This is an excerpt translation of the Japanese original. In the event of any discrepancy between this translated
document and the Japanese original, the original shall prevail.

Annual Securities Report(Report pursuant to Article 24, Paragraph 1 of the
Financial Instruments and Exchange Act)The 52nd Fiscal Year(from April 1, 2022 to March 31, 2023)(E04788)-1-

Table of Contents
Page
Cover page
Part 1 Company Information ............................................................................................................................................................... 4
Item 1. Overview of the Company and its Consolidated Subsidiaries ................................................................................................... 4
1. Summary of Business Results ................................................................................................................................................... 4
2. History....................................................................................................................................................................................... 6
3. Description of Business............................................................................................................................................................. 8
4. Overview of Subsidiaries and Affiliates .................................................................................................................................. 10
5. Employees ............................................................................................................................................................................... 13
Item 2. Business Overview .................................................................................................................................................................. 18
1. Management Policy, Business Environment and Tasks Ahead, etc. ....................................................................................... 18
2. Concept and Efforts for Sustainability .................................................................................................................................... 24
3. Risk Factors ............................................................................................................................................................................ 30
4. Management’s Analyses of Consolidated Financial Position, Operating Results and Cash Flows ......................................... 39
5. Material Agreements, etc. ....................................................................................................................................................... 49
6. Research and Development Activities .................................................................................................................................... 49
Item 3. Property, Plants and Equipment .............................................................................................................................................. 50
1. Leased Assets .......................................................................................................................................................................... 50
2. Assets for Own Use ................................................................................................................................................................. 50
Item 4. Information on the Company .................................................................................................................................................. 51
1. Information on the Company’s Shares, etc. ............................................................................................................................ 51
2. Acquisitions, etc. of Treasury Shares ...................................................................................................................................... 61
3. Dividend Policy ...................................................................................................................................................................... 62
4. Corporate Governance, etc. ..................................................................................................................................................... 64(Note) This document is an excerpt translation of the Annual Securities Report (The 52nd Fiscal Year from April 1, 2022 to March
31, 2023), which was originally prepared in Japanese, that covers up to “Item 4. Information on the Company.” For details
regarding “Item 5. Financial Information” of the Annual Securities Report prepared in Japanese, please refer to Financial
Information 2023 (For the year ended March 31, 2023).

-2-

CoverDocument Title

Annual Securities Report (“Yukashoken Hokokusho”)

Clause of Stipulation

Article 24, Paragraph 1 of the Financial Instruments and Exchange Act

Place of Filing

Director-General of the Kanto Local Finance Bureau

Filing Date

June 27, 2023

Fiscal Year

The 52nd Fiscal Year (from April 1, 2022 to March 31, 2023)

Company Name

Mitsubishi HC Capital Inc.

Company Name in English

Mitsubishi HC Capital Inc.

Title and Name of Representative

Taiju Hisai, Representative Director, President & CEO

Address of Registered Head Office

5-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Telephone Number+81-3-6865-3004

Name of Contact Person

Hirokazu Kato, Senior Corporate Officer, General Manager of Accounting
Department

Nearest Place of Contact

5-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Telephone Number+81-3-6865-3004

Name of Contact Person

Hirokazu Kato, Senior Corporate Officer, General Manager of Accounting
Department

Place for Public Inspection

Tokyo Stock Exchange, Inc.
(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Nagoya Stock Exchange, Inc.
8-20, Sakae 3-chome, Naka-ku, Nagoya, Aichi
Mitsubishi HC Capital Inc. Nagoya Office(22-24, Marunouchi 3-chome, Naka-ku, Nagoya, Aichi)
Mitsubishi HC Capital Inc. Makuhari Office(6-1, Nakase 2-chome, Mihama-ku, Chiba, Chiba)
Mitsubishi HC Capital Inc. Osaka Office(1-1, Fushimimachi 4-chome, Chuo-ku, Osaka, Osaka)
Mitsubishi HC Capital Inc. Omiya Branch(11-3, Sakuragicho 1-chome, Omiya-ku, Saitama, Saitama)
Mitsubishi HC Capital Inc. Yokohama Branch(11-5, Kitasaiwai 1-chome, Nishi-ku, Yokohama, Kanagawa)-3-

Part 1 Company Information
Item 1. Overview of the Company and its Consolidated Subsidiaries
1. Summary of Business Results(1) Consolidated
Fiscal Year

48th

Year ended

49th

50th

51st

52nd

March 31, 2019 March 31, 2020 March 31, 2021 March 31, 2022 March 31, 2023

Revenues(Millions of Yen)

864,224

923,768

947,658

1,765,559

1,896,231

Recurring Income(Millions of Yen)

87,60594,37664,968117,239

146,076

Net Income Attributable to
Owners of the Parent(Millions of Yen)

68,79670,75455,314

99,401

116,241

Comprehensive Income(Millions of Yen)

66,71848,29653,066

174,586

265,136

Total Equity(Millions of Yen)

778,582

798,820

817,906

1,333,467

1,551,029

Total Assets(Millions of Yen)

5,790,929

6,285,966

6,014,896

10,328,872

10,726,196

Equity per Share(Yen)

846.97872.78901.66912.191,064.46

Earnings per Share

(Yen)

77.28

79.44

62.07

69.24

80.95

Diluted Earnings per Share

(Yen)

76.99

79.14

61.84

69.06

80.71

Equity Ratio

(%)

13.0

12.4

13.4

12.7

14.3

Return on Equity

(%)

9.4

9.2

7.0

8.0

8.2

Price Earnings Ratio(Times)

7.3

6.7

10.8

8.2

8.4

Cash Flows from Operating
Activities(Millions of Yen)

(239,403)(252,199)

199,314

195,845

46,752

Cash Flows from Investing
Activities(Millions of Yen)

(34,063)(32,988)1,220(107,879)(127,322)

Cash Flows from Financing
Activities(Millions of Yen)

299,752

552,320(372,808)(192,157)(8,948)Cash and Cash Equivalents
at the End of the Year

(Millions of Yen)

186,489455,588286,213520,083

460,486

3,217
(283)

3,301
(277)

3,284
(372)

8,803
(1,569)8,648(1,462)

Number of Employees(Separately, Average
Number of Temporary
Employees)(Persons)(Note) Effective from the 51st term, the Company changed its accounting policies for “Method for How to Post Re-leasing Revenues
in Lease Transactions,” “Method for Posting Lease Transactions as Finance,” and “Method for Posting Deferred Assets (BondIssuance Cost),” and the new accounting policies have been retrospectively applied to the figures of the 50th term.

-4-(2) Management Indicators of the Submitting Company, etc.
Fiscal Year

48th

Year ended

49th

50th

51st

52nd

March 31, 2019 March 31, 2020 March 31, 2021 March 31, 2022 March 31, 2023

Revenues(Millions of Yen)

474,081

470,854492,019

838,475

764,506

Recurring Income(Millions of Yen)

50,791

41,087

61,392

34,00879,910Net Income(Millions of Yen)

46,27938,76863,39951,58482,204

Share Capital(Millions of Yen)

33,19633,19633,19633,19633,196

895,834,160

895,834,160

895,834,160 1,466,912,244

1,466,912,244

Total Number of Issued Shares(Shares)

Total Equity(Millions of Yen)

497,324508,589

557,554880,601

881,212

Total Assets(Millions of Yen)

4,236,814

4,476,092

4,181,294

5,700,025

5,317,966

Equity per Share(Yen)

556.83569.07623.69612.00612.09Dividend per Share(of the above Interim Dividendper Share)

(Yen)

23.50
(9.50)

25.00(12.50)25.50(12.75)28.00(13.00)33.00(15.00)Earnings per Share

(Yen)

51.99

43.53

71.14

35.93

57.24

Diluted Earnings per Share

(Yen)

51.79

43.36

70.87

35.84

57.08

Equity Ratio

(%)

11.7

11.3

13.3

15.4

16.5

Return on Equity

(%)

9.5

7.7

11.9

5.7

9.4

Price Earnings Ratio(Times)

10.8

12.2

9.4

15.9

11.9

(%)

45.2

57.4

35.8

77.9

57.7

(Persons)

1,317
(105)

1,379
(105)

1,412
(112)

2,235
(289)

2,182
(282)

(%)
(%)

94.2
(95.0)

93.0(85.9)

118.9(122.1)

107.7(124.6)131.3(131.8)

(Yen)

760

728

699

670

747

(Yen)

480

445

437

521

558

Payout Ratio
Number of Employees(Separately, Average Number of
Temporary Employees)
Total Shareholders Return(Indicator: TOPIX Machinery
Index)
Highest Share Price of EachFiscal Year
Lowest Share Price of EachFiscal Year

(Notes) 1. The highest and lowest share prices were those on the First Section of the Tokyo Stock Exchange on or before April 3,
2022, and have been those on the Prime Market of the Tokyo Stock Exchange since April 4, 2022.
2. Effective from the 51st term, the Company changed its accounting policies for “Method for How to Post Re-leasing
Revenues in Lease Transactions,” “Method for Posting Lease Transactions as Finance,” and “Method for Posting Deferred
Assets (Bond Issuance Cost),” and the new accounting policies have been retrospectively applied to the figures of the 50th
term.

-5-

2. History
Month and Year

Former Mitsubishi UFJ Lease & Finance Company
LimitedFormer Hitachi Capital Corporation

September

Established Tokyo Hitachi Home Electric Appliance

1957

Geppuhanbai Corp. and Osaka Hitachi Home ElectricAppliance Geppuhanbai Corp. (merged with Hitachi
Geppan Corp. in December 1960).
Established Kyushu Hitachi Home Electric ApplianceMay 1958

Geppuhanbai Corp. and Nagoya Hitachi Home
Electric Appliance Geppuhanbai Corp. (merged with
Hitachi Geppan Corp. in December 1960).
Established Hitachi Geppan Corp. (changed its trade

August 1960

name to Hitachi Credit Corp. in January 1969).
April 1971

Established Diamond Lease Company Limited with a
total of 16 companies as shareholders, including 11
Mitsubishi Group companies, notably The Mitsubishi
Bank, Limited (currently MUFG Bank, Ltd.),
Mitsubishi Corporation, The Mitsubishi Trust andBanking Corporation (currently Mitsubishi UFJ Trustand Banking Corporation), Meiji Life Insurance
Company (currently Meiji Yasuda Life Insurance
Company), and Tokio Marine & Fire Insurance Co.,
Ltd. (currently Tokio Marine & Nichido Fire
Insurance Co., Ltd.), as well as Nippon Life Insurance
Company, The Dai-ichi Mutual Life Insurance
Company (currently The Dai-ichi Life Insurance
Company, Limited), and three affiliated companies of
The Chase Manhattan Bank (at that time).

December
1976

Listed on the Second Section of the Tokyo Stock
Exchange.

September
1979

Listed on the First Section of the Tokyo Stock
Exchange.

March 1985

Listed on the Second Section of the Tokyo Stock
Exchange.

September
1988

Listed on the First Section of the Tokyo Stock
Exchange.

October 1999
October 2000

Merged with Ryoshin Leasing Corp.
Merged with Hitachi Leasing Corp. and changed its
trade name to Hitachi Capital Corp.

April 2007

Merged with UFJ Central Leasing Co., Ltd. andchanged its trade name to Mitsubishi UFJ Lease &Finance Company Limited.
Listed on the First Section of the Nagoya Stock
Exchange.

August 2016

Mitsubishi UFJ Lease & Finance Company Limited and Hitachi Capital Corp. entered into a capital and businessalliance.

-6-

Month and Year
April 2021

Mitsubishi HC Capital Inc.
Mitsubishi UFJ Lease & Finance Company Limited merged with Hitachi Capital Corp. and changed its tradename to Mitsubishi HC Capital Inc.

November
2021
April 2022

Acquired all shares of CAI International, Inc. and made it a consolidated subsidiary.
Following the reorganization of market segments on the stock exchanges, shifted to the Prime Market of theTokyo Stock Exchange and the Premier Market of the Nagoya Stock Exchange.

-7-

3. Description of Business
The Group consists of the Company, 442 subsidiaries and 101 affiliates. Other affiliated companies include Mitsubishi Corporationand Mitsubishi UFJ Financial Group, Inc.
(1) Effective April 1, 2022, the Group integrated business organizations having similar functions and roles in preparation for the
Medium-term Management Plan (2025 MTMP) starting from fiscal 2023 (the fiscal year ending March 31, 2024). As a resultof the reorganization, the Group has seven reportable segments of “Customer Solutions,” “Global Business,” “Environment,
Energy & Infrastructure,” “Aviation,” “Logistics,” “Real Estate,” and “Mobility.”
The main services and businesses of each reportable segment are as follows.
Reportable Segments

Main Services and Business Description

Customer Solutions

Finance solutions for companies and government agencies, sales finance provided
through collaboration with vendors, real estate leasing, and financial services

Global Business

Finance solutions, sales finance provided through collaboration with vendors in
Europe, the Americas, China, and ASEAN region

Environment, Energy &Renewable energy power generation business, energy-saving business, and overseas

Infrastructure

infrastructure investment business

Aviation

Aircraft leasing business, and aircraft engine leasing business

Logistics

Marine container leasing business, and railway freight car leasing business

Real Estate

Real estate securitization finance, real estate revitalization investment business, andreal estate asset management business

Mobility

Auto leasing business and supplementary services

Regarding the fiscal year ending March 31, 2024 along with the organizational changes, the reportable segment name in the“Environment, Energy & Infrastructure” is planned to be changed to “Environment & Energy.”-8-(2) Our business structure is shown below.

Other affiliatedcompanies

Mitsubishi Corporation< Major Consolidated Subsidiaries andAffiliated Companies Accounted for by the Equity Method >Customer
Solutions

DFL Lease Company Limited
SHUTOKEN LEASING CO., LTD.
JAPAN MEDICAL LEASE CORPORATION
Mitsubishi HC Capital Property Inc.
Capital Insurance Corporation
Mitsubishi HC Capital Community Corporation
Mitsubishi HC Business Lease Corporation
PT HCD Properti Indonesia
Mitsubishi Electric Financial Solutions Corporation

Global Business

Mitsubishi HC Capital UK PLC
ENGS Holdings Inc.
Mitsubishi HC Capital America, Inc.
Mitsubishi HC Capital Canada, Inc.
Mitsubishi HC Capital (Shanghai) Co., Ltd.
Mitsubishi HC Capital Leasing (Beijing) Co., Ltd.
Mitsubishi HC Capital Factoring (Shanghai) Co., Ltd.
Mitsubishi HC Capital Management (China) Limited
Mitsubishi HC Capital (Hong Kong) Limited
Mitsubishi HC Capital Asia Pacific Pte. Ltd.
Mitsubishi HC Capital (Thailand) Co., Ltd.
PT. Mitsubishi HC Capital and Finance Indonesia

Environment,
Energy &Infrastructure

Mitsubishi HC Capital Energy Inc.
Japan Infrastructure Initiative Company Limited
Chubu Electric Power & MHC Germany Transmission GmbH

Aviation

JSA International Holdings, L.P.
Engine Lease Finance Corporation

Logistics

CAI International, Inc.
PNW Railcars, Inc.

Real Estate

Mitsubishi HC Capital Reality Inc.

Mobility

Mitsubishi Auto Leasing Corporation-9-

Customers

Mitsubishi HC Capital Inc.

Mitsubishi UFJ Financial Group, Inc.

< Segment >4. Overview of Subsidiaries and Affiliates

Company Name

Location

Share Capital

Principal Business(Note 1)

Ownershipor
Ownership
Ratio of
VotingRights(%)

Relationship(Consolidated Subsidiaries)
DFL Lease Company Limited(Note 2)Chuo-ku, Osaka,
Osaka¥3,700 million Customer Solutions

80

Loans of business
funds

SHUTOKEN LEASING CO.,LTD.

Chiyoda-ku,
Tokyo¥3,300 million Customer Solutions

70.71

Loans of business
fundsJAPAN MEDICAL LEASECORPORATION

Shinagawa-ku,
Tokyo¥100 million Customer Solutions

100

Loans of businessfunds¥251 million Customer Solutions

100

Leasing of realestateLoans of businessfunds, etc.

¥6,200 million Customer Solutions

79.36

Mitsubishi HC Capital Property Chiyoda-ku,
Inc.
Tokyo
Capital Insurance Corporation(Note 2)

Chiyoda-ku,
Tokyo

Mitsubishi HC Capital
Community Corporation

Minato-ku,
Tokyo¥80 million Customer Solutions

100

Mitsubishi HC Business Lease
Corporation (Note 2)

Minato-ku,
Tokyo¥10,000 million Customer Solutions

100

PT HCD Properti Indonesia(Notes 2 and 8)

Jakarta

Rp580,000 million Customer Solutions

63.45(63.45)

Mitsubishi HC Capital UK PLC Staines-upon(Note 2)
ThamesSTG£116,168
Global Businessthousand

100

ENGS Holdings Inc. (Note 3)

Itasca

US$0 thousand Global Business

100

Mitsubishi HC Capital
America, Inc. (Notes 2 and 3)

Norwalk

US$180,000
Global Businessthousand100

Debt guarantee

Mitsubishi HC Capital Canada,
Burlington
Inc. (Notes 2 and 8)

CA$97,000
Global Businessthousand

100
(100)

Debt guarantee

Mitsubishi HC Capital(Shanghai) Co., Ltd. (Note 2)

Shanghai

US$55,000
Global Businessthousand100

Debt guarantee

Beijing

US$170,000
Global Businessthousand

100
(100)

Debt guarantee

Shanghai

RMB306,570
Global Businessthousand

100
(100)

Debt guarantee

Hong Kong

HK$2,285,516
Global Businessthousand100

Debt guarantee

Mitsubishi HC Capital (HongKong) Limited (Notes 2 and 8)

Hong Kong

HK$310,000
Global Businessthousand

100
(100)

Debt guarantee

Mitsubishi HC Capital Asia
Pacific Pte. Ltd. (Note 2)

Singapore

S$126,400
Global Businessthousand100

Debt guarantee

Mitsubishi HC Capital Leasing(Beijing) Co., Ltd.
(Notes 2 and 8)
Mitsubishi HC Capital
Factoring (Shanghai) Co., Ltd.
(Notes 2 and 8)
Mitsubishi HC CapitalManagement (China) Limited(Note 2)- 10 -

Leasing of realestateLoans of business
funds
Leasing ofequipment, etc.
Loans of business
funds

Debt guaranteeCompany Name

Location

Ownershipor
Ownership
Ratio of
VotingRights(%)

Relationship

THB1,100,000
Global Businessthousand100(99.99)Debt guarantee

Rp400,000 million Global Business

100
(15)

Debt guarantee

Share Capital

Principal Business(Note 1)

Mitsubishi HC Capital(Thailand) Co., Ltd.
(Notes 2 and 8)

Bangkok

PT. Mitsubishi HC Capital and
Finance Indonesia(Notes 2 and 8)

Jakarta

Mitsubishi HC Capital Energy
Inc.

Chiyoda-ku,
Tokyo¥150 million

Environment, Energy& Infrastructure100

Leasing ofequipment, etc.
Loans of business
fundsJapan Infrastructure Initiative
Company Limited(Notes 2 and 4)

Chiyoda-ku,
Tokyo¥9,000 million

Environment, Energy& Infrastructure

100

Loans of business
funds

JSA International Holdings,
L.P. and its 24 subsidiaries(Note 2)

Cayman Islands
Grand Cayman,etc.

US$742,183
Aviationthousand

100

Loans of business
funds
Debt guarantee

Engine Lease FinanceCorporation (Note 8)

Shannon

US$1 thousand Aviation

100
(100)

Debt guarantee

CAI International, Inc.
(Notes 5 and 8)

San
Francisco

US$0 thousand Logistics

100
(100)

Debt guarantee

PNW Railcars, Inc. (Note 8)

Portland

US$1 thousand Logistics

100
(100)

Mitsubishi HC Capital Reality
Inc.

Chiyoda-ku,
Tokyo

MHC America Holdings
Corporation (Note 2)

New York

US$0 thousand

Mitsubishi Electric Financial
Solutions Corporation (Note 6)

Shinagawa-ku,
Tokyo

Chubu Electric Power & MHC
Germany Transmission GmbH

Dusseldorf

Mitsubishi Auto Leasing
Corporation (Note 7)

Minato-ku,
Tokyo

100

Loans of business
funds

100

Debt guarantee
One concurrent
officer¥1,010 million Customer Solutions

45

Leasing ofequipment, etc.

Environment, Energy& Infrastructure49¥300 million Real EstateGroup financing
business

202 other companies(Affiliated companies accounted
for by the equity method)

EUR25 thousand¥960 million Mobility

50

Leasing ofequipment, etc.

Leasing ofequipment, etc.

67 other companies(Other affiliated companies)(Owned)Mitsubishi Corporation(Note 9)Chiyoda-ku,
Tokyo¥204,446 million

General trading
company

18.39

Mitsubishi UFJ Financial
Group, Inc. (Notes 8 and 9)

Chiyoda-ku,
Tokyo¥2,141,513 million

Bank holding
company

20.05(5.53)(Notes) 1. The “Principal Business” column of consolidated subsidiaries other than MHC America Holdings Corporation indicatesthe name of the reportable segment of the principal business operated by the consolidated subsidiaries. Since MHC America
Holdings Corporation does not belong to any specific reportable segment, the business it operates is presented.
2. These companies are specific subsidiaries.
In addition, 4 of the 24 subsidiaries of JSA International Holdings, L.P. are specific subsidiaries.

- 11 -

3. As of April 1, 2023, Mitsubishi HC Capital America, Inc. and ENGS Holdings Inc. underwent an absorption-type merger,
where Mitsubishi HC Capital America, Inc. is the surviving company and ENGS Holdings Inc. is the absorbed company.
4. As of April 1, 2023, the Company and Japan Infrastructure Initiative Company Limited underwent an absorption-typemerger, where the Company is the surviving company and Japan Infrastructure Initiative Company Limited is the absorbed
company.
5. Because an absorption-type merger was conducted as of January 1, 2023 (local time), where CAI International, Inc. was
the surviving company and Beacon Intermodal Leasing, LLC was the absorbed company, Beacon Intermodal Leasing,
LLC has been removed from the major subsidiaries.
6. As of October 1, 2022, Mitsubishi Electric Financial Solutions Corporation changed its name from Mitsubishi Electric
Credit Corporation.
7. As of March 9, 2023, Mitsubishi Auto Leasing Holdings Corporation underwent an absorption-type merger, where
Mitsubishi Auto Leasing Corporation is the surviving company and Mitsubishi Auto Leasing Holdings Corporation is theabsorbed company.
8. The figure in parentheses in “Ownership or ownership ratio of voting rights” is the included number of indirect ownershipor the ownership ratio of indirect ownership.
9. It is a company that submits annual securities reports.

- 12 -

5. Employees(1) Consolidated(As of March 31, 2023)
Name of the Segment

Number of Employees

Customer Solutions

2,627

(830)

Global Business

4,278

(316)

Environment, Energy & Infrastructure

174

(35)

Aviation

212(8)

Logistics

183

(1)

Real Estate

188

(31)

Mobility

231

(119)

Corporate

755

(122)

8,648

(1,462)

Total(Notes) 1. Number of employees includes those seconded from outside of the Group to the Group, excluding those seconded fromthe Group to outside of the Group.
2. The figures in parentheses in the column of the number of employees indicate the average number of temporary employees
employed during the fiscal year under review.
3. The number of temporary employees includes part-timers, temporary employees, and employees on temporary contracts.
4. The reportable segments have been changed from the fiscal year under review. Details are as described in “Notes to
Segment Information, etc.” in “1. Consolidated Financial Statements, etc.” of “Item 5. Financial Information.”
5. The number of employees listed as “Corporate” refers to those belonging to administrative divisions that cannot beclassified into specific segments.

- 13 -

(2) Status of Submitting Company
Number of Employees
2,182

Average Age

Average Length of Service

41.0

15 years 9 months(282)
Name of the Segment(As of March 31, 2023)
Average Annual Salary(Thousands of Yen)
9,243

Number of Employees

Customer Solutions

1,168

(147)

Global Business

45

(3)

Environment, Energy & Infrastructure

77

(2)

Aviation48(4)

Logistics

24(1)

Real Estate

48

(3)

Mobility

21(2)

Corporate

751

(120)

2,182

(282)

Total

(Notes) 1. Number of employees includes those seconded from other companies to the Company, excluding those seconded from theCompany to other companies.
2. The figures in parentheses in the column of the number of employees indicate the average number of temporary employees
employed during the fiscal year under review.
3. The number of temporary employees includes part-timers, temporary employees, and employees on temporary contracts.
4. Average annual salary includes bonuses and non-standard wages.
5. The reportable segments have been changed from the fiscal year under review. Details are as described in “Notes to
Segment Information, etc.” in “1. Consolidated Financial Statements, etc.” of “Item 5. Financial Information.”
6. The number of employees listed as “Corporate” refers to those belonging to administrative divisions that cannot beclassified into specific segments.
(3) Relationship with Labor Union
Some consolidated subsidiaries have labor unions.
There is nothing to be noted for labor-management relations.
(4)

Information on Diversity(i) Initiatives to promote Diversity and Inclusion
We position the promotion of diversity and inclusion as an important management strategy for the further expansion of theGroup’s business domain and global development.
Basic Views
We seek to foster a corporate culture with the vitality to create new value by bringing together diverse talent who canleverage one another’s strengths to maximize the impact of their individual motivations and talents.

- 14 -

Management Message
Mitsubishi HC Capital positions the promotion of diversity as an important management strategy for the further expansion of
the Group’s business domain and global development. We aim to create an environment that brings together talented
individuals with a diversity of knowledge, experience, and attributes so they can leverage one another’s strengths tomaximize the impact of their individual motivations and talents.
To realize a workplace environment where diverse talent can exercise their strengths, we hire and promote personnel
regardless of nationality, age, gender, race, or disability. Further, we support the formation of careers tailored to eachindividual and provide a robust support system to accommodate a variety of work styles, and strive to foster a supportive
corporate culture. Through such efforts, we will continue to advance diversity and inclusion.
Taiju Hisai, Representative Director, President & CEO
Mitsubishi HC Capital Inc.
(ii) Promote Women’s Participation and Advancement
We have formulated an action plan based on the Act on Promotion of Women’s Participation and Advancement in the
Workplace, and work to promote empowerment of female employees. We have introduced systems to advance women’slong-term employment, implement job-rank training, and send female employees to attend external training programs to
support women’s career development. As a numerical target (the Company), we aim to increase the percentage of womenin management positions (manager and above) to 20% or more by the end of fiscal 2025.
Management Message
Mitsubishi HC Capital believes that promoting the active participation of diverse human resources and leveraging theirdiverse values and personal attributes, such as nationality, age, and gender, is an important management strategy
consideration that will enhance corporate competitiveness.
As such, in the area of promoting women’s professional participation and advancement, we have implemented a range ofmeasures based on enhancing support systems that enable work-life balance and creating a workplace environment in which
each individual can fully exercise their talents and excel.
Going forward, by continuing these measures while systematically nurturing and promoting well-qualified women, we aim toincrease the percentage of women in management positions to 20% or more by the end of fiscal 2025.
Taiju Hisai, Representative Director, President & CEO
Mitsubishi HC Capital Inc.
Target for the Ratio of Female Managers in the Company and Changes in the Results
ResultAs of March 31, 2022

ResultAs of March 31, 2023

TargetAs of March 31, 2026

14.0

14.0

20.0

Ratio of Female Managers (%)(iii) Support for Balancing Work and Childcare

We are working to expand the support system and create a work environment that enables employees to balance work andchildcare. We are also actively working to encourage men to take childcare leave, and to this end we have set up a childcare
leave consultation desk and published a childcare leave guidebook targeting male employees, aiming to achieve 100% ratioof men’s taking childcare leave by the end of fiscal 2025.
Targets for the Ratio of Taking Maternity and Childcare Leave for Men and Women in the Company and Changes in the Results
Results
Fiscal Year ended March
31, 2022

Results
Fiscal Year ended March
31, 2023

Targets
Fiscal Year ending March
31, 2026

Ratio of Taking Childcare Leavefor Men (%)

79.0

97.1

100.0

Ratio of Taking Childcare Leave
and Maternity Leave for Women
(%)

100.0

100.0

100.0

(iv) Workplace Enhancement
We have introduced a telecommuting system, flex-time working hours and other systems to allow employees to choose
flexible working styles according to the demands of their own personal circumstances. In addition, we have set numerical- 15 -

targets for the rate of annual paid holidays taken by employees and monthly average overtime hours, and are working torealize work-life balance.
Targets for the Rate of Annual paid Holidays taken by Employees and Monthly Average Overtime Hours in the Company, andChanges in the Results
Results
Fiscal Year ended March
31, 2022

Results
Fiscal Year ended March
31, 2023

Targets
Fiscal Year ending March
31, 2026

Rate of Annual paid Holidays
taken by Employees (%)

63.7

68.7

70.0

Monthly Average Overtime Hours

20.7

19.4

14 hours or less(v) Results of Each Indicator for Diversity of the Submitting Company and Consolidated Subsidiaries (Note 1)
Fiscal Year under Review

Company Name

Ratio of Female Ratio of Taking
Childcare Leave
Workers infor MaleManagement
Workers (%)
Positions (%)(Note 3)(Note 2)

Gender Pay Gap for Workers (%)(Notes 2 and 6)

All Workers

Of which
RegularWorkers

Of which PartTimers and
Fixed-Term
Workers

Mitsubishi HC Capital Inc.
(Note 4)

14.0

97.1

66.7

65.4

67.3

Mitsubishi HC Business Lease
Corporation

21.5

100.0

63.7

67.3

52.2

DRS Company Limited (Note 5)

28.6

66.6

–

–

–

MHC Triple Win Corporation

7.9

–

–

–

–

Mitsubishi HC Capital Servicer
Corporation

18.8

–

–

–

–

JAPAN MEDICAL LEASECORPORATION

3.3

–

–

–

–

(Notes) 1. As for consolidated subsidiaries, we disclose indicators released, or scheduled to be released shortly, for domestic
consolidated subsidiaries with 101 or more regularly employed workers as stipulated by the “Act on the Promotionof Women’s Active Engagement in Professional Life (Act No. 64 of 2015),” pursuant to the said act.
2. The figures were calculated based on the provisions of the Act on the Promotion of Women’s Active Engagementin Professional Life (Act No. 64 of 2015).
3. The figures represent the percentage of taking childcare leave, etc. specified in Article 71-4, Item 1 of the“Ordinance for Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfareof Workers Caring for Children or Other Family Members (Ordinance of the Ministry of Labor No. 25 of 1991)”
pursuant to the provisions of the “Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfareof Workers Caring for Children or Other Family Members (Act No. 76 of 1991).”
4. The ratio of male workers, by employment management classification, who have taken childcare leave at Mitsubishi
HC Capital Inc. is as follows:
Career-track positions (including career-track course)

97.1%

Business professional–

Business associate

100.0%

5. The ratio of male workers, by employment management classification, who have taken childcare leave at DRS
Company Limited is as follows:
Career-track positions

66.6%

Associate career-track positions–

General positions–

6. For salary, the same standards are applied depending on position and post. Gender pay gap for the same positionand post does not differ. Differences in the average salary for men and women occur due to hiring by position, the- 16 -

number of years of continuous service and other factors. We will continue to advance women’s long-term
employment, support women’s career development, and proactively carry out promotions.

- 17 -

Item 2. Business Overview
1. Management Policy, Business Environment and Tasks Ahead, etc.
The management policy, business environment and tasks ahead, etc. of the Group are as follows.
Forward-looking statements herein are based on the Group’s judgment as of the end of the fiscal year under review.
(1) Basic Management Policy
The Company has established the following “Our Mission,” “Our Vision” and “Action Principles” as its basic management
policy.
“Our Mission” is our long-term goal, “Our Vision” is the objectives to achieve our long-term goal, and the “Action Principles”
are the values and mindset to be held and actions to be taken by each and every employee in order to realize our Mission and
Vision.
◎ Our Mission
Contribute to a prosperous and sustainable future by creating social value through maximizing the potential of
assets.
◎ Our Vision
・ Solve social issues by developing unique and progressive businesses with consideration for the global environment.
・ Aim for sustainable growth through value co-creation with diverse stakeholders across the globe.
・ Enhance corporate value by evolving our business model through utilizing digital technology and data.
・ Foster an “open, creative and engaging” corporate culture that shapes each and every employee’s motivation andpride.
・ Aim to be a trusted company by complying with laws and regulations, as well as implementing ethical corporate
management.
◎ Action Principles
・ Challenge: Challenge ourselves to look forward to the future with a sense of responsibility and commitment.

・ Digital: Drive digital innovation and expertise.

・ Communication : Communicate openly and honestly to build mutual understanding and trust.
・ Diversity: Embrace diversity and respect each other.

・ Sustainability: Act in harmony with people, society and the earth to create a sustainable world.

・ Integrity: Maintain the highest standards of ethics and integrity.

- 18 -

(2) The Company’s Management Strategy in the Medium to Long Term and Issues to be addressed(i)Business Environment
In recent years, there have been drastic changes in the external environment and there is an increasing need to recognize
megatrends, or the trends influencing domestic and international economies over the medium to long term, such as
geopolitics and the economy, climate change, expansion and evolution of technology, demographics, and wealth disparities.
In these changes to the external environment, the roles required of the Group are changing to better resolve social issues
through business investment and operation, in addition to conventional leasing and finance. Further, business models at anindustry level are expected to change rapidly at a speed which has exceeded all expectations. In such circumstances that allcompanies are to adapt to the environmental changes, the prominence of the Group, holding various asset-related functions
and offering flexible services which are not limited to financial functions, will increase further.
In light of these circumstances, the Group formulated a Medium-term Management Plan covering the three-year period
from the fiscal year ending March 31, 2024 (“2025 MTMP”), which was announced in May 2023.

(ii) The Direction the Group should take and the Outline of the 2025 MTMP
We established Our 10-year Vision, “Together we innovate, challenge and explore the frontiers of the future.” To achieve
this vision, we will proceed with the evolution and layering of business models by developing services and promoting
business investment, utilizing tangible and intangible assets, such as data and other elements, to their fullest potential.
For the promotion of the above, we will aim for sustainable growth by solving environmental, social, and economic issues.
At the same time, we will aim to enhance our medium- to long-term corporate value by achieving an optimal balance sheet
based on well-balanced growth potential, return on capital, and financial soundness.
The 2025 MTMP is positioned as the “hop” plan of our three Medium-term Management Plans (“hop,” “step,” and “jump”)
toward Our 10-year Vision. We will address the management plan with “sowing seeds” and “gaining a solid foothold”
leading to a leap to the “step” and “jump” plans as keywords.
 We will achieve “Our 10-year Vision” by implementing Medium-term Management Plans in three phases. The new Medium-term Management Plan startingin FYE3/2024 is set as phase one, “hop,” followed by the Management Plans as phase two, “step,” and phase three, “jump.”
 Our expected target of ROA* is approx. 1.5% and of ROE* is approx. 10% for FYE3/2026, the final fiscal year of the “hop” phase. The expected target of
payout ratio for the period of the new Medium-term Management Plan is aimed to be approx. 40%.

Together we innovate, challenge and explore the frontiers of the future

Our
10-year
Vision To achieve our mission, continue to be an “innovator (who ventures into unexplored fields
and creates innovation)” who challenges the frontiers of the future without being bound by
precedents.
 Anticipate the changes in society and the business environment including changes in global
industrial structures, accelerating digitalization and increasing importance of sustainability,
and continue addressing social issues that can be solved only by MHC through approaches
such as SX (sustainability transformation) and DX (digital transformation) with customers andpartners.

1stMedium-term Management Plan

2nd
Medium-term Management Plan

Hop

3rd
Medium-term Management Plan

Step

FYE3/2022

FYE3/2023

FYE3/2024

FYE3/2026

ROA*

1.0%

1.1%

・・・

Approx. 1.5%

ROE*

8.0%

8.2%

・・・

Approx. 10%

Payout Ratio

40.4%

40.5%

Jump
FYE3/2029

FYE3/2032

Approx. 40%(during the period of new Medium-term Management Plan)* ROA and ROE are based on net income attributable to owners of the parent.

[Expected target](Note) Figures for FYE 3/2023, expected targets for FYE 3/2026, and an expected target of payout ratio during the periodof new Medium-term Management plan are as of May 16, 2022.
(iii) Business Strategies
Business Types
The Group classifies its businesses into the five types below, and will proceed with the “evolution and layering of businessmodels” to achieve business portfolio transformation.

- 19 -

Business TypeAsset

Evolution and Layering of Business Models⑤ utilization
business

Business Characteristics
Promote business investment
utilizing assets, aiming tomaximize revenue from thosebusinesses

Direction

ExamplesRisks and returns are relatively
higher than ① and ②, so we will
increase the size of asset
utilization business in a phasedmanner in consideration of risk
capital, etc.

• Non-FIT renewableenergy businesses• Real estate
revitalizationand development
investment

Datautilization④ platform
services

Utilize data to develop
platform businesses, andmainly acquire service revenue

The initiative for this business isdifficult and will take time togenerate profits. However, it will
help differentiate MHC fromcompetitors, so we will actively
plant seeds for this domain• Inventory optimization
services utilizing data
• Sharing services
utilizing data

Finance +③ services

Add maintenance services,AM*5, etc. mainly to ②, andacquire service revenue aswell as income gain and capitalgain

Promote the shift mainly from ②(add services) to increase
profitability• Operating leases withmaintenance services• Service solutions suchas asset management

Investment and lending mainlyin specific marketable general
purpose assets backed by thevalue of business assets.
Capital gain as well as income
gain can be acquired

A profit base which generates stable
cash flows. However, some assets
have relatively low risk but yield low
returns, so we aim to increase
profitability by reducing lowprofitability assets and evolving into
an O&D business• Operating leases• Real estate
securitization

Acquire income gain morestably and continuously
through corporate financing

Same as ②. However, risks andreturns of this business are both
lower than ②, so we will take drastic
action to increase profitability(accelerating the reduction of lowprofitability assets, promoting
efficiency improvement, etc.)• Finance leases• Vendor leases• Installment sales• LendingAsset② finance

Customer① finance

Risk

ReturnMedium risk andmedium returnLow risk andlow return

Vision of the Evolution and Layering of Business Models
We will proceed with the evolution and layering of business models by simultaneously working on the enhancement of the
profitability and efficiency of existing businesses, shifting existing businesses to high value-added services, and developing
new businesses.

Enhance Profitability and Efficiency of Existing Businesses① Customer finance and ② asset finance are positioned as profit bases for creating stable cash flows from their firm
customer bases. On the other hand, given that returns on some assets are relatively low, in addition to strengthening theirprofitability, we will steadily promote the reduction of low-profitability assets.



Shift Existing Businesses to High Value-Added Services

We will maintain and expand our ① customer finance and ② asset finance customer bases and shift these existing
businesses to high value-added services—namely ③ finance + services and ④ data utilization platform services—andincrease their returns by improving customer experience.

- 20 -



Develop New Businesses

We will proceed with the development of ④ data utilization platform services, ⑤ the asset utilization business, and othernew businesses, and focus on these new businesses as the pillars of medium- to long-term profit growth, in addition to ③
finance + services.
Premise for Business Strategies
We will achieve profit growth by transforming our business portfolio and the quality of our assets in the medium- to longterm through the evolution and layering of business models. To this end, we will actively invest cash flows from a mediumto long-term perspective after paying dividends.
For the purpose of supporting this effort, we will achieve medium- to long-term return on capital and financial soundness
by optimizing our balance sheet, and then maximize our corporate value.

Business Strategies by Segment
The direction of the business strategies by segment is as follows.
Segment

Direction of Business Strategies

Customer Solutions

Achieve business portfolio transformation through establishing our solid customer
base and the development of a new sales process by utilizing data and digitaltechnologies

Global Business

Improve profitability through strategic allocation of management resources
considering regional characteristics

Aviation

Recover profitability early on and develop a new business base by strengthening
group synergy

Logistics

Contribute to solving social issues in the logistics field by further strengthening ourbusiness base and developing new businesses

Environment & Energy

Maintain our position as a leading renewable energy operator in Japan and increase
added value by expanding business domains

Real Estate

Contribute to building a sustainable social infrastructure through real estate
investment and lending business and asset management business

Mobility

Expand profits by strengthening and developing EV-related businesses inconsideration of social decarbonization needs(Note) As the name of the “Environment, Energy & Infrastructure” reportable segment will be changed to “Environment& Energy” for the next consolidated fiscal year (ending March 31, 2024) in accordance with the organizationalchanges, the name after the change is shown.
Key Themes across Segments
We have defined the themes below to be addressed with the concerted efforts of the Group across segments.
These themes will lead to our goal of contributing to a prosperous and sustainable future by creating social value withpartners, not by the Group alone.

- 21 -

Hydrogen

Develop hydrogen business strategies that leverage global business operations andcustomer bases

EVs

Develop and commercialize an integrated service that can extensively provide thefunctions necessary for introducing and operating EVs such as renewable energy
supply and charging infrastructure

Logistics

To address social issues and customer needs on logistics supply chains, develop andprovide “seamless logistics solutions” by collaborating with leading partners

Decarbonization solutions(energy conservation, carbon
credits)

Develop and provide a one-stop service contributing to realizing a decarbonizedsociety (visualizing CO2 emissions, energy conservation, renewable energies, creating
carbon credits, etc.)(iv) Corporate Functions Strategies
We will enhance our corporate functions centering on the four strategies below.
Major Initiatives for the 2025 MTMP

Fostering and Securing Talent Enhance employee engagement by utilizing surveys, etc.
 Develop a talent portfolio contributing to the achievement of management
strategies

 Strategically disclose human capital Procure stable and competitive funds, expand funding capacity and enhance the
ALM framework
Bolstering the Financial Base Redevelop frameworks for credit examination and management in response to
and Internal Organizational Basebusiness portfolio transformation
 Develop optimal IT systems responding to new businesses and business models

 Promote group-wide unified management by strengthening the consolidated
Strengthening the Corporate
Governance Framework

management framework
 Enhance integrated risk management in response to business evolution andchanges Develop a framework for unified management of internal auditing on a globalbasis Enhance financial and non-financial information to be disclosed and diversify
Enhancing Stakeholder
Engagementmeans to dispatch information

 Enhance communication with external stakeholders
 Promote and strengthen efforts for sustainability(v) Frameworks to promote Transformation
We will eliminate obstacles to achieving transformation, and change our way of thinking for transformation.
We will speedily promote various initiatives from new perspectives and not simply stay on conventional paths.
Direction of Initiatives
1“Lay” the Foundation ofTransformation

Foster all employees’ awareness of transformation

2“Create” Transformation

Develop frameworks so that efforts contributing to transformation can be actively
launched

3“Promote” Transformation

Develop an agile discussion framework and promote transformation by advancing
efficient decision-making processes and the delegation of authority that comes withresponsibility, etc.

(3) Business Issues to be addressed as a Priority MatterIn order to achieve Our 10-year Vision, the Group will proceed with the “evolution and layering of business models” bypromoting services and business investment, utilizing tangible and intangible assets, such as data and other elements, to theirfullest potential.
It is considered necessary to transform the awareness of each employee in order to progress the “evolution and layering ofbusiness models.” As a mechanism for this, we will build the “frameworks to promote transformation.” As the “frameworks
to promote transformation,” we will implement measures from three angles of “laying the foundation of transformation,”“creating transformation,” and “promoting transformation,” and will execute the measures from new perspectives that are not
an extension of the past.

- 22 -

Further, the 2025 MTMP is positioned as the “hop” plan of the three Medium-term Management Plans (“hop,” “step,” and“jump”) for achieving Our 10-year Vision, and will be strategically implemented to contribute to the “sowing seeds” and“gaining a solid foothold” that will lead to the leap towards the “step” and “jump” plans, including transforming the awarenessof employees towards reform.
(4) Target Performance Indicators
The Company will aim to achieve the following financial and non-financial targets during fiscal 2023 to fiscal 2025 (from thefiscal year ending March 31, 2024 to the fiscal year ending March 31, 2026), which is the period that is the subject of the 2025
MTMP.
<Financial Targets>
Item

Targets

Financial Targets(End of FY2025)

Net income attributable toowners of the parent¥160.0 billion (CAGR vs. FY2022: +11.2%)

ROA

Approx. 1.5% (vs. FY2022: Approx. +0.4 pts)

ROE

Approx. 10% (vs. FY2022: Approx. +1.8 pts) As a general rule, return profits to shareholders by paying
Dividend Policy(2025 MTMP Period)

Payout ratio: 40% or higher

dividends

 Sustainably increase the total amount of dividend payment
through profit growth

Financial Soundness(2025 MTMP Period)

 Establish both a sound financial base and an active investment
Maintain A ratings

strategy

 Maintain current stand-alone ratings(Notes) 1. CAGR: Compound Annual Growth Rate
2. Net income attributable to owners of the parent is used for the calculation of ROA and ROE<Non-financial Targets>
KPI
Level of Fulfillment of a Talent Portfolio inLine with Our Management Strategies

Targets (2025 MTMP)
Formulate the talent portfolio framework and visualize the level offulfillment.

Results of the Employee Engagement Survey Refine the survey content, enhance analysis.
Number of New DX-Related Businesses andDevelop a base for DX frameworks (develop and acquire DX talent, system
Products
investment, etc.).
Operational Efficiency
Ratio of Female Managers

20% or more

Rate of Annual paid Holidays taken by
Employees

70% or more

Monthly Average Overtime Hours

14 hours or less

Ratio of Taking Childcare and Maternity
Leave

100%

GHG Emissions Amount (Scope 3)

Analyze the categories which have a major impact and visualize Scope 3
emissions.

GHG Emissions Amount (Scope 1, 2)-55% in FY2030 vs. FY2019
Net zero in FY2050

Energy Consumption (Domestic)-1% YoY continually.

(Note) GHG: Green House Gas- 23 -

2.

Concept and Efforts for Sustainability
Forward-looking statements herein are based on the Group’s judgment as of the end of the fiscal year under review.
(1) Basic Views on Sustainability
The Company believes that efforts toward sustainability—among them, protecting the global environment, respecting humanrights, and embracing diversity—are an essential responsibility to society that corporations should fulfill. To continue tosurvive, corporations must pursue long-term growth while gaining the trust of their stakeholders by engaging in businessactivities that seek to resolve environmental, social, and economic issues.
(2) Materiality (Material Issues)
Mitsubishi HC Capital Inc. identified the following six materiality as priority key challenges which must be addressed toachieve sustainable development of Mitsubishi HC Capital Group.
Against a backdrop of megatrends such as recent climate change driven by global warming, population growth, urbanizationand scarcity of resources, not only our personal life but also social environment have been drastically changing worldwide.
Under such circumstances, companies are expected to take efforts to solve numerous issues, such as to promote a decarbonizedsociety and to create a circular economy.
The Group will proceed its effective management and business activities toward solving such issues based on the materiality
with appreciating the significance.

Materiality of the Group
Materiality

Promote a decarbonizedSociety

Why the Group treats as Highly Material Challenges
・Efforts to realize a decarbonized society have been globally
recognized as an urgent issue, and the Group can significantly
contribute to solving this challenge through its service andsolutions, such as renewable energy investment and EV
promotion.
・It is quite a few impact on but is significant for the Group to
distinct its business from the business not solving social issues.

Realize the Circular
Economy・The Group aims to contribute to creating a circular economy by
reducing waste, not only in the Group but also within society
through maximizing the potential of assets as a leading leader inthe leasing industry. The Group treats this challenge as material.
・The Group can also contribute to realizing a sustainable andprosperous society through strengthening the collaboration
between partners.

・Large parts of the infrastructure within Japan needs to be
repaired. The Group also recognizes the business has huge
potential opportunities to support the development of
infrastructure in overseas countries with active collaboration
Establish Resilient Social
between various partners and create a smart city.
Infrastructure
・The Group will contribute to the business being diversified,enhanced and efficient through establishing the system andproviding services for supporting the collaboration of various
companies.
・It is vital for its stakeholders that the Group recognizes theimportance of health, safety, mental and physical wellbeing forRealize Healthy Lifestyles
realizing the prosperous future.
that promote Positive
・Valuable human resources are key. Personal development andWellbeing
attraction and retention of talent is significant for the Group
members.

- 24 -How Related to SDGs

Materiality

Why the Group treats as Highly Material Challenges

How Related to SDGs

・Both financing for the purpose of digital transformation ofcustomers and providing solution by internal and external digital
Create Businesses Utilizing technologies urge to develop new business models.
the Latest Technologies

・Including establishing supply chain with utilizing with new
alternative energies, the Group identifies material one as theopportunity.
・Social issues differ by countries and regions. It is significant
that the Group aims to solve these issues by collaborating withlocal partners to ensure the Group is meeting individual needs
Collaborate with Partners
through local community-based communication.
locally and globally
・The Group can realize mutual benefits in developing society by
utilizing the integrated capability in the Group.
* Please refer to the website regarding how the Company identified the materiality.
https://www.mitsubishi-hc-capital.com/english/sustainability/materiality.html(3) Basic Sustainability Policy
The Company has been building partnerships with numerous stakeholders globally and has considered itself to have the huge
potential capability to contribute and solve social issues. The Company established “Our Mission” to create social value withcustomers and partner companies and to contribute the prosperous and sustainable future as its ideal image, and defined what
the Group needs to do to achieve “Our Mission” as “Our Vision.” The Basic Sustainability Policy consists of and integrates“Our Mission,” “Our Vision” and the materiality.
How Materiality relate to “Our Mission” and “Our Vision”(4) Addressing Climate Change
Climate change is a major challenge that needs to be resolved in order for a sustainable society become a reality. The Group
believes that for any company to survive moving forward, it must work to solve this problem through its business activities.
Furthermore, the Group is aware of the importance of earning the trust of stakeholders through proper disclosure of
information, and supports the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD).
Information Disclosure according to Four Disclosure Items suggested by TCFD Recommendations(i)

Governance
The Group established the Sustainability Committee in April 2021 to better contribute to the realization of a sustainable andprosperous future. This Committee is considered one of the advisory bodies to the Executive Committee and meets to discuss
the climate change issue and other key challenges related to sustainability. The results of the deliberations are reported to the
Executive Committee and the Board of Directors. The material issues announced in December 2021 that include promotion- 25 -

of a decarbonized society were identified through deliberations by the Sustainability Committee, Executive Committee, andBoard of Directors. The Group will promote efforts to identify and manage the impact of climate change on business andreinforce its governance.
(ii) Risk Management
Regulatory changes, technological innovation, shift in business models in line with the transition to a decarbonized society or
extreme weather, etc. stemming from global warming may affect our operating results and financial condition in the form ofbusiness failure of business partners due to earnings deterioration and other factors, decline in value of assets owned by theGroup, and others. The Group recognizes climate change risk as one of the critical risks in company-wide risk management
and will promote efforts to properly identify and manage it.
a.

Risk Management System Overview

The Group uses the “integrated risk management” framework to comprehensively manage risks to primary businesses that
could have a substantial impact on investors’ decisions.
The important risks managed within the integrated risk management framework include, but are not limited to, credit risks,
asset risks, investment risks, market risks, liquidity risks, and operational risks.
To manage envisaged risk factors, the departments overseeing specific risks monitor issues arising from developments in theexternal environment or other changes, regularly consider measures to address such risks, and then report and deliberate themat meetings of each committee including the Risk Management Committee. In addition, we operate a risk management system
in which important matters are reported to and discussed by the Executive Committee and the Board of Directors. For detailsof the risk management system, please refer to “Item 2. Business Overview, 3. Risk Factors.”b. Classification and Example of Impacts of Climate Change Risks
Climate change risks consist of transition risks associated with climate-related regulation tightening and technologicalinnovation, etc. and physical risks associated with extreme weather and changes in climates. The TCFD recommendationsclassify these risks into subcategories of policy and legal/technology/market/reputation, and acute/chronic, and show examplesof impacts.
The Company recognizes that impacts of climate change risks occur in various time frames such as short, medium and longterm through broad transmission routes including existing risks like credit risks, asset risks and investment risks. Furthermore,in addition to direct impacts on the Company’s business activities, the onset of indirect impacts through the Company’s
customers is also possible.
Based on such risk characteristics and details of the TCFD recommendations, the Company sorts out examples of impacts ofclimate change risks for each of its major risks, also taking into account its risk management framework. Under the integrated
risk management system, the Company is also advancing the establishment of a system to identify/assess and manage climatechange risks in light of relations with other major risks.
Going forward, the Company will review the risk classification and examples of impacts according to changes in external
environment, and deepening of analysis and assessment of climate change risks.
c. Status of Integration into Overall Risk Management
Comprehensive impacts of climate change risks on other major risks are reported to and discussed by the Risk Management
Committee. We will advance reflection of such risks, including risks identified through scenario analysis, in overall risk
management by establishing a monitoring system and other means. In addition, development of targets and plans related toclimate change and details of monitoring are reported to and discussed by the Sustainability Committee. Details of discussionsof the both committees are reflected in the Company’s management strategies under the system of monitoring by the Boardof Directors so that we can appropriately address the risks from the both perspectives of overall risk management andindividual risks.
(iii) Strategy
The Company identifies risks and opportunities brought by future climate change to the Group, and conducts scenario analysis
on “transition risks” and “physical risks” for the purpose of appropriately disclosing information and considering future
measures.
The scenario analysis is carried out based on limited information and data available at present. We will strive to reflect theanalysis in appropriate disclosure by carefully interpreting the obtained results of this analysis, obtaining more information
and relevant data through dialogues with stakeholders in the future, and promoting refinement of analysis methods andexpansion of businesses to be analyzed.

- 26 -

a. Overview of the Scenario Analysis
Overview of Transition Risk Analysis
Target Sector
Energy(Oil and Gas, Coal and Electric Utilities)
Target Sector and Main Segment Transportation (Air Freight and Passenger
Air Transportation)
Materials and Buildings (Real EstateManagement and Development)

Main Segment
Environment, Energy & Infrastructure
Aviation
Real Estate

Scenario

Net Zero Emissions by 2050 Scenario (NZE scenario) and Stated Policies Scenario(STEPS scenario) published by the International Energy Agency (IEA)

Analysis Method

Identify opportunities and risks for a decarbonized society in target sectors and assessbusiness impacts (qualitative analysis)

Overview of Physical Risk Analysis
Analysis Subject

Assets for business possessed by the Environment, Energy & Infrastructure Business
Division, the Real Estate Business Division, and the Group’s offices and branches

Scenario

Shared Socioeconomic Pathways (SSP5-8.5) published by the Intergovernmental Panelon Climate Change (IPCC)

Analysis Method

Assess business impacts of extreme weather and changes in climates that can occur atthe locations of assets for business (qualitative analysis)b. Results of the Scenario Analysis
Each headquarters in charge of Environment, Energy & Infrastructure, Aviation, Real Estate, and Customer Solutions, which
are segments subject to implementation of the scenario analysis, and the Risk Management Department, a department incharge of company-wide overall risk management, discussed the Company’s business impacts of climate change andconfirmed consistency between results of the scenario analysis and the existing strategic policy.
The Group endeavors to minimize risks and maximize opportunities by taking short- and long-term measures as for risks andopportunities related to climate change. As results of the transition risk analysis, the need to appropriately handle risks andopportunities associated to expansion of renewable energy (Environment, Energy & Infrastructure), shift to low mileageaircraft/engines and low-carbon fuels such as SAF and hydrogen (Aviation), growing demand for low-carbon buildings (Real
Estate), etc. have been recognized. Furthermore, as results of the physical risk analysis, risks including damage caused bydisasters to power stations and deterioration of power generating facilities such as solar panels (Environment, Energy &Infrastructure), loss in value of real estate due to intensification of natural disasters and increases in construction/operation
expenses and renovation costs (Real Estate), damage caused by disasters to the Group’s offices, and increases in operating
expenses and insurance costs have been anticipated.
While appropriate countermeasures for climate change risks have been developed, acquisition of business opportunities has
been incorporated in strategies as for opportunities brought by climate change. Going forward, we will reflect KPIs related toclimate change in the process of implementing the Medium-term Management Plan, and establish a system to regularly
monitor relevant trends in Japan and abroad, and the status of initiatives of the Group.
(iv) Metrics and Targets
Based on the recognition that efforts to realize a decarbonized society are an urgent issue, we will set the Group’s greenhousegas reduction targets pursuant to the Paris Agreement, and we see the transition to a decarbonized society as an “opportunity”
and actively promote the transition. In the case where greenhouse gas emissions increase significantly in the future due toefforts for new businesses, or where numerical value changes while calculation of greenhouse gas emissions of the entire
Group including supply chains are sophisticated, and other cases, the established targets may be reviewed appropriately, but
we plan to set the targets so that any targets are in line with the level of the Paris Agreement, just like the targets establishedthis time.

- 27 -

a. The Group’s Targets for Reduction of Greenhouse Gas Emissions
Short Term (Every Year)
Scope 1 and Scope 2

Energy usage in Japan:(1)% compared to the priorfiscal year

Medium Term
(to Fiscal 2030)(55)% compared to fiscal
2019Long Term (to Fiscal 2050)

Net zerob. Future Efforts
For Category 11 (Use of sold products), Category 13 (Downstream leased assets) and Category 15 (Investments) of Scope 3,
which are expected to comprise a majority of the Group’s greenhouse gas emissions, we also consider the measurement
method and conduct discussions toward disclosure.
Going forward, we will consider reduction of greenhouse gas emissions of the entire Group including supply chains throughvisualization of the status of greenhouse gas emissions related to business transactions, formulation of the policy for sectors
with high greenhouse gas emissions and the transaction plan, and other means.
(5) Human Capital Strategy(i)Direction of the Human Capital Strategy
The Company recognizes that accumulating and utilizing “human capital” is an important issue to improve corporate value
through realization of the “basic management policy” and “medium- to long-term management direction.” In particular, torealize “SX/DX” and “business portfolio transformation” shown in the “medium- to long-term management direction” andachieve performance indicators at which the Company aims, it will secure and utilize necessary “human capital” in terms ofboth quality and quantity.
In fiscal 2022, we started visualizing “human capital” and began considering a gap between human resources necessary forthe realization of “SX/DX” and “business portfolio transformation” shown in the “medium- to long-term management
direction” and current human resources in terms of both quality and quantity. As a result, we have recognized again that both“qualitative shift in human resources” and “securing of the quantity of human resources” are important to realize the “mediumto long-term management direction.”(ii) Themes that We want to accomplish
In securing and utilizing “human capital” (“qualitative shift in human resources” and “securing of the quantity of humanresources”) we uphold two themes to be accomplished in the medium to long term.
What we want to accomplish (a)Develop and secure humanresources contributing to theCompany’s realization ofstrategies (quality and quantity)(fulfillment of a talent portfolio)
What we want to accomplish (b)Make an environment where
employees work together topromote value creation(improvement in employee
engagement)

We define quality and quantity of human resources necessary to realize the “mediumto long-term management direction” and visualize a talent portfolio.
We understand a gap between necessary human resources and current humanresources in terms of quality and quantity, and implement measures for filling the gap
to supplement necessary human resources.
The Company makes an environment where “employees take pride in their work andmake discretionary efforts to work,” “there is a comfortable working environment
where employees can utilize their capacities,” and “diverse employees are respected”
to enable employees to work together to promote value creation.
We clarify issues to achieve it and promote measures to continuously realize the statusof high employee engagement.

(iii) Details of Initiatives
With regard to the above two themes to be accomplished, we will give priority to working on two matters of “reconstructionof the human resource management base” and “creation of a system for improvement in engagement” for the Group to realize
the management strategy during the period of the Medium-term Management Plan up to fiscal 2025. We will make the“qualitative shift in human resources” through “reconstruction of the human resource management base” and continuously
realize the status of high employee engagement through “creation of a system for improvement in engagement” to achieve“securing of quantity of human resources.”- 28 -

Details of Initiatives
Reconstruction of the Human
Resource Management Base

The Company has collected/accumulated information on human resources and used it
for utilization of human resources (allocation and development) to date.
Going forward, for “What we want to accomplish (a) fulfillment of a talent portfolio,”
we will reconstruct the human resource management base, define types of humanresources necessary to realize the “medium- to long-term management direction,” andthen further understand human resources and conduct the human resource developmentthat contributes to qualitative shift.
In understanding human resources, we handle qualitative factors such as experience,
knowledge, skills and competency in addition to the quantitative perspective including
the number of employees. In human resource development (qualitative shift), we
identify qualitative issues to fulfill a talent portfolio and take measures for capacity
development.
Moreover, we will improve the accuracy of matching between human resources andjobs by also putting in place information on jobs, in addition to information on humanresources, systematically to further ensure that the right people are placed in the rightjobs.

Creation of a System for
Improvement in Engagement

The Group has identified current issue areas by conducting engagement survey, andimplemented improvement activities to date.
Going forward, with KPIs set as indicators for engagement survey, we will actively set
challenges by establishing and utilizing a system to manage cause/effect and processes
and promote measures.
We will continuously realize the status of high engagement as the entire Group,
resulting in also securing the quantity of human resources.

(iv) Indicators and Targets
To achieve the two “themes to be accomplished,” we will formulate a framework for a talent portfolio and visualize its levelof fulfillment during the period of the Medium-term Management Plan up to fiscal 2025, and in addition, we will refine thecontent of engagement survey and then make efforts to sophisticate analysis.
In addition to monitoring of outcome measures, we will identify important causes/processes and promote effective measuresby setting outcome measure KPIs and cause/process measure KPIs, aiming to surely achieve targets.

- 29 -

3. Risk Factors
Of the business and related risks of the Mitsubishi HC Capital Group, the main items with potential for important impact on
investors’ decisions are managed comprehensively in the framework set out below under (1) Integrated Risk Management. An
outline of the risk and a specific statement of the main efforts to address it are given under (2) Major Risks managed within
Framework of integrated Risk Management. The Group has established an appropriate system to manage these risks and strives toprevent them from emerging or to minimize their impact if they occur.
To manage these potential risk factors, we operate a system whereby the division responsible for the relevant area of risk monitors
and identifies issues arising from changes in the external environment and other factors. Each of these divisions holds regular
discussions to review appropriate response measures and reports promptly to the Executive Committee, a consultative and decisionmaking body that controls the execution of business. Specifically, in addition to the Asset Liability Management (ALM) Committee,
Compliance Committee, Disclosure Committee on J-SOX, and other committees that discuss the issues surrounding and measures
to address individual risks, the Risk Management Committee meets quarterly or as necessary to undertake comprehensive andsystematic management of risks affecting all operational areas. Additionally, important matters at each committee are reported toand discussed by the Board of Directors.
The forward-looking statements herein are based on judgments made by the Group as of March 31, 2023.

(1) Integrated Risk Management
Mitsubishi HC Capital engages in business operations that incorporate the framework of integrated risk management in order
to work toward sustainable growth by balancing maintenance of management soundness with improving profitability. The
major risks managed within the framework of integrated risk management include credit risk, asset risk, investment risk,
market risk, liquidity risk, and operational risk. Risk management is conducted on a consolidated basis.
Specifically, risk capital is allocated to the respective risk category based on the Company’s risk capital management policy
after quantifying each risk using risk assessment methods tailored to the characteristics of the asset or business. Reasonablerisk-taking is then carried out within the scope of risk tolerance.
Within this risk management framework, regular monitoring is undertaken of the utilization of risk capital and the status of
portfolios, the results of which are reported to and discussed by the Risk Management Committee, the Executive Committee,
and the Board of Directors. In this way, efforts are made to ensure appropriate response measures and to promote effective
internal communication about risk. Arrangements are in place to ensure that the Board of Directors is fully informed of therisk management system and risk management status and that it maintains oversight thereof.

- 30 -

(2) Major Risks managed within Framework of integrated Risk Management
The Mitsubishi HC Capital Group conducts business activities globally. The Group provides capital investments and services
necessary for customer businesses through leases and other means. The assets it holds for leases and related transactions arediversified, ranging from general movable property such as office equipment and production equipment to assets, such as
aircraft, that are used in particular industries. Demand for capital investment can decline considerably if a customer’s businessenvironment deteriorates with deceleration or slowdown in business at home or abroad. In that case, a decline in leases andother transactions could impact the Group’s business results and financial position. Additionally, losses arising frominadequacy of internal processes, personnel, or systems or their failure to function, or exogenous events could impact theGroup’s business results and financial position.
The major items among these envisioned risks are managed within the framework set out under (1) Integrated Risk
management.
(i)Credit Risk
The Mitsubishi HC Capital Group conducts business that extends credit over the medium to long term through leases,
installment sales, monetary loans, and other financial services of various forms. Depending on future business trends andthe financial landscape, additional provisions of allowance for doubtful receivables could be necessary with increasing nonperforming loans due to deterioration in a company’s credit status, which could impact the Group’s business results andfinancial position. Furthermore, because the Group is engaged in business globally, it is subject to country risk in which
losses may arise depending on the political and economic situations in the countries and territories where customers andinvestees are located.

[Main Efforts to address Risk]
When considering the advisability of each deal, the Group carefully reviews the customer’s credit standing using its own
rating system and makes a thorough study in light of the value of the leased property, country risk, and other factors in aneffort to ensure a reasonable return for the risk. Additionally, the Group continues to check the customer’s credit standing on
an ongoing basis even after entering into business relations and has a system in place to take the necessary steps in the eventthat the customer’s credit standing worsens. Moreover, it engages in credit management with respect to the portfolio as awhole and considers risk diversification to ensure that credit is not concentrated with a specific customer, industry, country,
territory, and so on, while striving to ensure sound management by regularly measuring the credit risk of its portfolio andmonitoring to ensure that it is within a certain scope of capital.
(ii) Asset Risk
In addition to general movable property, the Mitsubishi HC Capital Group holds such global assets as aircraft and real estate,including buildings, and conducts a business leasing these assets in and outside Japan in the form of operating leases andothers. In this business, the Group is exposed to asset risk in addition to the aforementioned credit risk, so fluctuation inrevenue from asset management and disposals could impact the profitability of the leases. For this reason, when engaging inoperating leases, the Group carefully assesses the future value according to asset type in addition to the customer’s credit
standing before working on each deal. Even after entering into business relations, the Group continues monitoring the status- 31 -

of the leasing and secondary markets for said assets along with the status of asset use by the leaseholder, striving to prevent
risks from emerging or to mitigate their impact if they occur.
a.

Global Assets
The Group holds global assets such as aircraft and aircraft engines, containers, and railway cars and conducts a businessleasing these assets in and outside Japan in the form of operating leases and others. In the business related to global assets, theGroup is exposed to price fluctuation risk pertaining to said assets in addition to the aforementioned credit risk. With operatingleases, in addition to lease fee revenue received from the customer, the Group recovers funds by selling the asset at the end of
the lease period. Additionally, in the event of a customer bankruptcy, the Group takes the asset back and recovers funds byleasing it to a different customer or selling it. As for selling assets, in addition to business trends and the financial landscape,major incidents arising from technical problems, obsolescence due to technological change, revisions to laws and regulations,increased concern over global pandemics or terrorism, natural disasters, war, or geopolitical risk may render the asset
irrecoverable or cause its selling price to fluctuate. Furthermore, the recording of an impairment loss or increased costs
associated with property management could also impact the Group’s business results and financial position.
[Main Efforts to address Risk]
When engaging in operating leases with global assets, the Group conducts a comprehensive review that includes a checklist
for deals involving movable property and future asset liquidity before working on each deal and endeavors to ensure areasonable return for the credit risk and asset value fluctuation risk. Furthermore, the Group has established internal criteria
to maintain a portfolio with risk diversification taken into account, including asset types, regions, and time of expiration.
Moreover, the Group continues to check the customer’s credit standing and industry trends on an ongoing basis even after
entering into business relations and has a system in place to take the necessary steps in the event that the customer’s credit
standing worsens, such as collecting a deposit from the customer to cover asset wear and tear as necessary. Additionally, theGroup holds warning sign management meetings as necessary at business divisions and risk management divisions for eachmajor asset category to review applicable industry trends and signs of problems that could impact asset value fluctuation. The
Group also regularly measures customer credit risk and the risk of fluctuations in the value of assets in its portfolio to monitor
whether it is within a certain scope of capital, in an effort to ensure sound management.

b.

Real Estate
The Group is engaged in and outside Japan in investment in and financing of commercial real estate such as offices, residences,
commercial facilities, logistics facilities, and hotels, and in leasing and other business operations based on its portfolio of
owned properties. These assets are subject to revenue fluctuation risk and price fluctuation risk. In the real estate-related
business, in addition to lease fee revenue from tenants, the Group recovers funds by selling those assets that are not long-termholdings at the right time. Lease fee revenue and revenue from sale of assets may fluctuate depending on the market
environment, such as business trends, the financial landscape, and the lease market in the specific location of the asset, andthis could impact the Group’s business results and financial position.
[Main Efforts to address Risk]
The Group makes a careful decision based on a comprehensive review of future asset value and liquidity before working oneach deal and endeavors to ensure a reasonable return for the asset value fluctuation risk. Furthermore, the Group continues
to check the status of asset management, price trends, and industry trends on an ongoing basis even after entering into business
relations and has a system in place to maximize revenue. Additionally, the Group holds warning sign management meetings
as necessary at business divisions and risk management divisions to review industry trends and signs of problems that could
impact asset value fluctuation. The Group also regularly measures the risk of fluctuations in the value of assets in its portfolio
to monitor whether it is within a certain scope of capital, in an effort to ensure sound management.

(iii) Investment Risk
The Mitsubishi HC Capital Group is engaged in investment in and financing of projects such as solar power generation andother renewable energy businesses and an overseas infrastructure business as well as various business investments, includingloans to operating companies and funds. These investing activities are subject to such risks as risk of changes in the businessenvironment including business fluctuations and declining demand, risk of revenue falling below the plan due to sluggish
performance of investees or partners, risk of diminished recoverability of the investment amount, risk of investee stock value
falling below a certain level, and risk of investee stock value staying below a certain level for a considerable period of time
due to sudden changes in the economic or financial situation or a major disruption of the financial markets regardless of theinvestee’s performance. These risks could result in a total or partial loss of the investment, including through valuation loss,
or create the necessity of additional funding. In addition, there are the risk that the Group may be unable to exit or restructure
the business at the desired time or using the desired method due to differences with the partner’s management policy or low- 32 -

liquidity of the investment asset and the risk that the Group may be disadvantaged by not being able to obtain relevant
information from the investee, and these risks could impact the Group’s business results and financial position.
[Main Efforts to address Risk]
The Group holds investment meetings according to the individual investment amounts and severity of risk to gather theopinions of the relevant departments and makes a careful decision based on a comprehensive review of future investment
value and liquidity from a broad point of view when considering each investment, thereby endeavoring to ensure a reasonable
return for the risk. Additionally, the Group continues to check the status of investment management and industry trends on an
ongoing basis even after entering into business relations and has a system in place to maximize revenue. The Group also
regularly measures the risk of fluctuations in the value of investments in its portfolio to monitor whether it is within a certain
scope of capital, in an effort to ensure sound management.
(iv) Market Riska.

Interest Rate Fluctuation Risk
The fees for leases and installment sales conducted by the Mitsubishi HC Capital Group are set based on the purchase pricefor the transacted property and the market interest rates at the time of contract. Most of these basically do not fluctuate during
the contract term. Acquisition funds for the leased property, on the other hand, are procured at both fixed and variable interest
rates for fundraising diversification and reduction of funding costs, and the cost of capital is affected by fluctuations in themarket interest rate. As such, a sharp rise in the market interest rate resulting from sudden changes in the financial situation
could impact the Group’s business results and financial position.

b.

Exchange Rate Fluctuation Risk
The Group actively conducts business outside Japan, and as foreign currency-denominated assets increase, so does theirpercentage of consolidated operating assets. The financial statements of the Group’s consolidated subsidiaries outside Japanare expressed in the local currency while the Company’s consolidated financial statements are expressed in Japanese yen.
As such, although fundraising is, in principle, conducted in the same currency as the asset, should a large fluctuation occur inexchange rates, it could impact the Group’s business results and financial position in Japanese yen terms.
[Main Efforts to address Risk]
The Group constantly watches movements in the financial markets and, as needed, monitors through ALM any imbalances in
the form of interest rates or currency exchange for asset management and for procurement of funds. It then manages interest
rate fluctuation risk through appropriate hedge operations while taking interest rate movements into account. To address
exchange rate fluctuation risk, in principle, the Group raises funds in the same currency as the operating asset in an effort tominimize loss on currency valuation of assets. The Group also regularly measures the quantitative risk of the position of
portfolio holdings incurring a loss over a certain period of time at a certain probability and to what extent in the event thatinterest or currency exchange rates take a disadvantageous turn based on past statistics, and monitors whether it is within acertain scope of capital in an effort to ensure sound management. Meanwhile, the ALM Committee meets quarterly or as
required to analyze scenarios and data in connection with geopolitical risk, pandemics, and various other risk factors and to
determine ALM policy based on trends in the financial market environment, the risk situation, and other considerations.

(v) Liquidity Risk
When engaging in acquisition of lease properties for leases, installment sales, and monetary lending, the Mitsubishi HC CapitalGroup raises a large amount of funds in Japanese yen and other currencies. The Group attempts to balance the period of leases
and other credit transactions and investments with the period of fundraising, but should it experience difficulty securing
enough funds because of heightened risk aversion on the part of financial institutions and investors due to a free fall in
economic and financial conditions and major confusion in the financial markets or a decline in the Group’s creditworthiness,
it could impact the Group’s business results and financial position.
[Main Efforts to address Risk]
With respect to the procurement of funds, the Group tries to ensure the liquidity of funds through efforts to diversify byprocuring funds directly from the market including corporate bonds, commercial paper, and securitization of lease receivables
in addition to borrowing from financial institutions as well as through procurement with long- and short-term balance, carefulmanagement of cash flow, and measures to supplement liquidity during emergencies, such as through the acquisition ofcommitment lines. Additionally, the Group conducts stage-by-stage management of liquidity, putting in place funding
arrangements to ensure that the immediately necessary funds can be secured, including funds for repayment, even if thefundraising environment deteriorates, and reporting on the status of funding to the ALM Committee.

- 33 -

In addition to analyses of credit, interest rate sensitivity (the impact on revenue of interest rate fluctuation) and other items,
the ALM Committee carries out comprehensive investigations of (iv) Market Risk and (v) Liquidity Risk in the event of stressdeveloping in the financial markets or other relevant areas, including the potential impact on profit. It then decides a fundprocurement strategy and risk response policies as the basis for the rollout of a Companywide strategy reflecting the market
environment. Regarding risk management in particular, it coordinates with the Risk Management Committee, which is one
arm of the Companywide integrated risk management system. By strengthening the warning sign management system andcoordinating with contingency planning, it makes efforts to improve the flexibility and resilience of financial structures in theevent of a crisis situation emerging.
Meanwhile, to support the globalization of its business over recent years and also to increase its ability to procure foreign
currency, the Group is progressing with the reorganization of its regional financial bases. As part of this, it has established aregional financial base in North America where it holds a large asset balance, thus putting in place a Group financing system,
which includes the consolidation of financing. The North American regional financial base offers not only indirect financing
but also various forms of fund procurement, including issuance of commercial paper and corporate bonds, thus providing
funds to Group companies expanding into North America.
(vi) Operational Riska.

Risk related to Earthquakes, Wind and Flood Damage, Pandemics, War, Terrorism, etc.
The Mitsubishi HC Capital Group uses facilities, including sites and systems, in and outside Japan to conduct its operations.
Earthquakes, wind and flood damage, or other natural disasters as well as pandemics, war, terrorism, or other unpredictable
circumstances could cause a reduction of activities or prevent operations at those sites by damaging the sites themselves or
the systems or by injuring employees or preventing them from coming to work, thereby disrupting business operations.
Moreover, depending on the extent of the damages or how long the event lasts, a large sum of money could be required torestore the systems or other facilities, or it may take a long time for business operations to recover. Such a situation could
impact the Group’s business results and financial position.

[Main Efforts to address Risk]
The Group has established responsible departments depending on the envisioned risk to prepare for such circumstances andhas a system in place to establish a crisis response headquarters to respond to a critical situation. The Group is also working
to establish a system for business continuity by putting together a business continuity plan, implementing redundancy
measures for backbone systems, establishing a system infrastructure that allows work from home, and implementing office
shifts limited to operations that must continue.
As the Group does not have bases in Ukraine or Russia, it envisages limited direct impact from the situation in the region.
However, should the situation escalate going forward, there may be indirect impacts such as an increase in non-performing
loans due to worsening of the credit status of customers. This might require measures such as additional provisions ofallowance for doubtful receivables, which could impact the Group’s business results and financial position.
In March 2022, the Group set up a Crisis Management Headquarters that is working to address cybersecurity, trade control,and money laundering, track financial trends, enhance screening and management of deals, monitor the impact on the valueof Group operating assets, and identify and manage other indirect impacts.
b. System Risk
The Group utilizes e-mail as well as a variety of information systems to conduct account processing, management of various
contracts, customer management, asset management of leased properties, and other operations. An outage or failure of theseinformation systems arising from poor maintenance, poor development, or other such problems could cause an interruption ofcontract and collection operations or services provided to customers, which in turn could cause a suspension of operating
activities and economic loss, thereby impacting the Group’s business results and financial position.
[Main Efforts to address Risk]
The Group has a system in place to properly manage and maintain these systems through internal cooperation and partnershipwith other companies in order to ensure their stable operation. The Group is equipped with an integrated response system for
failures that includes swift action and sharing of information internally and externally where the failure occurs as well as
establishment and implementation of measures to prevent subsequent recurrence. Additionally, Group-wide IT control isimplemented for system development at the Group companies in Japan and other countries by using standardized methods aspart of a proprietary process.
c.

Cybersecurity Risk and Information Security Risk
The Group utilizes e-mail as well as a variety of information systems to conduct account processing, management of various
contracts, customer management, asset management of leased properties, and other operations. These information systems are- 34 -

subject to risk of business e-mail scams, malware infections, unauthorized access by outside parties, and other cyberattacks.
Unauthorized access by outside parties, malware infections, human error, fraud, scams, and other problems could result insystem outages or failures, monetary damages, leaks or unauthorized use of confidential information or customer information,or other incidents. These could cause an interruption of contract and collection operations or services provided to customers,
which in turn could cause a suspension of operating activities, economic loss, or loss of social confidence from leakage ofimportant information, thereby impacting the Group’s business results and financial position.
[Main Efforts to address Risk]
The Group has established a cross-organizational Security Incident Response Team (MHC-SIRT) to address these risks andhas a system in place to prevent incidents at the entrance, internal, and exit stages and respond to them if they occur.
Specifically, in preparation for cyberattacks that exploit vulnerabilities, the Group keeps software up to date to detect
unauthorized access, malware, and other cyberattacks and maintains management preparedness to prevent problems. At thesame time, the Group has established an internal and external coordination system and conducts drills to prepare for incidents.
Moreover, targeted e-mail training is provided for all employees, and internal education on information security is carried out
on an ongoing basis.
d. Compliance Risk
The Group’s operations are subject to a range of relevant legislation in and outside Japan. As the primary examples, in Japan
its operations must comply with the Companies Act, tax laws, the Financial Instruments and Exchange Act, the Anti-Monopoly
Act, the Personal Information Protection Act, the Money Lending Business Act, the Installment Sales Act, the Act on
Prevention of Transfer of Criminal Proceeds, and laws and regulations related to the environment. Outside Japan, the Group’s
operations are subject to the legislation of each country and region as well as to oversight by regulatory authorities. Should
there be a failure of compliance with legislation, social norms, or company rules, it could impact the Group’s business results
and financial position by causing restriction on or interruption of operations, a claim for damages from customers or others,
and a fall in social confidence.
[Main Efforts to address Risk]
In addition to rigorous compliance with legislation and company rules, the Group makes it a practice to carry out operationsin accordance with high ethical standards and social norms. The Group provides continuing training on compliance and takes
measures to prevent money laundering, funding of terrorism, and fraud in an effort to further strengthen its compliance system.
e.

System Change Risk
The Group’s operations are subject to a range of relevant legislation, accounting and tax regulations, and other systems in andoutside Japan. Should there be substantial changes or revisions to any of the various systems closely related to the Group’s
operations that the Group was unable to properly address, there could be penalties for nonconformance, suspension of productoffering, restrictions on business activities, sales losses, or other negative consequences that could impact the Group’s businessresults and financial position.

[Main Efforts to address Risk]
The Group’s corporate centers, business divisions, sales bases in Japan, and sites in each country continuously monitor
revisions and changes to the various systems in and outside Japan, such as legal, accounting, and tax systems, applying to therelevant country and services. In addition, the Group gathers information on and implements measures to address changes andrevisions as quickly as possible while reinforcing such monitoring by actively utilizing outside experts.
f.

Administrative Risk
The Group conducts transactions in various forms, and various administrative work arises with each transaction. Improper
administrative work, including human error, fraud, and other irregularities, could cause an interruption of contract andcollection operations or services provided to customers, which in turn could cause a suspension of operating activities or lossof customer trust, thereby impacting the Group’s business results and financial position.
[Main Efforts to address Risk]
The Group has established administrative rules for each transaction and conducts business according to these rules while
reviewing them as needed. Additionally, an internal reporting system is in place for internal administrative incidents. Shouldsuch an incident occur, the system includes internal reporting, swiftly addressing the incident, identifying the cause, andestablishing/implementing measures to prevent recurrence.

(3) Other Major Risks
In addition to risk addressed in the framework of integrated risk management, the Group recognizes the major risks listed
below. These risks are managed within the integrated risk management framework, including individual impact and combined- 35 -

impacts across multiple risk items, according to their individual characteristics and status. The Group explores a unified
response and formulates a response policy as necessary and additionally conducts scenario analysis appropriate to the situationas part of a multi-faceted verification of risk resilience.
(i)

Risk Related to Expansion of Operating Base, Strategic Partnerships, and M&As
In pursuit of continued growth through expansion of its operating base, the Mitsubishi HC Capital Group engages, in andoutside Japan, in strategic partnerships with outside entities aimed at the enhancement of various services and tries to diversify
and expand the Group’s business portfolio through M&As in addition to expanding business on its own. The Group endeavors
to diversify its business and enhance its services through this kind of approach.
However, changes in the domestic or international economic and financial conditions, intensification of competition, changes
in the business environment or strategy of partners, revision of relevant legislation, and other factors could cause a failure toachieve expected results or result in the need to record additional expenses, such as impairment of goodwill recorded at thetime of an M&A. Such a situation could impact the Group’s business results and financial position.

[Main Efforts to address Risk]
In addition to review by the relevant departments according to the individual investment amounts and severity of risks, theGroup brings in outside experts for a comprehensive review of the fitness of the investment structure and the future investment
effect from a broad point of view when considering each M&A or partnership deal. Even after an M&A deal is executed, theGroup’s rules are applied to establish a system for proper operational management, and monitoring is carried out on thebusiness plan, results management, and other aspects so that the necessary actions can be taken in a timely manner.
(ii) Global Pandemic Risk
Should a global pandemic arise, negative consequences such as broad disruption of the supply chain, temporary restrictions
on or suspension of economic activity by each national government, and damage to industrial systems or financial functions
could impact a wide range of customers or businesses utilizing the assets of the Mitsubishi HC Capital Group. This may resultin customer bankruptcies or a drop in the value of the Group’s asset holdings, which could impact the Group’s business results
and financial position.
We have taken steps in response to the COVID-19 pandemic being downgraded to a “Category V” on May 8, 2023. Based on
our recognition that we are now in the post-COVID-19 phase, while being cautious of the possibility of a resurgence ininfections, we will continue to utilize the remote IT communication tools that spread in use during the pandemic for bothinternal and external communication. We will also further enhance and expand face-to-face communication and proactively
undertake new initiatives.
[Impact of the Resurgence of COVID-19 Pandemic]
Although the COVID-19 pandemic, which began in 2020, is subsiding, the potential for the spread of new variant strains has
not completely disappeared.
Should a global resurgence of a new variant strain of COVID-19 occur, it could impact the Group’s business in several ways,
including curtailment, reduction, or postponement of capital investment by customers due to the stagnation of global economic
activities. As a result, the Group’s operating assets may not increase as planned or may decrease, leading to a decline inrevenue. A range of additional impacts, including rising prices and interest rates as well as supply chain disruption resulting
in worsening customer credit status, may in turn lead to an increase in non-performing loans, which could require additional
provisions of allowance for doubtful receivables or other measures.
Moreover, these impacts could affect the assets held as operating assets by the Group through price falls, reduced operating
rates for leases and similar assets, and price falls in shares or similar assets.
Furthermore, in the event of a financial crisis arising from resurgence of the COVID-19 pandemic, it could become impossible
to procure funds as planned. However, the Group has taken measures to ensure reliable on-hand liquidity. It has also worked
on reviewing the workflow, utilizing IT tools, and enhancing information security while taking sufficient steps to prevent the
spread of infection. As such, it has already expanded its preparedness to enable smooth remote business operations.
(iii) Climate Change Risk
Failure to respond to regulatory changes, technological innovations, or shifts in business models associated with the transition
to a decarbonized society, or extreme weather conditions associated with global warming could cause customer bankruptcies
due to deteriorating performance or the value of assets held by the Group to decline, which could impact the Group’s businessresults and financial position. Moreover, if the Group’s response to climate change risk or its information disclosure are
inadequate, or are deemed to be so, there is the possibility for the Group’s corporate value to be damaged.

- 36 -

[Main Efforts to address Risk]
The Group recognizes promoting a decarbonated society as a priority task in achieving sustainable growth that forms part ofits materiality (important issues). Accordingly, the Group has expressed its support for the recommendations of the Task Forceon Climate-Related Financial Disclosures (TCFD) and is working to enhance risk identification and assessment and relevant
information disclosure in accordance with the recommendations. Additionally, the Group recognizes climate change as asignificant risk for Companywide risk management and is progressing with relevant initiatives.
(iv) Human Rights Violation Risk
With corporate responsibility extending throughout the supply chain and the emphasis on sustainability initiatives, theprevailing view is that companies should recognize stakeholders as broadly encompassing ordinary individuals and local
residents. Under these circumstances, if the Group were to neglect these stakeholders, and human rights violations were tooccur within the Group or be committed by customers of the Group, it could be perceived as the Group itself causing,encouraging, or directly participating in those human rights violations. In turn, this could lead to damage to the Group’s
corporate value.
[Main Efforts to address Risk]
The Group established the Human Rights Policy in September 2022, declaring that we “recognize that conducting businesswith the utmost respect of human rights is a major challenge, and we will fulfill our responsibilities in this matter across all
our business activities.” In addition, the Group launched an internal project to address human rights violation risk in October
2022. Moving forward, the Group will continue to advance efforts to eliminate human rights violations.
(v) Risk associated with Expansion of Business Domains
The Mitsubishi HC Capital Group is expanding the scope of its operations on a global basis, including new business domains,
within the scope permissible under laws, regulations, and various other conditions. Should risks emerge within that processthat exceed the scope of reasonable assumptions despite verification of the risks along with our knowledge and experience inthe expanded business domain, or if the expanded business does not develop as envisioned, it could impact the Group’sbusiness results and financial position.
(vi) Intensifying Competition
Competition in the leasing and other businesses of the Mitsubishi HC Capital Group conducted in and outside Japan could
intensify not only from companies in the same business but also from financial institutions and others, or the competitive
landscape could change due to a shift in business models of other industries, technical innovation, or other factors. The Groupmakes various efforts to maintain and strengthen its competitiveness, including by offering greater added value to its customers
and creating value as an asset holder and through low-cost fund procurement. However, should the current competitive
situation intensify further, a fall in market share and decline in income could impact the Group’s business results and financial
position.
(vii) Risk related to Personnel Recruitment
The Mitsubishi HC Capital Group must stably secure adequate human resources, in order to maintain and strengthen its
competitiveness in the various businesses it operates in and outside Japan. The Group strives to continuously recruit and train
capable personnel, but should it not be able to adequately secure and train the needed personnel this could impact the Group’sbusiness results and financial position.
(viii) Risk related to Labor and Employment Management
The Group employs a large number of staff in its business operations. This involves the risk of long working hours having anegative effect on the mental or physical health of employees or other negative impacts, making them unable to fulfill the
expected duties, and the risk of legal infringement due to failure to appropriately monitor legal requirements relating toemployment and related areas. Additionally, there is the possibility of these risks resulting in damage to public trust.
To lessen the abovementioned risks, the Group promotes projects aimed at improved productivity and introduces systems toenable diverse workstyles (teleworking, flextime, etc.). In this way, it works not only to reduce long working hours but also
to put in place a work environment that accommodates employees with childcare or nursing care responsibilities. Additionally,
to address harassment and other personnel issues, the Group has introduced measures for employees in Japan and overseas,
including internal whistleblowing systems and advice services. To enable employees to develop their abilities to the full, theGroup is addressing workplace enhancement as a major focus of initiatives.
(4) Stress Tests
In the execution of management strategy, the Group makes efforts to gauge the degree of impact of stress periods caused byvarious risk events with potential impact on its business, such as deterioration in market conditions including economic- 37 -

downturns and market fluctuation. Specifically, the Group has posited a number of potential high-stress scenarios, ranging
from a deterioration in the overall world economy to market fluctuation, deterioration in credit, and the emergence of largescale concentrations of risk in individual business fields. Based on these scenarios, it has undertaken analysis and verificationof the potential degree of impact of stress conditions on profitability and equity in each fiscal period.
These multifaceted verifications enable the Group to confirm its risk resilience and to ensure that the risk-return balance ofmanagement plans does not exceed tolerable levels.

- 38 -

4. Management’s Analyses of Consolidated Financial Position, Operating Results and Cash Flows(1) Overview of Operating Results, etc.
The financial position, operating results and cash flows of the Group (the Company, consolidated subsidiaries and affiliatedcompanies accounted for by the equity method) (hereinafter referred to as “operating results, etc.”) for the fiscal year underreview are as follows.
In the fiscal year under review, the reportable segments were changed. Figures for the previous fiscal year and end of theprevious fiscal year have been updated to reflect this change. In addition, segment profit or loss presented is consistent with
net income attributable to owners of the parent in the consolidated statements of income.
(Details of changes in reportable segments are described in “Notes to Segment Information, etc.” in “1. Consolidated Financial
Statements, etc.” of “Item 5. Financial Information.”)(Consolidated Operating Results)(Billions of yen)

Fiscal Year ended March Fiscal Year ended March
31, 2022
31, 2023

Changes

Changes (%)

Revenues

1,765.5

1,896.2

130.6

7.4

Gross Profit

334.6

357.3

22.6

6.8

Operating Income

114.0

138.7

24.6

21.6

Recurring Income

117.2

146.0

28.8

24.6

99.4

116.2

16.8

16.9

2,507.8

2,640.6

132.7

5.3

Net Income
Attributable to
Owners of the Parent
New Transactions
Volume(Consolidated Financial Position)(Billions of yen)

Fiscal Year ended March Fiscal Year ended March
31, 2022
31, 2023

Changes

Changes (%)

Total Equity

1,333.4

1,551.0

217.5

16.3

Total Assets

10,328.8

10,726.1

397.3

3.8

Interest-Bearing Debt

8,066.0

8,236.1

170.0

2.1

Equity-to-Asset Ratio
(%)

12.7

14.3

1.6 pt–- 39 -

(i)Financial Position and Operating Results
For operating results, etc. for the fiscal year under review, on the sales front, the volume of new transactions increased by¥132.7 billion or 5.3% year on year to ¥2,640.6 billion.
Revenues were up by ¥130.6 billion or 7.4% to ¥1,896.2 billion.
Meanwhile, gross profit rose by ¥22.6 billion or 6.8% to ¥357.3 billion, operating income by ¥24.6 billion or 21.6% to¥138.7 billion, recurring income by ¥28.8 billion or 24.6% to ¥146.0 billion, and net income attributable to owners of theparent by ¥16.8 billion or 16.9% to ¥116.2 billion.
At the end of the fiscal year under review, total assets were up by ¥397.3 billion or 3.8% from the previous fiscal year-end
to ¥10,726.1 billion, while total equity rose by ¥217.5 billion or 16.3% to ¥1,551.0 billion. The interest-bearing debt
(excluding lease obligations) was up by ¥170.0 billion or 2.1% to ¥8,236.1 billion, and the equity-to-asset ratio increased
1.6 points to 14.3%.

(ii) Cash Flows
Cash and cash equivalents as of March 31, 2023 totaled ¥460.4 billion, a decrease of ¥59.5 billion or 11.4% from theprevious fiscal year-end.
The decrease comes from ¥46.7 billion provided by operating activities, being set against ¥127.3 billion used in investing
activities and ¥8.9 billion used in financing activities.
Operating activities provided net cash of ¥46.7 billion compared to ¥195.8 billion in the previous fiscal year. Inflows of¥153.1 billion in income before income taxes with an adjustment including ¥479.7 billion for depreciation, loss on disposal
and sales of leased assets were set against outflows including ¥496.1 billion for purchases of leased assets and otheroperating assets, ¥76.7 billion for an increase in loans receivable, and ¥22.6 billion for a decrease in trade payables.
Investing activities used net cash of ¥127.3 billion compared to ¥107.8 billion in the previous fiscal year. Inflows including¥139.0 billion in proceeds from withdrawal of time deposits were set against outflows including ¥252.4 billion in payments
into time deposits.
Financing activities used net cash of ¥8.9 billion compared to ¥192.1 billion in the previous fiscal year. This included net
outflows of ¥120.4 billion for direct funding, net inflows of ¥154.6 billion for bank loans and other forms of indirect funding,and ¥43.0 billion in cash dividends paid.

- 40 -

(iii) Operating Transactionsa.

New Transaction Volume
The actual volume of new transactions for each segment in the fiscal year is as follows.
Previous Fiscal Year
(Billions of yen)
Reportable Segments
Customer
Solutions

New Transactions
VolumeGlobalBusiness

958.0

1,109.0

Environment,
Energy &Infrastructure
36.4

Adjustments
Aviation

Logistics

Real Estate

74.6

116.2

181.3

Total

Mobility
31.9

(0.0)

2,507.8

Fiscal Year under Review(Billions of yen)
Reportable Segments
Customer
Solutions
New Transactions
VolumeGlobalBusiness933.2

1,300.7

Environment,
Energy &Infrastructure
35.8

Adjustments
Aviation

Logistics

Real Estate

55.3

87.9

195.6

Total

Mobility
31.8–

2,640.6

b. Operating Results
Operating results for each segment in the fiscal year are as follows.
Previous Fiscal Year
(Billions of yen)
Reportable Segments
Customer
SolutionsGlobalBusiness

Environment,
Energy &Infrastructure

Aviation

Logistics

Real Estate

Mobility

Amountrecorded in
Adjustments Consolidated
Statement of
IncomeGross Profit

116.0

112.2

17.6

35.0

6.9

26.6

8.2

11.9

334.6

Segment Profit

32.6

40.8

2.2

5.6

0.8

12.3

3.1

1.5

99.4

Fiscal Year under Review(Billions of yen)
Reportable segments
Customer
SolutionsGlobalBusiness

Environment,
Energy &Infrastructure

Aviation

Logistics

Real Estate

Mobility

Amountrecorded in
Adjustments Consolidated
Statement of
IncomeGross Profit

116.5

121.1

16.4

33.6

32.1

24.9

9.0

3.4

357.3

Segment profit

38.1

29.0

11.6

6.2

15.3

12.6

3.7

(0.6)

116.2

c.

Segment Asset Balance
Segment asset balance at the end of the fiscal year is as follows.
Previous Fiscal Year
(Billions of yen)
Reportable Segments
Customer
Solutions

Segment Assets

3,337.6

GlobalBusiness
2,316.3

Environment,
Energy &Infrastructure
419.3

Aviation
1,365.1

Logistics

Real Estate

1,026.7

712.7

Mobility
129.4

Amountrecorded in
Adjustments
Consolidated
Balance Sheet
1,021.4

10,328.8(Note) Segment assets include operating assets, investments in the affiliates accounted for by the equity method, goodwill andinvestment securities. Adjustments include segment assets not attributable to any reportable segments, and the difference
between the total amount of segment assets and the total assets on the consolidated balance sheets, which consists of cash andcash equivalents and own-used assets, etc.

- 41 -

Fiscal Year under Review(Billions of yen)
Reportable Segments
Customer
Solutions
Segment Assets

3,227.7

GlobalBusiness
2,644.2

Environment,
Energy &Infrastructure
433.2

Aviation
1,640.2

Logistics

Real Estate

1,092.9

447.2

Mobility
41.4

Amountrecorded in
Adjustments
Consolidated
Balance Sheet
1,199.0

10,726.1(Note) Segment assets include operating assets, investments in the affiliates accounted for by the equity method, goodwill andinvestment securities. Adjustments include segment assets not attributable to any reportable segments, and the difference
between the total amount of segment assets and the total assets on the consolidated balance sheets, which consists of cash andcash equivalents and own-used assets, etc.

- 42 -

(2) Views and Issues Analyzed/Discussed with Regard to the Operating Results, etc. from the Management’s Perspective(i)

Overview of Financial Results, etc.
Net income attributable to owners of the parent exceeded the financial forecast and reached a record high of ¥116.2 billion.
The annual dividend per share is ¥2 higher than the forecast at the beginning of the fiscal year.



The Group recorded record-high net income attributable to owners of the parent for the fiscal year ended March 31, 2023.
The ¥16.8 billion (16.9%) increase over the previous fiscal year to ¥116.2 billion was driven by the profit contribution of
CAI International, Inc., a marine container leasing company in the U.S.A. that became our wholly owned subsidiary in
November 2021, reduced credit costs, and growth in the Americas business within the Global Business segment.



Net income attributable to owners of the parent for the fiscal year ended March 31, 2023 exceeded the financial forecastof ¥110.0 billion by ¥6.2 billion.



In conjunction with outperforming the earnings forecast, the annual dividend per share has been set to ¥33, up ¥2 fromthe forecast dividend of ¥31, bringing the payout ratio to 40.8%. This is a ¥5 increase over the previous fiscal year’s
dividend of ¥28.

◎ Increase/Decrease in Net Income Attributable to Owners of the Parent(Billions of yen)

* Net income attributable to owners of the parent
Major factors for increase/decrease in net income attributable to owners of the parent are as follows (the amounts provided
reflect the impact on income before income taxes).
Business Growth¥25.9 billion

Decrease in Credit Costs
Increase in Operating Expenses¥21.5 billion¥(18.6) billion

Decrease in Extraordinary Income/Loss
Decrease in Others (tax expenses, etc.)¥(22.9) billion¥10.9 billion

The amount of business growth is the combined total of gross profit and non-operating income/loss (the amount of nonoperating income/loss does not include recoveries of written-off receivables).
(ii) Major Topics
Formulation and Announcement of the Medium-Term Management Plan for FY2023 - FY2025 (“2025 MTMP”)
The Company formulated the Medium-term Management Plan covering the three-year period from the fiscal year ending
March 31, 2024 to the fiscal year ending March 31, 2026 (the “2025 MTMP”), which was announced in May 2023. The 2025
MTMP is positioned as the “hop” plan of the three Medium-term Management Plans (“hop,” “step,” and “jump”) for achieving
Our 10-year Vision (Together we innovate, challenge and explore the frontiers of the future). The financial targets for the
fiscal year ending March 31, 2026, the final fiscal year of the 2025 MTMP, are net income attributable to owners of the parentof ¥160.0 billion, ROA of approximately 1.5%, ROE of approximately 10%, and a payout ratio of 40% or higher during the2025 MTMP period. Net income attributable to owners of the parent is used for the calculation of ROA and ROE.
For details on the 2025 MTMP, see “1. Management Policy, Business Environment and Tasks Ahead, etc.” in “Item 2. Business
Overview.”- 43 -

Establishment and Announcement of the “Human Rights Policy”
In accordance with the United Nations “Guiding Principles on Business and Human Rights,” we established the “Human
Rights Policy” and announced it in October 2022. We will proactively and continuously conduct our business activities inconsideration of internationally recognized standards related to human rights, in order to fulfill our responsibility to respecthuman rights as is expected of global companies, for achieving a society where human rights are respected.
Major Business Topics
May 2022
 Announced the acquisition of a partial stake in a distributed solar power generation project in
Massachusetts, the U.S.A.
July 2022

 Completed an eco-friendly multi-tenant logistics facility “CPD Nagoya Minato.”
 Built a new solar power plant next to the Akita Tenbinno Wind Power Plant which was built in Akita
city, Akita prefecture in September 2015 and started commercial operation as a wind and solar hybrid

September 2022

power plant.
 Invested in a newly established subsidiary of Mitsubishi Corporation, which undertakes the warehouse
DX operations that have been developed by Mitsubishi Corporation.
 Completed an eco-friendly logistics facility “CPD Nishiyodogawa.”

December 2022

 Announced to conclude a capital and business alliance agreement with Connected Robotics Inc.,
engaging in research and development of robotics services designed for the food industry.

 Announced to transfer shares of Diamond Asset Finance Company Limited, a Group company mainly
operating the residential real estate-related finance, in order to concentrate resources on prioritizedbusinesses in the Real Estate segment, and to improve profitability in the segment (transfer completed
in March 2023).
January 2023

 Commenced the business operation under the new management structure following the completion of
the merger of CAI International, Inc. and Beacon Intermodal Leasing, LLC, operating the marine
container leasing business.

 Announced to merge Mitsubishi HC Capital Energy Inc. and HGE Ltd., operating solar power
generation business (merger completed in April 2023).
February 2023

 Established an auto leasing joint venture in Thailand with ALD S.A., a global leading company in theauto leasing industry based in France.
 Announced to absorb and merge Japan Infrastructure Initiative Company Limited (“JII”), a Group
company making investments and providing loans in the overseas infrastructure sector, after making
JII a wholly owned subsidiary on the premise that MUFG Bank, Ltd. would assign all of the shares
which it holds to the Company (merger completed in April 2023).

 Announced the business integration of Group companies in the U.S.A., Mitsubishi HC Capital
America, Inc., Mitsubishi HC Capital (U.S.A.) Inc., and ENGS Commercial Finance Co. (businessintegration completed in April 2023).

 Concluded a merger agreement between Mitsubishi Auto Leasing Corporation, which engages in theauto leasing business, and Mitsubishi HC Capital Auto Lease Corporation (merger completed in April
March 20232023).
 Formed a joint healthcare fund with the Development Bank of Japan Inc.
 Concluded a lease agreement with TOKYO GAS CO., LTD that utilizes a transition loan.
 Universal Hydrogen Co. an investee of the Company in the U.S.A, develops hydrogen storage capsulesand hydrogen fuel cell-powered aircraft engines, successfully completed the first test flight of apropeller aircraft with a 40-seat capacity, the largest in the world for hydrogen fuel cell-powered

April 2023

aircraft, and is progressing with its practical application.
 Announced the conclusion of a “Virtual PPA” (non-fossil certificate transfer agreement for renewableenergy electricity) between Mitsubishi HC Capital Energy Inc., which is engaged in the renewableenergy power generation business, and Tokyo Metro Co., Ltd.

 Made CenterPoint Development Inc., a Group company engaged in the development of logistics
facilities and an asset management business specializing in such facilities, a wholly owned subsidiary.

- 44 -

(iii) Operating Results by Reportable Segment◎ Increase/Decrease in Net Income Attributable to Owners of the Parent (by Segment)(Billions of yen)
2.2

0.8

1.5

FYE 3/2022
32.6

Total: 99.4

FYE 3/2023

38.1

Total: 116.2
Customer Solutions

Global Business

40.8

29.0

Environment, Energy & Infrastructure

11.6

Aviation

5.6

6.2

Logistics

12.3

3.1

15.3

12.6

3.7

Real Estate

Mobility-0.6

Adjustments

Operating results by reportable segment are presented below.
Customer Solutions
Segment profit increased by ¥5.4 billion or 16.7% from the previous fiscal year to ¥38.1 billion, mainly thanks to the recordingof large gains on sales related to real estate leasing and a decrease in credit costs.
Global Business
Segment profit decreased by ¥11.8 billion, or 29.0% year on year, to ¥29.0 billion due to the posting of a loss on revaluationof securities associated with a decline in market value of certain strategic shareholdings and an absence of large gains on salesof strategic shareholdings recorded in the fiscal year ended March 31, 2022 despite factors contributing to profit increase suchas the business growth of the subsidiaries mainly in the Americas, a decrease in credit costs, and gains on revaluation of
securities recorded at a European subsidiary.
Environment, Energy & Infrastructure
Segment profit was up by ¥9.3 billion or 411.6% compared to the previous fiscal year to ¥11.6 billion mainly thanks to anincrease in profits from overseas renewable energy-related equity-method investments, recording of gains on sales ofinvestments in certain projects in the infrastructure business, and the absence of credit costs for certain customers in theinfrastructure project recorded in the previous fiscal year.
Aviation
Segment profit rose by ¥0.5 billion or 9.3% to ¥6.2 billion as the business showed signs of recovery, including an increase inleasing revenue and gains on sales of owned assets and a decrease in credit costs. This was despite the absence of gains onsales of certain receivables from bankrupt debtors recorded in the previous fiscal year and an increase in exchange revaluation
losses related to foreign currency-denominated borrowings due to yen depreciation in Japanese Operating Lease with Call
Option (JOLCO), as well as an increase in impairment losses.
Logistics
Segment profit climbed to ¥15.3 billion, up ¥14.5 billion or 1,787.4% from the previous fiscal year, mainly thanks to the fullyear profit contribution from CAI International, Inc., a marine container leasing company in the U.S.A. that became our wholly
owned subsidiary in November 2021, and the steady performance of Beacon Intermodal Leasing, LLC, which operates in thesame space.
These companies, which both operated a marine container leasing business, were merged on January 1, 2023.
Real Estate
Segment profit was up by ¥0.2 billion or 2.0% from the previous fiscal year to ¥12.6 billion, mainly thanks to a decrease intax expenses associated with the share transfer of our wholly owned subsidiary Diamond Asset Finance Company Limited
despite the recording of credit costs for a certain project in the U.S.A. and other factors.
Mobility
Segment profit came to ¥3.7 billion, up ¥0.6 billion or 21.2% from the previous fiscal year. This was mainly thanks to anincrease in gains on sales of vehicles for which the leasing term has matured against the backdrop of high demand for usedcars in Japan.
(iv) Financial Position
At the end of the fiscal year under review, total assets increased by ¥397.3 billion or 3.8% from the previous fiscal year-end
to ¥10,726.1 billion, while total equity rose by ¥217.5 billion or 16.3% to ¥1,551.0 billion. The interest-bearing debt (excluding- 45 -

lease obligations) increased ¥170.0 billion or 2.1% to ¥8,236.1 billion, and the equity-to-asset ratio increased 1.6 points to
14.3%.
(v) Capital Resources and Liquidity of Funds
We obtain a large amount of funds in domestic and foreign currencies to fund our operations such as lease transactions andproviding loans.
At the end of the fiscal year under review, interest-bearing debt (excluding lease obligations) increased ¥170.0 billion to¥8,236.1 billion, and total liabilities increased ¥179.7 billion to ¥9,175.1 billion. Out of interest-bearing debt, long-term
liabilities such as long-term borrowings decreased by ¥95.9 billion to ¥5,194.0 billion, while short-term liabilities such as
short-term borrowings and commercial papers increased by ¥266.0 billion to ¥3,042.0 billion.
We are committed to securing funds to support our businesses at any time while we control the cost of funds. We diversify
our financing methods such as by using indirect financing through borrowings from financial institutions and direct financing
through corporate bonds, commercial paper, and securitization of lease receivables. With regard to indirect financing, we
continue borrowing from wide range of financial institutions with long standing relationship, such as Japan’s three megabanks, regional banks, and life insurance companies. With regard to direct financing, we diversify our funding source, suchas issuing bonds for retail investors as well as financing from banks and institutional investors.
With regard to fund management in the entire Group, we have put in place a system to allocate funds efficiently utilizing
group finance from Mitsubishi HC Capital and Regional Treasury Base.
From the perspective of liquidity, we manage cash flow closely and monitor funding liquidity risk even in normal times. The
quarterly ALM Committee identifies the current status and issues of liquidity risk and discusses measures against the risk. We
are committed to maintaining a strong financial position through these risk management initiatives.
In order to prepare for changes in the funding environment due to financial market turmoil and various risks, we have madeoverdraft agreements and commitment line agreements with multiple financial institutions to secure liquidity support in theevent of an emergency. At the end of the fiscal year, the undrawn commitment in the Group amounted to ¥703.0 billion.
For cash flows, please refer to “(ii) Cash Flows” in “(1) Overview of Operating Results, etc.” in “4. Management’s Analysesof Consolidated Financial Position, Operating Results and Cash Flows” of “Item 2. Business Overview.”(vi) Significant Accounting Estimates and Assumptions used in Such Estimates
Of the accounting estimates used in the preparation of the consolidated financial statements and the non-consolidated financial
statements and the assumptions used in such estimates, those that are significant are described in “Notes on Significant
Accounting Estimates” in “1. Consolidated Financial Statements, etc.” of “Item 5. Financial Information” and “Notes on
Significant Accounting Estimates” in “2. Non-Consolidated Financial Statements, etc.” of “Item 5. Financial Information.”(3) Status of Operating Loans Receivable based on the Cabinet Office Ordinance on Disclosure of Specified Finance
Companies, etc. (Ordinance of the Ministry of Finance No. 57 of May 19, 1999)
The status of operating loans receivable in the Company is as follows.
(i)

Breakdown of Loans Receivable Outstanding by Type(As of March 31, 2023)
Average
Contracted Interest
Percentage (%)
Rate
(%)

Number (Items)

Percentage (%)

Balance (Millions
of Yen)Unsecured (excluding
Housing)

29

0.31

42

0.00

2.05

Secured (excluding Housing)

–

–

–

–

–

6,088

65.91

31,389

2.01

1.43

6,117

66.22

31,431

2.01

1.43

Total

3,120

33.78

1,533,466

97.99

2.04

Total

9,237

100.001,564,897

100.001.99Type of Loans Receivable
For Consumers

For Housing
Total
For Business Operators- 46 -

(ii) Breakdown of Financing(As of March 31, 2023)
Lenders, etc.

Balance (Millions of Yen)

Average Financing Interest Rate (%)

Borrowings from Financial Institutions, etc.

2,177,665

1.69

Others1,954,763

0.91

1,850,470

0.95

4,132,429

1.32

862,621–

33,196–

Bonds andCommercial Papers
Total
Shareholders’ Equity
Share Capital andCapital Contributions(Notes) 1. The total amount of loans receivable transferred in the fiscal year under review was ¥499 million.
2. The average financing interest rate is the weighted average interest rate based on the contracted interest rate on the yearend balance of borrowings, etc.
(iii) Breakdown of Loans Receivable Outstanding by Industry(As of March 31, 2023)
Number of Obligors(Items)By Industry

Balance (Millions of
Yen)

Percentage (%)

Percentage (%)

Manufacturing

111

1.92

28,368

1.81

Construction

17

0.29

443

0.03

Electricity, Gas, Heat Supply and
Water

41

0.71

95,951

6.13

Transport and Communications

34

0.59

261,545

16.71

219

3.79

20,813

1.33

Finance and Insurance

28

0.48

39,215

2.51

Real Estate

209

3.62

383,722

24.52

Service544

9.41

631,484

40.35

Agriculture

–

–

–

–

Individuals

4,474

77.42

31,431

2.01

102

1.77

71,921

4.60

5,779

100.001,564,897

100.00Wholesale and Retail Trade, andEating and Drinking Places

OthersTotal(iv) Breakdown of Loans Receivable Outstanding by Collateral(As of March 31, 2023)
Type of Collateral received

Balance (Millions of Yen)

Securities

Percentage (%)

–

–

–

－

6,995

0.45

2,631

0.17

Merchandise––

Real Estate

160,18110.24

including Shares
Claimincluding Deposits- 47 -

Type of Collateral received

Balance (Millions of Yen)

Foundation

Percentage (%)

–

–

3,605

0.23

170,781

10.92

Guarantees

3,963

0.25

Unsecured

1,390,152

88.83

1,564,897

100.00

OthersTotal

Total(v) Breakdown of Loans Receivable Outstanding by Period(As of March 31, 2023)
By Period

Balance (Millions ofYen)

Number (Items)

Percentage (%)

935

10.12

150,055

9.59

Over 1 Year to 5 Years

1,023

11.07

707,21045.19

Over 5 Years to 10 Years

1,004

10.87

289,026

18.47

Over 10 Years to 15 Years

87

0.94

308,996

19.74

Over 15 Years to 20 Years

613

6.64

54,245

3.47

Over 20 Years to 25 Years

1,584

17.15

9,952

0.64

Over 25 Years

3,991

43.21

45,410

2.90

9,237

100.001,564,897

100.00

1 Year or Less

Total
Average Period per Case

Percentage (%)

7.16 years(Note) Periods are on a contractual term basis.

- 48 -

5. Material Agreements, etc.
(1) Aircraft Purchase Agreement between JSA International U.S. Holdings, LLC, a Consolidated Subsidiary of the Company,
and Boeing
Expected Date
Description of the Contractof Receipt
Fiscal year
Since 2023
Aircraft purchase agreement
JSA International
ended March 31,
Boeingup to 2026
U.S. Holdings, LLC
 Boeing 737 Max 8 22 aircraft (Note 1)
2019(Note 2)
(Notes) 1. In the fiscal year ended March 31, 2021, the Company entered into an agreement to change the number of aircraft
purchased to 22 from 30 in the initial agreement.
2. In the fiscal year ended March 31, 2023, the Company entered into an agreement to change the expected date ofreceipt in the initial agreement (since 2023 up to 2025) to the period since 2023 up to 2026.
Contract Company
Name

Contract Year

Contractor(2) The Company resolved at the Board of Directors’ meeting held on December 23, 2022 that Mitsubishi HC Capital Auto Lease
Corporation (hereinafter “Mitsubishi HC Capital Auto Lease”), a consolidated subsidiary, would conduct a capital increase
through third-party allocation with Mitsubishi Corporation (hereinafter “Mitsubishi Corp.”) as the allottee, and that at thesame time, the Company’s share of ownership would be 50%. Also, Mitsubishi HC Capital Auto Lease entered into anunderwriting agreement with Mitsubishi Corp. on February 22, 2023, and concluded a merger agreement with Mitsubishi
Auto Leasing Corporation (hereinafter “Mitsubishi Auto Leasing”), an affiliated company accounted for by the equity method,
as of the said date. Details are as described in “Notes to Business Combinations” in “1. Consolidated Financial Statements,etc.” of “Item 5. Financial Information.”(3) The Company resolved at the Board of Directors’ meeting held on December 23, 2022 to transfer all of the held shares of
Diamond Asset Finance Company Limited, a consolidated subsidiary, and entered into a share transfer agreement as of thesaid date. Details are as described in “Notes to Business Combinations” in “1. Consolidated Financial Statements, etc.” of“Item 5. Financial Information.”(4) The Company resolved at the Board of Directors’ meeting held on February 10, 2023 to undergo an absorption type mergerof Japan Infrastructure Initiative Company Limited, a wholly owned subsidiary of the Company, with April 1, 2023 as theeffective date, and entered into a merger agreement on February 10, 2023. Details are as described in “Notes to Significant
Subsequent Events” in “2. Non-Consolidated Financial Statements, etc.” of “Item 5. Financial Information.”(5) The Company resolved at the Board of Directors’ meeting held on April 14, 2023 to acquire all of the shares of CenterPoint
Development Inc., an affiliated company accounted for by the equity method, and entered into a share transfer agreement asof the said date. Details are as described in “Notes to Significant Subsequent Events” in “1. Consolidated Financial Statements,etc.” of “Item 5. Financial Information.”

6.

Research and Development Activities
There is nothing to be noted.

- 49 -

Item 3. Property, Plants and Equipment
1. Leased Assets(1) Overview of Capital Investments
The breakdown of capital investment in leased assets at the Group (the Company and its consolidated subsidiaries) for the
fiscal year under review is as follows.
Category

Acquisition Cost (Millions of Yen)

Operating lease assets

452,516(Note) Lease assets transferred from lease investment assets due to the conclusion of a renegotiated lease agreement after the completionof a finance lease transaction are not included.
Breakdown of assets sold or retired due to the termination of lease transactions during the fiscal year under review are as
follows.
Category

Book Value (Millions of Yen)

Operating lease assets

165,768(Note) Includes sales and retirement of leased assets under renegotiated lease agreements.
(2) Major Facilities
The breakdown of leased assets at the Group is as follows.
Category

Book Value (Millions of Yen)

Operating lease assets

3,356,032(Note) Includes leased assets under renegotiated lease agreements.
(3) Plans for Capital Investment, Disposal of Property, Plants and Equipment, etc.
There are no plans to build or dispose of important facilities. The Group offers flexible services which are not limited tofinancial functions while utilizing various functions related to tangible and intangible assets, and has not formulated a capital
investment plan that targets only leased assets. Based on contracts, etc. with business partners, assets related to operatingleases, etc. are acquired and disposed of as needed.

2. Assets for Own Use(1) Overview of Capital Investments
There is nothing to be noted.
(2) Major Facilities
There is nothing to be noted.
(3) Plans for Capital Investment, Disposal of Property, Plants and Equipment, etc.
There is nothing to be noted.

- 50 -

Item 4. Information on the Company
1. Information on the Company’s Shares, etc.
(1) Total Number of Shares, etc.
(i)

Total Number of Shares
Type

(ii)

Common Shares

4,800,000,000

Total

4,800,000,000

Outstanding Shares
Number of Shares Issued as ofType

Total Number of Authorized Shares

the End of the Fiscal Year
(March 31, 2023)

CommonShares1,466,912,244

Total

1,466,912,244

Name of Financial Instrument Exchange
Number of Shares Issued as
or Registered Authorized Financialof the Date of Submission
Instrument Firm Association on which(June 27, 2023)
Shares are listed
Prime Market of the Tokyo Stock
Exchange
1,466,912,244
Premier Market of the Nagoya Stock
Exchange
1,466,912,244

Description
Number ofshares per unit
100

―

―

(2) Share Acquisition Rights, etc.
(i)

Description of the Stock Option Plan

Date of Resolution

Category and Number of Grantees (Persons)September 29, 2010

September 29, 2011

Directors of the Company: 9(excluding Outside Directors)

Directors of the Company: 10(excluding Outside Directors)

Executive Officers of the Company:
17

Executive Officers of the Company:
17(excluding those concurrently
holding positions as Directors)(excluding those concurrently
holding positions as Directors)

Number of Share Acquisition Rights*

343

542

Class, Description and Number of Shares to be issued

Common Shares

Common Shares

upon Exercise of Share Acquisition Rights*

34,300 (Note 1)

54,200 (Note 1)

Amount to be paid upon Exercise of Share¥1 per share

Acquisition Rights*
Exercise Period of Share Acquisition Rights*
Issue Price of Shares and Additional paid-in Capitalper Share if Shares are issued upon Exercise of Share
Acquisition Rights*

From October 16, 2010

From October 15, 2011

to October 15, 2040

to October 14, 2041

Issue Price: ¥250.2

Issue Price: ¥283.2

Additional paid-in capital per
share: ¥125.1

Additional paid-in capital per share:¥141.6

Conditions for exercise of Share Acquisition Rights*(Note 2)Matters concerning the transfer of Share Acquisition

Acquisition of share acquisition rights by transfer shall be subject to theapproval of the Board of Directors of the Company by its resolution.

Rights*Matters concerning the Delivery of Share Acquisition
Rights in Connection with Organizational
Restructuring*(Note 3)

- 51 -

Date of Resolution

Category and Number of Grantees (Persons)September 27, 2012

September 26, 2013

Directors of the Company: 10

Directors of the Company: 10(excluding Outside Directors)
Executive Officers of the Company:(excluding Outside Directors)
Executive Officers of the Company:

17(excluding those concurrently

19(excluding those concurrently

holding positions as Directors)

holding positions as Directors)

Number of Share Acquisition Rights*
Class, Description and Number of Shares to Be
issued upon Exercise of Share Acquisition Rights*

1,012

1,012

Common Shares
101,200 (Note 1)

Common Shares
101,200 (Note 1)

Amount to be paid upon Exercise of Share
Acquisition Rights*
Exercise Period of Share Acquisition Rights*
Issue Price of Shares and Additional paid-in Capitalper Share if Shares are issued upon Exercise of Share
Acquisition Rights*¥1 per share
From October 16, 2012

From October 16, 2013

to October 15, 2042

to October 15, 2043

Issue Price: ¥312.9

Issue Price: ¥503

Additional paid-in capital per share: Additional paid-in capital per share:¥156.5¥252

Conditions for Exercise of Share Acquisition Rights*(Note 4)

Matters concerning the Transfer of Share Acquisition

Acquisition of share acquisition rights by transfer shall be subject to theapproval of the Board of Directors of the Company by its resolution.

Rights*Matters concerning the Delivery of Share Acquisition
Rights in Connection with Organizational
Restructuring*
Date of Resolution

Category and Number of Grantees (Persons)(Note 3)September 25, 2014

September 29, 2015

Directors of the Company: 10

Directors of the Company: 9(excluding Outside Directors)
Executive Officers of the Company:(excluding Outside Directors)
Executive Officers of the Company:

18(excluding those concurrently

20(excluding those concurrently

holding positions as Directors)

holding positions as Directors)

Number of Share Acquisition Rights*
Class, Description and Number of Shares to be issued
upon Exercise of Share Acquisition Rights*

Common Shares
209,000 (Note 1)[199,300] (Note 1)¥1 per share

Acquisition Rights*

Issue Price of Shares and Additional paid-in Capitalper Share if Shares are issued upon Exercise of Share
Acquisition Rights*[1,993]

Common Shares
179,600 (Note 1)

Amount to be paid upon Exercise of Share

Exercise Period of Share Acquisition Rights*

2,090

1,796

From October 16, 2014
to October 15, 2044

From October 16, 2015
to October 15, 2045

Issue Price: ¥491
Additional paid-in capital per share:

Issue Price: ¥547
Additional paid-in capital per share:

¥246

¥274

Conditions for Exercise of Share Acquisition Rights*(Note 4)

Matters concerning the Transfer of Share Acquisition
Rights*Acquisition of share acquisition rights by transfer shall be subject to theapproval of the Board of Directors of the Company by its resolution.

Matters concerning the Delivery of Share Acquisition
Rights in Connection with Organizational
Restructuring*(Note 3)- 52 -

Date of Resolution

Category and Number of Grantees (Persons)September 29, 2016

September 27, 2017

Directors of the Company: 9

Directors of the Company: 9(excluding Outside Directors)
Executive Officers of the Company:(excluding Outside Directors)
Executive Officers of the Company:

20(excluding those concurrently

27(excluding those concurrently

holding positions as Directors)

holding positions as Directors)

3,129[2,973]

3,674

Common Shares
312,900 (Note 1)

Common Shares

Number of Share Acquisition Rights*
Class, Description and Number of Shares to be issued
upon Exercise of Share Acquisition Rights*
Amount to be paid upon Exercise of Share
Acquisition Rights*
Exercise Period of Share Acquisition Rights*
Issue Price of Shares and Additional paid-in Capitalper Share if Shares are issued upon Exercise of Share
Acquisition Rights*

367,400 (Note 1)[297,300] (Note 1)¥1 per share
From October 15, 2016
to October 14, 2046

From October 14, 2017
to October 13, 2047

Issue Price: ¥437

Issue Price: ¥567

Additional paid-in capital per share:¥219

Additional paid-in capital per share:¥284

Conditions for Exercise of Share Acquisition Rights*(Note 4)

Matters concerning the Transfer of Share Acquisition

Acquisition of share acquisition rights by transfer shall be subject to theapproval of the Board of Directors of the Company by its resolution.

Rights*Matters concerning the Delivery of Share Acquisition
Rights in Connection with Organizational
Restructuring*
Date of Resolution

Category and Number of Grantees (Persons)(Note 3)June 28, 2018
Directors of the Company: 6

Directors of the Company: 5(excluding Outside Directors)
Executive Officers of the Company:(excluding Outside Directors)
Executive Officers of the Company:

33(excluding those concurrently

30(excluding those concurrently

holding positions as Directors)

holding positions as Directors)

Number of Share Acquisition Rights*
Class, Description and Number of Shares to be issued
upon Exercise of Share Acquisition Rights*[4,308]
Common Shares
454,500 (Note 1)

Common Shares
323,500 (Note 1)[430,800] (Note 1)¥1 per share

Acquisition Rights*

Issue Price of Shares and Additional paid-in Capitalper Share if Shares are issued upon Exercise of Share
Acquisition Rights*

4,545

3,235

Amount to be paid upon Exercise of Share

Exercise Period of Share Acquisition Rights*

June 25, 2019

From July 14, 2018
to July 13, 2048

From July 13, 2019
to July 12, 2049

Issue Price: ¥591
Additional paid-in capital per share:

Issue Price: ¥514
Additional paid-in capital per share:

¥296

¥257

Conditions for Exercise of Share Acquisition Rights*(Note 4)

Matters concerning the Transfer of Share Acquisition
Rights*Acquisition of share acquisition rights by transfer shall be subject to theapproval of the Board of Directors of the Company by its resolution.

Matters concerning the Delivery of Share Acquisition
Rights in Connection with Organizational
Restructuring*(Note 3)

- 53 -

Date of Resolution

Category and Number of Grantees (Persons)June 24, 2020
Directors of the Company: 5

Directors of the Company: 6(excluding Outside Directors and(excluding Outside Directors)
Executive Officers of the Company:

Directors who are Audit &Supervisory Committee Members)

31(excluding those concurrently

Executive Officers of the Company:
55

holding positions as Directors)(excluding those concurrently
holding positions as Directors)

4,710

Number of Share Acquisition Rights*
Class, Description and Number of Shares to be issued
upon Exercise of Share Acquisition Rights*

Common Shares

Conditions for Exercise of Share Acquisition Rights*

Common Shares
850,300 (Note 1)

471,000 (Note 1)[447,200] (Note 1)¥1 per share

Acquisition Rights*

Issue Price of Shares and Additional paid-in Capitalper Share if Shares are issued upon Exercise of Share
Acquisition Rights*

8,503[4,472]

Amount to be paid upon Exercise of Share

Exercise Period of Share Acquisition Rights*

June 25, 2021

From July 16, 2020

From July 16, 2021

to July 15, 2050

to July 15, 2051

Issue Price: ¥425
Additional paid-in capital per share:

Issue Price: ¥500
Additional paid-in capital per share:

¥213

¥250

(Note 4)(Note 5)Matters concerning the Transfer of Share Acquisition
Rights*Acquisition of share acquisition rights by transfer shall be subject to theapproval of the Board of Directors of the Company by its resolution.

Matters concerning the Delivery of Share Acquisition
Rights in Connection with Organizational
Restructuring*(Note 3)

- 54 -

Date of Resolution

June 28, 2022
Directors of the Company: 6(excluding Outside Directors andDirectors who are Audit &Category and Number of Grantees (Persons)Supervisory Committee Members)
Executive Officers of the Company:
55(excluding those concurrently
holding positions as Directors)

Number of Share Acquisition Rights*

8,554

Class, Description and Number of Shares to be issued
upon Exercise of Share Acquisition Rights*

Common Shares
855,400 (Note 1)

Amount to be paid upon Exercise of Share
Acquisition Rights*¥1 per share

Exercise Period of Share Acquisition Rights*
Issue Price of Shares and Additional paid-in Capitalper Share if Shares are issued upon Exercise of Share
Acquisition Rights*
Conditions for Exercise of Share Acquisition Rights*

Matters concerning the Transfer of Share Acquisition
Rights*Matters concerning the Delivery of Share Acquisition
Rights in Connection with Organizational
Restructuring*

From July 16, 2022
to July 15, 2052
Issue Price: ¥512
Additional paid-in capital per share:¥256(Note 5)Acquisition of share acquisitionrights by transfer shall be subject tothe approval of the Board of
Directors of the Company by its
resolution.
(Note 3)*Description as of the last day of the fiscal year under review (March 31, 2023) is presented. For matters that changed from the last
day of the fiscal year under review to the end of the month before the submission date (May 31, 2023), the description as of the endof the month before the submission date is described in [ ], and for other matters, there is no change from the description as of thelast day of the fiscal year under review.
(Notes) 1. The class of shares to be issued upon exercise of the share acquisition rights shall be common shares, and the number ofshares to be issued upon exercise of each share acquisition right (hereinafter referred to as the “Number of Shares Granted”)
shall be 100 shares.
If the Company splits its common shares (including gratis allotment of shares of common shares of the Company; the same
shall apply hereinafter to the description of a share split) or consolidates its common shares after the date on which theshare acquisition rights are allotted (hereinafter referred to as the “Allotment Date”), the Number of Shares Granted shallbe adjusted according to the following formula; provided, however, that such adjustment shall be made to the number ofshares underlying the share acquisition rights that have not been exercised at the time of such adjustment, and any fraction
less than one share arising from such adjustment shall be discarded.
Number of Shares Granted after adjustment = Number of Shares Granted before adjustment × Ratio of stock split or
stock consolidation
Number of Shares Granted after adjustment shall apply in the case of a stock split on or after the day following the record
date of such stock split (if the record date is not specified, the effective date thereof) and in the case of a share consolidation
on or after the effective date thereof; provided, however, that in cases where a stock split is carried out on the condition
that a proposal to increase share capital or reserves by reducing the amount of surplus is approved at the General Meetingof Shareholders of the Company, and where the record date for the stock split is a day on or before the date of conclusionof such General Meeting of Shareholders, the Number of Shares Granted after adjustment shall apply on or after the day
following the date of conclusion of such General Meeting of Shareholders.

- 55 -

In addition to the above, if the Company carries out a merger, company split or share exchange or otherwise requires anadjustment to the Number of Shares Granted after the Allotment Date, the Company may make an adjustment to the
Number of Shares Granted as deemed necessary by the Board of Directors of the Company.
2. (1) In addition to the period within “Exercise Period of Share Acquisition Rights,” share acquisition right holders may
exercise share acquisition rights within a period not exceeding five years from the date on which one year has passed
from the date following the date on which they lost their positions as Directors, Corporate Auditors or Executive
Officers of the Company.
(2) Notwithstanding (1) above, if a proposal for approval of a merger agreement under which the Company will become
an extinct company, a proposal for approval of a company split agreement or company split plan under which theCompany will become a splitting company, or a proposal for approval of a share exchange agreement or share transfer
plan under which the Company will become a wholly owned subsidiary is approved at the General Meeting of
Shareholders of the Company (if a resolution of the General Meeting of Shareholders is not required, a resolution of
the Board of Directors of the Company is adopted), share acquisition rights may be exercised within 30 days from the
day following the date of such approval; provided, however, that this shall not apply to cases where the share acquisitionrights of the restructured company are delivered to the share acquisition right holders in accordance with the mattersrelated to delivery of share acquisition rights in accordance with the organizational restructuring as set forth in (Note3) below.
(3) Other conditions shall be as set forth in the “Share Option Allotment Agreement” to be concluded between the
Company and the share acquisition right holders.
3. In the event the Company merges (only if the Company disappears as a result of merger), performs an absorption-typecompany split or an incorporation-type company split (only if the Company is to be a splitting company), or conducts ashare exchange or a share transfer (only if the Company becomes a wholly owned subsidiary) (hereinafter collectively
referred to as “Organizational Restructuring”), share acquisition rights of a corporation described in Article 236, Paragraph
1, Item (viii) (a) through (e) of the Companies Act (hereinafter referred to as “Restructured Company”) shall be delivered
respectively to share acquisition right holders remaining unexercised (hereinafter referred to as “Remaining Share
Acquisition Rights”) immediately prior to the effective day of Organizational Restructuring (this means the day on which
an absorption-type merger becomes effective with regard to an absorption-type merger, the day of formation of the stockcompany incorporated in the consolidation-type merger with regard to a consolidation-type merger, the day on which anabsorption-type company split becomes effective with regard to an absorption-type company split, the day of formation of
the stock company incorporated in the incorporation-type split with regard to an incorporation-type company split, the dayon which a share exchange becomes effective with regard to a share exchange, and the day of formation of the wholly
owning parent company incorporated in the share transfer with regard to a share transfer; the same shall apply hereinafter);provided, however, that the delivery of share acquisition rights of the Restructured Company in accordance with thefollowing items shall be subject to the provisions of the absorption-type merger agreement, consolidation-type merger
agreement, absorption-type company split agreement, incorporation-type company split plan, share exchange agreement
or share transfer plan.
(1) Number of Share Acquisition Rights of the restructured Company to be delivered
The same number of share acquisition rights as the number of remaining share acquisition rights held by the shareacquisition right holders shall be delivered respectively.
(2) Class of Shares of the Restructured Company to be issued upon Exercise of Share Acquisition Rights
Common shares of the Restructured Company.
(3) Number of Shares of the Restructured Company to be issued upon Exercise of Share Acquisition Rights
To be decided according to (Note 1) above after taking into consideration the conditions, etc. of the Organizational
Restructuring(4) Value of Assets to be contributed upon Exercise of Share Acquisition Rights
Value of assets to be contributed upon the exercise of each share acquisition right to be delivered shall be the amountobtained by multiplying the exercise price after restructuring as specified below by the number of shares of the
Restructured Company to be issued for each share acquisition right as determined in accordance with (3) above. The
exercise price after restructuring shall be 1 yen per share of the Restructuring Company that can be delivered byexercising each share acquisition right to be delivered.
(5) Period during which Share Acquisition Rights can be exercised
Starting from the later of either the initial date of the exercise period of share acquisition rights as stipulated in the“Exercise Period of Share Acquisition Rights” or the date on which the Organizational Restructuring becomes effective
and ending on the expiration date for the exercise of share acquisition rights as stipulated in the “Exercise Period of
Share Acquisition Rights.”- 56 -

(6) Matters concerning increase in Share Capital and Capital Reserve by Issuing of Shares upon Exercise of Share
Acquisition Rights(i) Amount of share capital to be increased with the issuance of shares upon exercise of share acquisition rights shall be
1/2 of the maximum amount of increase in share capital as calculated in accordance with Article 17, Paragraph 1 of
the Regulations on Corporate Accounting, and where any fraction less than one yen arises as a result of the calculation,such fraction shall be rounded up.
(ii) Amount of capital reserve to be increased with the issuance of shares upon exercise of share acquisition rights shallbe the maximum amount of increase in share capital as described in (i) above less the amount of share capital increase
as described in (i) above.
(7) Restriction on the Acquisition of Share Acquisition Rights by Transfer
Acquisition of share acquisition rights by transfer shall be subject to the approval of the board of Directors of the
Restructured Company by its resolution.
(8) Conditions for Exercise of Share Acquisition Rights
To be determined in accordance with (Note 2) above.
(9) Terms of Acquisition of Share Acquisition Rights
The Company may acquire share acquisition rights on the date specifically determined by the Board of Directors of
the Company without any compensation if proposals (i), (ii), (iii), (iv) or (v) below are approved by the General
Meeting of Shareholders of the Company (if a resolution of the General Meeting of Shareholders is not required, aresolution of the Board of Directors of the Company is adopted).
(i) Proposal to approve a merger agreement under which the Company will become an extinct company(ii) Proposal to approve a company split agreement or a company split plan under which the company will become asplitting company(iii) Proposal to approve a share exchange agreement or share transfer plan under which the Company will become awholly owned subsidiary(iv) Proposal to approve an amendment to the Articles of Incorporation to create a provision, as a feature of all sharesissued by the Company, that the approval of the Company shall be required for the acquisition of such shares bytransfer(v) Proposal to approve an amendment to the Articles of Incorporation to create a provision that, as a feature of a classof shares underlying share acquisition rights, approval of the Company shall be required for the acquisition of suchclass of shares by transfer, or that the Company shall acquire all of such class of shares by resolution of a General
Meeting of Shareholders of the Company
4. (1) In addition to the period within “Exercise Period of Share Acquisition Rights,” share acquisition right holders may
exercise share acquisition rights within a period not exceeding five years from the date on which one year has passed
from the date following the date on which they lost their positions as Directors, Corporate Auditors, Executive
Officers, etc. of the Company.
(2) Notwithstanding (1) above, if a proposal for approval of a merger agreement under which the Company will become
an extinct company, a proposal for approval of a company split agreement or company split plan under which theCompany will become a splitting company, or a proposal for approval of a share exchange agreement or share transfer
plan under which the Company will become a wholly owned subsidiary is approved at the General Meeting of
Shareholders of the Company (if a resolution of the General Meeting of Shareholders is not required, a resolution of
the Board of Directors of the Company is adopted), share acquisition rights may be exercised within 30 days from the
day following the date of such approval; provided, however, that this shall not apply to cases where the share acquisitionrights of the restructured company are delivered to the share acquisition right holders in accordance with the mattersrelated to delivery of share acquisition rights in accordance with the organizational restructuring as set forth in (Note3) above.
(3) Other conditions shall be as set forth in the “Share Option Allotment Agreement” to be concluded between the
Company and the share acquisition right holders.
5. (1) In addition to the period within “Exercise Period of Share Acquisition Rights,” share acquisition right holders may
exercise share acquisition rights within a period not exceeding five years from the date on which one year has passed
from the date following the date on which they lost their positions as Directors or Executive Officers, etc. of theCompany.
(2) Notwithstanding (1) above, if a proposal for approval of a merger agreement under which the Company will become
an extinct company, a proposal for approval of a company split agreement or company split plan under which theCompany will become a splitting company, or a proposal for approval of a share exchange agreement or share transfer
plan under which the Company will become a wholly owned subsidiary is approved at the General Meeting of- 57 -

Shareholders of the Company (if a resolution of the General Meeting of Shareholders is not required, a resolution of
the Board of Directors of the Company is adopted), share acquisition rights may be exercised within 30 days from the
day following the date of such approval; provided, however, that this shall not apply to cases where the share acquisitionrights of the restructured company are delivered to the share acquisition right holders in accordance with the mattersrelated to delivery of share acquisition rights in accordance with the organizational restructuring as set forth in (Note3) above.
(3) Other conditions shall be as set forth in the “Share Option Allotment Agreement” to be concluded between the
Company and the share acquisition right holders.
(ii) Rights Plan
Not applicable.
(iii) Other Share Acquisition Rights, etc.
Not applicable.

- 58 -

(3) Exercises, etc., of Moving Strike Convertible Bonds, etc.
Not applicable.
(4) Changes in Number of issued Shares, Share Capital, etc.

Date

Changes in
Number ofissued Shares(ThousandShares)Balance of
Number ofissued Shares(ThousandShares)Changes inShare Capital(Millions of
Yen)

Balance ofShare Capital(Millions of
Yen)

Changes in
CapitalReserve(Millions of
Yen)

Balance ofCapitalReserve(Millions ofYen)

April 1, 2021

571,078

1,466,912–

33,196–33,802(Note) As a result of the merger of Mitsubishi UFJ Lease & Finance Company Limited and Hitachi Capital Corp. (merger ratio: 1: 5.1)
on April 1, 2021, the total number of issued shares increased 571,078 thousand shares to 1,466,912 thousand shares.

(5) Shareholding by Shareholder Category(As of March 31, 2023)
Status of Shares (100 Shares per Unit)
Financial
Institutions

Financial
Instruments
Business
Operators

Other
Corporations

–

85

50

Number of
Shares held
(Units)–3,502,127

Shareholding
Ratio (%)

–

23.90

Category

National and
Local
Governments

Number of
Shareholders

Foreign Shareholders

Individuals
and Others

Total

Shares Less
than One
Unit(Shares)

Other than
Individuals

Individuals

1,065

570

309

227,026

229,105–522,2235,700,632

2,633,313

1,901

2,294,226

14,654,422

1,470,044

3.56

38.90

17.97

0.01

15.66

100.00–(Note) 30,416,158 shares of treasury shares are stated in “Individuals and Others,” including 304,161 units, and 58 shares in Sharesless than one unit.

- 59 -

(6) Major Shareholders

Name

Number of
Shares held(Thousands ofShares)Location(As of March 31, 2023)
Ownership
Percentage to the
Total Number ofissued Shares(excluding Treasury
Shares) (%)

Mitsubishi Corporation

3-1 Marunouchi 2-chome, Chiyoda-ku, Tokyo

264,044

18.38

Mitsubishi UFJ Financial Group,Inc.

7-1 Marunouchi 2-chome, Chiyoda-ku, Tokyo

208,345

14.50

The Master Trust Bank of Japan,
Ltd. (Trust Account)11-3 Hamamatsucho 2-chome, Minato-ku, Tokyo

112,341

7.82

8-12 Harumi 1-chome, Chuo-ku, Tokyo

65,391

4.55

Hitachi, Ltd.

6-6 Marunouchi 1-chome, Chiyoda-ku, Tokyo

59,152

4.11

MUFG Bank, Ltd.

7-1 Marunouchi 2-chome, Chiyoda-ku, Tokyo

50,3483.50

4-5 Marunouchi 1-chome, Chiyoda-ku, Tokyo

28,4311.97

1-1 Marunouchi 2-chome, Chiyoda-ku, Tokyo

27,990

1.94

7-3 Marunouchi 2-chome, Chiyoda-ku, Tokyo

22,807

1.58

1776 HERITAGE DRIVE, NORTH QUINCY,
MA 02171, U.S.A.
(15-1 Konan 2-chome, Minato-ku, Tokyo)

11,5430.80–

850,396

59.19

Custody Bank of Japan, Ltd.
(Trust Account)

Mitsubishi UFJ Trust andBanking Corporation (Note)
Meiji Yasuda Life Insurance
Company
JPMorgan Securities Japan Co.,Ltd.
STATE STREET BANK WEST
CLIENT - TREATY 505234(Standing proxy: Settlement &Clearing Services Department,
Mizuho Bank, Ltd.)
Total(Note) Shares in trust business is not included for Mitsubishi UFJ Trust and Banking Corporation.
(7) Voting Rights(i)Issued Shares(As of March 31, 2023)
Category

Number of Voting Rights(Units)Number of Shares (Shares)

Description

Shares without Voting Rights

–

–

–

Shares with restricted Voting Rights(Treasury Shares, etc.)

–

–

–

Shares with restricted Voting Rights(Others)–––

30,416,100––

1,435,026,100

14,350,261–

1,470,044––

Total Number of issued Shares

1,466,912,244––

Total Number of Voting Rights–

14,350,261–

Shares with Full Voting Rights (Treasury

CommonShares, etc.)

sharesShares with Full Voting Rights (Others)
Shares Less than One Unit

CommonsharesCommonshares- 60 -

(Notes) 1. The shares of common shares in the “Shares with Full Voting Rights (Others)” and “Shares Less than One Unit” columns
include 6,100 shares (61 voting rights) and 20 shares, respectively, held by Japan Securities Depository Center,
Incorporated.
2. The shares of common stock in the “Shares with Full Voting Rights (Others)” and “Shares Less than One Unit” columns
include 302,000 shares (3,020 voting rights) and 73 shares, respectively, held by the trust as a performance-based stockcompensation plan implemented by the former Hitachi Capital Corp.
(ii) Treasury Shares, etc.
(As of March 31, 2023)

Name of Shareholders

Mitsubishi HC Capital Inc.

Number of
Shares held
under Own
Name (Shares)

Address of Shareholders

5-1, Marunouchi 1chome, Chiyoda-ku,
Tokyo

Total

–

Numberof Shares
held under
the Namesof Others(Shares)

Total Shares
held (Shares)

Ownership
Percentage to the
Total Number ofissued Shares (%)

30,416,100–

30,416,100

2.07

30,416,100–

30,416,100

2.07(8) Description of Officers’ and Employees’ Shareholding Plan
The Company resolved at the 52nd Annual General Meeting of Shareholders held on June 27, 2023 to adopt a performancebased stock compensation plan that uses a trust (hereinafter, the “Plan”) for Directors (excluding non-Executive Directors andnon-residents in Japan) excluding Directors who are Audit & Supervisory Committee Members and Executive Officers, etc.
(excluding non-residents in Japan; hereinafter, the Directors and the Executive Officers, etc. are collectively referred to as the“Director(s), etc.”).
(i)Outline of the Plan
The Plan is a stock compensation plan where the Company shares and cash equivalent to the conversion value of the Company
shares (hereinafter, the “Company Shares, etc.”) are delivered or paid (hereinafter, the “Delivery, etc.”) to the Directors, etc.,
based on the achievement level of performance targets of the Medium-term Management Plan of the Company. The Company
entrusts money to a trust bank to acquire, in advance, the Company shares of which the Delivery, etc. will be conducted in the
future, and the trust bank acquires the Company shares with the entrusted money. Furthermore, in accordance with theseparately established company rules on share delivery, points are granted to the Directors, etc. and the Deliver, etc. of theCompany Shares, etc. to the Directors, etc. is conducted according to the points. The initial trust term shall be approximately
three years from August 2023 to August 2026 (planned), corresponding to the period of the Medium-term Management Plan,
and the maximum amount of trust money contributed by the Company to the trust in the initial trust term shall be ¥2.4 billion.

(ii) Total Number of Shares of which Delivery, etc. to the Directors, etc. will be conducted
4,650 thousand shares (maximum number for the three years)(iii) Scope of Persons who can receive Beneficiary Rights and Other Rights under the Plan
Of the Directors, etc., persons who meet the beneficiary requirements separately stipulated in the company rules on sharedelivery

2. Acquisitions, etc. of Treasury SharesClass of Shares, etc.- Acquisition of shares of common shares pursuant to Article 155, Item 7 of the Companies Act(1) Acquisitions by a Resolution of the General Meeting of Shareholders
Not applicable.
(2) Acquisitions by a Resolution of the Board of Directors
Not applicable.

- 61 -

(3) Acquisitions Not based on a Resolution of the General Meeting of Shareholders or the Board of Directors
Category

Number of Shares (Shares)

Total Amount (Yen)Treasury Shares Acquired during the Fiscal Year under Review

689

446,556

Treasury Shares Acquired during the Period

90

65,358(Note) The treasury shares acquired during the period do not include shares purchased for fractional shares from June 1, 2023 until thedate of submission of this Annual Securities Report.
(4) Disposals or Holding of Acquired Treasury Shares
During the Fiscal Year under Review
Category

Number of Shares(Shares)Acquired Treasury Shares that were offered toTotal Disposal
Amount(Yen)

During the period
Number of Shares(Shares)

Total Disposal
Amount
(Yen)

–

–

–

–

–

–

–

–

–

–

–

–

338,859443,20272,80072,80030,416,158–

30,343,448–

Subscribers for Subscription
Acquired Treasury Shares that were canceled
Acquired Treasury Shares that were transferred
due to Merger, Exchange of Shares, Issue of
Shares or Corporate Split
Others (Note 1)
Number of Treasury Shares held

(Notes) 1. The breakdown of the disposal of treasury shares acquired during the fiscal year under review is due to the exercise ofshare acquisition rights (number of shares: 338,700 shares, total disposal price: ¥338,700) and the sale of shares constituting
less than one unit (number of shares: 159 shares, total disposal price: ¥104,502). In addition, the disposal of treasury sharesacquired during the period is due to the exercise of share acquisition rights.
2. The number of treasury shares to be disposed of during the period does not include the sale of shares constituting less than
one unit and the exercise of share acquisition rights from June 1, 2023 to the submission date of this Annual Securities
Report.
3. The number of treasury shares held during the period does not include any increase or decrease due to the purchase or saleof shares constituting less than one unit and the exercise of share acquisition rights from June 1, 2023 to the submission
date of this Annual Securities Report.

3. Dividend Policy
The Company’s basic policy is to return profits to shareholders through dividends.
The Company’s basic policy is to pay dividends of surplus twice a year, consisting of an interim dividend and a year-end dividend.
Pursuant to Article 459, Paragraph 1 of the Companies Act, the Company’s Articles of Incorporation stipulate that dividends ofsurplus may be paid by resolution of the Board of Directors.
The Company is subject to consolidated dividend regulations.
As stated in “(4) Target Performance Indicators, 1. Management Policy, Business Environment and Tasks Ahead, etc., Item 2.
Business Overview,” a medium-term target level for the payout ratio shall be 40% or higher for the three-year period from fiscal
2023 (the fiscal year ending March 31, 2024), the period covered by the Medium-term Management Plan (2025 MTMP). We willsustainably increase the total amount of dividend payment through profit growth.
The Company will make effective use of retained earnings for future management by allocating it to funds for the purchase ofhigh-quality operating assets.

- 62 -

Dividends of surplus for the fiscal year under review are as follows:
Date of Resolution
November 10, 2022
Board of Directors’ Resolution
May 23, 2023
Board of Directors’ Resolution

Total Dividend Amount(Millions of Yen)

Dividend per Share(Yen)

21,54515.00

25,856

18.00- 63 -

4. Corporate Governance, etc.
(1) Overview of Corporate Governance(i) Basic Stance on Corporate Governance
The Company recognizes that transparent and sound management is one of its social responsibilities, with a focus onsustainable growth and medium- to long-term enhancement of corporate value. The Company respects the rights and interestsof all stakeholders, including shareholders, customers, local communities, and employees, and strives to contribute to therealization of a prosperous society while responding to their trust.
In order to fulfill its social responsibilities, the Company has established the “Basic Policy on Corporate Governance” and the“Mitsubishi HC Capital Group’s Code of Ethics,” and is continuously working to enhance its corporate governance byrevitalizing the Board of Directors, improving the Audit & Supervisory Committee and internal audit system, disclosing
information in a timely and appropriate manner, and promoting investor relations (IR) activities.
Basic Policy on Corporate GovernanceAppropriate Cooperation with All Stakeholders
Based on Our Mission, which serve as guidelines for all activities, and the Mitsubishi HC Capital Group’s Code of Ethics
and Code of Conduct, which serve as standards of judgment and conduct for all employees, the Company strives tocooperate appropriately with shareholders, customers, local communities, employees, and various other stakeholders.
The Company will also strive to foster a corporate culture and culture that respects the diversity of our stakeholders andrespects their rights, positions, and sound business ethics.
Appropriate Information Disclosure and Transparency
The Company actively and continuously discloses information in order to gain the trust and appropriate evaluation of its
stakeholders. In addition, the Company will develop and properly operate an internal system for accurate, prompt and fairdisclosure of information on the Company’s management policies, business strategies, business activities and financial
conditions.
In addition to the items required to be disclosed by laws and regulations, the Company voluntarily and proactively discloses
non-financial information that is deemed useful to its stakeholders.
Securing the Rights and Equality of Shareholders
The Company will take appropriate measures, including improving the environment, to ensure that shareholders’ rights are
secured and exercised effectively, and will give consideration to the equal treatment of all shareholders, including minority
and foreign shareholders.
Dialogue with Shareholders
The Company will engage in constructive and proactive dialogue with shareholders through financial results briefings,
domestic and overseas IR events, etc., to gain an understanding from shareholders of the Company’s management strategy,
etc., and to take appropriate measures based on an understanding of the position of shareholders.
Responsibilities of the Board of Directors
All members of the Board of Directors of the Company, including Outside Directors, utilize their experience and knowledge
to invigorate the Board of Directors through open-minded discussions. In addition, the Board of Directors appropriately
fulfills its roles and responsibilities for the sustainable growth of the Company, the enhancement of medium- to long-term
corporate value, and the improvement of profitability and capital efficiency in an environment that supports appropriate
risk-taking.

- 64 -

Mitsubishi HC Capital Group’s Code of Ethics
Establishing Trust
Fully recognizing the weight of our social responsibility and public mission, the Company aims to establish the unshaken
trust of society through complete information management and sound and proper business activities, including the timely
and appropriate disclosure of company information.
Customer-oriented Approach
Consistently taking a customer-oriented approach and having good communication, the Company offers products andservices that best meet customers’ needs to obtain customers’ satisfaction and support.
Strict Compliance with Laws and Regulations
The Company strictly adheres to all applicable laws and rules (including social, industry, and company rules) and undertakes
appropriate and sincere corporate activities in line with social norms. The Company also respects internationally accepted
standards as a corporate group operating globally.
Respect for Human Rights and the Environment
Respecting the personality and character of each other and emphasizing conservation of the global environment that is theshared asset of humankind, The Company pursues harmony with society.
Exclusion of Anti-Social Elements/Money-Laundering Prevention
The Company takes a resolute stance against anti-social elements that threaten the order and safety of civil society.
In compliance with all applicable laws and regulations related to preventing money laundering, the Company takes every
possible measure to block money laundering and terrorist financing.
(ii) Corporate Governance Systema.

Overview of Corporate Governance Systems
The Company conducted a business integration through a merger with Hitachi Capital Corporation as of April 1, 2021. In
conjunction therewith, the Company transitioned into a company with an Audit & Supervisory Committee in order to enhance
the fairness and transparency of management, strengthen the supervisory functionsof the Board of Directors, and enhance corporate governance.
i)

ii)

Matters concerning the Board of Directors and the Audit & Supervisory Committee
The Company implements a system to manage and operate business in line with the basic policy decided by the Board of
Directors. Each Outside Director has qualities appropriate for their positions, giving the Board of Directors a set ofdiversified and sufficient skills.
In addition, for timely, appropriate, and smooth provision of information particularly to Outside Directors, the General
Affairs Department serves as the secretariat for the Board of Directors, and the Audit & Supervisory Committee Officehas been established in which staff members assist the duties of the Audit & Supervisory Committee.
Please refer to “(3) Status of the Audit” in “4. Corporate Governance, etc.” in “Item 4. Information on the Company” formatters concerning the Audit & Supervisory Committee.
Matters concerning the Governance Committee, the Nominating Committee and the Compensation Committee
The Company has established the Governance Committee, which is composed of Outside Directors, Representative
Directors, and others. It will widely exchange opinions on the enhancement of the effectiveness of the Board of Directors,
and other matters concerning the Board of Directors, and continue to work on enhancing the soundness, transparency, andfairness of the Company’s management.
In addition, the Company has established the Nomination Committee and the Compensation Committee as advisory
bodies to the Board of Directors, in order to enhance the independence, objectivity and accountability of the functions of
the Board of Directors in relation to the nomination and compensation of Directors.
The Nomination Committee will deliberate on matters such as the nomination of Directors, the succession plan for the
President & CEO, and the knowledge, experience, and skills that Directors should possess.
The Compensation Committee will employ an external expert organization to regularly monitor the comparison between
the Company’s compensation system for Directors and the market level, and deliberate on various policies concerning
the compensation systems, levels, etc. for Directors.
The members and chairperson of the Nomination and Compensation Committees are selected by the Board of Directors,
and matters for deliberation at the Committees shall be resolved by a majority of the members present. The internal rules
stipulate that the Board of Directors shall make resolutions by respecting the contents of the resolutions of the Committees.

- 65 -Name of the Organization and the Names of Its Members
Name

Title

Board ofDirectors

Takahiro Yanai

Director, Chairman

Taiju Hisai

Audit &
Supervisory
Committee

GovernanceCommittee

Nominating
Committee◎◎◎

Representative Director
President & CEO〇〇

Kanji Nishiura

Representative Director
Deputy President〇〇

Kazumi Anei

Director
Deputy President〇

Haruhiko Sato

Director
Managing Executive
Officer〇

Hiroyasu Nakata

Director(Independent Outside
Director)

〇

〇

〇

〇

Yuri Sasaki

Director(Independent Outside
Director)

〇

〇

〇

〇

Takuya Kuga

Director(Outside Director)

〇

〇

〇

〇

Akira Hamamoto

Director (Audit &Supervisory Committee
Member)〇◎〇Koichiro Hiraiwa

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

〇

〇

〇

〇

〇

Hiroko Kaneko

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

〇

〇

〇

〇

〇

Masayuki Saito

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

〇

〇

〇

〇

〇

(Note) ◎: Chairperson/Committee Chairperson, ○: Member- 66 -

Compensation
Committee◎

iii) Matters concerning Business Execution
As a company with an Audit & Supervisory Committee, the Company delegates many business execution decisions to
the Executive Committee, a body which will deliberate and decide on important management matters, and expedites thedecision-making process, with the aim of strengthening the supervisory function of the Board of Directors. In addition,
the Company has introduced an executive officer system, in order to further enhance and invigorate the functions of theBoard of Directors by clarifying the responsibilities related to the execution of business.
The Executive Committee, a body which will deliberate and decide on important management matters, is composed of
the President & CEO, Deputy President, and Executive Officers separately specified by the President & CEO. The
Committee will hold deliberations and make decisions on important matters, including the business management of theGroup, in addition to conducting preliminary considerations of matters that are to be submitted to the Board of Directors
to facilitate decision-making by the Board of Directors.
The Company has 26 Executive Officers (four of whom concurrently serve as Directors) as of June 27, 2023.
iv) Reasons for Adoption of Current Corporate Governance System
In order to enhance the fairness and transparency of management, strengthen the supervisory functions of the Board of
Directors, and enhance corporate governance, the Company adopted the institutional design of a company with an Audit& Supervisory Committee. Also, the Company has established a Governance Committee comprised of Outside Directors,
Representative Directors, etc. as an advisory body to the Board of Directors concerning improvement of the effectivenessof the Board of Directors, in addition to the establishment of the Nomination and Compensation Committees as advisory
bodies concerning matters such as the nomination of the President and compensation for Directors, in order to further
enhance corporate governance.

b. Status of Activities of the Board of Directors and each Committee (Frequency of Meetings, Specific Discussion Items,
Attendance of Directors and Committee Members)i) Board of Directors
The Board of Directors meetings are held every month, in principle. The meetings were held 14 times in FY2022, whereimportant management matters such as the next Medium-term Management Plan, HR strategies, major investment
projects, business strategies of each business division, and IR activities were deliberated and decided. In addition, thesignificance of strategic shareholdings was verified, and details of deliberations in the advisory bodies to the Executive
Committee, such as risk management, compliance, sustainability, and digitalization were regularly reported to the Boardof Directors. Then, the Board of Directors deliberated the important policies for each area. Furthermore, the status of audit
is reported from the Audit & Supervisory Committee in every meeting.

- 67 -

Attendance at the Board of Directors meetings by Directors and Audit & Supervisory Committee Members in FY2022
was as follows:
14/14 times (100%): Seiji Kawabe, Takahiro Yanai, Kanji Nishiura, Kazumi Anei, Haruhiko Sato, Hiroyasu Nakata, Yuri
Sasaki, Go Watanabe, Koichiro Hiraiwa, Hiroko Kaneko
11/11 times (100%): Taiju Hisai, Takuya Kuga, Akira Hamamoto (Note 1)
10/11 times (91%):(Note 1)

Masayuki Saito (Note 1)

Regarding Taiju Hisai, Takuya Kuga, Akira Hamamoto, and Masayuki Saito, attendance at the Board of
Directors meetings held later than June 28, 2022 is provided as they were newly appointed as Directors in the
General Meeting of Shareholders held on June 28, 2022.

ii)

Governance Committee
The committee meetings were held 3 times in FY2022, and conducted PDCA for effectiveness assessment by deliberating
the manner of effectiveness assessment for the Board of Directors and the analysis of the assessment results.
Attendance by Directors was as follows:
3/3 times (100%):

Seiji Kawabe, Takahiro Yanai, Kanji Nishiura, Hiroyasu Nakata, Yuri Sasaki, Go Watanabe,
Koichiro Hiraiwa, Hiroko Kaneko

2/2 times (100%):

Takuya Kuga, Akira Hamamoto, Masayuki Saito (Note 2)iii) Nomination Committee
The committee meetings were held 5 times in FY2022, which deliberated the selection of Director candidates, skills thatthe Directors should have (skill matrix), selection/dismissal standards and independence standards for Directors.
Furthermore, the committee discussed the expertise, quality, etc. required for the Company’s President & CEO as a partof the succession plan for the President & CEO, and deliberated on the next President & CEO based on the candidates
list.
Attendance by Directors was as follows:
5/5 times (100%):

Seiji Kawabe, Hiroyasu Nakata, Yuri Sasaki, Go Watanabe, Koichiro Hiraiwa, Hiroko Kaneko

4/4 times (100%):

Takuya Kuga, Masayuki Saito (Note 2)iv) Compensation Committee
The committee meetings were held 8 times in FY2022, which deliberated the Directors’ compensation scheme andstandards, verified the amount paid as performance-based compensation, and deliberated the adoption of a performancebased stock compensation plan.
Attendance by Directors was as follows:
8/8 times (100%):

Takahiro Yanai, Hiroyasu Nakata, Yuri Sasaki, Go Watanabe, Koichiro Hiraiwa, Hiroko Kaneko

7/7 times (100%):

Takuya Kuga, Masayuki Saito (Note 2)(Note 2)

Regarding Takuya Kuga, Akira Hamamoto, and Masayuki Saito, attendance at the committee meetings held
later than June 28, 2022, is provided as they have been members since June 28, 2022.

c.

Development of Risk Management System and Internal Control System
The Company has resolved to use a system for ensuring the propriety of business activities of the company (internal control
system), as follows, in accordance with Article 399-13, paragraph (1), (b) and (c) of the Companies Act, as well as relevantlaws and regulations. Going forward, the Company will continue to make further improvements and enhancements byreviewing it appropriately in accordance with changes in the environment.
Hereinafter, “the Group” refers to “the Company and the Company’s subsidiaries and affiliates,” and “Group companies”
refers to “the Company’s subsidiaries and affiliates.” In addition, in specifically applying the internal control system to theGroup companies, the system will be applied after making appropriate adjustments based on factors such as the business
operations, scale, and importance of each Group company.

- 68 -

System for Group Management(1) The Company shall establish the “Mitsubishi HC Capital Group’s Code of Ethics and Code of Conduct” in order toshare fundamental values and ethics to be embraced by all members of the Group and reflect them in business.
(2) The Company shall establish a management method between the Company and the Group companies, in order toensure the propriety of the business activities of the Group companies, and establish internal rules, etc. to improve themanagement efficiency and corporate value of the Group as a whole, through the Group carrying out activities witha strong sense of solidarity.
(3) The Company shall receive reports, etc. from the Group companies and conduct management of the Group in linewith various internal rules, etc. established for the Group management, in adherence to the allocation of duties.
(4) The Company shall establish management and operational methods for internal controls pertaining to the financial
reports of the Group, and shall effectively develop and operate the internal controls of the Group as a whole, so that
the Company’s financial reports will be prepared appropriately, in accordance with the provisions of the Financial
Instruments and Exchange Act.
System for Compliance with Laws and Regulations(1) The Company shall establish the “Mitsubishi HC Capital Group’s Code of Ethics and Code of Conduct” in order toshare fundamental values and ethics to be embraced by all members of the Group and reflect them in business.
(2) The Company shall establish a system for ensuring that the officers and employees of the Group comply with laws
and regulations and the Articles of Incorporation, by establishing and disseminating various internal rules, etc. andthe Compliance Manual.
(3) The Company shall establish the Compliance Committee, which deals with establishment, maintenance, management,
etc., of the Group’s compliance system, in addition to the Chief Compliance Officer (Head of Risk Management
Division), who is responsible for the compliance of the Group, and the Legal & Compliance Department, which istasked with enforcing compliance.
The Group companies shall, if there are any legal risks, etc. intrinsic to the business activities of such company,
cooperate with the Company as necessary, and develop an appropriate compliance system.
(4) The Company shall formulate compliance programs (specific plans to ensure that the officers and employees of theGroup comply with laws and regulations, etc., including education for the Group’s officers and employees) andmonitor how the Group’s officers and employees are working on those programs.
(5) The Company shall establish the Compliance Hotline System as an internal whistleblowing framework under which
the Group’s officers, employees, etc., can report to or seek consultations with the Company regarding unfair practices
and other conduct.
(6) The Group shall take a resolute stance against anti-social forces, which threaten the peace and stability of civil society,and work to prevent transactions with such forces.
(7) The Company shall be aware of the possibility that funds transacted through the Group may be used for various
criminal activities and/or terrorism, and shall work to prevent money laundering.
Information Disclosure System(1) The Group shall establish internal rules, etc. for appropriately disclosing information regarding decisions andoccurrences concerning the Group in a timely manner, in accordance with accounting standards and other relevantlaws and regulations. The Group companies shall cooperate with the Company as necessary.
(2) The Company shall establish a Disclosure Committee for deliberating on the appropriateness of information disclosure
regarding the Group and the effectiveness of internal controls and procedures related to information disclosure, among
other matters.
Internal Audit System(1) The Company shall establish internal rules, etc. to smoothly and effectively promote audit activities by clarifying
procedures for planning, implementing, and reporting internal audits and providing instructions for improvement
within the Group.
(2) The Company shall establish the Internal Audit Department as a department in charge of internal audits. The Internal
Audit Department shall systematically implement internal audits related to the Group based on an annual audit planand report the audit results to the Representative Director, the Board of Directors and Audit & Supervisory Committee.
The Internal Audit Department shall also ensure the effectiveness of audits by, in the case of matters requiring
improvement that are identified and guidance given to the parties subject to auditing by the Group (matters requiring
improvement), having the results of improvements reported to the General Manager of the Internal Audit Department- 69 -

of the Company after the audit, and in the case of significant matters requiring improvement, having the results
reported to the Representative Director.
(3) The General Manager of the Internal Audit Department shall regularly and appropriately build collaborative
relationships with the Audit & Supervisory Committee Member of the Company and Auditors and other relevant
persons and the Accounting Auditor of the Group companies, such as by exchanging relevant information with them,and shall work to ensure the efficient implementation of the audit.

- 70 -

Risk Management System
Company-wide Risk Management(1) The Company shall establish a company-wide risk management system that is based on the policy of taking risks
within the controlled scope decided by the Executive Committee, the Board of Directors etc. through overall
understanding of the wide-ranging risks of the Group and sufficient consideration of potential risks estimated alongwith new operations. The company-wide risk management aims to ensure sound management and contribute tosustainable improvement of corporate value, while performing its social responsibility as a company to stakeholders
including clients, shareholders, employees and communities.
(2) The Company aims for the stable recording of returns commensurate with risk, achievement of an appropriate capital
structure, and appropriate allocation of resources, by identifying and recognizing, evaluating and measuring,
controlling, monitoring, and reporting the risks of the Group as well as conducting integrated risk management andongoing operations.
(3) The Company shall classify the major risks of the Group as follows according to the characteristics of its businesses,
operations, etc., and establish risk management methods, operations, and the like.
i) Credit risksii) Asset risksiii) Investment risksiv) Market risksv) Liquidity risksvi) Country risksvii) Operational risks(4) The Group companies shall understand the Group’s overall risks that can be reasonably evaluated and measured
quantitatively. The Company shall discuss risk capital management as necessary and on a regular basis and takeactions for its implementation, monitoring, etc.
(5) The Company shall establish internal rules, etc. that state, among other matters, the Group’s basic policies for risk
management and risk management frameworks and operations. The Group companies shall also prepare internal rules,
etc. that state, among other matters, the risk management frameworks and operations.
(6) The Company shall establish an executive officer and a department in charge of companywide risk management
respectively and hold Risk Management Committee meetings related to integrated risk management of the Group as
necessary and on a regular basis. The report at the Risk Management Committee shall be made on major risks of theGroup’s business, and other risk-management-related matters concerning financial markets, liquidity, compliance,systems, IT and others provided from the committees and internal auditing.
(7) The Company shall request the Group companies to report important risk-related matters and compile informationthat is necessary for the company-wide risk management. Then a report shall be made to the Board of Directors on
the current situation, issues and measures to be taken as necessary, etc. and the Board of Directors shall supervise theintegrated risk management and operations.
Crisis Management(1) The Company shall clarify the Group’s basic approach to and criteria for responding to crisis events and sharing themwith the Group companies in order to prepare for events such as huge financial losses, loss of credibility, excessive
delays or prolonged suspension of business at the Group. Also, the Company shall establish the systems necessary toensure the continuation of overall business operations, perform its social responsibility and minimize the Group’s
losses and the restoration of normal functions.
(2) The Company shall, during normal times, designate departments to respond to potential emergency events according
to its nature and establish a response system according to risk stage. The Company shall establish internal rules, etc.
that are necessary in an emergency for information collection, internal collaboration and implementation of measuresfor business continuation and recovery. The Group companies shall establish corresponding internal rules, etc. withineach company.

- 71 -

Framework for Ensuring the Efficient Execution of Duties(1) The Company shall set management targets for the Group and draw up management plans to manage business basedon appropriate methods. The Group companies shall conduct business management based on appropriate methods,
based on the Group’s management targets and management plans.
(2) The Company shall establish the Executive Committee, to which decisions, etc., regarding certain matters aredelegated by the Board of Directors to the president subject to deliberation at the Executive Committee. The Executive
Committee will hold discussions and make decisions on important matters, including the business management of theGroup, in addition to conducting preliminary considerations of matters that are to be submitted to the Board of
Directors to facilitate decision-making by the Board of Directors. In addition, various committees shall be establishedas advisory bodies for the Executive Committee.
(3) In order to efficiently conduct the execution of duties based on the decisions of the Board of Directors, the Company
shall build an employee rank framework, organizational structure, etc., in accordance with the internal rules, etc., andshall assign the execution of duties. The Group companies shall provide appropriate cooperation such as reports toand consultations with the Company on necessary matters pursuant to the internal rules, etc.
Other Matters related to the Execution of Duties by Directors(Framework for ensuring that the execution of duties by Directors complies with laws, regulations, and the Articles ofIncorporation, framework for retention and management of information, and framework for reports to the Company ofmatters related to the execution of duties by subsidiaries’ Directors)(1) The Company shall establish the Executive Committee to deliberate and decide on important management matters.
The Audit & Supervisory Committee Member(s) selected by the Audit & Supervisory Committee shall attend themeeting, confirm the details of the deliberation, and receive reports.
(2) The Company shall clearly define the authority and responsibilities of the Board of Directors and Directors regarding
material decision-making matters including compliance management, as well as matters decided at the discretion of
the Board of Directors.
(3) The Board of Directors shall receive and confirm reports of material information related to the execution of duties by
Executive Directors, and utilize an internal whistleblowing system through reports, etc. of the Compliance Committee.
(4) The Company shall retain and manage material documents and other data related to the execution of duties by Directors
pursuant to the provisions of the internal rules, etc.
(5) The Company shall request reports of matters related to the execution of duties by Directors of the Group companies
pursuant to the provisions of the internal rules, etc.
Framework concerning Employees who assist with Duties of the Audit & Supervisory Committee(1) The Company shall establish an Audit & Supervisory Committee Office to assist with duties of the Audit &Supervisory Committee.
(2) The Company shall allocate employees to assist with duties of the Audit & Supervisory Committee to the Audit &Supervisory Committee Office.
(3) The above employees shall not be subject to the directions and instructions of Directors excluding Directors who are
Audit & Supervisory Committee Members.
(4) When implementing personnel transfers or disciplinary action for the above employees, prior consent of the Audit &Supervisory Committee shall be obtained. When determining performance evaluation, compensation, etc., related tothose employees, the prior consent of the full-time Audit & Supervisory Committee Member(s) selected by the Audit& Supervisory Committee shall be obtained.
(5) Executive Directors shall cooperate in developing working environments and other relevant conditions so that theabove employees can assist with duties of the Audit & Supervisory Committee smoothly.
Framework for Reporting to the Audit & Supervisory Committee(1) Directors, Executive Officers and other relevant executives, and employees must report the following matters without
delay to the Audit & Supervisory Committee or the Audit & Supervisory Committee Member(s) selected by the Audit& Supervisory Committee:
1. When they discover any facts that are likely to cause significant damage (including loss of credit) to the Company
or when significant damage occurs, they shall immediately report that effect (including matters concerningmaterial lawsuits);
2. The status of whistleblowing through an internal whistleblowing system developed by Directors;
3. The status of management concerning elimination of transactions, and blocking of relationships, with anti-social
forces; and- 72 -

4. Other matters that the Audit & Supervisory Committee requests to be reported.
(2) Directors, Auditors, and employees of subsidiaries or persons who receive reports from any of those persons must
report to the Audit & Supervisory Committee or the Audit & Supervisory Committee Member(s) selected by the Audit& Supervisory Committee without delay, if any of the matters set forth in the preceding paragraph occurs.
(3) The Audit & Supervisory Committee Member(s) selected by the Audit & Supervisory Committee shall cooperate
closely with the Auditors of Group companies and other relevant persons, through means such as exchanging
information necessary for the execution of duties.
(4) If required by the Audit & Supervisory Committee, Directors, Executive Officers and other relevant executives andemployees must attend the Audit & Supervisory Committee meeting and explain matters with necessary materials. In
addition, they have a similar duty to explain if required by the Audit & Supervisory Committee Member(s) selectedby the Audit & Supervisory Committee.
(5) The Company shall not treat persons who have made the reports under (1) to the Audit & Supervisory Committee or
any Audit & Supervisory Committee Members disadvantageously, just because they made those reports.
(6) The Company shall not treat persons who have made reports just because they made those reports using an internal
whistleblowing system disadvantageously, and the Company shall specify this in the internal rules and fully informall employees through internal training and on other occasions.
Matters concerning Policies regarding the Expenses or Liabilities Arising from the Execution of Duties by the
Audit & Supervisory Committee Members(1) The Audit & Supervisory Committee Office shall promptly process expenses or liabilities when each Audit &Supervisory Committee Member makes requests with respect to the prepayment of expenses and other payments,
except in cases where such requested expenses or liabilities are deemed to be clearly unnecessary for the executionof the duties of an Audit & Supervisory Committee Member.
Other Frameworks for Ensuring Effective Audits by the Company’s Audit & Supervisory Committee Members(1) The Audit & Supervisory Committee should create an opportunity to conduct interviews regularly with Directors andExecutive Directors, and employees, concerning the business, and conduct regular meetings to exchange opinionswith the President and Accounting Auditor.
(2) The Audit & Supervisory Committee may request opinions from lawyers, Accounting Auditors, etc. as necessary, forcases that require expertise.
(3) The Audit & Supervisory Committee should receive in advance an audit plan from the Accounting Auditors, andregularly receive an audit implementation report; in addition, it should conduct an interview as necessary, regarding
the implementation of audits.
(4) The Audit & Supervisory Committee should make efforts to enhance the effectiveness of the audit, by cooperatingwith the Internal Audit Department and conducting an audit, regularly or in a timely manner, on the offices, etc.
including the subsidiary, and by understanding the actual situation.
(5) An employee who should assist the duties of an Audit & Supervisory Committee Member selected by the Audit &Supervisory Committee and the duties of the Audit & Supervisory Committee may attend the Executive Committee,
committees and other important meetings and make necessary statements thereat, and view important documents.
(6) An Audit & Supervisory Committee Member selected by the Audit & Supervisory Committee should request that theCompany and its subsidiaries report on its business, or investigate the situation of the duties and properties, and theCompany and its subsidiaries should cooperate therewith.
(7) The person to serve as the General Manager of the Internal Audit Department should be decided upon priorconsultation with the Full-time Audit & Supervisory Committee Member selected by the Audit & Supervisory
Committee.
(8) The Internal Audit Department should make a report to the Audit & Supervisory Committee regarding the internal
audit plan, internal audit result, and the amendment and abolition of the important rules related to internal audit, andshould respond to requests by the Audit & Supervisory Committee in relation to information provision, investigation,and report.
(9) Directors, Executive Directors and employees should provide the necessary cooperation for the execution of duties of
the Audit & Supervisory Committee, based on the Audit & Supervisory Committee Regulations, standards for audit,
etc. of the Audit & Supervisory Committee, and standards for the Audit & Supervisory Committee to conduct an audit
regarding an internal control system.

- 73 -

d. Overview of limited Liability Agreements and Directors and Officers Liability Insurance Agreementsi)

Limited Liability Agreements
The Company has entered into limited liability agreements with non-Executive Directors, namely Takahiro Yanai,
Hiroyasu Nakata, Yuri Sasaki, Takuya Kuga, Akira Hamamoto, Koichiro Hiraiwa, Hiroko Kaneko, and Masayuki Saito,
as described below.
・ In the event that a non-executive Director is liable to the Company as a result of negligence in their duties, that liability
shall be limited to the minimum liability set forth in Article 425, Paragraph 1 of the Companies Act.
・ The above limitation is recognized only when the non-executive Director performed the duty in question in good faithand without gross negligence.

ii)

Directors and Officers Liability Insurance Agreements
The Company plans to enter into a Directors and officers liability insurance agreement as provided for in Article 430,
Paragraph 3, Item 1 of the Companies Act with an insurance company. The agreement will cover losses incurred fromdamage compensation, legal fees, etc. in cases where an insured receives a claim for damages from a shareholder or third
party. In addition, as a measure to ensure that the lawfulness of the execution of duties of the insured person is notcompromised, the following losses, etc. are excluded from coverage.
1) Damage arising from the fact that the insured illegally obtains a private gain or benefit
2) Damage arising from criminal acts of the insured3) Damage arising from the insured’s acts committed with the knowledge that they violate laws or regulations
The insured parties under this agreement are the Directors, Directors who are Audit & Supervisory Committee members,
Audit & Supervisory Board Members, and Executive Officers of the Company and its 41 subsidiaries in Japan. There isno insurance premium to be paid by the insured parties.

(iii) The Contents of the Articles of Incorporation that provide for a fixed Number of Directors or Restrictions on the Qualificationsof Directors, or make Special Provisions which differ from those of the Companies Act with Respect to the Requirements fora Resolution on the Appointment and Dismissal of Directors
The Company’s Articles of Incorporation stipulate the following regarding the fixed number of Directors and the resolution
for their election.
a. Fixed Number of Directors
The Articles of Incorporation stipulate that the Company shall have no more than 22 Directors (of these, no morethan seven Directors are Audit & Supervisory Committee Members).
b. Requirements for Resolution on Election of Directors
The Company’s Articles of Incorporation stipulate that a resolution for the election of Directors shall be adopted
by a majority of the votes of shareholders present at the meeting who hold at least one-third of the voting rights
of shareholders entitled to exercise voting rights.
In addition, the Articles of Incorporation also stipulate that resolution for the election of Directors shall not bemade by cumulative voting.
(iv) Matters and Reasons if it has been decided that the Matters for Resolution of a Shareholders Meeting may be resolved by a
Board of Directors Meeting; Matters and Reasons if it is stipulated in the Articles of Incorporation that the Matters for
Resolution of a Board of Directors Meeting may not be resolved by a Shareholders Meeting; and Contents and Reasons if theRequirements for Special Resolution of a Shareholders Meeting have been changed
a. Decision-Making Body for Dividends of Surplus, etc.
The Company’s Articles of Incorporation stipulate that, except as otherwise provided for by laws and regulations, thematters including dividends of surplus set forth in each item of Article 459, Paragraph 1 of the Companies Act shall be
determined by resolution of the Board of Directors without a resolution of the General Meeting of Shareholders. This is forthe purpose of flexibly returning profits to shareholders by making dividends of surplus, etc. with the authority of the Boardof Directors.

- 74 -

b. Decision-Making Body for Acquisition of Treasury Shares
The Company’s Articles of Incorporation stipulate that, in accordance with Article 165, Paragraph 2 of the Companies Act,
the Company may acquire its treasury shares through market transactions or other means by resolution of the Board of
Directors in order to implement capital policies quickly.
c. Exemption of Directors, etc. from Liability
In accordance with Article 426, Paragraph 1 of the Companies Act, the Company’s Articles of Incorporation stipulate that
the Company may, by resolution of the Board of Directors, exempt Directors (including a person who was a Director) fromliability for damages under Article 423, Paragraph 1 of the Act, to the extent of the minimum liability amount stipulated bylaws and regulations, in order to develop an environment in which Directors can fully exercise their abilities and performtheir expected roles.
In addition, as a transitional measure in connection with the management integration of the Company and Hitachi Capital
Corporation, the Company’s Supplementary Provisions of its Articles of Incorporation stipulate that the Company may,pursuant to the provisions of Article 426, Paragraph 1 of the Companies Act, exempt executive officers (including persons
who were executive officers) of the absorbed company in an absorption-type merger with the Company as the surviving
company and Hitachi Capital Corporation as the absorbed company, from liability for damages prior to the taking effect ofthe merger under Article 423, Paragraph 1 of the Companies Act, by a resolution of the Board of Directors, to the extent
permitted by laws and regulations.
d. Requirements for Special Resolution of Shareholders’ Meeting
The Company’s Articles of Incorporation stipulate that the adoption of a special resolution of a shareholders’ meeting,provided for in Article 309, Paragraph 2 of the Companies Act, shall require at least two-thirds of the votes of shareholders
present at the meeting who hold at least one-third of the voting rights of shareholders entitled to exercise voting rights. The
purpose of this is to ensure smooth management of the General Meeting of Shareholders by relaxing the quorum for special
resolutions at the General Meeting of Shareholders.

- 75 -

(2) Directors of the Company(i) Directors and Executive Officers
Male: 10 Female: 2(Percentage of female officers: 16.7%)
Title

Name

Date of Birth

Career Summary

April 1982
May 2012

June 2015
Director, Chairman

Takahiro Yanai

May 4, 1958

May 2016
June 2017

April 2021

April 2023

Term

Joined The Mitsubishi Bank, Ltd. (currently
MUFG Bank, Ltd.)Managing Executive Officer of The Bank ofTokyo-Mitsubishi UFJ, Ltd. (BTMU)In charge of CIB (Corporate Investment Banking)and Secondarily in charge of Market Sales
Division of BTMUManaging Officer, Deputy Group Head, Integrated
Trust Assets Business Group, Deputy Group Head,
Integrated Corporate Banking Business Group, andHead of the Corporate & Investment Banking
Planning Division of Mitsubishi UFJ Financial
Group, Inc. (MUFG)
Managing Director, Chief Executive, Retail
Banking Business Unit of BTMU
(Note)4
Managing Executive Officer, Group Head,
Integrated Retail Banking Business Group of
MUFG
Senior Managing Executive Officer, Group Head,
Transaction Banking Group of BTMU
President & CEO of Mitsubishi UFJ Lease &Finance Company Limited (MUL) (currently theCompany)
Concurrently served as Executive Officer of MULRepresentative Director, President & CEO of theCompany
Concurrently served as Executive Officer of theCompany
Director, Chairman of the Company (incumbent)- 76 -

Number ofCompany’s
Sharesowned(Shares)

21,600TitleName

Date of Birth

Career Summary

Term

April 1985

Representative
Director,
President & CEO

Taiju Hisai

April 27, 1962

Joined The Mitsubishi Bank, Ltd. (currently
MUFG Bank, Ltd.)
July 2012
General Manager, Corporate Banking Division for
Europe, Middle East and Africa, Headquarters for
Europe, Middle East and Africa of The Bank ofTokyo-Mitsubishi UFJ, Ltd. (BTMU)
Concurrently assigned to BTMU (Europe) Limited
June 2014
Executive Officer and General Manager, Corporate
Banking Division for Europe, Middle East andAfrica, Headquarters for Europe, Middle East andAfrica of BTMU
Concurrently assigned to BTMU (Europe) Limited
September 2014 Executive Officer, Regional Executive for India
Concurrently served as Deputy General Manager,
Corporate Banking Division for Asia and Oceania,
Headquarters for Asia and Oceania of BTMUMay 2016
Managing Executive Officer, in charge of Credit of(Note)4
BTMU
April 2018
Managing Executive Officer and Group Head,
Corporate Banking Group No. 1 of MUFG Bank,
Ltd. (MUFG Bank)
April 2019
Senior Managing Executive Officer and Group
Head, Corporate Banking Group No. 1 of MUFG
Bank
June 2021
Deputy President of the Company
Concurrently served as Executive Officer of theCompany
June 2022
Director, Deputy President of the Company
Concurrently served as Executive Officer of theCompany
April 2023
Representative Director, President & CEO of theCompany (incumbent)
Concurrently serves as Executive Officer of theCompany (incumbent)

Number ofCompany’s
Sharesowned(Shares)- 77 -

3,700

TitleName

Date of Birth

Career Summary

April 1980
June 1986
July 1993
January 2003
April 2009
April 2010

April 2011
April 2013

April 2015
April 2016
Representative
Director, Deputy
President

Kanji Nishiura

February 11, 1958

April 2018

June 2018

April 2019

April 2020
June 2020
April 2021

June 2023

Term

Joined Mitsubishi Corporation
Resident in Saudi Arabia (al-Khobar) (until
September 1989)
Mitsubishi Corporation (UK) Plc (based in
London) (until August 1999)
Seconded to Metal One Corporation
General Manager, Metals Group CEO Office of
Mitsubishi Corporation
Senior Vice President and General Manager,
Metals Group CEO Office of Mitsubishi
Corporation
Senior Vice President and Division COO, NonFerrous Metals Division of Mitsubishi Corporation
Senior Vice President, Division COO, Mineral
Resources Investment Division, and General
Manager, MDP Department of Mitsubishi
Corporation
Executive Vice President and Group COO, Metals
Group of Mitsubishi Corporation
Executive Vice President and Group CEO, Metals
Group of Mitsubishi Corporation
Executive Vice President, Corporate Functional(Note)4
Officer, Global Strategy & Coordination, Global
Research, International Economic Cooperation,
Logistics Management, (Concurrently) Regional
CEO, Asia & Oceania of Mitsubishi Corporation
Representative Director, Executive Vice President,
Corporate Functional Officer, Global Strategy &Coordination, Global Research, International
Economic Cooperation, Logistics Management,(Concurrently) Regional CEO, Asia & Oceania of
Mitsubishi Corporation
Representative Director, Executive Vice President,
Corporate Functional Officer, Global Strategy of
Mitsubishi Corporation
Member of the Board of Mitsubishi Corporation
Corporate Advisor of Mitsubishi Corporation
Representative Director, Deputy President of theCompany (incumbent)
Concurrently serves as Executive Officer of theCompany (incumbent)
Director of Sumitomo Metal Mining Co., Ltd.
(incumbent)- 78 -

Number ofCompany’s
Sharesowned(Shares)

4,000

TitleName

Date of Birth

Career Summary

April 1985
April 2003

April 2005
April 2010
April 2011
October 2011
April 2014

April 2015

April 2016

Director, Deputy
President

Kazumi Anei

September 18, 1960
April 2017

April 2018

April 2019

April 2020

April 2021
May 2021

Director, Managing
Executive Officer

Haruhiko Sato

June 19, 1965

Term

Joined Hitachi Leasing Corp. (currently theCompany)
General Manager of Sales Dept. II, Kansai
Corporate Sales Branch, Kansai Sales Division of
Hitachi Capital Corporation (Hitachi Capital)
Head of Kansai Corporate Sales Branch, Kansai
Sales Division of Hitachi Capital
Head of Kanagawa Sales Division of Hitachi
CapitalHead of Tokyo Sales Division III, Corporate
Business Division of Hitachi Capital
Co-Head of Corporate Business Division of
Hitachi Capital
Corporate Officer, Head of Corporate Business
Division, and Co-Head of Account Sales
Promotion Division of Hitachi Capital
Corporate Officer and Head of Corporate Business
Division, Corporate Sales & Marketing Group of
Hitachi Capital
Executive Officer, Head of Corporate Business
Division, Corporate Sales & Marketing Group, andHead of Service Business Division of Hitachi
Capital(Note)4
Executive Officer, Corporate Sales & MarketingGroup, in charge of Japan, and Head of Customer
E&E Business Division of Hitachi Capital
Vice President and Executive Officer, Co-Head ofCorporate Sales & Marketing Group, in charge ofJapan, and Head of Environment and Energy
Business, Corporate Business Division, Customer
E&E Business Division of Hitachi Capital
Vice President and Executive Officer, Co-Head ofCorporate Sales & Marketing Group, and Chief
Executive for Japan, Corporate Sales & MarketingGroup of Hitachi Capital
Senior Vice President and Executive Officer, Chief
Marketing Officer, and Head of Business
Enhancement Division (in charge of Europe andthe Americas) of Hitachi Capital
Director, Senior Managing Executive Officer of
the Company
Director, Deputy President of the Company(incumbent)
Concurrently serves as Executive Officer of theCompany (incumbent)

April 1989
Joined Mitsubishi Corporation
November 2002 Mitsubishi International GmbHJanuary 2007 Moscow Office of Mitsubishi Corporation
April 2009
Treasurer Office of Mitsubishi Corporation
March 2014
Senior Vice President, Corporate Staff Section and
CFO of Mitsubishi Corporation (Americas)
April 2019
General Manager, Power Solution Administration
Department of Mitsubishi Corporation
April 2021
Director, Managing Executive Officer of theCompany (incumbent)
Concurrently serves as Executive Officer of theCompany (incumbent)- 79 -(Note)4

Number ofCompany’s
Sharesowned(Shares)

51,3000TitleName

Date of Birth

Career Summary

April 1977

Completed the legal apprentice course at the Legal
Training and Research Institute of the Supreme
Court of Japan
Admitted to the bar (Daini Tokyo Bar Association)(until March 1990)
Associate Professor at Faculty of Law andEconomics, Chiba University
Professor at Faculty of Law and Economics, Chiba
University
Professor at Faculty of Law, Hitotsubashi
University
Professor of Graduate School of Law, Hitotsubashi(Note)4
University
Trustee of Hitotsubashi University
Professor at The University of Tokyo Graduate
Schools for Law and Politics and The University ofTokyo Faculty of Law
Emeritus Professor of Hitotsubashi University
Professor at Waseda Law School
Emeritus Professor of The University of Tokyo
Audit & Supervisory Board Member of Mitsubishi
UFJ Lease & Finance Company Limited (currently
the Company)
Director of the Company (incumbent)

1,300

Assistant at Hitotsubashi University (Faculty ofCommerce and Management)
April 1998
Assistant Professor of Faculty of Commerce,
Takachiho University of Commerce (current
Takachiho University)
April 2001
Assistant Professor of Faculty of Economics, Meiji
Gakuin University
April 2006
Visiting Scholar at University of Washington
April 2007
Professor of Faculty of Economics, Meiji Gakuin
University (incumbent)
June 2014
Director of JBA TIBOR Administration(Note)4
January 2015 Expert Committee Member of Financial System
Council of Financial Services Agency (incumbent)
November 2015 Visiting Scholar at University of Washington
June 2018
Director of Hitachi Capital Corporation (currently
the Company)
April 2020
Dean of Faculty of Economics, Meiji Gakuin
University
April 2021
Director of the Company (incumbent)
July 2022
Director of Meiji Yasuda Life Insurance Company(incumbent)

1,100

April 1990
June 1993
April 1995
Director(Independent Outside Hiroyasu Nakata
Director)

August 29, 1951

Term

Number ofCompany’s
Sharesowned(Shares)

April 1999
April 2003
April 2008

April 2015
April 2017
June 2017
June 2018

April 2021
April 1995

Director(Independent Outside
Director)

Yuri Sasaki

May 26, 1967

- 80 -

TitleDirector(Outside Director)

Name

Takuya Kuga

Date of Birth

Career Summary

Term

Number ofCompany’s
Sharesowned(Shares)

December 5, 1963

April 1986
Joined Mitsubishi Corporation
December 1997 Seconded to MC Realty, Inc. (Vice President)(Dallas, Los Angeles from June 1999) (until
February 2003)
April 2008
Seconded to Diamond Realty Management Inc.
May 2008
President & Representative Director of Diamond
Realty Management Inc.
July 2009
Seconded to Mitsubishi Corp.- UBS Realty Inc.
October 2009 President & Chief Executive Officer of Mitsubishi
Corp.- UBS Realty Inc.
July 2013
General Manager, Strategic Planning Office, Real
Estate Development & Construction Division of
Mitsubishi Corporation
April 2015
General Manager, Urban Development
Department, Real Estate Development &Construction Division of Mitsubishi Corporation
April 2016
Division COO, Real Estate Development &Construction Division of Mitsubishi Corporation(Concurrently) General Manager, North America
Real Estate Development Department of
Mitsubishi Corporation
October 2016 Division COO, Real Estate Business Division of
Mitsubishi Corporation(Concurrently) General Manager, North America
Real Estate Development Department of
Mitsubishi Corporation
January 2017 Division COO, Real Estate Business Division of
Mitsubishi Corporation
April 2017
Senior Vice President, Division COO, Real EstateBusiness Division of Mitsubishi Corporation
April 2019
Senior Vice President, Division COO, Urban
Infrastructure Division of Mitsubishi Corporation
November 2019 Senior Vice President, General Manager, Urban
Development Group CEO Office, Mitsubishi
Corporation
April 2022
Executive Vice President and Group CEO, Urban
Development Group of Mitsubishi Corporation(incumbent)
June 2022
Director of the Company (incumbent)(Note)4300- 81 -

TitleName

Date of Birth

Career Summary

April 1983
June 2010

May 2011

Director(Audit & Supervisory
Akira Hamamoto
Committee Member)(Full-time)May 2013
May 19, 1960
June 2015

June 2017

June 2019

June 2021
June 2022

Term

Joined The Tokai Bank, Ltd. (currently MUFG
Bank, Ltd.)
Executive Officer and General Manager, Internal
Audit Division of Mitsubishi UFJ Financial Group,
Inc. (MUFG)
Executive Officer and Deputy General Manager,
Global Compliance Division of MUFG
Concurrently served as Deputy General Manager,
Corporate Risk Management Division of MUFG
Executive Officer and General Manager, Global
Compliance Division of The Bank of TokyoMitsubishi UFJ, Ltd. (BTMU)
Concurrently served as Senior Manager,
Information Security Management Office of
BTMU
Concurrently served as Senior Manager,
Information Systems Planning Office, Information
Systems Division of BTMU (Special appointment)
Managing Executive Officer and General Manager,
Corporate Banking Division No.2 of BTMU
(Note)5
Managing Corporate Executive and Group CCO of
MUFG
Concurrently served as Group CLO (Chief Legal
Officer) of MUFG
Managing Director and CCO of BTMU
Concurrently served as CLO of BTMU
Senior Managing Corporate Executive and GroupCCO of MUFG
Concurrently served as Group CLO of MUFG
Director and Senior Managing Executive Officer
and CCO of BTMU
Concurrently served as CLO of BTMU
Member of the Board of Directors and Full-timeMember of the Audit & Supervisory Committee of
MUFG Bank, Ltd.
Senior Managing Executive Officer of theCompany
Director (Audit & Supervisory Committee
member) of the Company (incumbent)- 82 -

Number ofCompany’s
Sharesowned(Shares)

3,400

TitleName

Career Summary

Term

Number ofCompany’s
Sharesowned(Shares)

Joined Bank of Japan
General Manager of Okayama Branch, Bank ofJapan
January 2002 General Manager of Kyoto Branch, Bank of Japan
April 2004
Head of Business Planning Department, Financial
Business Division, NTT DATA Corporation
June 2005
Head of Financial Strategy Business Promoting
Office, Financial Business Division, NTT DATA
Corporation
July 2008
Head of Financial Business Planning Office,Financial Business Planning and Administration
Department, NTT DATA Corporation
March 2009
President & Representative Director, the Kyoto
Hotel, Ltd.
March 2015
Director, Allied Telesis Holdings K.K.
Representative Director, Apua Consulting Inc.
June 2015
Director, Hitachi Capital Corporation (currently
the Company)
December 2017 Representative Director, Dream Estate Tokyo Inc.
(incumbent)
June 2019
Chairman, Hitachi Capital Corporation
April 2021
Director (Audit & Supervisory Committee
member) of the Company (incumbent)(Note)5

10,200Joined The Sapporo Television Broadcasting Co.,
Ltd.
October 1989 Joined Ota Showa Audit Corporation (currently
ERNST & YOUNG SHINNIHON LLC)
February 1993 Registered as certified public accountant
May 2007Partner, ERNST & YOUNG SHINNIHON(currently ERNST & YOUNG SHINNIHON LLC)
July 2010
Senior Partner, ERNST & YOUNG SHINNIHON
LLC
April 2018
Professor at Waseda Graduate School of
Accountancy
June 2018
Audit & Supervisory Board Member, The Shoko
Chukin Bank, Ltd.
(Note)5
June 2019
Director, Kanagawa Chuo Kotsu Co., Ltd.
June 2020
Audit & Supervisory Board Member of Mitsubishi
UFJ Lease & Finance Company Limited (currently
the Company)
February 2021 Member of Business Accounting Council,
Financial Services Agency (incumbent)
April 2021
Director (Audit & Supervisory Committee
member) of the Company (incumbent)
March 2022
Member of the Board, The Yokohama Rubber Co.,
Ltd. (incumbent)
June 2022
Director (Audit & Supervisory Committee
Member) of Kanagawa Chuo Kotsu Co., Ltd.
(incumbent)

1,300

Date of Birth

April 1974
May 1997

Director(Audit & Supervisory
Committee Member) Koichiro Hiraiwa(Independent Outside
Director)

January 2, 1950

April 1980

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

Hiroko Kaneko

March 28, 1958

- 83 -

TitleName

Date of Birth

Career Summary

April 1977
April 2008
June 2010
April 2011
April 2012

April 2013

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

Masayuki Saito

November 8, 1954

January 2016

January 2020

January 2021

June 2022

Term

Joined Dainippon Ink and Chemicals, Incorporated(currently DIC Corporation)
Executive Officer and Head of Finance andAccounting Unit of DIC Corporation
Director and Executive Officer, Head of Financeand Accounting Unit of DIC Corporation
Director and Managing Executive Officer, Head ofFinance and Accounting Unit of DIC Corporation
Representative Director, Senior Executive Officer,
Assistant to the President and CEO, and Head ofFinance and Accounting Unit of DIC Corporation
Representative Director, Senior Executive Officer,
Assistant to the President and CEO, and Head ofFinance and Accounting Unit of DIC Corporation
Chairman of the Supervisory Board, Sun ChemicalGroup Coöperatief U.A.
(Note)5
Representative Director, Executive Vice President,
CFO, and Assistant to the President and CEO of
DIC Corporation
Chairman of the Supervisory Board, Sun ChemicalGroup Coöperatief U.A.
Representative Director and Executive Vice
President, and Assistant to the President and CEO
of DIC Corporation
Chairman of the Supervisory Board, Sun ChemicalGroup Coöperatief U.A.
Chairman of the Board of Directors of DIC
Corporation (incumbent)
Chairman of the Supervisory Board, Sun ChemicalGroup Coöperatief U.A. (incumbent)
Director (Audit & Supervisory Committee
member) of the Company (incumbent)

Total

Number ofCompany’s
Sharesowned(Shares)

1,300

99,500(Notes) 1. Directors who are not Audit & Supervisory Committee members, Mr. Hiroyasu Nakata, Ms. Yuri Sasaki and Mr.
Takuya Kuga are Outside Directors.
2. Directors who are Audit & Supervisory Committee members, Mr. Koichiro Hiraiwa, Ms. Hiroko Kaneko and Mr.
Masayuki Saito are Outside Directors.
3. The Company has introduced an executive officer system, and has 26 Executive Officers (four of whom concurrently
serve as Directors).
4. From the close of the Annual General Meeting of Shareholders held on June 27, 2023 to the close of the Annual
General Meeting of Shareholders for the fiscal year ending March 31, 2024.
5. From the close of the Annual General Meeting of Shareholders held on June 28, 2022 to the close of the Annual
General Meeting of Shareholders for the fiscal year ending March 31, 2024.

- 84 -

(ii) Status of Outside Officers
The Company has six Outside Directors, including five independent Outside Directors.
The Board of Directors is responsible for the appropriate decision-making of the Board of Directors and the oversight ofoverall management from an external perspective. The Board of Directors appoints a number of Outside Directors andstrives to establish and further enhance an efficient and effective corporate governance system.
At present, the Company’s Board of Directors is composed of Directors from a variety of professions and industries, andthe Company believes that it has the right number and diversity.
The personnel relationship, capital relationship or business relationship between the Outside Directors and the Company,
other interests, and the reasons for the election of the Outside Directors are as follows.
Title

Outside Director

Outside Director

Name

Relationship with the Company

Reasons for Appointment and expected Role

Not applicable・Based on his deep knowledge as a legal expert, he has
contributed to the appropriate decision-making of theBoard of Directors and supervision of overallmanagement as an Independent Outside Director, andhas therefore been reappointed as a Director.
・The Company expects that he will contribute to theappropriate decision-making of the Board of
Directors and the supervision of overall management
as an Independent Outside Director, and contribute toimproving the soundness, transparency and fairnessof management as a member of the GovernanceCommittee, the Nomination Committee and theCompensation Committee, based on the above
knowledge and from an objective perspective
independent from the management team that executes
business.

Not applicable・Based on her academic knowledge as a university
professor and excellent insights and abundant
experience as a researcher of international finance,
she has contributed to the appropriate decisionmaking of the Board of Directors and supervision of
overall management as an Independent Outside
Director, and has therefore been reappointed as a
Director.
・The Company expects that she will contribute to theappropriate decision-making of the Board of
Directors and the supervision of overall management
as an Independent Outside Director, and contribute toimproving the soundness, transparency and fairnessof management as a member of the GovernanceCommittee, the Nomination Committee and theCompensation Committee, based on the above
knowledge and experience and from an objective
perspective independent from the management teamthat executes business.

Hiroyasu Nakata

Yuri Sasaki- 85 -

TitleOutside Director

Name

Relationship with the Company

Reasons for Appointment and expected Role

Mr. Takuya Kuga is currently Executive Vice
President of Mitsubishi Corporation, a major
shareholder of the Company, and there are business
relationships such as lease agreements between
Mitsubishi Corporation and the Company.

・Based on his extensive management experience at
Japan’s leading general trading company and his
extensive knowledge of domestic and overseas
businesses, he is deemed to contribute to the Board of
Directors’ appropriate decision-making and overallmanagement supervision from a practical perspective
as an Outside Director, and has therefore beenreappointed as a Director.
・As Mr. Kuga concurrently serves as the Executive
Vice President of Mitsubishi Corporation, a major
shareholder of the Company, he is not designated asan Independent Director. Mitsubishi Corporation is
an important business partner for the Company towork together with to aim for the improvement ofcorporate value.
・Among other positions, including overseas
assignments in the U.S.A., he had served as Division
COO, Real Estate Business Division and Division
COO, Urban Infrastructure Division. Currently heassumes a position of the Group CEO, Urban
Development Group. The Company expects to utilize
Mr. Kuga’s management experience and extensive
knowledge in overall Japanese and international
businesses for its management and effectively utilize
advice from him, who has served as a chief ofbusiness areas of collaboration between Mitsubishi
Corporation and the Company. The Company deems
that this will lead to the improvement of its corporate
value and contribute to the enhancement of theinterests of all shareholders including minority
shareholders.
・Mr. Kuga has indicated his intention to perform his
duties as a Director for the benefit of the Company,
and not for any specific shareholder. If any item ofbusiness posing a conflict of interest between
Mitsubishi Corporation and the Company issubmitted to the Company’s Board of Directors, hewill participate in neither the resolutions nor the
deliberations.
・The Company expects that he will contribute to theappropriate decision-making of the Board of
Directors and the supervision of overall management
as an Outside Director, and contribute to improving
the soundness, transparency and fairness ofmanagement as a member of the GovernanceCommittee, the Nomination Committee and theCompensation Committee, based on the above
knowledge.

Takuya Kuga

- 86 -

TitleName

Relationship with the Company

Reasons for Appointment and expected Role

・Mr. Koichiro Hiraiwa previously held the position ofRepresentative Director and President at The Kyoto
Hotel, Ltd. While there are business relationships suchas lease agreements between Kyoto Hotel and theCompany, the transaction amount in FY2022 was lessthan 1% of the consolidated net sales of Kyoto Hoteland the Company.

・Based on his experience at the central bank in Japanand Japan’s leading telecommunication company aswell as his extensive knowledge throughmanagement of a major hotel, he has contributed to
the Board of Directors’ appropriate decision-making
and overall management supervision as an
Independent Outside Director, and to neutral andobjective audit, and has therefore been reappointed asa Director (Audit and Supervisory Board Member).
・The Company expects that he will contribute toensuring its sound management as an Independent
Outside Director, and contribute to improving thesoundness, transparency and fairness of management
as a member of the Governance Committee, theNomination Committee and the Compensation
Committee, based on the above knowledge and froman objective perspective independent from the
management team that executes business.

Not applicable・Based on her extensive experience at major audit
firms and as a university professor as well as her indepth knowledge as an accounting expert, she has
contributed to the Board of Directors’ appropriate
decision-making
andoverallmanagement
supervision as an Independent Outside Director, andto neutral and objective audits, and has therefore beenreappointed as a Director (Audit and Supervisory
Board Member).
・The Company expects that she will contribute toensuring its sound management as an Independent
Outside Director, and contribute to improving thesoundness, transparency and fairness of management
as a member of the Governance Committee, theNomination Committee and the Compensation
Committee, based on the above knowledge and froman objective perspective independent from the
management team that executes business.

・Mr. Masayuki Saito is currently serving as Director
and Chairman at DIC Corporation. While there arebusiness relationships such as lease agreements
between DIC and the Company, the transaction amountin FY2022 was less than 1% of the consolidated net
sales of DIC and the Company.

・Based on his extensive management experience at
Japan’s leading manufacturer and his extensive
knowledge in the finance and accounting fields, he isdeemed to contribute to the Board of Directors’
appropriate decision-making, overall management
supervision, and neutral and objective audit as an
Independent Outside Director, and has therefore been
appointed as a new Director (Audit and Supervisory
Board Committee Member).
・The Company expects that he will contribute toensuring its sound management as an Independent
Outside Director, and contribute to improving thesoundness, transparency and fairness of management
as a member of the Governance Committee, theNomination Committee and the Compensation
Committee, based on the above knowledge and froman objective perspective independent from the
management team that executes business.

Outside Director(Audit & Supervisory Koichiro Hiraiwa
Committee Member)

Outside Director(Audit & Supervisory
Committee Member)

Outside Director(Audit & Supervisory
Committee Member)

Hiroko Kaneko

Masayuki Saito(Note) The Company has designated Directors Hiroyasu Nakata and Yuri Sasaki, and Directors Koichiro Hiraiwa, Hiroko Kaneko,
and Masayuki Saito, who are members of the Audit & Supervisory Committee, as independent Directors, and has registeredthem as such with the Tokyo Stock Exchange and the Nagoya Stock Exchange.

- 87 -

Independence Standards for Outside Directors
Based on the assumption that the requirements for being an independent officer are satisfied as stipulated by the Tokyo
Stock Exchange and other domestic financial instruments exchanges, the Company checks whether the individual falls
under any of the following (1) through (6) at present and in the past three fiscal years, and then judges whether they canbe deemed to be independent objectively and substantially.
(1) A major shareholder of the Company (a person who holds 10% or more of the total voting rights) or an executive
thereof (*1)(2) An executive of a lender (*2) that exceeds the standards set by the Company(3) An executive of a business partner (*3) that exceeds the standards set by the Company(4) A person who provides professional services, such as a consultant, lawyer, or certified public accountant, receiving
monetary or other property benefits exceeding 10 million yen per business year in addition to remuneration for
officers from the Company(5) Representative partner or employee of the Company’s accounting auditor(6) A person who belongs to an organization that has received a donation exceeding a certain amount (*4) from theCompany(*1) Executive means executive Directors, executive officers and other employees, etc.
(*2) Lenders exceeding the standards set by the Company are those with the Company’s borrowings exceeding 2% of
the consolidated total assets.
(*3) A business partner that exceeds the standards set by the Company is a business partner with which transactions
with the Company exceed 2% of the consolidated net sales of the Company or the business partner.
(*4) A donation exceeding a certain amount means a donation exceeding 10 million yen per business year.
In addition, even in cases that fall under any of (1) to (6) above, if the Company judges that there are special circumstances
to designate the person as an Independent Officer and that the person is substantially independent, and files a notification
as an Independent Officer with a financial instruments exchange in Japan, such as the Tokyo Stock Exchange, theCompany will explain and disclose the reason in the Reference Documents for the General Meeting of Shareholders, etc.
pertaining to the notification and the election proposal.

(iii) Interaction between Supervision or Audits by Outside Directors and Internal Audits, Audits by the Audit & Supervisory
Committee and Accounting Audits, and Relationship with Internal Control Departments
At the Board of Directors’ meetings, Outside Directors receive internal audit plans and audit implementation reports fromthe Internal Audit Department, activity reports from the Audit & Supervisory Committee, and financial results, the status ofbusiness execution and reports on operation of the Risk Management Committee, the Compliance Committee, etc. frominternal control departments.
Of Outside Directors, Directors who are Audit & Supervisory Committee Members regularly receive reports on theimplementation status of individual audits from the Internal Audit Department, and reports on audit and review results fromthe Accounting Auditor, and express their opinions where appropriate to strengthen mutual collaboration.
The status of the Audit & Supervisory Committee’s activities is as described in “(3) Status of the Audit” in “4. Corporate
Governance, etc.” of “Item 4. Information on the Company.”- 88 -

(3) Status of the Audit(i) Status of the Audit of the Audit & Supervisory Committeea. Organization, Personnel and Procedures
The Company is a company with an Audit & Supervisory Committee, which consists of one full-time Audit & Supervisory
Committee Member and three part-time Audit & Supervisory Committee Members (outside) at the time of submission ofthis report.
Mr. Akira Hamamoto, Mr. Koichiro Hiraiwa and Mr. Masayuki Saito have a wealth of management experience in a major
financial institution (in the case of Mr. Hamamoto) and listed companies (in the case of Mr. Hiraiwa and Mr. Saito) andhave considerable knowledge regarding corporate management, finance and accounting. In addition, Mr. Akira Hamamoto,who served as a full-time Audit & Supervisory Committee Member of a major financial institution, and Mr. Koichiro
Hiraiwa, who served as Chairman of the Audit Committee of Hitachi Capital Corporation, are well acquainted with audit
operations.
Ms. Hiroko Kaneko, who has been involved in accounting audits for many years as a certified public accountant, possesses
considerable knowledge regarding finance and accounting. Each Audit & Supervisory Committee Member of the Company
has a high level of insight into the financial business, and the Company also has established a system to ensure the full
effectiveness of accounting audits.
Mr. Akira Hamamoto serves as Chairman of the Audit & Supervisory Committee. In addition, the Company has establishedthe Audit & Supervisory Committee Office, which assists in activities of the Audit & Supervisory Committee. Employeeswith appropriate knowledge, ability and experience have been assigned to the Office.
b. Status of Activities of the Audit & Supervisory Committee
A. Number of Audit & Supervisory Committee Meetings held and Attendance of each Audit & Supervisory Committee
Member
The Audit & Supervisory Committee meetings are held every month, in principle. Audit & Supervisory Committee
meetings were held 14 times during fiscal 2022, and attendance of Audit & Supervisory Committee Members is asfollows
14/14 times (100%): Koichiro Hiraiwa, Hiroko Kaneko
11/11 times (100%): Akira Hamamoto, Masayuki Saito(Note) Regarding Akira Hamamoto and Masayuki Saito, attendance at the Audit & Supervisory Committee
meetings held later than June 28, 2022 is provided as they were newly appointed as Audit & Supervisory
Committee Members at the General Meeting of Shareholders held on June 28, 2022.
B. Specific Matters for Consideration, etc. by the Audit & Supervisory Committee
With the basic policy of implementing audits that contribute to the establishment of a quality corporate governancestructure, the Audit & Supervisory Committee closely cooperates with the Internal Audit Department, internal control
departments and the Accounting Auditor to conduct effective audits.
During fiscal 2022, the Audit & Supervisory Committee discussed audit policies and audit plans, fees for the
Accounting Auditor, the reappointment of the Accounting Auditor and the appropriateness of audit results, thepreparation of audit reports, and the election, compensation, etc. of Directors (excluding those who are Audit &Supervisory Committee Members). In addition, reporting was made on matters including important agenda proposedto the meetings of the Board of Directors, results of operational audits and internal control audits by the Internal Audit
Department, the status of internal control by internal control departments, and the progress and results of audits by the
Accounting Auditor, and the committee actively asked questions and exchanged opinions. As for Key Audit Matters(KAM), the committee exchanged opinions after receiving explanations from the Accounting Auditor.
C. Status of Audit Activities of the Audit & Supervisory Committee
The Audit & Supervisory Committee strives to conduct effective audits based on the annual audit policies, audit plans,
and action plans. Full-time Audit & Supervisory Committee Members, as nominated Audit & Supervisory Committee
Members, shall attend important executive meetings including the Executive Committee as well as the Board of
Directors and the Audit & Supervisory Committee. They also perform duties including having meetings withRepresentative Directors and other management members, confirming important documents, receiving reports fromand exchanging information with the Internal Audit Department, internal control departments and the Accounting
Auditor, conducting on-site audits at offices in Japan and overseas, and having meetings with directors and auditorsof Group companies. Part-time Audit & Supervisory Committee Members attend Board of Directors meetings andAudit & Supervisory Committee meetings, and as members of the Governance Committee, the Nomination
Committee, and the Compensation Committee, they provide opinions as necessary for agendas and deliberations.

- 89 -

Furthermore, they share information via various reports from full-time Audit & Supervisory Committee Members, theInternal Audit Department, internal control departments, and the Accounting Auditor, and express their opinion whennecessary. They communicate what they have noticed in these audit activities to Representative Directors andexecutives, and they provide advice as needed.

(ii) Status of Internal Audits
Internal audits of the Company are implemented by the Internal Audit Department (48 members). The Internal Audit
Department conducts internal audits systematically based on an annual audit plan, regularly reports the results to theRepresentative Director, the Board of Directors and the Audit & Supervisory Committee, and closely exchanges opinions
on mutual recognition of issues and other matters. The General Manager of the Internal Audit Department asks audit targets
to correct matters requiring improvement that the targets were notified of and instructed on (matters requiring improvement),
has them report the results of improvement, and reports important matters requiring improvement to the Representative
Director to ensure the effectiveness of the audit. The General Manager of the Internal Audit Department has built
cooperative relationships with Audit & Supervisory Committee Members, auditors and others at Group companies, and the
Accounting Auditor, and this enables exchange of information and other actions on a regular and appropriate basis, in aneffort to conduct audits efficiently. The General Manager also exchanges related information with internal control divisions
in charge of the Risk Management Committee, the Compliance Committee, and others.

- 90 -

(iii) Status of Accounting Auditsa. Name of Audit Firm
Deloitte Touche Tohmatsu LLC
b. Continuous Audit Period
The Company (then Diamond Lease Company Limited) concluded an audit agreement with Deloitte Touche Tohmatsu
LLC (then Nishikata Audit Corporation) in 1980. Subsequently, the Company merged with UFJ Central Leasing Co., Ltd.
in April 2007 and changed the trade name to Mitsubishi UFJ Lease & Finance Company Limited, which merged with
Hitachi Capital Corporation in April 2021 and changed the trade name to Mitsubishi HC Capital Inc., and continued toconclude audit agreements with Deloitte Touche Tohmatsu LLC.
c. Certified Public Accountants who executed the Services
Hideo Shirata, Designated Engagement Partner, Certified Public Accountant
Motohiro Shimizu, Designated Engagement Partner, Certified Public Accountant
Aki Saito, Designated Engagement Partner, Certified Public Accountant
d. Composition of Assistants in Audit Duties
The assistants involved in the audit duties of the Company are 13 certified public accountants and 52 other members.
e. Policy and Reason for the Selection of an Audit Firm
In selecting an audit firm, the Company has the policy of deciding on an audit firm after comprehensively evaluating abroad range of items concerning the audit firm that include governance; the status of organizations and systems including
business administration; the status of personnel affairs, such as the policies for recruitment and HR development; andfinancial conditions, all of which are the management basis of audit firm, as well as experience in auditing the industry inwhich the Company operates; the level of understanding of details of the Company group’s business and risks; theavailability of professionals in finance; expertise, such as the status of its overseas network; the status of compliance withrelated laws and regulations; the status of compliance with responding to inspection, etc. of relevant authorities; ensuringof independence; maintenance and improvement of quality management; the system for offering services including
communication with management executives and the Audit & Supervisory Committee; and the level of auditing fees. The
Company concluded that Deloitte Touche Tohmatsu LLC fully satisfied these items and selected the firm as the audit firmof the Company.
When it is recognized that the Accounting Auditor falls under any of the items set forth in Article 340, paragraph 1 of theCompanies Act, the Company considers the dismissal of the Accounting Auditor. When judging that there is an immediateneed for dismissal, the Audit & Supervisory Committee will dismiss the Accounting Auditor based on the consent of all
Audit & Supervisory Committee Members. When judging that the Accounting Auditor should be changed mainly due tothe recognition that execution of duties by the Accounting Auditor is disrupted, the Audit & Supervisory Committee will
decide on the content of an agenda item proposed to a General Meeting of Shareholders concerning the dismissal or nonreappointment of the Accounting Auditor.
f. Evaluation of the Audit Firm
The Audit & Supervisory Committee evaluates the audit firm comprehensively concerning matters including the structureof the most recent audit team, the appropriateness of the audit plan, the difference between the plan and the actual results,
and analysis of the causes, in addition to items listed in the reasons for its selection.
(iv) Content, etc. of Audit Fees
a. Fees for certified Public Accountants, etc. for Audits
Previous Fiscal Year
Category

ReportingCompany
Consolidated
Subsidiaries
Total

Fees based on Audit andAttestation Services(Millions of Yen)

Fiscal Year under Review

Fees based on Non-audit
services (Millions of
Yen)

Fees based on Audit andAttestation Services(Millions of Yen)

Fees based on Non-audit
Services (Millions of
Yen)

296

34

256

31

151

21

194

13

448

56

450

44

- 91 -

(Notes) 1. The content of non-audit services in the Company for the previous fiscal year and the fiscal year under review consistsof preparation of comfort letters, etc.
2. The content of non-audit services in consolidated subsidiaries for the previous fiscal year and the fiscal year underreview consists of preliminary investigation services related to the change of Accounting Auditors and preparation of
comfort letters, etc.
b. Fees for Deloitte Touche Tohmatsu Limited’s member firms that belong to the same network with the certified public
accountants, etc. for audits (excluding a.)Previous Fiscal Year
Category

ReportingFees based on Audit andAttestation Services(Millions of Yen)

Fiscal Year under Review

Fees based on Non-audit
Services (Millions of
Yen)

Fees based on Audit andAttestation Services(Millions of Yen)

Fees based on Non-audit
Services (Millions of
Yen)

–

47

–

54

Consolidated
Subsidiaries

787

143

1,132

169

Total

787

191

1,132

224

Company(Notes) 1. The content of non-audit services in the Company for the previous fiscal year and the fiscal year under review consistsof tax advisory services, etc.
2. The content of non-audit services in consolidated subsidiaries for the previous fiscal year and the fiscal year underreview consists of tax advisory services, etc.
c. Content of Fees for Other Important Audit and Attestation Services
There are no important fees for audit and attestation services that some of the consolidated subsidiaries of the Company
paid in the previous fiscal year and the fiscal year under review to certified public accountants for audits, etc. who belong
to networks other than ones that certified public accountants, etc. of the Company belong to.
d. Policy for Determining Audit Fees
Although there are no applicable items, they are determined in consideration of the size, characteristics, number of audit
days, etc.
e. Reason why the Audit & Supervisory Committee gave Consent to Fees, etc. for the Accounting Auditor
The reason why the Audit & Supervisory Committee gave consent pursuant to Article 399, paragraphs 1 and 3 of theCompanies Act concerning fees, etc. for the Accounting Auditor that the Board of Directors proposed is that the Audit &Supervisory Committee confirmed that the proposed fees, etc. had been determined after sufficient consultation with the
Accounting Auditor about audit fees, based on the number of audit days and the number of staff, etc. required forappropriate and efficient accounting audits.

- 92 -

(4) Officers’ Remuneration, etc.
(i)

Policy for Determining Details, Amount, and Calculation Method of Officer Remuneration, etc. and Method of
Determination

a. Basic Policy• For the purpose of increasing corporate value through the execution of business strategies, the Company also considers
officer incentive when determining officer remuneration.
•The level of remuneration shall be appropriate for the roles and responsibilities of each officer, taking into consideration
the level of the market, from the standpoints of increasing corporate value in the medium- to long-term and improving
business performance in the short term.
In accordance with the above basic policy, the Board of Directors of the Company, has resolved the policy for determining thedetails of remuneration, etc. of individual Directors (excluding Directors who are Audit & Supervisory Committee Members)
as follows in b.
[Composition Ratio of Remuneration]b. Policy for Determining the Details of Remuneration, etc. of Individual Directors (excluding Directors who are Audit &Supervisory Committee Members)i) Remuneration System• In principle, remuneration, etc. for Executive Directors shall be comprised of basic remuneration (fixed remuneration),annual incentive compensation (performance-based compensation), and medium- to long-term incentive compensation.
• Percentages are set for performance-based compensation and non-performance-based compensation for the purpose ofmaintaining a healthy ratio of performance-based compensation. In addition, in order to improve not only short-term
performance but also medium- to long-term corporate value, the Company establishes appropriate short-term andmedium- to long-term incentive ratio in the remuneration system.
• Specifically, the ratio of non-performance-based compensation (basic remuneration and stock-based compensation stock
option) to performance-based compensation (bonus) shall be around 1.3 to 0.3 (the ratio of basic remuneration to stockbased compensation stock option to bonuses shall be around 1 to 0.3 to 0.3). While maintaining this basic policy, theratio shall be determined based on a comprehensive consideration of the individual Director’s role, responsibilities, etc.

- 93 -

FixedType of
Remuneration

Basic Remuneration

62.5%
1

18.75%
0.3

Floating

Bonus(Short-Term
Incentive)
Performance-based

Remuneration
Ratio

Stock-based
Compensation Stock
Option (Medium-to
Long-Term
Incentive)
Stock Compensation

18.75%
0.3

Details of Remuneration

Evaluation Method,
Ratio

Range of
Variation based
on KPI
Achievement

1. The amount determined according to title
is paid monthly.

––

1. The amount paid to each individual isdetermined based on the consolidated
business performance of the previous
year, etc.
2. The financial indicators, etc. emphasizedin the management strategy as indicators
representing the Company’s growth thatare important in management strategy as
indicators representing the Company’s
growth are set as the KPI for evaluatingcompany-wide performance, and thetargets are set according to the Company’s
numerical targets (net income attributableto owners of the parent, ROA, ROE,
OHR).
3. The achievement of the executive officers
excluding Representative Directors intheir duties is evaluated using a standard
evaluation sheet, from the perspective ofperformance and the level of contribution
regarding the duties.
1. Share acquisition rights of the number
calculated based on the stock price on thebase date are offered from the perspectiveof sharing value with shareholders andimproving medium- to long-term
corporate value.
2. The number of stock options to be offeredis determined according to the title at the
beginning of the term of the officer, which
is June.
3. Share acquisition rights can be exercisedfor 5 years from the day 1 year after theretirement of an officer.

[Representative
Director]
Company-wide
performance
evaluation: 100%

0-150%[Executive Director](Other thanRepresentative
Director)
Company-wide
performance
evaluation: 70%
Evaluation of
responsible duties:
30%

–

–

(Note) In addition, in the event that it becomes necessary to reside in an area away from home, an appropriate property
shall be provided as company housing.

- 94 -

• For non-Executive Directors including Outside Directors (excluding Directors who are Audit & Supervisory Committee
Members), from the standpoint of ensuring the effectiveness of the supervisory function, bonuses and stock-based
compensation stock option, which are incentive compensation, shall not be paid. Remuneration shall be limited to basic
remuneration only.

Fixed

Type of
Remuneration

Basic Remuneration

Remuneration
Ratio

Details of Remuneration

100%

1. For Internal Directors who do not concurrently serve as Executive Officers(excluding those who are Audit & Supervisory Committee Members) and Outside
Directors (excluding those who are Audit & Supervisory Committee Members),
from the standpoint of ensuring the effectiveness of the supervisory function,bonuses and stock-based compensation stock option, which are incentive
compensation, shall not be paid. Remuneration shall be limited to basic
remuneration only.

ii) Performance-based Compensation• From the standpoint of clarifying the relationship between performance and compensation, the financial indicators, etc.
emphasized in the management strategy as indicators representing the Company’s growth are set as the KPI for
evaluating company-wide performance when it comes to bonuses, which are performance-based compensation. For thetarget values, net income attributable to owners of the parent, ROA, ROE, and OHR are used, which are set according
to the Company’s numerical targets.
• The total amount of the bonus for the Representative Director is linked to the company-wide performance, and theamount to be paid is determined within the range of 0 to 150% of the standard amount according to the degree ofachievement of the plan for the company-wide performance evaluation (KPI).
• In regard to bonuses for Executive Directors other than the Representative Director, 70% is linked to the company-wide
performance evaluation and 30% is linked to the evaluation of responsible duties, while the amount of both bonuses isdetermined within the range of 0 to 150% of the standard amount.
• For the portion linked to operational responsibilities, the President will use a standard evaluation sheet to perform
quantitative and qualitative evaluations from the standpoint of performance and contribution of the Executive Director
with respect to the operations for which they are responsible. The purpose of this is to improve the incentive of individual
Directors by properly evaluating not only the degree of achievement of targets for business results but also the degree ofcontribution, which cannot be evaluated solely quantitatively.

- 95 -

【KPIs and Evaluation Ratio of Performance-based Compensation】
Company-wide
Performance
Evaluation

Evaluation of
Responsible Duties

Net income
attributable to ownersof the parent
KPI

ROA

Company-wide Performance Evaluation System
Evaluatedindividually

ROE
OHR
Evaluation
Ratio

Representative
Director

100%–

Executive Director
Other than the
Representative
Director

70%30%iii) Non-performance-based Compensation• For stock-based compensation stock option, which are medium- to long-term incentive compensation, the number ofshare acquisition rights to be allocated is determined and paid according to the role and position of each individual
Director.
(Note) The details of the stock option plan are as set forth in “(i) Description of the Stock Option Plan” in “(2) Share
Acquisition Rights, etc.” in “1. Information on the Company’s Shares, etc.” of “Item 4. Information on the
Company.”• If a Director needs to live in an area far away from his or her home due to a transfer associated with a change in their
responsibilities or assigned location, the Director is provided with an appropriate property as company housing(hereinafter, the difference between the total monthly rent required for the Company to rent the company housing andthe total amount of monthly company housing rent collected from the Director is referred to as “Non-monetary
Remuneration for the Provision of Company Housing”). The company housing to be provided shall be a general standard
property, and the maximum rent shall be established in advance based on position and geographical area. The company
housing rent calculated based on the predetermined percentage (if the maximum rent is exceeded, the full amount of theexcess amount is added) shall be collected from the Director as their own expenses.
iv) Policy on Determining Timing or Conditions of Remuneration, etc.
• Basic remuneration shall be paid in a fixed monthly amount on the designated day.
• Bonuses shall be paid in an amount determined based on the results of the previous fiscal year (April to next March) onor after the date of the Annual General Meeting of Shareholders in June of every year.
• For stock-based compensation stock option, the number of share acquisition rights to be allocated to each Director shallbe resolved at the meeting of the Board of Directors in June of every year and paid in July (advance payment).
• Non-monetary remuneration for the provision of company housing shall be paid monthly in addition to basic
remuneration.
v) Method of Determining Remuneration, etc., Outline of the Committee’s Procedures, and Description of its Activities• To ensure transparency and objectivity in determining officer remuneration, etc., it is resolved at meetings of the Boardof Directors after deliberation by the Compensation Committee, which is comprised of a majority of Outside Directors,
on the details of remuneration, etc. and the policy for determining remuneration, etc. The Compensation Committee alsodeliberates annually on the appropriateness of the level and composition of remuneration based on remuneration dataand other information provided by external professional organizations.
• The members and chairperson of the Compensation Committee are selected by the Board of Directors, and theCommittee adopts resolutions by a majority of the members present. In addition, the Company’s rules stipulate that theBoard of Directors shall respect the deliberations of the Committee.
• In regard to the amount of remuneration, etc. for Directors (excluding Directors who are Audit & Supervisory Committee
Members), as set forth in the resolution at the General Meeting of Shareholders (February 26, 2021), the total amount of- 96 -

basic remuneration and bonuses is to be ¥800 million or less per year (¥100 million for Outside Directors), the amountof compensation, etc. provided in the form of stock-based compensation stock option is to be ¥150 million or less per
year, and the amount of non-monetary remuneration for the provision of company housing is to be ¥2 million or less permonth. The above-mentioned resolution of the General Meeting of Shareholders does not stipulate the number of
Directors (excluding Directors who are Audit & Supervisory Committee Members) relating to the amount of
remuneration, etc., but as of the effective date of the resolution, there were ten Directors (excluding Directors who are
Audit & Supervisory Committee Members and three of whom were Outside Directors paid only basic remuneration).
• The Company believes it is good for the specific amount of basic remuneration and bonuses, as well as non-monetary
remuneration for the provision of company housing, to be determined flexibly based on certain standards by someone
who is familiar with individual operations and the Company’s situation. The decision is thus entrusted to the President& CEO (Takahiro Yanai until March 31, 2023, and Taiju Hisai from April 1, 2023), who is the Representative Director,
within the upper limit set forth by resolution of the General Meeting of Shareholders, based on the policy resolved by
the Board of Directors and Compensation Committee. The Company will take measures to ensure that the authority of
the President & CEO is appropriately exercised as follows.
• In regard to stock-based compensation stock option, the number of share acquisition rights to be allocated to each
Director is determined by resolution of the Board of Directors.
vi) Measures to ensure that the delegated Authority is properly exercised• Basic remuneration is determined based on certain pre-established standards (remuneration table) that are deliberated by
the Compensation Committee• The following shall apply to the portion of the bonus linked to the company-wide performance:-

KPI is established according to numerical targets discussed at the Board of Directors.

-

The amount to be paid is determined according to the achievement rate of the KPI based on a predetermined payment
coefficient deliberated by the Compensation Committee.

-

The results of the company-wide performance evaluation and the amount to be paid are subsequently reported to theCompensation Committee for verification.

In addition, the following shall apply to the portion of the bonus linked to operational responsibilities:-

After deliberations in advance by the Compensation Committee, an evaluation sheet (an evaluation sheet providing
details on predetermined targets, weighting of individual targets, and evaluation criteria) is finalized.

-

After the individual duties are evaluated based on the evaluation sheet, the results and amount to be paid are subsequently
reported to the Compensation Committee for verification.

• In regard to non-monetary remuneration for provision of company housing, (a) the company housing to be provided
shall be a general standard property, and the maximum rent shall be established in advance based on position andgeographical area, while (b) the company housing rent calculated based on the predetermined percentage (if the
maximum rent is exceeded, the full amount of the excess amount is added to the rent) shall be collected from the Directors
as their own expenses.
c. Details and Method of Determining Remuneration, etc. of Directors who are Audit & Supervisory Committee Members• For Directors who are Audit & Supervisory Committee Members, from the standpoint of ensuring the fairness of audits,
bonuses and stock-based compensation stock option, which are incentive compensation, shall not be paid. Remuneration
shall be limited to basic remuneration only.
• In accordance with the resolution the General Meeting of Shareholders (February 26, 2021), the amount of remuneration
for Directors who are Audit & Supervisory Committee Members is to be ¥200 million or less per year. The amount of
remuneration for Directors who are Audit & Supervisory Committee Members is to be determined through discussion
by Directors who are Audit & Supervisory Committee Members. The above-mentioned resolution of the General
Meeting of Shareholders does not stipulate the number of Directors who are Audit & Supervisory Committee Members
relating to the amount of remuneration, etc., but as of the effective date of that resolution, there were five Directors who
are Audit & Supervisory Committee Members.

- 97 -

Type of

Fixed

Remuneration

Remuneration
Ratio

Details of Remuneration

100%

1. For Directors who are Audit & Supervisory Committee Members, from thestandpoint of ensuring the fairness of audits, bonuses and stock-based compensation
stock option, which are incentive compensation, shall not be paid. Remuneration
shall be limited to basic remuneration only.

Basic

Remunerationd. Matters concerning Calculation of Performance-based Compensation• The KPIs for evaluating company-wide performance for bonuses, which are performance-based compensation, for
Directors (excluding Outside Directors and those who are Audit & Supervisory Committee Members) for the fiscal year
under review are as follows: (1) net income attributable to owners of the parent (weighted at 70%), which is emphasizedin the management strategy as one of the indicators of the Company’s growth and has been announced as a numericaltarget for the current fiscal year; (2) ROA (weighted at 10%); (3) ROE (weighted at 10%); and (4) OHR (weighted at10%). The amount of performance-based compensation is calculated using the designated formula based on theachievement rate of each KPI.
• The results for the fiscal year ended March 31, 2023 are as follows.
KPI

TargetResultAchievement Rate

Evaluation WeightNet Income Attributable to
Owners of the Parent¥110.0 billion¥116.2 billion

105.6%

70%

ROA

1.1%

1.1%

100.0%

10%

ROE

8.2%

8.2%

100.0%

10%

OHR

54.1%

55.8%

96.3%

10%

• In addition, for the portion linked to operational responsibilities of Executive Directors other than the Representative
Director, the President, who is the Representative Director, will use a standard evaluation sheet to perform quantitativeand qualitative evaluations from the standpoint of performance and contribution. Performance targets are set based on
the environment of the business in charge, the previous year’s performance, and other factors according to the
responsibilities of each Director, and evaluations are performed taking into account the respective performance andcontribution.
e. Reasons for the Board of Directors’ Determination that the Content of Individual Remuneration of Directors (excluding
Directors who are Audit & Supervisory Committee Members) for the Fiscal Year under Review is in Line with the Policy• The specific amount of basic remuneration and bonuses, as well as non-monetary remuneration for the provision ofcompany housing are entrusted to the President & CEO within the upper limit set forth by resolution of the General
Meeting of Shareholders. The Company has taken measures as described in “Measures to ensure that the delegatedAuthority is properly exercised” at b.vi) above. Furthermore, there is a system for the Compensation Committee and the
Audit & Supervisory Committee to confirm that individual remuneration, etc. for Directors is determined by proceduresthat are objective and transparent, and that the content is in line with the policy established by the Company. As such,the Board of Directors has determined that a system is in place to ensure that the content of individual remuneration, etc.
for each Director for the fiscal year under review is in line with the remuneration policy.

- 98 -

(ii) Total Amount of Remuneration, etc. by Officer Category, Total Amount of Remuneration, etc. by Type, and Number of
Eligible Officers
Total Amount of Remuneration, etc. by Type

Total Amount(Millions of Yen)of
Officer Category

Remuneration,

Fixed

Performance-etc.

Remuneration

based(Millions of(BasicCompensation

Remuneration)(Bonus)Yen)

Number of Applicable Officers
Stock Option

Other

Directors who are Not Audit &Supervisory Committee
Members (excluding Outside

519

329

95

95

–

7

61

61

–

–

–

3

101

101

–

–

–

9

Directors)
Directors who are Audit &Supervisory Committee
Members (excluding Outside
Directors)
Outside Directors(Notes) 1.

The amount of performance-based compensation (bonus) is the amount of reversal of provision for bonuses for
directors (and other officers) for the fiscal year under review.
2. There were no payments of non-monetary compensation related to the provision of company housing during the
fiscal year under review.

(iii) Total Amount of Remuneration, etc. paid by the Group to Each Officer
Total AmountAmount of Remuneration, etc. paid by the Group by Typeof
RemunerationName, etc. paid by
the Group

OfficerCompany

Category

Category

Fixed
Remuneration(Basic(Millions of

Performance-based
Compensation

Stock Option

Other(Bonuses)

Remuneration)

Yen)
Seiji Kawabe

120

Director

Takahiro Yanai

114

Director

Reportingcompany
Reportingcompany

74

23

22

–

74

17

22

–

(Note) The amount of performance-based compensation (bonus) is the amount of reversal of provision for bonuses for
directors (and other officers) for the fiscal year under review.

(iv) Policy for Determining Details, Amount, and Calculation Method of Officer Remuneration, etc. and Method of
Determination on or after June 27, 2023
Following the adoption of the performance-based stock compensation plan, which was resolved at the 52nd Annual General
Meeting of Shareholders held on June 27, 2023, “Policy for Determining Details, Amount, and Calculation Method of Officer
Remuneration, etc. and Method of Determination” was partially revised as follows as of the said date.
a. Basic Policy• For the purpose of increasing corporate value through the execution of business strategies, the Company also considers
officer incentive when determining officer remuneration.
• The level of remuneration shall be appropriate for the roles and responsibilities of each officer, taking into consideration
the level of the market, from the standpoints of increasing corporate value in the medium- to long-term and improving
business performance in the short term.

- 99 -

b. Policy for Determining the Details of Remuneration, etc. of Individual Directors (excluding Directors who are Audit &Supervisory Committee Members)i)Remuneration System• In principle, remuneration, etc. for Executive Directors shall be comprised of basic remuneration (fixed remuneration),annual incentive compensation (performance-based monetary compensation), and medium- to long-term incentive
compensation (performance-based stock compensation). Regarding annual incentive compensation, cash is paid as abonus, while regarding medium- to long-term incentive compensation, the Company Shares, etc. are provided throughthe use of the system of trust.
• Percentages are set for performance-based compensation and non-performance-based compensation for the purpose ofmaintaining a healthy ratio of performance-based compensation. In addition, in order to improve not only short-term
performance but also medium- to long-term corporate value, the Company establishes appropriate short-term andmedium- to long-term incentive ratio in the remuneration system.
• Specifically, the ratio of non-performance-based compensation (basic remuneration) to performance-based
compensation (bonus and stock compensation) shall be around 1 to 0.6 (the ratio of basic remuneration to bonuses tostock compensation shall be around 1 to 0.3 to 0.3). While maintaining this basic policy, the ratio shall be determinedbased on a comprehensive consideration of the individual Director’s role, responsibilities, etc.

- 100 -

Type of

Fixed

Remuneration

Remuneration
Ratio

Basic

62.5%

Remuneration

1

18.75%
0.3

Floating

Bonus(Short-Term
Incentive)
Performance-based

Stock Compensation(Medium- to LongTerm Incentive)
Performance-based(Note)

18.75%
0.3

Details of Remuneration

Evaluation Method,
Ratio

Range of
Variation based
on KPI
Achievement

1. The amount determined according totitle is paid monthly.

––

1. The amount paid to each individual isdetermined based on the consolidated
business performance of the previous
year, etc.
2. The financial indicators, etc.
emphasized in the management
strategy as indicators representing theCompany’s growth that are importantin management strategy as indicators
representing the Company’s growth
are set as the KPI for evaluatingcompany-wide performance, and thetargets are set according to theCompany’s numerical targets (netincome attributable to owners of theparent, ROA, ROE, OHR).
3. The achievement of the executive
officers excluding Representative
Directors in their duties is evaluatedusing a standard evaluation sheet,from the perspective of performanceand the level of contribution regarding
the duties.

[Representative
Director]
Company-wide
performance
evaluation: 100%

0-150%[Executive Director](Other thanRepresentative
Director)
Company-wide
performance
evaluation: 70%
Evaluation of
responsible duties:
30%

1. From the perspective of the increase of
the corporate value in the medium- tolong-term, indicators set as anumerical plan, etc. in the Mediumterm Management Plan (the growthrate of net income attributable toowners of the parent, ROA, ROE, andTSR against TOPIX growth rate) are
set as indicators for evaluating
performance (KPIs).
Company-wide
2. Points corresponding to the position
performanceand the term of office are granted in
evaluation: 100%
accordance with the company rules onshare delivery, through the use of thesystem of trust. In the fiscal year
following the final fiscal year of theMedium-term Management Plan, aportion of shares corresponding toaccumulated points is converted into
cash, and the compensation is paid at apercentage of shares 50% : cash 50%.

0-150%In addition, in the event that it becomes necessary to reside in an area away from home, an appropriate property
shall be provided as company housing.

- 101 -

• For non-Executive Directors including Outside Directors (excluding Directors who are Audit & Supervisory Committee
Members), from the standpoint of ensuring the effectiveness of the supervisory function, bonuses and stock-based
compensation stock option, which are incentive compensation, shall not be paid. Remuneration shall be limited to basic
remuneration only.
Type of

Fixed

Remuneration

Basic Remunerationii)

Remuneration
Ratio

Details of Remuneration

100%

1. For Internal Directors who do not concurrently serve as Executive Officers(excluding those who are Audit & Supervisory Committee Members) and Outside
Directors (excluding those who are Audit & Supervisory Committee Members),
from the standpoint of ensuring the effectiveness of the supervisory function,bonuses and stock- based compensation stock option, which are incentive
compensation, shall not be paid. Remuneration shall be limited to basic
remuneration only.

Performance-based Compensation• From the standpoint of clarifying the relationship between performance and compensation, the financial indicators, etc.
emphasized in the management strategy as indicators representing the Company’s growth are set as the KPI for
evaluating business performance when it comes to bonuses and stock compensation.
Bonuses- Net income attributable to owners of the parent, ROA, and ROE are used, which are set according to the Company’s
numerical targets (KPI for evaluating company-wide performance).
- The total amount of the bonus for the Representative Director is linked to the company-wide performance, and theamount to be paid is determined within the range of 0 to 150% of the standard amount according to the degree ofachievement of the plan for the company-wide performance evaluation (KPI).
- In regard to bonuses for Executive Directors other than the Representative Director, 70% is linked to the companywide performance evaluation and 30% is linked to the evaluation of responsible duties, while the amount of bothbonuses is determined within the range of 0 to 150% of the standard amount.
- For the portion linked to operational responsibilities, the President will use a standard evaluation sheet to perform
quantitative and qualitative evaluations from the standpoint of performance and contribution of the Executive Director
with respect to the operations for which they are responsible. The purpose of this is to improve the incentive of
individual Directors by properly evaluating not only the degree of achievement of targets for business results but also
the degree of contribution, which cannot be evaluated solely quantitatively.
Stock Compensation- The growth rate of (1) net income attributable to owners of the parent, (2) ROA, (3) ROE, and (4) TSR against TOPIX
growth rate, which has been set as numeral targets in the Medium-term Management Plan to increase the Company’s
corporate value in the medium- to long-term, shall be indicators for evaluating performance (KPIs).
- The Company Shares, etc. corresponding to share conversion points, which are calculated as the following formula,
are provided, with the use of the system of trust. Specifically, one Company share shall be provided per one point. In
principle, a portion of shares held by the trust is converted into cash in the trust, and the compensation is paid at apercentage of shares 50% : cash 50%.
Share conversion points = “points granted corresponding to the position and the term of office (accumulated value fora period of three years, which is the period of the Medium-term Management Plan) × performance-linked factor(varying in a range between 0% to 150%) according to the achievement level of KPIs”

iii) Non-performance-based Compensation• If a Director (excluding Outside Directors and those who are Audit & Supervisory Committee Members) needs to live
in an area far away from his or her home due to a transfer associated with a change in their responsibilities or assigned
location, the Director is provided with an appropriate property as company housing (hereinafter, the difference between
the total monthly rent required for the Company to rent the company housing and the total amount of monthly company
housing rent collected from the Director is referred to as “Non-monetary Remuneration for the Provision of Company
Housing”). The company housing to be provided shall be a general standard property, and the maximum rent shall beestablished in advance based on position and geographical area. The company housing rent calculated based on the- 102 -

predetermined percentage (if the maximum rent is exceeded, the full amount of the excess amount is added) shall becollected from the Director as their own expenses.
iv) Policy on Determining Timing or Conditions of Remuneration, etc.
• Basic remuneration shall be paid in a fixed monthly amount on the designated day.
• Bonuses shall be paid in an amount determined based on the results of the previous fiscal year (April to next March) onor after the date of the Annual General Meeting of Shareholders in June of every year.
• As for stock compensation, in principle, points corresponding to the position and the term of office are granted at theend of each fiscal year (end of March), and then the Company Shares, etc. are provided in July of the fiscal year following
the final fiscal year of the Medium-term Management Plan (three years) based on share conversion points calculated bymultiplying the accumulated value of the points for the three years by the performance-linked factor.
• Non-monetary remuneration for the provision of company housing shall be paid monthly in addition to basic
remuneration.
v)

Method of Determining Remuneration, etc., Outline of the Committee’s Procedures, and Description of its Activities• To ensure transparency and objectivity in determining officer remuneration, etc., it is resolved at meetings of the Boardof Directors after deliberation by the Compensation Committee, which is comprised of a majority of Outside Directors,
on the details of remuneration, etc. and the policy for determining remuneration, etc. The Compensation Committee alsodeliberates annually on the appropriateness of the level and composition of remuneration based on remuneration dataand other information provided by external professional organizations.
• The members and chairperson of the Compensation Committee are selected by the Board of Directors, and theCommittee adopts resolutions by a majority of the members present. In addition, the Company’s rules stipulate that theBoard of Directors shall respect the deliberations of the Committee.
• The amount of remuneration, etc. to be paid to Directors (excluding those who are Audit & Supervisory Committee
Members) was resolved as follows at the General Meeting of Shareholders.
- In regard to the amount of remuneration, etc. for Directors (excluding Directors who are Audit & Supervisory
Committee Members), as set forth in the resolution at the General Meeting of Shareholders held on February 26, 2021,
the total amount of basic remuneration and bonuses is to be ¥800 million or less per year (¥100 million for Outside
Directors) and the amount of non-monetary remuneration for the provision of company housing is to be ¥2 million orless per month. The above-mentioned resolution of the General Meeting of Shareholders does not stipulate the number
of Directors (excluding Directors who are Audit & Supervisory Committee Members) relating to the amount of
remuneration, etc., but as of the effective date of the resolution, there were ten Directors (excluding Directors who are
Audit & Supervisory Committee Members and three of whom were Outside Directors paid only basic remuneration).
- In regard to stock compensation for Directors (excluding non-Executive Directors and non-residents in Japan) and
Executive Officers, etc. (excluding non-residents in Japan), it was resolved, at the General Meeting of Shareholders
held on June 27, 2023, that separately from the above amounts, the maximum amount of money contributed from theCompany to the trust shall be ¥800 million per fiscal year (¥2,400 million in total for the period of three fiscal years
which is the initial target period), and the maximum number of the Company shares to be delivered shall be 1,550
thousand shares per fiscal year (4,650 thousand shares in total for the period of three fiscal years which is the initial
target period). Although the number of Directors (excluding non-Executive Directors and non-residents in Japan)
excluding those who are Audit & Supervisory Committee Members relating to the amount of remuneration, etc. was
not specified in the relevant resolution of the General Meeting of Shareholders, the number of Directors (excluding
non-Executive Directors and non-residents in Japan) excluding those who are Audit & Supervisory Committee
Members at the time of the resolution at said General Meeting of Shareholders becoming effective is four.
• The Company believes it is good for the specific amount of basic remuneration and bonuses, as well as non-monetary
remuneration for the provision of company housing, to be determined flexibly based on certain standards by someone
who is familiar with individual operations and the Company’s situation. The decision is thus entrusted to the President& CEO (Taiju Hisai), who is the Representative Director, within the upper limit set forth by resolution of the General
Meeting of Shareholders, based on the policy resolved by the Board of Directors and Compensation Committee. The
Company will take measures to ensure that the authority of the President & CEO is appropriately exercised as follows.

- 103 -

• As for stock compensation, points corresponding to the position and the term of office are granted at the end of eachfiscal year in accordance with the “Company Rules on Share Delivery,” which was established by resolution of the Boardof Directors, and then the Company Shares, etc. equivalent to the number of share conversion points calculated bymultiplying the number of accumulated value of the points for the three years by the performance-linked factor, which
is determined after the end of a three-year Medium-term Management Plan in principle, are provided (one Company
share shall be provided per one point, and in principle, a portion of the Company shares held by the trust is converted
into cash in the trust, and the compensation is paid at a percentage of shares 50% : cash 50%).
vi) Measures to ensure that the delegated Authority is properly exercised• Basic remuneration is determined based on certain pre-established standards (remuneration table) that are deliberated by
the Compensation Committee• The following shall apply to the portion of the bonus linked to the company-wide performance:- KPI is established according to numerical targets discussed at the Board of Directors.
- The amount to be paid is determined according to the achievement rate of the KPI based on a predetermined payment
coefficient deliberated by the Compensation Committee.
- The results of the company-wide performance evaluation and the amount to be paid are subsequently reported to theCompensation Committee for verification.
In addition, the following shall apply to the portion of the bonus linked to operational responsibilities:- After deliberations in advance by the Compensation Committee, an evaluation sheet (an evaluation sheet providing
details on predetermined targets, weighting of individual targets, and evaluation criteria) is finalized.
- After the individual duties are evaluated based on the evaluation sheet, the results and amount to be paid aresubsequently reported to the Compensation Committee for verification.
• In regard to stock compensation, points corresponding to the position and the term of office at the end of each fiscal year
are granted based on certain standards predetermined in the “Company Rules on Share Delivery,” which were establishedby resolution of the Board of Directors, and the performance-linked factor, which is determined after the end of a threeyear Medium-term Management Plan in principle, is also determined based on the “Company Rules on Share Delivery.”• In regard to non-monetary remuneration for provision of company housing, (a) the company housing to be provided
shall be a general standard property, and the maximum rent shall be established in advance based on position andgeographical area, while (b) the company housing rent calculated based on the predetermined percentage (if the
maximum rent is exceeded, the full amount of the excess amount is added to the rent) shall be collected from the Directors
as their own expenses.
vii) Malus and Claw-Back Provisions in Stock Compensation and Shareholding Policy• As for stock compensation, in the case where the person makes any serious breach of duty or internal rules, voluntarily
retires from office against the Company’s will, is removed for a due reason, or gains employment with any other company
in the same industry without permission from the Company, and in other cases, the Company takes a measure that enables
it to confiscate the points or share conversion points already granted to the person, or reclaim the amount equivalent to
the Company Shares, etc. already provided to the person.
• All the Company shares acquired during the term of office of officers shall continue to be held until their retirementfrom office in principle, regardless of the number of held shares.

- 104 -

(5) Status of Shareholdings(i)

Investment Share Classification Standards and Approach
For the classification of investment shares for pure investment purposes and those for purposes other than pure investment,
the Company classifies investment shares held solely for the purpose of targeting gains through fluctuations in the value ofshares or the receipt of dividends related to shares into investment shares for pure investment purposes; and classifies thosewith a view to developing long-term and stable relationships with business partners and promoting business, and those forthe purpose of strengthening relationships based on continuous capital and business alliances into investment shares forpurposes other than pure investment.

(ii) Investment Shares for Purposes Other than Pure Investmenta.

Methods of Verifying the Shareholding Policy and the Reasonableness of Shareholdings, and the Content of the Verificationby the Board of Directors, etc. concerning the Rationality of the Holding of individual Issues
Under the corporate policy of enhancing its corporate value, the Company holds shares for purposes other than pure investment
with a view to developing stable and long-term relationships with business partners, promoting business, along withstrengthening such relationships based on capital/business alliances, and creation of new business opportunities. The
Company’s basic policy is to regularly examine if it is rational to hold each stock and sell such shares when it is judged nolonger rational to hold them. Even when it is judged rational to hold shares, the Company may sell such shares in considerationof the impact of the risk of mark-to-market valuation fluctuations of the shares on the Company’s finance, capital efficiency,
etc. (Out of investment shares for purposes other than pure investment, the description herein refers to shares other thanunlisted shares.)
The methods for verifying the rationality of the shareholdings employ the following main items to verify: (i) A quantitativeevaluation based on factors including the size of business transactions/profit, dividends received, and capital costs, (ii) A
qualitative evaluation of the business activities to date, and (iii) Potential business opportunities in the future. The Board of
Directors verifies the rationality of shareholdings by adjusting the focus on each of the items above in accordance with thesignificance of holding each stock and the benefits expected therefrom.
The Company examined the relevant investment shares using the above methods at the Board of Directors meeting held in thefiscal year ended March 2023. It was confirmed that stocks subject to this examination where it was judged no longer
reasonable to hold them would be sold.

b. Number of Issues and Amount reported on the Balance Sheet
Number of
Total Amount recorded on theIssuesBalance Sheet (Millions of Yen)
(Issues)
Unlisted Stocks

88

4,912

Stocks Other than unlisted
Stocks49

21,741(Issues that increased in Number held in the Fiscal Year under Review)
Number of Total Acquisition Cost related
Issuesto an Increase in the Number of(Issues)
Shares held (Millions of Yen)

Unlisted Stocks

3406

Stocks Other than unlisted
Stocks––Reason for the Increase in the Number of
SharesTo develop and expand business mainly
through acquiring information, knowledge,know-how and others, providing the above toeach other, and strengthening relationships.
–(Note) Issues with an increased or decreased number of shares do not include changes caused by stock consolidation, stock
splits, stock transfers, stock exchange, mergers, etc.

- 105 -(Issues that decreased in Number held in the Fiscal Year under Review)
Number ofIssues(Issues)

Total Sales Amount related to a
Decrease in the Number of
Shares held (Millions of Yen)

Unlisted Stocks

14

923

Stocks Other than unlisted
Stocks17

2,073(Note) One out of the unlisted issues that decreased in number was due to corporate liquidation.

- 106 -

c.

Information on the Number of specified Investment Stocks and Deemed Holdings of Shares by Issue and Amounts reported
on the Balance Sheet, etc.
Specified Investment Stock

IssuesDuring the Fiscal Previous Fiscal Year
Year under Review
Number of Shares
Number of Shares(Shares)(Shares)Amount reported on Amount reported on
the Balance Sheet
the Balance Sheet(Millions of Yen)
(Millions of Yen)
1,351,492

1,801,992

Purpose of Holding, Overview of Business
Alliance, etc., Quantitative Holding Effectand Reason for Increase in the Number of
Shares
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions

Aeon Co., Ltd.
3,467

4,702

Holding of
Shares in the
Company

segment. During the fiscal year underreview, the Company sold a portion of its

Noshareholding.
430,000

430,000

Mainly held to maintain and strengthen
comprehensive business relationships

1,780

1,821

including leases in the Customer Solutions
segment.

1,581,298,147*

Held to create business opportunities in thedigital and mobility sectors, and maintain

Shimadzu Corporation

PT GoTo Gojek
Tokopedia Tbk

1,534

*

768,634

768,634

Mainly held to maintain and strengthen

1,521

1,325

comprehensive business relationships
including leases in the Customer Solutions

187,563

187,563

Mainly held to maintain and strengthen

1,442

1,380

comprehensive business relationships
including leases in the Customer Solutions

221,600

221,600

Mainly held to maintain and strengthen
comprehensive business relationships

1,309

1,130

including leases in the Customer Solutions
segment.

216,500

216,500

Mainly held to maintain and strengthen
comprehensive business relationships

1,104

866

210,080

210,080

Tokai Corp.

Tokyo Ohka Kogyo
Co., Ltd.

Okuma Corporation

Mitsubishi ResearchInstitute, Inc.

and strengthen cooperative relationships
with the said company. Became subject toNoNo

description from the fiscal year underreview due to its new listing.

Yes

segment.

No

segment.

including leases in the Customer Solutions
segment.

Yes

No

The Company entered into a businessalliance agreement with the said company
for the purpose of collaboration in the non-Sompo Holdings, Inc.
1,103

1,130

life insurance business. Mainly held tomaintain and strengthen cooperativeNo

relationships at non-life insurancecompanies in which the two companies
jointly invest.

76,20076,200Mainly held to maintain and strengthen742

comprehensive business relationships
including leases in the Customer Solutions

Okaya & Co., Ltd.
790

- 107 -

segment.

Yes

IssuesDuring the Fiscal Previous Fiscal Year
Year under Review
Number of Shares
Number of Shares(Shares)(Shares)Amount reported on Amount reported on
the Balance Sheet
the Balance Sheet(Millions of Yen)
(Millions of Yen)
482,064

482,064754

716

302,964

302,964680

576

920,000

920,000

544

463

125,000

125,000

530

858

243,900

304,800

Rock Field Co., Ltd.

Zeria PharmaceuticalCo., Ltd.

Bangkok Bank PublicCo., Ltd.

Jeol Ltd.

Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.

498

661

Holding of
Shares in the
Company

Yes

Yes

Mainly held to maintain and strengthen
cooperative relationships at the Company’s
overseas local subsidiaries
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.

No

No

Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions

Nagoya Railroad Co.,Ltd.

Purpose of Holding, Overview of Business
Alliance, etc., Quantitative Holding Effectand Reason for Increase in the Number of
Sharessegment. During the fiscal year underreview, the Company sold a portion of its

Yes

shareholding.
113,000

113,000

Nachi-Fujikoshi Corp.
473

165,375

55,125Mainly held to maintain and strengthen
comprehensive business relationships

421

392

including leases in the Customer Solutions
segment.

142,400

142,400339

333

including leases in the Customer Solutions
segment.

60,00060,000Mainly held to maintain and strengthen

331

340

comprehensive business relationships
including leases in the Customer Solutions

500,000

500,000

GS Yuasa Corporation

Taisho Pharmaceutical
Holdings Co., Ltd.

comprehensive business relationships
including leases in the Customer Solutions

446

Tokio Marine
Holdings, Inc.

Mainly held to maintain and strengthen

JDC Corporation
302

276

- 108 -

No

segment.

Mainly held to maintain and strengthen
comprehensive business relationships

No

No

No

segment.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.

NoIssuesDuring the Fiscal Previous Fiscal Year
Year under Review
Number of Shares
Number of Shares(Shares)(Shares)Amount reported on Amount reported on
the Balance Sheet
the Balance Sheet(Millions of Yen)
(Millions of Yen)
50,64150,641

Purpose of Holding, Overview of Business
Alliance, etc., Quantitative Holding Effectand Reason for Increase in the Number of
SharesThe Company entered into a businessalliance agreement with the said company
for the purpose of collaboration in thecommunications infrastructure sharing

JTower Inc.
248

366

Holding of
Shares in the
Company

sector. Held to maintain and strengthen
cooperative relationships with the said

No

company in establishing a finance scheme
related to capital investment in the sector.
200,000
Cyfuse Biomedical
K.K.

Tokai Tokyo Financial
Holdings, Inc.

MS&AD InsuranceGroup Holdings, Inc.

*

244

*

633,937

633,937

Ltd.

Mainly held to maintain and strengthen

255

42,90742,907

Mainly held to maintain and strengthen

176

170

comprehensive business relationships
including leases in the Customer Solutions

179,450

179,450

169

161

101,970

101,970

168

162

66,800150,000

137

311

Yes

segment.

No

segment.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.

Yes

Yes

Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions

Hirano Tecseed Co.,No

description from the fiscal year underreview due to its new listing.

232

Meito Sangyo Co.,Ltd.

and strengthen cooperative relationships
with the said company. Became subject tocomprehensive business relationships
including leases in the Customer Solutions

SENKO Group
Holdings Co., Ltd.

Held to create business opportunities in theregenerative medicine sector, and maintainsegment. During the fiscal year underreview, the Company sold a portion of its

Yes

shareholding.
115,000

115,000

The Company entered into a businessalliance agreement with the said company
for the purpose of providing financial

Iseki & Co., Ltd.
136

149

services related to agricultural machines
and others sold by the said company’sNogroup. Held to maintain and strengthen
partnership in the agricultural sector.
212,000

212,000

The Torigoe Co., Ltd.
127

139

- 109 -

Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.

NoIssuesDuring the Fiscal Previous Fiscal Year
Year under Review
Number of Shares
Number of Shares(Shares)(Shares)Amount reported on Amount reported on
the Balance Sheet
the Balance Sheet(Millions of Yen)
(Millions of Yen)
188,200

200,000

Freund Corporation
120

157

134,000

134,000

106

88

60,00060,000

Nippo Ltd.

SK-Electronics Co.,
Ltd.

Japan Transcity
Corporation

106

49

150,491

150,491

91

91

53,20053,20081

75

49,812

66,412

SoftBank Corp.

Tsuzuki Denki Co.,Ltd.

Meiji ElectricIndustries Co., Ltd.

77

98

60,00060,00072

61

30,626

61,226

Purpose of Holding, Overview of Business
Alliance, etc., Quantitative Holding Effectand Reason for Increase in the Number of
Shares
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment. During the fiscal year under

67

127

No

review, the Company sold a portion of its
shareholding.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.

No

Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions

No

segment.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions

No

segment.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.

No

Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment. During the fiscal year underNo

review, the Company sold a portion of its
shareholding.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions

Yes

segment.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions

Kisoji Co., Ltd.

Holding of
Shares in the
Company

segment. During the fiscal year underreview, the Company sold a portion of its

Noshareholding.
64,70064,70065

6448,80048,80059

72

Waida MFG. Co., Ltd.

Mitsumura Printing
Co., Ltd.

- 110 -

Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.

No

Yes

IssuesDuring the Fiscal Previous Fiscal Year
Year under Review
Number of Shares
Number of Shares(Shares)(Shares)Amount reported on Amount reported on
the Balance Sheet
the Balance Sheet(Millions of Yen)
(Millions of Yen)
26,302

26,30258

59

37,50075,000Imuraya Group Co.,
Ltd.

Hochiki Corporation
58

92

38,16038,160

Okamura Corporation

Yamada Holdings Co.,
Ltd.

52

46

100,000

100,000

45

38

39,60039,60032

31

13,31013,31030

2740,00040,000

Yahagi Construction
Co., Ltd.

Koike Sanso Kogyo
Co., Ltd.

Yamanaka Co., Ltd.
27

28

29,00039,000Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.

16

25

Holding of
Shares in the
CompanyNo

Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment. During the fiscal year underNo

review, the Company sold a portion of its
shareholding.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions

No

segment.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions

No

segment.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions
segment.

No

No

Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions

Yes

segment.
Mainly held to maintain and strengthen
comprehensive business relationships
including leases in the Customer Solutions

JAPAN CRAFTHOLDINGS CO.,LTD.

Purpose of Holding, Overview of Business
Alliance, etc., Quantitative Holding Effectand Reason for Increase in the Number of
Sharessegment. During the fiscal year underreview, the Company sold a portion of its

Noshareholding.
9,466

9,466

Mainly held to maintain and strengthen
comprehensive business relationships

11

11

including leases in the Customer Solutions
segment.

40,08040,08010

10including leases in the Customer Solutions
segment.

5,000

5,000

Mainly held to maintain and strengthen

Aska Pharmaceutical
Holdings Co., Ltd.

Altech Co., Ltd.

Encho Co., Ltd.
4

4

- 111 -

Mainly held to maintain and strengthen
comprehensive business relationships

comprehensive business relationships
including leases in the Customer Solutions
segment.

No

No

No

IssuesDuring the Fiscal Previous Fiscal Year
Year under Review
Number of Shares
Number of Shares(Shares)(Shares)Amount reported on Amount reported on
the Balance Sheet
the Balance Sheet(Millions of Yen)
(Millions of Yen)

Purpose of Holding, Overview of Business
Alliance, etc., Quantitative Holding Effectand Reason for Increase in the Number of
SharesThe Company held the shares to maintainand strengthen the relationship, but sold all–

400,000–272

of its shareholding during the fiscal year
under review.

–

39,600

The Company held the shares to maintainand strengthen the relationship, but sold all–

47of its shareholding during the fiscal year
under review.

–

10,000

The Company held the shares to maintain–32

and strengthen the relationship, but sold allof its shareholding during the fiscal year–

57,750

The Company held the shares to maintain–23

and strengthen the relationship, but sold allof its shareholding during the fiscal year

TAKEDA iP
HOLDINGS CO.,–28,900

LTD.

–

18

of its shareholding during the fiscal year
under review.

–

4,791

The Company held the shares to maintainand strengthen the relationship, but sold all–17of its shareholding during the fiscal year
under review.

–

25,647The Company held the shares to maintain–16

and strengthen the relationship, but sold allof its shareholding during the fiscal year–

14,320

–

12

–

5,000

–

3

TOA Corporation

Takihyo Co., Ltd.

Daiwa House Industry
Co., Ltd.

The Hachijuni Bank,Ltd.

Suzuken Co., Ltd.

Sala Corporation

Techno Ryowa Ltd.

J-MAX Co., Ltd.

Holding of
Shares in the
Company

No

Yes

No

under review.

Yesunder review.
The Company held the shares to maintainand strengthen the relationship, but sold all

Yes

No

No

under review.
The Company held the shares to maintainand strengthen the relationship, but sold allof its shareholding during the fiscal year

Yes

under review.
The Company held the shares to maintainand strengthen the relationship, but sold allof its shareholding during the fiscal year
under review.

No(Notes) 1. The quantitative holding effect is verified for each individual issue using the method described in (ii) a. above, but is notdescribed for confidentiality reasons.
2. A hyphen “–” indicates that the Company does not hold the relevant issue.
3. An asterisk “*” indicates that the information was omitted because the relevant issue was unlisted stock.

- 112 -

(iii) Investment Stocks for Pure Investment Purposes
During the Fiscal Year under Review
Category

Total Amount recordedon the Balance Sheet(Millions of Yen)

Number of Issues(Issues)

Unlisted Stocks
Stocks Other than unlisted
StocksPrevious Fiscal Year
Total Amount recordedon the Balance Sheet(Millions of Yen)

Number of Issues(Issues)

1

1,650

2

14,951––––

During the Fiscal Year under Review
Category

Total Dividends received Total Gain (Loss) on Sale(Millions of Yen)
(Millions of Yen)

Unlisted Stocks
Stocks Other than unlisted
StocksTotal unrealized Gains(Losses) (Millions of
Yen)

244

1,534

–

–

–

–

(Note) As unlisted stocks do not have market prices, “Total unrealized gains (losses)” are not stated.
(iv) There are no investment shares reclassified from held for pure investment to held for other than pure investment during the
fiscal year under review.
(v) There are no investment shares reclassified from held for other than pure investment to held for pure investment during the
fiscal year under review.

- 113 -