

Corporate assets (Note)¥

2,949,704$

23,350,621$

24,096,923

76,325¥2,979,285

746,302

Note: Corporate assets include surplus funds (cash and deposits, etc.), long-term investment funds (investment securities) and assets related to administrative divisions that are not attributable toany reportable segment.

Depreciation

Millions of yen
FY2021Thousands of U.S. dollars
FY2020

FY2021(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

Reportable segments total¥
Adjustment
Amounts reported on the consolidated financial statements ¥49,244
1,789
51,034¥44,243
1,907
46,150¥$$402,294
14,621
416,915

Note: Depreciation adjustments mainly represent depreciation on own-used assets.

Amortization of goodwill

Millions of yen
FY2021Thousands of U.S. dollars
FY2020

FY2021(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

Reportable segments total¥
Adjustment
Amounts reported on the consolidated financial statements ¥

111

1,405
–
1,405

¥
¥

1,326
–
1,326

$
$

11,480–
11,480Fuyo Lease Group Integrated Report 2022

112

Financial Section

About Us

Investments in entities accounted
for using equity method

Millions of yen
FY2021Thousands of U.S. dollars
FY2020

FY2021(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)¥

Reportable segments total
Adjustment

Amounts reported on the consolidated financial statements ¥–42,07542,075¥–28,942
28,942¥$–
343,726
343,726$

Fuyo Shared ValueCSV Highlight

Management

Financial Section/
Corporate Data

Corporate Governance

3. Information for each of main customers
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.
FY2020 (From April 1, 2020 to March 31, 2021)
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.

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.

Increase in property, plant and equipment
and intangible assets

Millions of yen
FY2021Thousands of U.S. dollars
FY2020

FY2021(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)¥

Reportable segments total
Adjustment

Amounts reported on the consolidated financial statements ¥225,419
2,179
227,599¥¥

144,974
4,177
149,152$$

1,841,513
17,804
1,859,317

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

Disclosure of impairment losses on non-current assets for each reportable segment
FY2021 (From April 1, 2021 to March 31, 2022)
Millions of yen
Lease andInstallment Sales

Impairment losses

¥

2,048

Financing¥

Corporate/
Elimination

Other

–

¥

642

¥

Total

–

¥

2,690

Thousands of U.S. dollars
Lease andInstallment Sales

Information associated with reportable segments
1. Information for each product or service

Impairment losses

FY2021 (From April 1, 2021 to March 31, 2022)
This information is omitted as it is identical to that in segment information.
FY2020 (From April 1, 2020 to March 31, 2021)
This information is omitted as it is identical to that in segment information.

$

Impairment losses

Millions of yen

21,895

Ireland

¥

Asia

$

4,807,691

Other

116,431¥27¥

EuropeNorth America andLatin America

$

$

–

$

178,869

Ireland

$

121

¥

Asia

Other

951,160¥–

Financing¥

Corporate/
Elimination

Other

21,980

–

¥

1

¥

Total

–

¥

1

Amortization and unamortized balance of goodwill for each reportable segment

Total

$

221

$

Millions of yen
Lease andInstallment Sales

726,984

Thousands of U.S. dollars
Japan

5,246

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

EuropeNorth America andLatin America¥$

Millions of yen
Lease andInstallment Sales(2) Property, plant and equipment

588,509–

Total

FY2020 (From April 1, 2020 to March 31, 2021)

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.

¥

$

Other

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

2. Information for each region

Japan

16,734

Financing

Corporate/
Elimination

Balance at end of period¥

196

Financing

¥

4,784

Corporate/
Elimination

Other

¥

16,252

¥

Total

–

Total

992

$

21,234

Thousands of U.S. dollars
Lease andInstallment Sales

5,938,934

Notes: 1. The figures shown are presented according to the respective countries and regions of the Company and its consolidated subsidiaries.
2. The following geographic categories primarily include the respective countries and regions shown below.
North America and Latin America: United States
Europe: United Kingdom, Ireland
Asia: China, Taiwan, Singapore, Thailand¥

Balance at end of period

$

1,608

Financing$

39,089Corporate/
Elimination

Other

$

132,774

$

Total

–

$

173,472

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

FY2020 (From April 1, 2020 to March 31, 2021)

FY2020 (From April 1, 2020 to March 31, 2021)(1) Revenues from external customers

Millions of yen
Lease andInstallment Sales

It is omitted since revenues from external customers in Japan exceeds 90% of net sales on the consolidated statement of income.

Balance at end of period(2) Property, plant and equipment
Millions of yen¥

546,417

EuropeNorth America andLatin America

Japan

¥

8,656

Ireland¥

116,509

Asia

Other

¥

2

¥

Notes: 1. The figures shown are presented according to the respective countries and regions of the Company and its consolidated subsidiaries.
2. The following geographic categories primarily include the respective countries and regions shown below.
North America and Latin America: United States
Europe: United Kingdom, Ireland
Asia: China, Taiwan, Singapore, Malaysia

113

5,792

Total

¥

677,379¥

246

Financing

¥

5,109

Corporate/
Elimination

Other

¥

15,362

¥

Total

–

¥

20,718

Note: The 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
FY2021 (From April 1, 2021 to March 31, 2022)
Not applicable
FY2020 (From April 1, 2020 to March 31, 2021)
Not applicableFuyo Lease Group Integrated Report 2022

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About Us

Fuyo Shared ValueCSV Highlight

XXIII. Related parties

2. Notes to parent company and significant associates

1. Related party transactions(1) Parent company’s information
There is no parent company.

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

Type

Name

Location

Business or(Millions of yen) occupation
CapitalPercentage
Relationsof votingTransaction Transaction
with related
rightsamountdetails(Millions of yen)partiesholding

Account
title

Year-endbalance(Millions of yen)(held) (%)

DirectMajor
shareholder

Type

Hulic Co.,
Ltd.

Name

Chuo-ku,Tokyo

Location¥111,609

Capital(Thousands of
U.S. dollars)

Real estateleasingbusiness

Business or
occupation(Holdings)

5.3
Direct (Held)
14.0

Lease
transactions

Lease
payments
received

Purchase ofoperating Purchase of
assetsoperatingassetsSale ofoperating
Sale ofassetsoperatingassets¥4,710Lease
receivables
andinvestments
in leases¥63,012¥2,559Account
title

Lease
transactions

Major
shareholder

Hulic Co.,Ltd.

Chuo-ku,Tokyo$911,764

DirectPurchase ofReal estate (Holdings)
operating
5.3
leasing
assetsbusiness Direct (Held)
Sale
of
14.0
operatingassetsLease
payments
received$38,479

Purchase ofoperatingassets$220,243

Sale ofoperatingassets$20,905

XXIV. Information on special purpose entities

For the diversification of funding sources and stable financing, the Company promotes securitization of 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 asproceeds 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 and the employees of the Company concurrently are assigned as corporate officer
positions by the entities.

(Thousands of
U.S. dollars)Millions of yen$514,769

As of March 31, 2021

As of March 31, 2022

Two companies

Two companies

Two companies¥

19,608

Total value of liabilities as of the latest balance sheet(without elimination of inter-company transactions)19,603Name

Location

Amount of major transactions or thebalance as of the end of the fiscal year
(Millions of yen)

Lease receivables and investments in leases
Percentage
Relationsof votingTransaction Transaction
with related
rightsamountdetails(Millions of yen)partiesholding

Account
title

Year-endbalance

Major
shareholder

Hulic Co.,Ltd.

Chuo-ku,Tokyo¥62,718

Lease
payments
received

DirectPurchase ofReal estate (Holdings)
operating Purchase of
6.0
leasing
assetsoperatingbusiness Direct (Held)
assetsSaleof
14.0
operating
Sale ofassetsoperatingassets¥4,752¥

15,996

Amount of major transactions or thebalance as of the end of the fiscal year

(Millions of yen)(Thousands of U.S. dollars)(held) (%)

Lease
transactions

4,219

$

4,214

160,185
160,150

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

Transferred assets (Note 1)

Type

¥

2. Amount of transactions, etc. with special purpose entities subject to disclosure

FY2020 (From April 1, 2020 to March 31, 2021)
Business or(Millions of yen) occupation

Thousands of U.S. dollars

As of March 31, 2022

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

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 amount records the total transaction amount that occurred in the fiscal year
ended March 31, 2022.

CapitalFinancial Section/
Corporate Data

(2) Summary financial information for significant associates
There are no significant associates.

End of year

(held) (%)

Lease
receivables
andinvestments
in leases

Corporate Governance

1. Overview of special purpose entities subject to disclosure and of transactions using special purpose entities subject
to disclosure¥26,960

Percentage
Transaction
Relationsof votingTransaction
amountwith related
rights(Thousands ofdetails
partiesholding
U.S. dollars)Management

Lease
receivables
andinvestments
in leases

Transferred assets (Note 1)¥62,888

Lease receivables and investments in leases$

130,678

Major gain or loss
Amount

Item(Millions of yen)

Gain on transfer(Note 2)¥141

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

Gain on transfer(Note 2)$

1,157

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.

¥23,069

FY2020 (From April 1, 2020 to March 31, 2021)¥4,644

Notes: 1. The above amounts do not include consumption taxes.
2. 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.
3. The purchase and sale of operating assets is determined based on the actual market price. The transaction amount records the total transaction amount that occurred in the fiscal year
ended March 31, 2021.

(2) Transactions of consolidated subsidiaries of the company reporting the consolidated financial statements withrelated parties

Amount of major transactions or thebalance as of the end of the fiscal year
(Millions of yen)Transferred assets (Note 1)
Lease receivables and investments in leases¥

289

Major gain or loss
AmountItem

Gain on transfer(Note 2)

(Millions of yen)¥

4

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.

Parent company of the company reporting the consolidated financial statements and major shareholders (limited to companies, etc.), etc.
FY2021 (From April 1, 2021 to March 31, 2022)
Not applicable
FY2020 (From April 1, 2020 to March 31, 2021)
Not applicable

115

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116

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About Us

XXV. Per share information
Yen¥

11,121.96¥

10,153.22

$

90.86

1,130.52

986.18

9.24

Diluted earnings per share

1,123.38

979.399.18

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 is 177,100 shares for the fiscal year ended
March 31, 2022 and 96,700 shares for the fiscal year ended March 31, 2021.
2. Treasury shares are deducted when calculating the average number of shares during the period, used in the computation 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 121,150 shares for the fiscal year
ended March 31, 2022 and 97,065 shares for the fiscal year ended March 31, 2021.
3. Calculation basis of net assets per share is as follows.

Millions of yen
As of March 31, 2022¥

374,239

Thousands of U.S. dollars

As of March 31, 2021¥

344,796

As of March 31, 2022$

3,057,265

41,40540,231

338,254

Of which, share acquisition rights

650

704

5,316

Of which, non-controlling interests

40,75439,527

332,937

Net assets attributable to common shares

332,834

304,565

2,719,012

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

29,92529,99629,925

Amounts excluded from total net assets

Millions of yen
FY2021Thousands of U.S. dollars
FY2020

FY2021(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

Basic earnings per share¥

33,886¥29,566$

276,828–––

Profit attributable to owners of parent attributable to common shares

33,88629,566

276,828

Average number of shares during the period (thousands shares)

29,97429,981

29,974

Amount not attributable to common shareholders

Diluted earnings per share

Increase in the number of common shares (thousands shares)
Residual securities that are not dilutive and not included in thecalculation of diluted earnings per share

Financial Section/
Corporate Data

¥

–
190
–

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, real estate 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 result of this additional acquisition of shares,
the entity and its subsidiary, INVOICE INC., became wholly owned subsidiaries of the Company.

2. Overview of accounting treatment to be 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 undercommon control, etc.

4. Calculation basis of basic earnings per share and diluted earnings per share is as follows

Adjustments to profit attributable to owners of parent

Corporate Governance

Additional acquisition of subsidiary shares

FY2021

Basic earnings per share

Profit attributable to owners of parent

Management

Transactions under common control etc.

U.S. dollars
FY2020(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021) (April 1, 2021 - March 31, 2022)

Total net assets

CSV Highlight

XXVI. Subsequent events

FY2021

Net assets per share

Fuyo Shared Value

¥

–
207
–

$

–
190
–

3. Matters concerning the additional acquisition of subsidiary shares
Acquisition priceCash and deposits

Acquisition cost

¥6,869 million

U.S.$56,119 thousand¥6,869 million

U.S.$56,119 thousand

4. Matters concerning a change in initial equity related to transactions with non-controlling shareholders(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¥5,376 million (U.S.$43,918 thousand)Corporate bond issuance
The Company issued straight bonds as follows:(1) Issue name:(2) Issuance amount:(3) Issuance date:(4) Issue price:(5) Coupon rate:(6) Redemption date:(7) Use of proceeds:

Fuyo General Lease Co., Ltd., No. 33 unsecured straight bond
¥30,000 million (U.S.$245,078 thousand)April 28, 2022
¥100 per ¥100 of face value
0.400% per year
April 28, 2027
To fund capital investments

In addition, the Company filed the amendment to Shelf Registration Statements concerning the issuance of public hybrid corporate bonds(subordinated bonds) for an amount up to ¥30.0 billion (U.S.$245,078 thousand) to the Director-General of the Kanto Local Finance Bureau
on May 10, 2022.

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Financial Section

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

Independent Auditor’s Report

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Financial Section

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

Independent Auditor’s Report

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Financial Section

About Us

Fuyo Shared ValueCSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data

Independent Auditor’s Report

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Stock Information / Participation in Initiatives

Stock Information
Total number ofauthorized share

100,000,000 shares

Number of shares
outstanding

30,288,000 shares

Share unit number

100 shares

Securities
companies

Individuals

22 shareholders
248,000 shares

18,433 shareholders
2,504,000 shares

CSV Highlight

Management

Corporate Governance

Financial Section/
Corporate Data8%

1%

Foreign
Shareholders

15%

Financial
Institutions

Breakdown of
Shareholders

243 shareholders
4,644,000 shares

18,929Fuyo Shared Value

Participation in Initiatives

As of March 31, 2022

Stock Overview

Number ofshareholders

About Us41%

35 shareholders
12,253 shares

Other domestic
firms

35%

196 shareholders
10,639,000 shares

TCFD: Task Force on
Climate-related
Financial Disclosures

UNGC: United Nations
Global Compact
The United Nations Global Compact(UNGC) is a voluntary initiative inwhich companies and organizations
act as good members of society andparticipate in the creation of a global
framework for sustainable growthby demonstrating responsible andcreative leadership. We becamea signatory in January 2018. We
support the 10 principles of the
UNGC in four categories (humanrights, labor, environment, and anticorruption) and work toward making
them happen.

TCFD is a task force established by
the Financial Stability Board (FSB),
an international organization ofcentral banks and financial regulatorsfrom major countries, to provide
a framework for climate changerelated disclosures. In May 2019, theCompany expressed its endorsementof the final report published by the
TCFD (TCFD Recommendations)and has implemented information
disclosures based on thoserecommendations.

RE100
Renewable Electricity 100

JCLP: Japan Climate
Leaders’ Partnership

RE100 is a global initiative run by the
Climate Group, an international NGO
in partnership with CDP. Member
companies commit to, and publish,
a target of 100% renewable energy
use in their businesses by 2050.
Fuyo Lease became a member in
September 2018, announced targetsof 50% renewable energy use by2024 and 100% by 2030, and istaking action to make them happen.

In February 2018, we became as u p p o r t i n g m e m b e r o f J C L P, acoalition of companies working
toward a sustainable, zero-carbon
society, and an executive member in
December 2018. As well as engaging
in our own zero-carbon initiatives,
we are involved in a broad rangeof activities that address climatechange, such as developing andproviding solutions that will help thetransition to a zero-carbon society,collaborating with global networks,
and making policy recommendations.

Major Shareholders (Top 10)
Number of shares held

Shareholders(in thousands)

Shareholding ratio (%)

4,218

Hulic Co., Ltd.

14.0%

2,978

The Master Trust Bank of Japan, Ltd. (Trust Account)

9.9%

Meiji Yasuda Life Insurance Company

2,690

8.9%

Retirement Benefit Trust managed by Mizuho Trust & Banking Co., Ltd. (Marubeni
Corporation account); Custody Bank of Japan, Ltd. as a Trustee of Retrust

1,512

5.0%

Custody Bank of Japan, Ltd. (Trust Account)

1,127

3.7%

Sompo Japan Insurance Inc.

1,002

3.3%

Azbil Corporation

1,000

3.3%

Mizuho Bank, Ltd.

907

3.0%

NICHIREI CORPORATION

416

1.4%

Tokio Marine & Nichido Fire Insurance Co., Ltd.

400

1.3%

Annual dividend per share (Yen)350

EMF: Ellen MacArthur
Foundation
The Ellen MacArthur Foundation(EMF) is an international initiative
whose purpose is to accelerate thetransition to the circular economy.
We became a member of thefoundation in November 2020 toacquire knowledge of the circular
economy and collaborate withother companies and researchorganizations.

Financial Behavior
Principles for the Formationof a Sustainable Society
Principles for Financial Action forthe 21st Century
The Principles for Financial Action
for the 21st Century were formulated
as the policy recommendation for
financial institutions seeking to fulfill
their roles and responsibilities informing a sustainable society. Fuyo
Lease signed the principles in June
2016.

285

250

Inclusion in ESG-Related Stock IndicesWe are strengthening our environment, social, and governance(ESG) initiatives as well as progressing CSV activities to solve
social problems.
We h a v e b e e n e v a l u a t e d b y t h e f o l l o w i n g t h i rd - p a r t yorganizations that mainly evaluate companies based on nonfinancial information.

(Forecast)

240

200

188

150

205

130
100

*

80
50
0
2015/3125

2016/32017/3

2018/3

2019/32020/32021/3J-CEP is a new business co-creation
partnership in which companies
aiming to realize a sustainable society
work to promote a circular economy
i n c o l l a b o r a t i o n w i t h re s i d e n t s ,governments, universities and otherorganizations. The Company has beena member of J-CEP since the time ofits foundation in October 2021.

Evaluation of Our Initiatives
The Company received the Gold Award (Ministry of theEnvironment Award) in the bonds category of the ESG FinanceAwards in fiscal 2019, and the Special Prize in the indirect
finance category in fiscal 2021.

The Fuyo Lease Group Integrated Report 2020 received the
Excellence Award in the Environmental Reporting category of
the 24th Environmental Communication Awards hosted by the
Ministry of the Environment and Global Environmental Forum.

Fuyo Lease received Platinum Kurumin certification in
fiscal 2017, which is awarded to companies with Kurumin
certification that have executed initiatives at a higher standard.

146

100

(J-CEP)

Third-Party Evaluation

316

300

The Japan Circular
Economy Partnership

2022/32023/3(Forecast)* The inclusion of Fuyo General Lease in any MSCI Index, and the use of MSCI logos, trademarks,
service marks or Index names herein, do not constitute a sponsorship, endorsement or
promotion of Fuyo General Lease by MSCI or any of its affiliates. The MSCI Indexes are theexclusive property of MSCI. MSCI and the MSCI Index names and logos are trademarks orservice marks of MSCI or its affiliates.

Under the 2022 Certified Health and Productivity Management
Organization (Large Enterprise Category), the Company wasrecognized by the Ministry of Economy, Trade and Industry andNippon Kenko Kaigi (Japan Health Council) as a listed company
carrying out excellent health and productivity management.
In fiscal 2021, the Company was certified as an “Eruboshi”
company as it has met specific criteria (recruitment, continuous
employment, way of working including working hours, percentage
of female managers, diverse career paths) for certification as an
excellent company promoting the advancement of women in
the workplace, etc. under the Act on the Promotion of Female
Participation and Career Advancement in the Workplace.

Fuyo Lease Group Integrated Report 2022

126

Kojimachi Garden Tower, 5-1-1, Kojimachi, Chiyoda-ku, Tokyo 102-0083, Japan
Phone: +81-3-5275-8800

https://www.fgl.co.jp/eng/

For inquiries about “Integrated Report 2022,” please contact:

Creating Shared Value Promotion Office TEL: +81-3-5275-8809 E-mail: fuyo-ir@fgl.co.jp