ANNUAL REPORT

2021

Year Ended March 31,2021

Sustained contribution to the regional communities
Management Principle

Strive to become a financial group that “endear ourselves to the regional
community by providing services tailored to customers’ needs, whilevaluing “broad networks of relationships” and “an enterprising spirit.”

Management Policy

1. Create a “most trusted by customers” financial group which
respects personal relationships and promotes honest andapproachable banking.
2. Create a financial group with a commanding regional presence byresearching and predicting trends to provide advanced, high-quality services.
3. Pursue transparent operations and live up to the trust of theshareholders, while maintaining a competitive edge through strong
financial standing, high profitability and management efficiency.
4. Promote “coexistence with the region” by utilizing industrial,academic and management networks for business matching.
5. Focus on gaining the trust of the communities through compliancewith laws and regulations and corporate activities that are considerate of the environment.
6. Provide a workplace for employees of the financial group which
encourages employees to exercise talents and develop skills, with
an emphasis on proactive self improvement, thereby contributing to
the development of upstanding citizens.

Vision ‘25

We contribute to build a future society where everyone can be active,
by offering absolute solutions to our regional customers and developing our potential ability.

Basic Policy

1. Offer the most suitable solutions exactly from customers’ point ofview through the various issues of customers.
2. Create a workplace where employees can be active in diverse
fields by meeting customers’ trust.
3. Contribute to realize a sustainable development of the regional
communities and reliable and fulfilling life of regional customers
through our business activities.

CONTENTS
Top Message ……………………………………………… 2
Launch the Fifth Medium-TermBusiness Plan ……………………………………………… 3
Outline of Fifth Medium-TermBusiness Plan (FY2021 to FY2023) …………………… 4
Establish and provide
thorough solutions ………………………………………… 5“Sustainability Declaration” ……………………………… 6
Sustainable management
promotion system ………………………………………… 7
FY2020 Financial Results ………………………………… 8
Corporate Governance …………………………………… 9Compliance Structure …………………………………… 17

1

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

Risk Management Structure …………………………… 19
Approach to Facilitation of Financing ………………… 23
Corporate Information………………………………… 25

Business Description of the Group …………………… 27
Organization and Board of Directors ………………… 28
Consolidated Financial Informationof Senshu Ikeda Holdings ……………………………… 31
Non-consolidated Financial Informationof The Senshu Ikeda Bank (Unaudited) ……………… 72

Top Message
I sincerely thank you for your continued strong

In light of the recent rise in awareness of

support. I would also like to express myenvironmental and other social issues, theheartfelt sympathy to those damaged by theGroup will accelerate to contribute to thenovel coronavirus (COVID-19).

realization of sustainable regional communities

Senshu Ikeda Holdings Group had positioned

through our core business.

the three years from FY2018 to FY2020 as a

We have expressed this determination as

period for strengthening our business“Sustainability Declaration.” Since The Groupstructure.To earn stable profits from our coregrow by the realization of sustainable regionalbanking business while significantly restraining

communities, we will promote mutual

securities investment, we had been reforming

understanding with our stakeholders while

profit structure, such as revising branchclarifying the promotion system.

management. As a result, despite the

All of our officers and employees will strive tosignificant impact of COVID-19, we recorded

become a financial group endeared by thenet income of ¥5.1 billion yen for the fiscal

regional communities. Appreciate youryear ended March 2021 (FY2020). Core

continued patronage and support.

business profit has continued to increase after
shifting to surplus. We had succeeded in the
Fourth Medium-Term Business Plan andstrengthen our business structure.
In May 2021, we formulated the Fifth MediumTerm Business Plan and positioned “growthstrategy and productivity improvement” as our
key strategy. We will promote “customeroriented” sales policies, as our main theme,“establish and provide thorough solutions.” We
will respond quickly our customers’ needs andcreate business opportunities for the Group by
solving our customers’ issues, although thebusiness environment change dramatically,such as domestic working-age population
decline, digitalization, global competition

Atsushi Ukawa
Representative Director, President and CEO
June, 2021

intensification, COVID-19 epidemic anddecarbonization.

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

2

Launch the Fifth Medium-Term Business Plan

To realize Vision ‘25

In May 2020, 10th anniversary of the merger, the Group formulated Vision ‘25 as ourselves future image toward 2025, a yearof great growth of Expo 2025. After strengthening our business structure under the Fourth Medium-Term Business Plan, theGroup aims to achieve our growth strategy under the Fifth Medium-Term Business Plan toward Vision ‘25.

2018

2020

Vision ‘25
Fourth Medium-Term Business Plan
1st Arrow Completed

2nd Arrow Completed

3rd Arrow

Summary of the Fourth Medium-Term Management Plan
Completed in FY2018

1st Arrow (Balance sheet issues)
Dispose unrealized losses on securities thoroughly

Posted net unrealized gains on available-for-sale securities

Net unrealized gains (losses) on available-for-sale securities

FY2017(11.7)(¥ billion)

FY2018+0.5

FY2019+1.7

Completed in FY2019

2nd Arrow (Profit and loss statement issues)
Revise branch management  Completed introduction of branch-in-branch system and area system

Improve the efficiency of branch operations

Announced in May 2020

3rd Arrow
Become a financial institution forregional communities andcustomers by offering thoroughsolutions
Looking ahead the next 10 years, weformulated “Vision ‘25” as ourselves
future image toward 2025, the year of
growth in Osaka and Kansai

Core business profit(Profits from customer service operations) (¥ billion)

Costs (¥ billion)
46.3

3.9

Down 11%

42.7

41.7

FY2018FY2019FY2020FY2017FY2018FY2019FY2020Period of Fourth Medium-Term Business Plan

2023

2025

2030

Expo 2025

Fifth Medium-Term Business Plan
Realize Vision ‘25

SDGs
Senshu Ikeda Holdings Groupsupports the SDGs

Future social issues andcustomer needs

Balance sheet of potentials
Alliances

Prosperous business areas

 pen collaboration/O
open innovation Professional
businesses
Industry,
academia,
government, etc. Media
Other industries

Growth opportunities
Umekita Second Phase (from 2024) Expo 2025

Business
firms
Venturestartups

National &local
governments

Financial
institutions

Research
institutions
Universities

Resources
A living lab for a future societyE mployment support, business succession, M&A
support, etc.
Senshu Ikeda Tokai Tokyo Securities, Shizen Soken, etc.

 iverse humanD
resources
High added value
Strategic partners

Expand the balance sheet of potentials with multiple networks andhuman resources development High quality solutions
SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

Individuals

Thorough solutions

Advantages
 arket (economic scale, gateway to Asia)
M
Innovation (Concentration of universities & research
institutions, many business openings)
Wealthy elderly, SMEs in diverse industries

3

5.2

(0.6)
FY2017

2021

Services, products

4.5

40.9

Period of Fourth Medium-Term Business Plan

A hub of greenery and innovation

FY2020+5.0

Corporations

Regions xtension of asset life
E
Sound asset formation
Dementia and nursing careSmooth succession ofassets ounders aging
FMobility and polarizationof human resources
“New normal”
Digital transformation,
globalization
 chieve SDGs and ESGsAGenerate innovation,
revitalize regions throughExpo 2025
Structural regional issues,
including low birthrate andaging population, and urban
development

Realize Vision ‘25(Fifth Medium-Term Business Plan)SENSHU IKEDA HOLDINGS,INC.

Outline of Fifth Medium-Term Business Plan (FY2021 to FY2023)
Senshu Ikeda Holdings has formulated the Fifth Medium-Term Business Plan to realize growth strategy and productivity
improvement.
We will continue to challenge the changing future society boldly.

To realize Vision ‘25

Vision ‘25

We contribute to build a future society where everyone can be active, byoffering thorough solutions to our regional customers and developing ourpotential ability.

Basic Policy

Customers

Employees

Regions

Offer the most suitable solutions exactly
from customers’ point of view throughthe various issues of customers.

Create a workplace where employees
can be active in diverse fields bymeeting customers’ trust.

Contribute to realize a sustainable
development of the regional communities and reliable and fulfilling life ofregional customers through our business activities.

Strategic Priorities (growth strategies, productivity improvement)

1
2
3
4
5
6

Establish and provide thorough solutions

Senshu Ikeda Holdings Group’s comprehensive solutions sales
structure (Established 5 divisions) Strengthen the holding group’sfunctions

Swiftly provide comprehensive solutions by the Group
Demonstrate group synergy
Please refer to p.5 for details
Reforme the bank’s sales structure to implement the thorough solutions stated in Vision ‘25
Disseminate and establish a customer-oriented and site-oriented sales structure andawareness reform(On-site: customer-oriented policy, Headquarters: site-oriented policy)

Thorough customer-oriented policy

Establish a structure for the Fifth Medium-Term Busi- Improve customer convenience by utilizing tablet devices
ness Plan
Promote rationalization and optimization of sales brahces for 1,800 employees members
Improve customer convenience and optimize operations/ countermeasures to COVID-19

Human resources strategy

Human resource strategy / bank staff and human resource solution
planning

Human resource development for branch management with a small number of employees
Improve talent and engagement to support Vision ‘25
Respond to changes in age structure and employment environment
Advance human resource management
Diversity & inclusion
Create an organizational culture that encourages challenges and growth

Capital and dividend policy

Shareholder Return Policy
Dividend of ¥7.5 or more per share
Shareholder return ratio of 30% or moreCapital policyPreferred stock ¥25.0 billion
acquired and retired on the call date (cost: - ¥750 million) (scheduled for July 2022)

Sustainable management

Formulate Senshu Ikeda Holdings Group’s Sustainability Declaration.
See p.7 for details.

FY2023 Targets (changes from FY2020)
Senshu Ikeda Holdings (consolidated)
Net income*¥7.0

billion(approx. +¥2.0 billion)

3

ROE

First half of %(approx. +1.0%)

Capital adequacy ratio

Half of%(approx. +2.0%)

11Senshu Ikeda Bank (non-consolidated)¥11.5

Core banking profit

billion(approx. +¥2.0 billion)

Core business profit

billion(approx. +¥2.0 billion)

Core OHR¥7.0
78% level(approx. -3.0%)*Net income = profit attributable to owners of the parent
SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

4

Establish and provide thorough solutions
To provide thorough solutions, Senshu Ikeda Holdings Group has established five divisions to oversee the Group.
We will strive to swiftly provide solutions by the Group ,demonstrate Group synergy, respond quickly to changes in theenvironment, issues and needs, and boldly challenge changing future society.

Bank
Senshu Ikeda Bank,
Ltd.

Securities
Senshu Ikeda
Tokai Tokyo
Securities Co., Ltd.

Divisions

Provide and establish solutions

KPI

1	For asset builders:

Retail Division

Strengthen very convenient face-to-face and non-face-to-face channels

2	For the elderly:

Major roles	Support healthy and fulfilling lives by create a safe and secure environment

Provide solutions,such
as asset formation,utilization, management,
succession,to individual
customers

3	Integrated services of banking and securities:

	Expand the range of products that can be handled, and build a sales andconsulting structure that meets a wide range of customer needs
4,000 cases(+1,700 comparedto FY2020)

FY2020Senshu Ikeda Holdings

Credit card
Senshu Ikeda
credit cardcompanies

Major roles

Provide tailor-madesolutions, such as asset
management and succession, to wealthy
customers

Investment
management

		

FY2023

FY2025Develop wealth management solutions
650 cases(+200 comparedto FY2020)

450
cases

FY2020CapitalSenshu Ikeda
Capital Co., Ltd.

FY2022

1 The wealthy class: High value-added, tailor-made solutions
Providing solutions

Private Banking Division

FY2021

FY2021

FY2022

FY2023

FY20251P
 rovide accompany solutions which address issues and needs
at each life stage of company, based on business feasibility.
2 Strengthen M&A solutions (including hands-on solutions)
3 Strengthen human resource solutions to meet the diverse
human resource needs of companies

Corporate Solutions Division

Major roles

Provide accompany solutions to corporate customers

Senshu Ikeda
Investment
Management Co.,
Ltd.

5700 cases(+3,800 comparedto FY2020)

1900
cases

Credit guaranteeATMmanagement
Station Network
Kansai Co., Ltd.

FY2020Major roles
Contact customers
Improve functions andconvenience(Branches, channels, digital)

Regional Co-Revitalization DivisionNon-financial
services
Shizen Soken
Co., Ltd.

5

Major roles

Develop regional communities and industries
Generate innovation

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

FY2021

FY2022

FY2023

FY2025

1 Expand sales area efficiently

Customer Contact Division

2 New channel with customers
3 Strengthen a sales ability by digital technology
Establishing solutions

Senshu Ikeda
Guarantee Co., Ltd.

4 Build “Senshu Ikeda” brand

1 Generate innovation
Generate innovation and revitalize regions through		
unique venture and startup support programs2 Industry/regional revitalization
Solve regional social issues through public-private		partnerships
Leverage regional growth opportunities to support the		growth of regional companies

Number of cases of solution consulting:

Leasing
Senshu Ikeda
Lease Co., Ltd.

10,000 in FY2025 (+6,000 compared to FY2020)

2,300
cases

SENSHU IKEDA HOLDINGS,INC.

Efforts toachieve SDGs
and ESGs“Sustainability Declaration”

Management Philosophy

Vision ‘25

Sustainability Declaration
Based on our management philosophy,We will solve regional issues through ourbusiness activities by utilizing a wide range of partnerships. We will strive tocontribute to realize sustainable regional communities and achieve ourselves
sustainable growth.

Senshu Ikeda Holdings Groupsupports the SDGs

Significance of the initiatives
 ontribute to achieve the SDGs in the region by working toCsolve regional issues through a wide range of partnerships.
Realize sustainable regional communities and the Groupgrow.

Customers

Regions

Investors

Key issues (materiality) of the SDGs and specific initiatives
ThemesBasic policies

Key issues (materiality)

Contribute to regional revitalization through comprehensive solutions
Specific initiatives

Regional
communities(S)

Provide sincere solutions
Formation, utilization, management and succession of assets utilize
alliances within and outside the GroupAccompany solutions based on business feasibility evaluation
Drive innovation by supporting ventures and startups
Build a regional ecosystem through industry-government-academia
collaboration toward World Expo 2025

Good health andwell-being

Decent work and economic
growthSustainable cities
and communities

Partnerships for thegoals

Affordable andclean energy

Climate action

Good healthand well-being

Gender equality

Industry, innovationand infrastructure

Address environmental issues through our core business of financial
services and conducting our business activities with an emphasis on
the environment

Environment

(E)

Human
resources(S)

Specific initiatives

Contribute to solve environmental issues by financing renewableenergy and other projects
Provide home loans and other financial products that address thethreat of natural disasters
Business activities with an emphasis on the environment, such as
switching to led lighting

Provide solutions to human resource issues for regional communities
and customers
Promote diversity and inclusion
Specific initiatives

Provide solutions for human resource issues of aging founders andbusiness succession
Promote the activities of diverse human resources and women within
the Group
Expand opportunities for senior human resources to be active
Employees’ health promoting action (health management)

Decent work andeconomic growth

Corporate governance (governance and management base) p.7 (G)SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

6

G

Sustainable management
promotion system

Senshu Ikeda Holdings Group will contribute to realize sustainable regional communities through our core business.
Board ofDirectors

Establish a strong and transparent governance system and strengthen supervisory functions
Monitor and evaluate implementation/progress of the Management Philosophy and Vision ‘25(Sustainability Declaration), and provide necessary instruction
ReportInstruct

The Group’s efforts
Corporate Planning and General
Affairs Divisions

Realize sustainable regional
communities

Products and services

Sales Department

Initiatives through collaboration

Senshu Ikeda Tokai Tokyo Securities, Shizen
Soken and other Group companies

Branches
Personnel Affairs Division

Risk Management Division

Loan Division

Operations and Systems DivisionMarket Division

SDGs Topics
Toyono Town in Osaka Prefectureand Senshu Ikeda Bank sign
“Revitalization Cooperation
Agreement Leading to the Future”
Toyono Town in Osaka Prefecture and Senshu Ikeda Bank haveconcluded the “Town Revitalization Cooperation Agreement For
the Future” to improve residents services and promote regional
communities revitalization. Toyono Town conclude a partnershipagreement with any private company, including a financial
institution for the first time.
We will tackle
regional issues,
such as vacanthouses whileaiming to create atown where kind to
the elderly andeasy to raisechildren.

Award from the Cabinet Office forour initiatives to contribute toregional revitalization
Senshu Ikeda Bank received an award from Tetsushi Sakamoto,
Minister in charge of Regional Revitalization.
The Headquarters of the Revitalization of Towns, People, andWorkplaces, Cabinet Office Secretariat selected our initiatives tohold recruitment interview for international students as one of the“Distinctive Efforts by Financial Institutions for Regional Revitalization in FY2020.”

Achievements in 2020

293 individualinterviews
23 students newly
employed by 18 companies(32 companies and 221 international students participated)

7

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

SENSHU IKEDA HOLDINGS,INC.

FY2020 Financial Results

Net profit¥5.1 billion (+¥1.2 billion
year-on-year)*Despite a precautionary allowance for doubtful accounts to uncertainty overthe impact of COVID-19, we have achieved an increase of ¥1.1 billion fromthe plan.

Business Performance
Net interest margin¥38.5 billion (+¥0.7 billion
year-on-year

Non-interest income¥7.4 billion ()(¥ billion)

38.3

38.5

FY201837.8

FY2020

Cost reduction

42.7

9.3
Planned7.2

FY2017

8.3 Actual
7.4

FY2018FY2019FY2020Core business profit*-¥0.8 billion
year-on-year¥5.2 billion ()(¥ billion)

46.3

8.7

Planned Actual

FY2019¥40.9 billion ()(¥ billion)

38.0 38.5

FY2017-¥1.9 billion
year-on-year+¥0.7 billion
year-on-year)(¥ billion)

41.7

Actual4.5
Planned

5.2

3.9

Actual42.8 40.9

Planned3.4(0.6)
FY2017FY2018FY2019FY2020FY2017FY2018FY2019FY2020*Lending balance × deposit/lending interest rate margin + fees and commissions – operating expenses

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

8

Corporate Governance

The Company is a holding company with subsidiaries suchas the Senshu Ikeda Bank, which upholds the Management
Principle of striving to become a financial group that“endear ourselves to the regional community” by providing
services tailored to customers’ needs, while valuing “broad
networks of relationships” and “an enterprising spirit.” Inorder to ensure sustainable growth and the medium- tolong-term enhancement of corporate value, the Company isengaged in initiatives to develop its corporate governancein line with the following basic principles.
(1) W e respect the rights of our shareholders and strive
to ensure their equality.
(2) W e consider the interests of stakeholders and strive toensure appropriate cooperation.
(3) W e disclose corporate information in an appropriatemanner and strive to ensure the transparency of suchinformation.
(4) T he Board of Directors and the Audit & Supervisory
Board strive to enhance the effectiveness of theirsupervision and audits of the execution of duties inline with their fiduciary responsibilities for ourshareholders.
(5) W e strive to engage in constructive dialogue with ourshareholders in order to contribute to sustainablegrowth and the medium- to long-term enhancement ofcorporate value.

Outline of Corporate Governance Structure andReasons for Adopting the Structure
The Company has adopted a corporate governancestructure for sustainable enhancement of its corporate
value through reinforcing supervision of management byelecting the outside directors and cooperating with the
Audit & Supervisory Board.
Specifically, directors who are familiar with banking
business – involving complex and sophisticatedmanagement decisions – supervise business execution ofrepresentative directors, while audit & supervisory board
members audit business execution of directors throughattendance to important meetings and inspection of critical
documents. The Company reinforces its corporate
governance structure through outside directors and outside
audit & supervisory board members (hereinafter “outside
officers”) who possess well-seasoned characters andinsights presenting meetings including the Board of
Directors and expressing their opinions actively.
The Company has concluded a liability limitationagreement with outside officers to the effect that their
liability for damages set forth in Article 423, Paragraph 1, of
the Companies Act shall be the amount prescribed by
Article 425, Paragraph 1 of said Act, in accordance with therelevant provisions of the Articles of Incorporation of theCompany, as long as they perform their duties in good faithand without gross negligence.

Corporate governance functions within the Companyl Board of Directors
The Board of Directors is comprised of 9 directors
including 5 internal directors and 4 outside directors. The
Board of Directors is held once a month in principle,
attended also by audit & supervisory board members, tomake decisions on critical business execution including
basic management policies and management plans, andto supervise the business execution of directors andexecutive officers under the rules of the Board of
Directors.

9

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

l Personnel Committee
The Personnel Committee has been established todeliberate matters including the selection of candidates
for directors. The Committee is comprised of 5 directors
including 1 internal director and 4 outside directors. As avoluntary advisory body to the Board of Directors, theCommittee accepts the involvement and advice ofindependent outside directors, for the purpose of
ensuring the objectivity and transparency of board
functions and strengthening corporate governance.
l Remuneration Committee
The Remuneration Committee has been established todeliberate matters including compensations for directors.
The Committee is comprised of 6 directors including 2
internal directors and 4 outside directors. The
Remuneration Committee, as a voluntary advisory bodyto the Board of Directors, accepts the involvement andadvice of independent outside directors, for the purposeof ensuring the objectivity and transparency of board
functions and strengthening corporate governance.
l Audit & Supervisory Board
The Audit & Supervisory Board is comprised of 4 audit &supervisory board members including 2 internal audit &supervisory board members and 2 outside audit &supervisory board members. Each audit & supervisoryboard member audits the business execution of directors
through attendance at important meetings including theBoard of Directors and the Management Committee,
inspection of critical documents and other means,according to the auditing guidelines and audit plan
decided by the Audit & Supervisory Board. Outside audit& supervisory board members are qualified with a highdegree of integrity along with superior insight andcapability, as well as expertise and hands-on experiencein their respective areas of specialty, providing advice onmanagement from diverse points of view.
l Management Committee
With the purpose of making more prompt management
decisions, the Management Committee has been
established under the Board of Directors. The
Management Committee is comprised of internal
directors and executive officers with titles, as well as
officers commissioned with responsibilities (excluding
persons concurrently serving as president of a Group
company). The Committee is held once a week inprinciple, attended also by internal audit & supervisoryboard members, to make decisions on critical mattersconcerning the business execution as well as to discuss
agenda items for the Board of Directors based on theauthorities delegated by the Board of Directors. The
Management Committee accepts appropriate
involvement of and advice from outside officers who
attend the Committee as needed and express theiropinions.

SENSHU IKEDA HOLDINGS,INC.

(List of members, etc. of each body)
Name

Position

Representative
Directorand Chairman
Representative
Director,
AtsushiPresident and
Ukawa
CEO
Director &SeniorYasukiManaging
Hosomi
Executive
Officer
Shinji Inoue
Director
Director &SeniorToshiyuki
Managing
Wada
Executive
Officer
MinoruDirector
Furukawa(Outside)
Director
Takao Koyama(Outside)
Tomokazu
Director
Yamazawa(Outside)
AtsukoDirector
Ogasawara(Outside)
Audit &
SatoshiSupervisory
Kitagawa
Board
MemberAudit &
Supervisory
Hiroo Maeno
Board
MemberAudit &
Supervisory
Seiji
Board
Morinobu
Member(Outside)
Audit &
Supervisory
Kohei
Board
Nakanishi
Member(Outside)Managing
Tsutomu Irie Executive
OfficerManaging
Osamu
Executive
Tsukagoshi
Officer
Takayuki Ota

Board ofDirectors

Audit &
Management
Personnel Remuneration
Supervisory
Committee
Committee Committee
Board

〇

◎

◎

〇

〇

〇

◎

〇

〇

〇

〇

〇

〇

〇

〇

◎

●

〇

〇

〇

●

〇

〇

〇

●

〇

〇

〇

●

●

◎

Position

Audit &
Supervisory
Board
Member(Full-time)

●

●

〇

●

●

〇

●

●

〇

●

Audit &
Supervisory
Board
Member(Full-time)〇〇* ◎: Chairman 〇: Member ●: Observer

Status of Auditsl Audits by audit & supervisory board membersa. Organization and Personnel of Audits by Audit &Supervisory Board Members
The Audit & Supervisory Board is comprised of 2internal and 2 outside members (3 outside members in
FY2020). The Company has allocated several staff
members who support the duties of audit &supervisory board members.
The status of each audit & supervisory board member
and their attendance at Audit & Supervisory Board
meetings for the fiscal year under review is as follows:

Audit &
Supervisory
Board
Member(Outside)

Attendance at
the Audit &Supervisory
Name
Experience, etc.
Board
Meetings in
the fiscal year
under review
Susumu Mr. Susumu Kawakami assumed the 100%
(19/19)Kawakami position of Executive Officer of The
Senshu Ikeda Bank, Ltd., a Group
company, after having served as
General Manager of the Market
Department and Sales Department.
As Executive Officer, he successively
held the positions of Officer incharge of the Regional
Headquarters, Personnel Affairs
Division, General Affairs Division,and Risk Management Division. He
has been involved in the
management area for many years
and has a wide range of knowledge
and experience, as well as
considerable expertise in financeand accounting gained throughengaging in finance and accounting
operations.
Satoshi Mr. Satoshi Kitagawa assumed the92%
Kitagawa position of Executive Officer of The(13/14)
Senshu Ikeda Bank, Ltd., a Group
company, after having served as
General Manager of the Loan
Division. He assumed the positionof Audit & Supervisory Board
Member of the bank in June 2013
and subsequently held the positionof Audit & Supervisory Board
Member at Group companies. He
has a track record of serving as
Audit & Supervisory Board Member
for many years.
Toshiaki Mr. Toshiaki Sasaki has abundant
100%
Sasakiexperience and a wide range of(19/19)insight through his experience as anaudit & supervisory board member
at financial institutions for many
years.
Seiji
Mr. Seiji Morinobu has a wide range 100%Morinobu of experience and insight as an(19/19)attorney.

Audit &
Supervisory
Board
Member(Outside)
Audit &Kohei
Mr. Kohei Nakanishi has a wide
Supervisory Nakanishi range of knowledge and expertiseBoard
regarding international finance as
Memberwell as experience on corporate(Outside)management and insight into
corporate governance though his
experience as a director at banks
and an outside director at othercompanies.

100%(19/19)Each audit & supervisory board member audits thebusiness execution of directors through attendance at
SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

10

important meetings such as the Board of Directors andthe Management Committee, as well as inspection ofcritical documents, according to guidelines such as the“Guidelines for Audits by Audit & Supervisory Board
Members” and the “Guidelines for Implementing Audits
of Internal Control System,” generally subject to theauditing guidelines and audit plan decided by the Audit& Supervisory Board, as an independent body mandatedby shareholders.
b. S
 tatus of Main Activities of the Audit & Supervisory
Board
Audit & Supervisory Board meetings are held once amonth, in principle, and in the fiscal year under review
they were held a total of 19 times. In accordance withthe auditing guidelines, audit plan, audit
methodologies, responsibilities for audit tasks andother items resolved upon at the Audit & Supervisory
Board at the beginning of the fiscal year, full-time audit& supervisory board members report on their activities,
and opinions are exchanged with directors of theCompany and from each Group company. In addition,
the Audit & Supervisory Board also gives consent to
the election and dismissal of accounting auditors,
amounts of remuneration and other matters.
c. S
 tatus of Main Activities of Audit & Supervisory Board
Members
In accordance with the auditing duties decided uponat the Audit & Supervisory Board, full-time audit &supervisory board members execute audits objectively
and rationally through their attendance at important
meetings, inspection of critical documents, auditing
visits, and reports from each division of theheadquarters.
In addition, auditing effectiveness is enhanced
through the exchange of opinions with the internal
audit division and each Group company, as well aswith accounting auditors. Part-time outside audit &supervisory board members enhance the effectivenessof audits by their participation in Board of Directors’
meetings, as well as by exchanging opinions withdirectors and accounting auditors at Audit &Supervisory Board meetings, and receiving audit
activity reports from full-time audit & supervisory board
members.
Audit & supervisory board members and accounting
auditors perform their audit duties efficiently andeffectively by establishing close mutual cooperation
through exchanging opinions about various auditing
issues at regular meetings to exchange information. In
addition, efficient and effective audit duties are also
performed by working together with the audit &supervisory board members of subsidiaries, as well as
through close mutual cooperation between audit &supervisory board members and the internal audit
division such as audit & supervisory board members’
attendance at internal audits and the exchange of
opinions.
l Internal Audits
The Company has established the Internal Audit Division,
which conducts internal audits based on the basic rulesof intra-group audits, set out to provide objectives andguidelines of internal audits. The Company’s Internal
Audit Division comprises 10 members of whom 9 serve

11

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

concurrently in the Internal Audit Division of the banking
subsidiary (as of March 31, 2021). The Internal Audit
Division conducts internal audits on each division of theCompany based on the internal audit plan approved by
the Board of Directors each year. The Internal Audit
Division also conducts internal audits on each Group
company, as necessary, on its own or by cooperating
and coordinating with internal audit divisions of thesubsidiaries, etc. and provides specific instructions andadvice on the improvement of operations, in addition to
managing and overseeing internal audit operations of theentire Group. Furthermore, the results of the audits are
regularly reported to the Board of Directors.
The Company develops an effective internal audit
structure that has independence and expertise in orderto ensure the soundness and adequacy of operation. The
Company also inspects and evaluates the adequacy andeffectiveness of the risk management and internal control
practices, and makes recommendations as appropriate
to the senior management of the Company on ways toimprove and rectify questionable areas. Thus theCompany’s internal audit guidelines facilitate effective
achievement of management objectives including theimprovement of the Group’s internal management
structure and the enhancement of its enterprise value.
l Accounting Audits
Name of the auditing firm
Ernst & Young ShinNihon LLC
Successive period of audit services provided
Eleven years and 6 months (audit contract dating from
October 2009 at the time of the Company’s founding)
The Bank of Ikeda (currently The Senshu Ikeda Bank)
concluded an audit contract with Ernst & Young
ShinNihon LLC (then Showa Audit Corporation) in 1976.
The Senshu Ikeda Bank, established through a merger
between the Bank of Ikeda (currently The Senshu Ikeda
Bank) and the Senshu Bank, subsequently continued theaudit contract with Ernst & Young ShinNihon LLC.
Certified public accountants who conducted the latest
accounting audit
Mr. Hideya Nanba and Mr. Tetsuro Tone
Starting with appointments and replacements for the
fiscal years commenced since April 1, 2016, the lead
audit engagement partner is not permitted to re-engage
in audits after engagement of five consecutive fiscal
years, and other audit engagement partners are notpermitted to re-engage in audits for five consecutive
fiscal years after engagement of seven consecutive fiscal
years, which is a rotation rule more stringent than as
regulated in laws and regulations.
Composition of assistants for the accounting audit
Assistants for the accounting audit of the Company are
7 certified public accountants and 32 others.
Policy and reasons for selecting the auditing firm
In accordance with the Practical Guidelines for
Cooperation with Accounting Auditors, released by theJapan Audit & Supervisory Board Members Association,
the Audit & Supervisory Board of the Company regularly
checks if the accounting auditors conform to auditing
standards, quality control standards, the practicalguidelines for auditing, and internal regulations of theauditing firm, to which they should conform as
professional specialists, and keeps itself updated on
accounting standards, through inquiries and dialogues.

SENSHU IKEDA HOLDINGS,INC.

The Company has selected the aforementioned certified
public accountants and others as a team responsible forthe accounting audit, after comprehensively examining
their track record of auditing and execution of duties forthe previous fiscal year, which led the Company todetermine that the appropriateness and reliability ofaccounting audits can be ensured.
The Audit & Supervisory Board shall dismiss anaccounting auditor, subject to unanimous consent of theaudit & supervisory board members, if it determines thatthe accounting auditor satisfies one or more of theconditions described in the provisions of Article 340,
Paragraph 1 of the Companies Act.
If the Audit & Supervisory Board comprehensively
examines the status of the execution of duties by theaccounting auditors and determines that theappropriateness and reliability of accounting audits
cannot be ensured, the Audit & Supervisory Board shalldetermine the contents of a proposal for a general
meeting of shareholders on dismissal or nonreappointment of the accounting auditors.
Content of the Audit & Supervisory Board’s evaluation of
the auditing firm
In accordance with the Practical Guidelines for Audit &Supervisory Board Members, etc. in developing theStandards for Evaluating and Selecting Accounting
Auditors, released by the Japan Audit & Supervisory
Board Members Association, the Audit & Supervisory
Board has established the Standards for Evaluating and
Selecting Accounting Auditors, based on which the Audit& Supervisory Board conducts evaluation.
As a result of the evaluation, it was found that theaccounting auditors satisfy none of the conditions
described in the provisions of Article 340, Paragraph 1 of
the Companies Act. The Company, therefore,
reappointed the accounting auditors, taking into accountthe results of the evaluation on the accounting auditors
by the Audit & Supervisory Board.

Status of Outside Officers

The Company has 4 outside directors.
Outside Director Minoru Furukawa holds 17,900 shares ofcommon stock of the Company and has ordinary banking
transactions with The Senshu Ikeda Bank. He also
concurrently serves as an officer at Hitachi Zosen
Corporation, Unitika Corporation, and The Midori Kai Co.
Ltd. The Senshu Ikeda Bank has ordinary banking
transactions with Hitachi Zosen Corporation, Unitika
Corporation and The Midori Kai Co., Ltd, and has
concluded a temporary staff dispatch contract with The
Midori Kai Co., Ltd.
As an outside director of the Company, he performs his
duties of supervising the business execution based on his
extensive experience and superior insight into corporate
management as a representative director of a listedcompany. He also concurrently serves as a non-executive
director (non-full-time) at The Senshu Ikeda Bank.
Outside Director Takao Koyama holds 17,900 shares ofcommon stock of the Company and has ordinary banking
transactions with The Senshu Ikeda Bank. He previously
served as an officer at Hitachi, Ltd. and Hitachi Solutions,Ltd. The Senshu Ikeda Bank has ordinary banking
transactions and commissions of system development andoperation with Hitachi, Ltd. and Hitachi Solutions, Ltd.; andthe Company has a capital relationship with Hitachi, Ltd.

As an outside director of the Company, he performs his
duties of supervising the business execution based on his
extensive experience and superior insight into corporate
management as a representative director. He also
concurrently serves as a non-executive director (non-fulltime) at The Senshu Ikeda Bank.
Outside Director Tomokazu Yamazawa holds 18,640
shares of common stock of the Company and has ordinarybanking transactions with The Senshu Ikeda Bank. He
previously served as an officer at Hankyu Hanshin
Holdings, Inc. He also concurrently serves as an officer atHankyu Hanshin Hotels Co., Ltd, Hanshin Expressway
Company Limited and Charm Care Corporation. The
Senshu Ikeda Bank has ordinary banking transactions with
Hankyu Hanshin Holdings, Inc., Hankyu Hanshin Hotels
Co., Ltd, Hanshin Expressway Company Limited andCharm Care Corporation. The Company has a capital
relationship with Hankyu Hanshin Holdings, Inc.
As an outside director of the Company, he performs his
duties of supervising the business execution based on his
extensive experience and superior insight into corporate
management as a representative director. He also
concurrently serves as a non-executive director (non-fulltime) at The Senshu Ikeda Bank.
Outside Director Atsuko Ogasawara holds 1,900 sharesof common stock of the Company and has ordinarybanking transactions with The Senshu Ikeda Bank.
As an outside director of the Company, she performs her
duties of supervising the business execution based on her
wide range of experience and achievements in thebusiness world, including serving in key positions at apress firm. She concurrently serves as a non-executive
director (non-full-time) at The Senshu Ikeda Bank.
The Company has 2 outside audit & supervisory board
members
Outside Audit & Supervisory Board Member Seiji
Morinobu has ordinary banking transactions with The
Senshu Ikeda Bank. He also concurrently serves as an
officer at KITAKEI CO., LTD. The Senshu Ikeda Bank hasordinary banking transactions with KITAKEI CO., LTD.
He performs his duties as an outside audit & supervisoryboard member in auditing the legality of the management
execution from an objective and neutral position, based on
his experience as an outside director, wide range ofexperience and superior insight as an attorney, andsufficiently high social credibility.
Outside Audit & Supervisory Board Member Kohei
Nakanishi holds 7,100 shares of common stock of theCompany and has ordinary banking transactions with The
Senshu Ikeda Bank. He previously served as an officer at
Japan Bank for International Cooperation (“JBIC”).
Although The Senshu Ikeda Bank has concluded amemorandum of understanding with JBIC for supporting
Japanese firms with expanding overseas, no considerationarises from transactions under the memorandum.
He performs his duties as an outside audit & supervisoryboard member independently from an objective and neutral
position, based on his wide range of experience andknowledge regarding international finance as well as
experience in corporate management and insight into
corporate governance through serving as director of a bankand outside director of corporations, and sufficiently highsocial credibility.
The Company has set forth the following standards forthe independence of outside directors and outside audit &SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 202112

supervisory board members (hereinafter “outside officers”)
in order to objectively determine their independence andelects outside officers on the basis of these standards. All 6
outside officers, namely outside directors Minoru Furukawa,Takao Koyama, Tomokazu Yamazawa, and Atsuko
Ogasawara and outside audit & supervisory board
members Seiji Morinobu and Kohei Nakanishi, satisfy thestandards for the independence. They have been
designated as independent officers and registered with theTokyo Stock Exchange as such, as they satisfy therequirements of independence stipulated by the relevant
stock exchange and pose no potential conflict of interests
with general shareholders.
<Standard for judging the independence>
At the Senshu Ikeda Group, as a general rule, Outside
Directors/Audit & Supervisory Board Members shall bethose who do not fall under any of the following
requirements, at present or recently.1
1. A person who deems the Group to be a major2 business
partner, or in the case of a company, an executing
person thereof.
2. A person who the Group deems to be a major business
partner, or in the case of a company, an executing
person thereof.
3. A business consultant, an accounting specialist or alegal specialist who has received a large sum3 of moneyand other properties other than Officers’ remunerationfrom the Group (or a quasi-executing person who has
belonged to the payee’s group).
4. A person who the Company deems to be a major
shareholder4 of the Company, or in the case of acompany, an executing person thereof.
5. A payee of a large sum of donation from the Group, or aquasi-executing person of the payee’s group, in the casewhere the receiver of the monies, etc., is an entity.
6. A former executing person of any of the Group
companies in the past.5
7. A relative6 of a person (excluding those who are notsignificant) mentioned below:
		A.	A person who is mentioned in the aforesaid items 1
through 6.
		B.	Directors, Audit & Supervisory Board Members,
Executive Officers and important employees of any of
the Group companies.
Notes:
1. Definition of “recently”: Refers to cases that might beregarded as almost “at present,” for example, including
the case where said person fell under any infringement
requirement item since the content of a proposal for theselection as Outside Director or Outside Audit &Supervisory Board Member was determined.
2. Definition of “major”: Refers to 2% or more of theconsolidated net sales per annum (Consolidated
ordinary income in case of the Company) for the nearest
fiscal year, as a benchmark for judgment.
3. Definition of “a large sum”: Refers to a three-year
average amount of ¥10 million or more per annum for the
past three years.
4. Definition of “major shareholder”: Refers to a shareholder
who held 10% or more of the total voting rights at the endof the nearest fiscal year.
5. Definition of “past”: Refers to “within 10 years up to thepresent.”
6. Definition of “relative”: Refers to “within the second
degree of kinship of a person.”

13

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

Supervision or Audit by Outside Directors or Outside
Audit & Supervisory Board Members, Interconnection
with Internal Auditing, Audits by Audit & Supervisory
Board Members, and Accounting Auditing, andRelationship with the Internal Control Division

Outside directors receive reports about the status of audits
by audit & supervisory board members, internal audits andaccounting audits, as well as the status of internal control
from the internal control division through Board of Directors.
On the other hand, outside audit & supervisory board
members receive reports from full-time audit & supervisoryboard members about the status of audits by audit &supervisory board members, internal audits andaccounting audits, as well as the status of internal control
from the internal control division. Both outside directors andoutside audit & supervisory board members give
recommendations and advice in return for these reports.

SENSHU IKEDA HOLDINGS,INC.

Corporate governance structure of the Group[Senshu Ikeda Holdings](As of the end of June, 2021)

General Meeting of
Shareholders
Appointment/Removal

Accounting Auditors
Accounting audit

Appointment/Removal
Joint coordination
Reporton Audit

Report on Audit
AdviceBoard of Directors

Bringing important
issues to meetings/
Reporting on business Appointment/
execution
Supervision

Bringing discussed
issues to meetings/
ReportingManagement Committee

Supervision

Group Strategy Division[The Senshu Ikeda Bank]

Audit

Joint coordination

Reporton AuditInternal Audit Division

Directors/Executive Officers
Internal audit

Instruction/
Direction

Corporate Planning andGeneral Affairs Division

Audit & Supervisory Board

Personnel Committee
Remuneration Committee

Representative Directors
Risk Management Committee
Compliance Committee
ALM Committee

Appointment/Removal

Personnel Affairs Division

General Risk
Management Division[Senshu Ikeda Tokai Tokyo Securities]

General Meeting of
Shareholders

General Meeting of
Shareholders
Audit & Supervisory Board

Audit & Supervisory Board

Board of Directors

Personnel Committee
Remuneration Committee

Board of Directors

Management Committee

Risk Management Committee

Management Committee

Compliance Committee

Compliance Committee

ALM Committee
Efficiency Improvement Committee

Branches

Head Office

Branches

Head Office

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

14

Basic approach to the internal control system and its
status of development

The Company and the Group companies are developinga structure necessary to ensure the adequacy ofoperation based on the following concepts; create a“most trusted by customers” financial group which
respects personal relationships and promotes honest
and approachable banking.
(1) Structure to ensure that directors and employees of theCompany and the Group companies execute businessin compliance with laws and regulations as well as with
the Articles of Incorporation
The Company and the Group companies focus oncompliance with laws and regulations (hereinafter“compliance”) as one of the most critical managementtask. The Company and the Group also set out the codeof ethics along with the code of conduct to ensure that
directors and employees behave in compliance with laws
and regulations as well as social norms, while setting out
basic rules of compliance under which overall
compliance policies and specific measures are
discussed at the Compliance Committee.
To ensure the above compliance implementation, theCompany and the Group companies appoint directors
who are responsible for compliance. In addition, theGeneral Risk Management Division coordinatescompliance arrangement across the Company and theGroup companies, while conducting education andtraining for directors and employees by developing
compliance program and compliance manual, andarranging compliance seminars.
Furthermore, the Group Compliance Hotline, awhistleblowing system has been set up and managed toallow directors and employees of the Company and theGroup companies to directly provide information about
questionable conduct in light of laws and regulations.
The hotline system is structured to guarantee that the
informants who provide such compliance-related
information are protected from being treated in a
disadvantageous manner.
Basic rules that directors and employees must abide
by are set out for the prevention of insider trading.
Besides, the Company and the Group companies havetaken uncompromising stance against anti-social forces
and organizations that threaten the order and safety of
the community, while making every effort to eliminate
their involvement in any trading activities. The Company
and the Group companies have also taken every
measure to eliminate money laundering in considerationof the possibility that funds transferred via financial
institutions could be used for criminal purposes including
terrorism.
Moreover, the Company and the Group companies
provide effective customer management including
customer protection, with the purpose to reassure ourcustomers of their security and to promote theirconvenience in an effort to implement a thorough‘customer first policy.’(2) Structure for the preservation and management of
information concerning the directors’ businessexecution
The Company and the Group companies have preparedand kept documents such as minutes of important
meetings including the Board of Directors and the15

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

Management Committee, as records of directors’
execution of duties.
The Company and the Group companies have also
prepared and kept documents and attachment
sanctioned by directors as appropriate.
(3) Arrangements including rules to manage the risk ofpotential losses of the Company and the Group
companies
With the purpose of ensuring the soundness ofmanagement and stable corporate earnings, theCompany and the Group companies have set out basic
rules of risk management. The Company and the Group
companies have classified risks into credit risk, market
risk, funding liquidity risk and operational risk, anddefined the department responsible for the managementof each category of risk, while establishing the Risk
Management Committee to monitor the status ofmanagement of each such category.
Meanwhile, the Company and the Group have set out
rules of risk management, with the purpose to minimize
the financial loss along with loss of confidence resulting
from the crisis event, and to ensure business continuity
through prompt restoration of normal operational
functions.
(4) Structure to ensure efficient business execution bydirectors of the Company and the Group companies
The Board of Directors sets out the management
objectives of the Company and the Group companies
with the purpose of enabling the directors andemployees of the Company and the Group companies toefficiently execute their business. The Board of Directors
also formulates the Group Management Plan and sets
forth operational plans on an annual basis to bring saidPlan into shape.
In addition, the Board of Directors establishes theManagement Committee with the purpose of enabling
directors to efficiently execute their business. The
Management Committee discusses beforehand theagenda of the Board of Directors to facilitate thedecision-making process at those meetings, while
discussing the critical issues for resolution in
implementing the basic management policies that havebeen resolved by the Board of Directors on the basis ofsuch policies.
The Management Committee also defines theheadquarters under the command of each director, alongwith the authority and responsibility involved, whiledeveloping and maintaining a structure for efficientbusiness execution by utilizing IT.
(5) Structure to ensure the adequacy of business operation
at the Group, which comprises the Company and theGroup companies
The Company regards the respective Group companies
as one group under the flag of Senshu Ikeda Holdings.
Thus each member company of the Group runs its
operation through developing an adequate internalmanagement structure according to its scale and natureof operation under the adequate guidance of, and incoordination with the Company.
The Company, as a responsible entity for theadministrative management of the entire Group, hasestablished administrative management rules targetingits subsidiaries. The Company has developed a structurein which it receives necessary reports concerning theSENSHU IKEDA HOLDINGS,INC.

business execution of directors and employees and otherrelevant matters from and consults on those issues withthe respective Group companies.
(6) Matters concerning employees who assist audit &supervisory board members in the performance of theirduties, the independence of those employees fromdirectors, and structure to ensure the effectiveness of
the instructions to such employees
In order to support audit & supervisory board members’
business execution, the Company and the Group employ
audit & supervisory board members’ staffs as secretariat
for the Audit & Supervisory Board. Such audit &supervisory board members’ staff shall receive
instructions from the audit & supervisory board members
for their business execution, while their personnel
changes and evaluations shall require an accord of therelevant audit & supervisory board members to ensure
the staff’s independence from directors. Thus theCompany and the Group companies ensure their
independence from directors.
(7) Structure to facilitate reporting from directors andemployees to audit & supervisory board members andother arrangements to ensure that audit & supervisoryboard members are adequately informed, as well as the
structure to ensure that no disadvantageous treatment isconducted because of having reported to audit &supervisory board members
Directors and employees of the Company and the Group
companies shall immediately report to audit &supervisory board members on matters that could havesignificant impact on the Company and the Group
companies, or any other matters as necessary, in
addition to matters legally required to be reported.
In addition, the hotline system is structured toguarantee that the informants who provide the Group
Compliance Hotline with compliance-related information
are protected from being treated in a disadvantageousmanner. Moreover, to complement this arrangement, theCompany and the Group companies have established astructure whereby audit & supervisory board members
are permitted to attend important meetings such as thoseof the Board of Directors, the Management Committee,
the Compliance Committee, the Risk Management
Committee and the ALM Committee.
(8) Other structure to ensure that audit & supervisory board
members conduct effective audits
Audit & supervisory board members hold meetings to
exchange opinions with representative directors, internal
audit division and accounting auditors.
Audit & supervisory board members attend important
meetings such as the Board of Directors, theManagement Committee, the Compliance Committee, theRisk Management Committee and the ALM Committee, inan effort to find out various problems they need toaddress in the execution of their duties.
Furthermore, audit & supervisory board members shallbe permitted to request posteriori for redemption of theexpenses that they deem necessary in executing theirduties if such expenses were previously budgeted bythem and have been disbursed for an emergency or
temporarily.

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

16

Compliance Structure
The Company and the Group sets “compliance” as oneof the most important management priorities. We are coping with it in order to fulfill our social responsibility andpublic duties, and to earn the trust of our customers andregional communities.
The Company has set up a “Compliance Committee”
to deliberate important matters regarding groupcompliance. We have also formed the General Risk
Management Division under the “Chief Compliance
Officer” to manage matters regarding compliance
unitarily.

The General Risk Management Division ensurescompliance by creating, reviewing, and following up the“Compliance Program,” which is a practical plan forreinforcement of compliance, by creating, updating, anddistributing the “Compliance Manual,” which stipulates
basics regarding compliance, and by conducting compliance education activities through various training
programs.
We assign “Compliance Officers” and “ComplianceManagers” to each division and branch in order to implement and penetration of compliance. In addition, weSenshu Ikeda Holdings

Board of Directors and Management Committee
Bringing issues to meetings/Reporting

Instruction

Compliance Committee(Administrative Office: General Risk Management Division)

Chief Compliance Officer(Director in charge of General Risk Management Division)
General Risk Management Division
Consultation /Reporting

Instruction

Compliance Officers in each Division (General Managers)
Compliance Managers (Deputy General Managers)

Consultation /Reporting

Instruction

The Senshu Ikeda Bank, Senshu Ikeda Tokai Tokyo Securities, Shizen Soken
Subsidiaries and affiliates

17

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

SENSHU IKEDA HOLDINGS,INC.

check the operations from compliance point of view andfacilitate the conduction of training programs to ensurecompliance.
We also set up and operate a hotline including external contact point in order to find compliance problems inearly stages and take corrective actions.
Compliance has become an increasingly important
issue for financial institutions. The Company and theGroup are committed to strict observance of the Banking
Act, Financial Instruments and Exchange Act, and related
laws and regulations. We also work toward the eliminationof anti-social forces, and strive to strengthen an appropriate protection system for our customers.
We intend to enrich and enhance our compliancestructure through improving various regulations andgiving training to our employees continuously so that customers can deal with us “reliably.”

Code of Ethics
The Group sets up Code of Ethics as follows that our directors and employees mustabide by. The directors and employees will regard the observance of the Code of
Ethics as a fundamental part of routine operations and will conduct fair and honest
corporate activities, while complying with laws and rules strictly to implement theGroup’s management philosophy and policies.
1. Winning the trust from our customers
Taking its social responsibility and public duties into consideration, we will intend
to become the most reliable financial group for the customers through conducting
sound and appropriate operations, including information management and proper
disclosure.
2. Implementing “customer first policy”
We will always consider any matters on customer first basis and will contribute to
the development of the regional economy and community through providing
high-quality financial services that are both original and innovative.
3. Strict compliance
We will strictly comply with all laws and rules, and will conduct fair and honest
corporate activities that are consistent with social code.
4. Respecting human rights and the environment
We will respect personal relationship, characters and personalities of the others,
and conduct environment-friendly corporate activities.
5. Eliminating anti-social forces
We will take an uncompromising stance against anti-social forces and organizations, and resolutely eliminate all undue intervention by such forces andorganizations which threaten the order and safety of the community.

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

18

Risk Management Structuren Basic Approach to Risk Management
While business opportunities for financial institutions
multiply as a result of deregulation, sophistication andglobalization of financial operations, and the significant
development in ICT, the risks that financial institutions
face are becoming more complicated and diverse qualitatively.
Moreover, it has been more important for financial
institutions to monitor, assess and manage risks properly,
and to respond to the changes quickly in the environment in order to earn the stable and continuous profits,
while serving various needs of customers. Under suchcircumstances, the Group regards enhancing andstrengthening risk-management structure as a highpriority management task in order to maintain andenhance the soundness of its business execution.
Specifically, the Group determines the structure andvarious rules regarding risk management and the departments in charge of each risk category at the Board of
Director. The group has also set up the risk management
division to oversee the departments regarding risk management. Furthermore, the Risk Management Committee
and the ALM Committee, consisting principally of management personnel have been established, with the
purpose to identify the risk situation within the Group as
well as its subsidiaries, and to discuss the relevant
agenda and countermeasures which shall subsequently
be reported and further discussed at the Board of Directors. Thus the Group ensures effective risk management
structure at management level.
Meanwhile, as action plans for risk management
based on the Group strategies, basic risk management
principles are set out annually and reviewed continuallyin order to deal with the risks newly emerging as a resultof changes in environment for timely and adequate way.
With the purpose to objectively examine the adequacy and effectiveness of the risk management structure,
the internal audit division which independents from theaudited departments conducts an audit. Thus the Group
ensures appropriate administrative processing andsound business operations through finding out andimproving the matters on risk management.

categories of credit risk, credit concentration risk
outside the calculation of capital ratio, interest rate risk
in banking accounts, market risk and operational risk,
and compares them with its management strength(capital ratio).
The Group regards development and reinforcement of risk management structure as its crucial
management task. Furthermore, the Group has developed an integrated risk management structure that therisk management division manages all risks in order tocomprehensively identify and appreciate various risks
associated with the Company’s operations by asuniform as possible measurement, and to earn thestable revenue, realize appropriate capital composition and allot management resources properly.
l Risk capital management system
The Group is running its operation based on the risk
capital management system that controls all risks
within certain proportion of capital base, under the
integrated risk management structure.
Specifically, the Company allocates risk capitalsourced from core capital base to credit risk, market
risk and operational risk, based on the calculated risk
amount in each category. The Company has also
monitored risk amount continuously to ensure that it is
kept within the tolerable limit from management pointof view. Thus the Company ensures smooth operations
and management soundness across the Group.

Risk buffer: Provisions against unpredictablerisks and risks associated withaffiliated companies

Risk buffer
Credit Risk
Core
capital baseRisk
capitalto beallotted

19

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

Market Risk
Market Risk
Operational
Risk

n Integrated Risk Managementl Integrated risk management
Integrated risk management refers to the process toadequately manage the risks that financial institutions
face. The Company evaluates the risks divided into

Credit Risk

Financialresource forallocation

Allocatablerisk capital

Risk capital
to beallocated

Operational
Risk
Risk amountSENSHU IKEDA HOLDINGS,INC.

l Calculation method for capital ratio regulation
In respect to risk asset calculation for the purpose of
the capital ratio regulation, the Group applies theFoundation Internal Ratings-Based Approach for credit
risk and the gross profit allocation method for operational risk.

n Credit Risk Management
Credit risk, as identified by the Group, is the risk of
suffering losses as a result of a decline or loss of thevalue of assets due to reasons such as the deteriorating
financial conditions of or default by the obligor.
The Group has set up “Credit Policy” in the banking
subsidiary that clarifies its policy for extending credit,
based on its management policy in order to maintain andenhance the soundness of its business execution.
Under this policy, the responsible division for the
management of credit risk, the Risk Management Division at banking subsidiary, in accordance with the
management methods stipulated in the Credit Management Regulations, administers finely-tuned responses torisks for the purpose of building up an optimum portfolio.
Specifically, the division analyzes and manages thecredit portfolio from various aspects including credit
concentration risk, type of business, borrower classification and credit ratings.
As for the credit analysis and management of eachloan at the banking subsidiary, the Group makes efforts
to ensure the independence of the investigation divisionfrom the business promotion division. The Board of
Directors and other appropriate body review each loan
for large obligor as well as the credit policy. Thus theGroup has focused on the development and improvement of its credit analysis system. Meanwhile, Loan
Division is managing housing loans receivable.
The banking subsidiary has also established theInternal Audit Division, to manage auditing of the selfassessment of assets, in order to maintain and enhance
the soundness of its asset base.

n Market Risk Management
Market risk, as identified by the Group, points to “marketrisk” and “market liquidity risk.” Market risk is the risk of
suffering losses through changes in the prices of assets
and liabilities held by the Group due to the fluctuations ofmarket risk factors, such as interest rates, prices of
securities, foreign exchange rates and so on. Market

liquidity risk is the risk of suffering losses arising from theinability to execute sufficient transactions under appropriate conditions, due to market confusion or an
insufficient trading base. The Group has established the
Risk Management Committee and the ALM Committee,
consisting principally of management personnel, anddiscussed appropriate and timely measures to address
the risks in order to earn the stable and continuous profit
through managing its assets and liabilities in a comprehensive way.

n Funding Liquidity Risk Management
Funding liquidity risk, as identified by the Group, is therisk of suffering funding difficulties from being unable toraise necessary funds due to market conditions or deterioration in the Group’s financial condition, as well as therisk of suffering losses from being forced to raise funds
at higher interest rates than usual.
The Group takes control of its funding situation
through careful monitoring of the fund management andfundraising. The Group also ensures liquidation of its
assets and diversifies the sources of fundraising. Thus
the Group has taken every possible measure to manage
funding liquidity risk.

n Operational Risk Management
Operational risk, as identified by the Group, is the risk of
suffering losses from the inappropriate business activityof the Group - including its employees-, systems, orexternal premises.
The Group has set a rule for operational risk management and classified the risks into the six categories asfollows; (1) administrative risk, (2) information asset(system) risk, (3) tangible fixed asset risk, (4) personnel
risk, (5) legal risk, and (6) reputation risk.
Furthermore, the Group identifies and evaluates all
risks associated with new products and services before
they are actually developed and provided, for the purpose of adequate risk management. Besides, the Groupmanages customer information sufficiently and ensuresmanagement soundness when outsources certain business operation.

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

20

l Administrative risk management
Administrative risk, as identified by the Group, is therisk of suffering losses from administration, fraud,
accidents and other risks that the Group’s operations
will not be carried out as intended.
The Group prescribes detailed rules on administrative procedures and strives to prevent accidents
through doing the administration promptly and accurately, so that the customer can enter into transactions
with the Group without any concern. Meanwhile, theGroup makes every effort to eliminate administrativerisk by measures such as review of the administrative
procedure from identification of potential risks throughthe analysis of administrative processes.
l Information asset (system) risk management
Information asset (system) risk, as identified by theGroup, is the risk of suffering losses due to loss, alteration, unauthorized use, leakage of information, as wellas to system defects caused by natural disasters or
breakdowns.
In consideration of the fact that its business operations are supported by various computer systems, theGroup ensures the reliability and security of systems
and has established back-up systems and structuresin case of emergency.
The Group is also working to establish appropriate
operation and management systems to prevent theleakage of information and unauthorized access to its
systems through encoding of data and strengtheningof access authority management.
l Tangible fixed asset risk
Tangible fixed asset risk, as identified by the Group, isthe risk of suffering losses associated with damage ofbuilding and equipment or deterioration of working
environment as a result of disasters or poor asset management.
The Group is preparing for disaster through conducting quake resistance tests and implementing
countermeasures against power failures in order toensure business continuity in the event of emergencies.
l Personnel risk
Personnel risk, as identified by the Group, is the risk of
suffering losses associated with the delay of failing insuccession of expertise within the Group, as a result ofdrain or loss of key staff, or degradation of morale.
21

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

The Group is striving to develop working environment to enable each employee to fully exert ability,
while helping him or her to improve their skills.
l Legal risk management
Legal risk, as identified by the Group, is the risk of
suffering losses from violations of laws and regulations,as well as inappropriate responses to changes invarious systems.
The Group strives to prevent the occurrence oflegal risk and to reduce the risk itself. To this end, theGroup has established the General Risk Management
Division to collect information concerning legal matters, and to manage legal risk identified from suchinformation, as well as appropriately responds to thelegal risk.
l Reputation risk management
Reputation risk, as identified by the Group, is the riskof suffering losses arising from deterioration of theGroup’s reputation due to circulation of unfounded
rumors or due to inadequate responses of the Group
concerning the facts.
The Group works to avoid reputation risk by disclosing information proactively thorough increases thetransparency of its management, taking into consideration the crucial influence on the management of theGroup.

n Crisis Management
The Group has established the “Crisis Management
Rules,” which set out the basic policies in responding toemergencies including large-scale disasters and system
failures. In the event of large-scale crisis, the Group sets
up a “Crisis Management Headquarters” take charge ofcompany-wide response. Specific action programs are
set out in a “Contingency Plan,” with the purpose toensure safety of customers and employees, as well as
set up business continuity structure of the financial
system.

SENSHU IKEDA HOLDINGS,INC.

The risk management structure of the Group(As of the end of June, 2021)

Senshu Ikeda Holdings
Board of Directors

Audit & Supervisory Board
Crisis Management Headquarters

Management Committee

Supervising
division

Type of risks

Responsible
divisions

ALM Committee

Risk Management Committee

General Risk Management Division

Credit Risk Market Risk

Funding
Liquidity
Risk

Operational Risk
Administrative
Risk

Information
Asset(system) Risk

General Risk Management Division

Divisions in chargeof operating
and managing

Tangible Fixed
Asset Risk

Personnel
Risk

Legal Risk

Corporate Planning andGeneral Affairs Division

Personnel Division

General Risk
Corporate Planning andManagement Division General Affairs Division

Reputation
Risk

Internal Audit Division

Committee

Banking subsidiary and affiliates

Direction of basic policies, etc.

Administration and management

Reporting on status of risk management

Consultation on risk management

The Senshu Ikeda Bank
Audit & Supervisory Board

Board of Directors

Crisis Management Headquarters
Management Committee

Supervising
division

Type of risks

Responsible
divisions
Divisions in chargeof operating
and managing

ALM Committee

Risk Management Committee

Risk Management Division

Credit Risk Market Risk

Funding
Liquidity
Risk

Risk Management Division

Operational Risk
Information
Asset(system) Risk

Tangible Fixed
Asset Risk

Personnel
Risk

Legal Risk

Reputation
Risk

Operations Management
Division

Corporate Planning andGeneral Affairs Division

Personnel Affairs
Division

Risk
Management
Division

Corporate Planning andGeneral Affairs Division

Administrative
Risk

Internal Audit Division

Committee

Each division of Headquarters, each branch, subsidiaries and affiliates

Senshu Ikeda Tokai Tokyo Securities

Shizen Soken

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

22

Approach to Facilitation of Financing
The Senshu Ikeda Bank (hereinafter the “Bank”) is focused on providing adequate and sufficient financial
intermediary function to customers in need of businessloans or housing loans, as one of the crucial management priorities. The Bank has formulated basic policy forfacilitation of financing (hereinafter the “Policy”) in orderto promote facilitation of financing to those in needparticularly under the current tight economic environment.
The Bank intends to communicate with our customers
and promote facilitation of financing positively.

l Organizational structure(1)	With the purpose to develop a management structurenecessary to supply facilitation of financing (hereinafter “Facilitation of Financing Management”) under the
Policy, the Bank appoints the Facilitation of Financing
Manager to check whether Facilitation of Financing
Management is effectively working.
(2)	The Bank appoints the director in charge of the Loan
Division to the Facilitation of Financing Manager. The
Manager will engage in the development and reinforcement of the structure for Facilitation of Financing
Management through checking the progress inrespect of Facilitation of Financing Management.
(3)	The Facilitation of Financing Manager coordinates theoverall business in respect of Facilitation of Financing
Management such as instructions to the division
responsible for Facilitation of Financing Management,

and drawing up of the rules governing facilitation offinancing, with the purpose to ensure adequacy,
sufficiency and effectiveness of Facilitation of Financing Management.
(4)	The Loan Division is responsible for Facilitation of
Financing Management. The Loan Division engages
in the adequate operation, examination and improvement of Facilitation of Financing Management under
the command of the Facilitation of Financing Manager
through gathering information necessary for Facilitation of Financing Management.

System for accepting consultation of facilitation of financing

The Senshu Ikeda Bank
[Headquarters][Branches]
Facilitation of Financing Manager
Consultation,
application andcomplaints

Reporting andconsultation

Coordination[Consultation Service over holidays]

Customers

Support andinstruction

Toll-free Consultation Service

Divisions associated with Facilitation of Financing

Instructions

Smooth financing
Appropriate explanations to customers
Dealing with complaints and consultations appropriately
Support in improving management
Support in restructuring
Personnel training
Analysis and improvement of management structureManagement
Committee[Consultation Service]Consultation, application and complaints

Toll-free Consultation Service
Repayment Consultation Approach

Sincere and adequate respondence

Coordination
Businesstransactions, etc.

23

Board
of
Directors

Divisions managing Facilitation of Financing

Over-the-counter Consultation Service

Over-the-counter Consultation Service

Reporting

Development and reinforcement of the supervising structure

Facilitation of Financing Officer

Sincere andadequate
respondence

Facilitation of Financing Manager

Credit Guarantee Corporation, Enterprise
Turnaround Initiative Corporation of Japan,
Japan Housing Finance Agency and other financial institutions

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

Contact for opinions and requests(complaints) concerning facilitationof financing <Toll-free>

Reporting

Audit &
Supervisory
Board

Disclosure

ReportingPublicAuthorities

SENSHU IKEDA HOLDINGS,INC.

l Basic Policies(1)	On receiving consultations or applications for newloans, or changes in loan terms from customers, theBank intends to make sincere effort to conduct adequate and prompt credit screening throughconsidering customers’ recent financial results,
assets and income as well as future potential andprospect. The Bank also deals with the applications
for new loans, after changes in loan terms in a similar
way as referred to above.
(2)	The Bank intends to make efforts to supply funds(including new credit granting) smoothly as well as tomake changes in loan terms by monitoring the conditions of the customers carefully and fully coordinatingwith other related financial institutions including otherbusiness categories.
(3)	Additionally, keeping in mind the purpose of the provisions of Article 64 of the Act on Regional Economy
Vitalization Corporation of Japan (Law No. 63, 2009)(*), the Bank intends to appropriately and proactively
engage in the vitalization of the regional economy
and the facilitation of regional financing.
(Note) The provision sets forth, “The Corporation andfinancial institutions, when providing support
to business activities that contribute to thebusiness rehabilitation of business operatorsand the vitalization of the regional economy,
shall strive to mutually cooperate with eachother in order to vitalize the regional economy
and facilitate regional financing through theenhancement of overall economic capabilitiesof the region.”(4)	Consequently, the Bank intends to provide maximum

support to the business improvement efforts of its
customers not only through its role as a provider offinancing but also through various customer services
including business consultation and guidance.
(5)	Furthermore, keeping in mind the purpose of the“Guidelines on Proprietor Guarantees” (Study Groupon Guidelines on Proprietor Guarantees, December
5, 2013; hereinafter “Guidelines on Proprietor
Guarantees”), the Bank intends to further promoteloans that are not dependent on proprietor
guarantees, while at the same time making efforts todeal with its customers based on the concept ofreasonable guarantee contracts as set forth in the“Guidelines on Proprietor Guarantees.”(6)	On receiving consultations or applications for newloans, or changes in loan terms from customers, theBank intends to provide sufficient explanation in orderto gain customers’ understanding and satisfaction, on
the basis of past trading records, customers’
knowledge, experience and assets situation. If the
Bank has to decline customers’ application, we will
explain the reason background of the decision as
concretely and courteously as possible.
(7)	The Bank intends to improve capability of directors
and employees about facilitation of financing bygiving internal training, to enable them to makeappropriate decisions based on good understandingof customers' situations.
(8)	The Bank intends to respond to any comments,
requests, consultations and complaints from
customers in respect of facilitation of financing
promptly and sincerely.

l Policies for handling of application for loans from small and medium enterprises and sole proprietors(1)	On receiving applications for changes in businessterms such as loan terms from small and medium
enterprises and sole proprietors, the Bank intends toaccommodate such application and offer adequatechanges in terms adequately as far as possible,
taking into consideration of the specialty and thecircumstance of customers’ businesses.
(2)	The Bank intends to provide small and medium
enterprises and sole proprietors with management
consultation, guidance and other adequate assistance in support of their effort for management
improvement, taking into consideration the operational circumstance of customers.
(3)	In the cases that customers borrow from other financial institutions as well as the Bank, we will, uponcustomers’ approval, strive to make arrangements incoordination with the other financial institutions inorder to help to reduce the burden of repayment.
(4)	On receiving request for the corporate rehabilitation
procedure through Alternative Dispute Resolution(ADR) for corporate rehabilitation (*) or Enterprise
Turnaround Initiative Corporation of Japan, the Bank
makes utmost effort to respond adequately to such
request as far as possible, in full consideration of theprospect of improvement or rehabilitation of thebusiness.
(Note) This refers to certified dispute resolution procedure set out in Article 2, Paragraph 25 of the
Law on Special Measures for Industrial
Revitalization, in which a private third party
organization formulates a rehabilitation plan,
as coordinator of the interests of creditors.

l Policies for handling of application for housing loan(1)	On receiving applications for new loans or changes inhousing loan terms from housing loan customers, theBank intends to accommodate such application andoffer adequate new loans or changes in terms adequately as far as possible, taking into considerationof circumstances including customers’ assets andincome and transactions with other financial institu-

tions.
(2)	In the cases that customers have transaction withother financial institutions as well as the Bank or withJapan Housing Finance Agency, we will, upon customers’ approval, strive to make arrangements incoordination with the other financial institutions inorder to help to reduce the burden of repayment.
SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

24

Corporate Information
Corporate Data (As of the end of March 2021)
Senshu Ikeda Holdings, Inc.
Establishment: October 1, 2009
Location:18-14 Chayamachi, Kita-ku, Osaka-City, Osaka 530-0013, Japan
Phone:
81-(0)6-4802-0181
URL:
https://www.senshuikeda-hd.co.jp
Share Capital:¥102.9 billion
Business Activities: Management and other related operations of banks and affiliates
whose shares can be held in accordance with the Banking Act
and other related operations, and businesses which bank holding
company can operate in accordance with the Banking Act.
Number of Employees: 104
Stock Listing:Tokyo Stock Exchange

The Senshu Ikeda Bank, Ltd.
Establishment: September 1, 1951
18-14 Chayamachi, Kita-ku, Osaka-City, Osaka 530-0013, Japan
Location:
Phone:
81-(0)6-6375-1005
URL:
https://www.sihd-bk.jp
Share Capital:¥61.3 billion
Deposits:¥5.4203 trillion
Loans:¥4.3115 trillion
Number of Branches: 139
Number of Employees: 2,280
Credit Ratings: A-(Japan Credit Rating Agency, Ltd.)International Network
Suzhou Representative Office:

Ho Chi Minh City Representative Office:399 East Baodai Road,
Wuzhong District, Suzhou,
Jiangsu, China

7th Floor, Sun Wah Tower,
115 Nguyen Hue Boulevard,
District 1, Ho Chi Minh City,
VietnamPhone:
84-(0)28-3821-3295
Facsimile :84-(0)28-3821-3298

Phone:
Facsimile :86-(0)512-6585-1791
86-(0)512-6585-2312

Senshu Ikeda Tokai Tokyo Securities Co.,Ltd.
Establishment: January 30, 2013
Location:18-14 Chayamachi, Kita-ku, Osaka-City, Osaka 530-0013, Japan
Phone:
81-(0)6-6485-0031
URL:
https://www.sittsec.co.jp
Share Capital:¥1.25 billion
Assets Under Management: ¥133.5 billion
Number of Branches: 7
Number of Employees: 127

25

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

SENSHU IKEDA HOLDINGS,INC.

Major Shareholders (As of March 31, 2021)
1. Common stock
Name

Number of Shares Owned (Thousands)

Custody Bank of Japan, Ltd. (Trust Account)*1

The Master Trust Bank of Japan, Ltd. (Trust Account)*1

The Senshu Ikeda Bank Employees’ Shareholders Association

Proportion of Total Shares (%)

35,481

12.66

13,323

4.75

11,077

3.95

MUFG Bank, Ltd.

5,934

2.11

ITAMI SANGYO CO., LTD.

3,692

1.31

Custody Bank of Japan, Ltd. (Trust Account 9G)*1

3,657

1.30

SMBC Nikko Securities Inc.
STATE STREET BANK WEST CLIENT - TREATY 505234(Standing proxy: Settlement & Clearing Service Division, Mizuho Bank, Ltd.)

3,630

1.29

3,609

1.28

Custody Bank of Japan, Ltd. (Trust Account 5G)
JP MORGAN CHASE BANK 385781(Standing proxy: Settlement & Clearing Service Division, Mizuho Bank, Ltd.)

3,459

1.23

3,370

1.20

*1

*1: These shares do not disclose the names of beneficiaries.
2: Japan Trustee Services Bank, Ltd. merged with JTC Holdings, Ltd. and Trust & Custody Services Bank, Ltd. on 27th July, 2020. The company changed
its name to Custody Bank of Japan, Ltd.

2. First series of seventh-class preferred stock
Name

Number of Shares Owned (Thousands)

Proportion of Total Shares (%)

OC FINANCE CORPORATION

5,000

20.00

Daikin Industries, Ltd.

5,000

20.00

Aozora Bank, Ltd.

3,000

12.00

ITAMI SANGYO CO., LTD.

2,000

8.00

NICHIA STEEL WORKS, LTD.

2,000

8.00

Non-Destructive Inspection Company Limited.

2,000

8.00

NEC Capital Solutions Limited

1,000

4.00

Mizuho Leasing Company, Limited

1,000

4.00

SHIMA SEIKI MFG., LTD.

1,000

4.00

Hankyu Hanshin Holdings, Inc.

1,000

4.00

ROHTO Pharmaceutical Co., Ltd.

1,000

4.00

Shionogi & Co., Ltd.

500

2.00

Nippon Paper Core Industrial Co., Ltd.

500

2.00

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

26

Business Description of the GroupThe Senshu Ikeda Bank, Ltd.
Senshu Ikeda Tokai Tokyo ●Securities Co.,Ltd.
Shizen Soken Co.,Ltd. ●Senshu Ikeda Holdings, Inc.

n Organizational Chart of the Group (As of the end of June, 2021)
Head office and branches: 136
Banking services

Sub-branches: 3
Representative offices: 3● Senshu Ikeda Lease Co., Ltd.

Leasing services● Senshu Ikeda Auto Lease Co., Ltd.
● Senshu Ikeda Guarantee Co., Ltd.

Credit guarantee services● Kinki Credit Guarantee Company Limited● Senshu Ikeda JCB Co., Ltd.

Credit card services● Senshu Ikeda DC Co., Ltd.
● Senshu Ikeda VC Co., Ltd.
● Senshu Ikeda Capital Co., Ltd.
● Senshu Ikeda Business Service Company Limited● Senshu Ikeda System Co., Ltd.

Other services● Senshu Ikeda Investment Management Co., Ltd.
Station Network Kansai Co., Ltd.
● Investment enterprise partnerships: 7

Securities services

Head office and branches: 7

Other services

Head office(Note:● indicates consolidated subsidiaries and○ indicates equity-method affiliates)n Subsidiaries and Affiliates (As of the end of June, 2021)

Affiliates

Subsidiaries

Name

27

Address

Major Business

Date ofestablishment

Share Capital Investment ratio (%)(millions of
Subsidiaries
Japanese yen) The Company and affiliates

The Senshu Ikeda Bank, Ltd.

18-14, Chayamachi, Kita-ku, Osaka-city Banking services

September 1, 1951

61,385100.00–Senshu Ikeda Tokai Tokyo
Securities Co.,Ltd.

18-14, Chayamachi, Kita-ku, Osaka-city Securities services

January 30, 2013

1,250

60.00

–

Senshu Ikeda Lease Co., Ltd.

4-5-36, Miyahara, Yodogawa-ku, Osaka-city Leasing services

April 1, 198650–

100.00Senshu Ikeda Auto Lease Co.,Ltd.

4-5-36, Miyahara, Yodogawa-ku, Osaka-city Leasing services

July 10, 1996

80

–

95.00

Senshu Ikeda Guarantee Co., Ltd.

3-1-22, Toyosaki, Kita-ku, Osaka-city

Credit guarantee services

July 20, 1973180–

100.00Kinki Credit Guarantee Company
Limited

3-1-22, Toyosaki, Kita-ku, Osaka-city

Credit guarantee services

April 1, 1975100–

100.00Senshu Ikeda JCB Co., Ltd.

3-2-1, Toyosaki, Kita-ku, Osaka-city

Credit card services

February 1, 1983

60–

100.00Senshu Ikeda DC Co., Ltd.

3-2-1, Toyosaki, Kita-ku, Osaka-city

Credit card services

September 5, 199030–

100.00Senshu Ikeda VC Co., Ltd.

3-2-1, Toyosaki, Kita-ku, Osaka-city

Credit card services

November 2, 199040–

100.00Senshu Ikeda Capital Co., Ltd.

18-14, Chayamachi, Kita-ku, Osaka-city Venture capital services

March 6, 198990–

100.00Senshu Ikeda Business Service
Company Limited

18-14, Chayamachi, Kita-ku, Osaka-city Back-office administration

April 1, 198330–

100.00Senshu Ikeda System Co., Ltd.

18-14, Chayamachi, Kita-ku, Osaka-city Computer software development
and sale services

June 10, 1985

50

–

98.00

Senshu Ikeda Investment Management Co., Ltd.

3-1-22, Toyosaki, Kita-ku, Osaka-city

Investment advisory and discretionary investment services

April 1, 1987

120–

100.00

Shizen Soken Co., Ltd.

2-1-11, Jonan, Ikeda-city

Information offering services

November 1, 1996

80

17.50

–

Station Network Kansai Co., Ltd.

1-4-8, Shibata, Kita-ku, Osaka-city

Planning and operation of ATM at station June 29, 2000

100

–

40.00

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

SENSHU IKEDA HOLDINGS,INC.

Organization and Board of Directors
Senshu Ikeda Holdingsn Organization (As of the end of June, 2021)

Management Committee

Group Strategy Division

ALM Committee

Compliance Committee

Risk Management Committee

Remuneration Committee

Personnel Committee

Personnel Affairs Division

Audit & Supervisory Board Members Office

Audit & Supervisory Board Members Audit & Supervisory Board

Board of Directors

General Meeting of Shareholders

Corporate Planning and General Affairs Division

General Risk Management DivisionInternal Audit Divisionn Board of Directors (As of June 23, 2021)
Representative Director
and Chairman
Representative Director,
President and CEO

Takayuki Ota
Atsushi Ukawa

Director &Senior Managing
Executive Officer
Director
Director &Senior Managing
Executive Officer
Director(Outside)

Yasuki Hosomi

Director(Outside)

Takao Koyama

Audit & Supervisory
Board Member(Full-time)

Hiroo Maeno

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

Seiji Morinobu

Executive
Officer

Tomoyuki Shinohara

Shinji Inoue

Director(Outside)

Tomokazu Yamazawa

Toshiyuki Wada

Director(Outside)

Atsuko Ogasawara

Minoru Furukawa

Audit & Supervisory
Board Member(Full-time)

Satoshi Kitagawa

Osamu Tsukagoshi

Executive
Officer

Katsumi Hiramatsu

Keisuke Misaki

Executive
OfficerAtsushi Otsuka

Kouhei Nakanishi

n Executive Officers (As of June 23, 2021)
Senior Managing
Executive Officer

Akira Harada

Managing
Executive Officer

Tsutomu Irie

Managing
Executive
Officer
Executive
Officer

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

28

The Senshu Ikeda Bankn Organization (As of the end of June, 2021)
Personnel Committee

Remuneration Committee

Corporate Planning and General Affairs Division
Personnel Affairs Division
Risk Management Division
Compliance Management Office
Operations Management Division
Operating Center

Management Committee

International Division
Branches (including sub-branches): 139
Retail Business Division
Personal Loan Promotion Office

ALM Committee

M&A Advisory Office

Efficiency Improvement Committee

Compliance Committee

Risk Management Committee

Solution Business Division

Audit & Supervisory Board Members Office

Audit & Supervisory Board Members Audit & Supervisory Board

Board of Directors

General Meeting of Shareholders

Risk Products Operations Office

CS Headquarters

Private Banking Office
Overseas Representative Office
Regional Co-Revitalization and Innovation Division
Business Strategy Division
Customer Center
Financial Market DivisionMarket Operations Office
Loan Division
Business Rehabilitation Supporting OfficeInternal Audit Divisionn Board of Directors (As of June 23, 2021)
Representative Director
and Chairman
Representative Director,
President and CEO

Takayuki Ota

Director & Senior Managing
Executive Officer

Atsushi Ukawa

Director & Senior Managing
Executive Officer

Shinji Inoue

Non-executive Director(Non-full-time)

Minoru Furukawa

Audit & Supervisory
Board Member (Full-time)

Osamu Horiuchi
Ken-ichi Yoshimoto
Kenji Fukuda

Toshiyuki Wada

Non-executive Director(Non-full-time)

Takao Koyama

Audit & Supervisory
Board Member (Outside)

Director & Managing
Executive Officer

Hiromasa Hirai

Non-executive Director(Non-full-time)

Tomokazu Yamazawa

Audit & Supervisory
Board Member (Outside)

Director & Managing
Executive Officer

Hirohito Sakaguchi

Non-executive Director(Non-full-time)

Atsuko Ogasawara

Director & Managing
Executive Officer

Osamu Tsukagoshi

Audit & Supervisory
Board Member (Full-time)Masahiro Saiton Executive Officers (As of June 23, 2021)
Senior Managing
Executive Officer
Managing
Executive Officer
Managing
Executive Officer
Managing
Executive Officer

29

Koji Miyata

Executive
Officer

Tsutomu Irie

Executive
Officer

Susumu Yamagata

Executive
Officer

Takayoshi Fujiwara

Executive
Officer

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2021

Kyoko Matsushita

Executive
Officer

Keisuke Misaki

Executive
OfficerAtsushi Otsuka

Executive
Officer

Hiromu Koujiya

Executive
Officer

Shin-ichi Kojima

Executive
Officer

Ryoichi Iimuro

Akira Sasaki

Executive
Officer

Masahide Inui

Hiroshi Sudo

Executive
Officer

Yasuji Kanbayashi

Yoshi Yamamoto

Executive
Officer

Takahiro DokiSENSHU IKEDA HOLDINGS,INC.

Deputy General Manager, Business Headquarters

General Manager, Business Headquarters

Branches

Business Management Division
Collaboration Promotion Office
Corporate Business Promotion Office

Product Management Division

General Manager, Management Headquarters

Representative Director and Vice President

Representative Director and President
Compliance Committee

Audit & Supervisory Board Members Audit & Supervisory Board

Management Committee

Board of Directors

General Meeting of Shareholders

Senshu Ikeda Tokai Tokyo Securitiesn Organization (As of the end of June, 2021)

Planning and General Affairs Division

Business Compliance DivisionInternal Audit Divisionn Board of Directors (As of June 23, 2021)
Representative
Director andPresident

Motoshi Inoue

Audit & Supervisory
Board Member(Full-time)

Mamoru Kudo

Representative
Director andVice President
Senior Managing
Director

Hironobu Furusawa

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

Jun Matsumura

Muneharu Kurita

Katsuo Saitoun Executive Officers (As of June 23, 2021)
Executive Officer

Toshiyuki Inoue

Executive Officer

Shigeki Kawamura

Executive Officer

Masaomi Umezawa

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 202130

Consolidated Financial Information of Senshu Ikeda Holdings
Consolidated Balance Sheets
Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
As of 31st March, 2021 and 2020

Thousands of U.S.
dollars (Note 1)
2021

Millions of yen
2021
2020

AssetsCash and due from banks (Notes 26 and 32)
Call loans and bills bought (Note 32)
Monetary claims bought (Note 32)
Trading account securities (Notes 4 and 32)
Money held in trust (Notes 6 and 32)
Securities (Notes 5, 7, 12, 19, 32 and 33)
Loans and bills discounted (Notes 8, 31, 32 and 33)
Foreign exchange assets (Notes 9 and 32)
Other assets (Notes 10 and 12)
Tangible fixed assets (Note 11)
Intangible fixed assets
Net defined benefit assets (Note 17)
Deferred tax assets (Note 28)
Customers’ liabilities for acceptances and guarantees
Reserve for possible loan losses
Total assets¥¥

1,671,441
9,414
79
–
20,001
564,580
4,291,531
5,061
83,95837,122
4,632
23,462
2,751
7,407(15,899)
6,705,548¥

807,879
6,651
99
50
19,988548,789
3,963,504
5,468
77,88938,5395,175
12,587
9,104
8,210(11,385)
5,492,555$ 15,097,470
85,032713–
180,661
5,099,629
38,763,716
45,714758,359
335,308
41,839211,923
24,84866,904(143,609)$ 60,568,584

5,408,845
10,323
973,225487
54,420
1,655
136

¥

4,987,885–
209,104556
51,3201,201
139$ 48,855,975
93,2438,790,759
4,398
491,554
14,948
1,228

4

4

36

392
175
1,171
8
250
7,407
6,458,505

519
183
873
6
176
8,210
5,260,182

3,540
1,580
10,57772
2,258
66,90458,337,142

102,999
42,10781,087(163)
226,030

102,999
42,10578,839(94)
223,850

930,349
380,336
732,427(1,472)
2,041,640

10,744(133)
7,889
18,50076
2,434
247,042
6,705,548

5,752
(170)
638
6,220
79
2,223
232,373
5,492,555

97,046(1,201)
71,258167,103686
21,9852,231,433$ 60,568,584¥

Liabilities and net assets
Liabilities
Deposits (Notes 12, 13 and 32)
Payables under securities lending transactions (Notes 12 and 32)
Borrowed money (Notes 12, 14, 32 and 33)
Foreign exchange liabilities (Notes 15 and 32)
Other liabilities (Notes 12 and 16)
Provision for employees’ bonuses
Net defined benefit liability (Note 17)
Accrued retirement benefits for directors and audit & supervisoryboard members
Reserve for reimbursement of deposits
Reserve for point services
Reserve for contingent losses
Reserve under special laws
Deferred tax liabilities (Note 29)
Acceptances and guarantees (Note 20)
Total liabilities
Net assets
Shareholders’ equity (Note 20):
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income:Net unrealized gain (loss) on available-for-sale securities (Note 7)
Net unrealized gain (loss) on deferred hedges (Note 33)
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Stock subscription rights (Note 20)
Non-controlling interests
Total net assets
Total liabilities and net assets
See accompanying notes to consolidated financial statements

31

¥

¥

¥

Consolidated Statements of Operations
Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
For the years ended 31st March, 2021 and 2020

Millions of yen
2021
2020

Thousands of U.S.
dollars (Note 1)
2021

IncomeInterest income:Interest on loans and bills discounted (Note 31)
Interest and dividends on securities
Other interest income
Fees and commissions
Other operating income (Note 21)
Recoveries of written-off claims
Gain on sales or disposal of fixed assets
Other income (Note 22)
Total income¥

39,5492,956
619
20,4522,533
686
27
14,53081,356¥39,291
5,060
633
21,731
6,290
1,169
363
14,044
88,584$357,230
26,7005,591
184,734
22,8796,196
243
131,243734,856

Expenses
Interest expenses:
Interest on deposits
Interest on borrowings and rediscounts
Other interest expenses
Fees and commissions
Other operating expenses (Note 23)
General and administrative expenses
Loss on sales or disposal of fixed assets
Loss on impairment of fixed assets
Other expenses (Note 24)
Total expenses
Income before income taxes

1,085
97
123
7,407
24
45,48346
619,45373,728
7,628

1,449
255
950
7,450
8,835
47,45329
99
17,01783,541
5,042

9,800
876
1,111
66,904
216
410,830415
54
175,711
665,956
68,900

Income taxes (Note 28)
Current
Deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of the parent

493
1,964
2,458
5,169
65
5,103

607
527
1,134
3,908
(35)
3,943

4,453
17,74022,202
46,689587
46,093¥¥$

See accompanying notes to consolidated financial statements

Consolidated Statements of Comprehensive Income
Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
For the years ended 31st March, 2021 and 2020

ProfitOther comprehensive income (Note 29)
Net unrealized gain (loss) on available-for-sale securities
Net unrealized gain (loss) on deferred hedges
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income
Total comprehensive income attributable to:
Owners of the parent
Non-controlling interests¥¥

Millions of yen
2021
2020
5,169
¥
3,908

4,990
37
7,250
12,27917,44817,38464¥(3,531)(34)(1,558)(5,124)(1,216)(1,181)(34)

Thousands of U.S.
dollars (Note 1)
2021$
46,689$45,072334
65,486110,911
157,600
157,022578

32

Consolidated Statements of Changes in Net Assets
Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
Year Ended 31st March, 2021

BALANCE, 1st April, 2019

Capitalstock

CapitalsurplusRetainedearnings

102,999

42,10378,804Purchase of shares of consolidated subsidiaries
Cash dividends
Profit attributable to ownersof the parent
Acquisition of treasury stock
Disposal of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes during the period
BALANCE, 31st March, 2020
Purchase of shares of consolidated subsidiaries
Cash dividends
Profit attributable to ownersof the parent
Acquisition of treasury stock
Disposal of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes during the period
BALANCE, 31st March, 2021

BALANCE, 1st April, 2020
Perchase of shares of consolidated subsidiaries
Cash dividends
Profit attributable to ownersof the parent
Acquisition of treasury stock
Disposal of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes during the period
BALANCE, 31st March, 2021

(831)

0

–
102,9992
42,1055

142,107

2,197

71

1,969

236,4620(3,908)

3,943

3,943

3,943

(0)
739

(0)
739

(0)
737

35
78,839737(94)(3,533)(34)(1,558)7

253(4,864)(3,533)
5,752

(34)
(170)

(1,558)
638

7
79

253
2,223

(4,088)232,3735(2,855)(2,855)775
223,8505(2,855)

5,103

5,103

5,103

(95)
21

(95)
21

(95)
25

2,248
81,087

CapitalsurplusRetainedearnings

930,349

380,31745

712,121

4,991

37

7,250

(2)

211

12,4894,991
10,744

37
(133)

7,250
7,889

(2)
76

211
2,434

14,669247,042

Thousands of U.S. Dollars (Note 1)
Accumulated othercomprehensive incomeNet
unrealizedNetgain (loss) on unrealized RemeasureTotal
availablegain (loss)
ments of
Stock
Treasury shareholder’s
for-saleon deferreddefinedsubscription
stock
equitysecurities
hedgesbenefit plansrights

Noncontrollinginterests

Total net
assets

20,0792,098,934

(69)
(163)

(849)

2,179
226,030

2,021,949

51,955(1,535)

5,762

713

(25,788)45(25,788)45(25,788)

46,09346,09346,093

(858)
189

(858)
189

(858)
225

(27)

9
380,336(136)

0Capitalstock–
930,349

9,285

Total net
assets(3,908)(3)–
102,999

223,074

Noncontrollinginterests(3,908)1

See notes to consolidated financial statements

33

TreasurystockMillions of Yen
Accumulated othercomprehensive incomeNet
unrealizedNetgain (loss) on unrealized RemeasureTotal
availablegain (loss)
ments ofStockshareholder’s
for-saleon deferreddefinedsubscription
equitysecurities
hedgesbenefit plansrights

20,305
732,427(623)(1,472)45,081

334

65,486

(18)

1,905

112,808

19,68245,081

71,258

(18)
686

1,905
21,985

132,499

97,046334(1,201)

65,486

2,041,640

2,231,433

Consolidated Statements of Cash Flows
Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
For the years ended 31st March, 2021 and 2020

Thousands of U.S.
dollars (Note 1)
2021

Millions of yen
2021
2020
Cash flows from operating activities
Income before income taxes¥

Depreciation

7,628

¥

5,042

$

68,900

5,207

5,784

47,032

Loss on impairment of fixed assets

6

99

54

Amortization of goodwill

27

27

243

(Earnings) losses from investments under the equity method

28

(8)

252

4,513

(2,580)40,764

Increase (decrease) in accrued bonuses

453

(23)

4,091

Decrease (increase) in net defined benefit asset(46)(1,352)(415)

Increase (decrease) in net defined benefit liability

(2)

(7)

(18)

Increase (decrease) in accrued retirement benefits for directors and audit & supervisory board members

–

(3)

–

(127)

(92)

(1,147)(72)

Increase (decrease) in reserve for possible loan losses

Increase (decrease) in reserve for reimbursement of deposits
Increase (decrease) in reserve for point services

(8)

(71)

Increase (decrease) in reserve for losses on guarantees

–

(371)

–

297

74

2,682

(43,124)(44,985)(389,522)

Interest expenses

1,306

2,655

11,796(Gain) loss on securities(2,147)

4,802(19,393)

Increase (decrease) in reserve for contingent losses
Interest income(Gain) loss on money held in trust

19

(43)

171

(Gain) loss on foreign exchange

(492)

3,524

(4,444)(Gain) loss on sales or disposal of fixed assets, net

–

(341)

–

Net (increase) decrease in loans and bills discounted(328,026)(50,417)(2,962,930)

Net increase (decrease) in deposits

420,959

42,3373,802,357

Net increase (decrease) in borrowed money (excluding subordinated borrowings)

764,120

86,027

6,901,996

Net (increase) decrease in due from banks (excluding due from the Bank of Japan)(5,379)833(48,586)

50

61

451

Net (increase) decrease in call loans and bills bought and others(2,742)476(24,767)

Net increase (decrease) in payables under securities lending transactions

10,323(87,321)

93,243
3,667

Net (increase) decrease in trading account securities

Net (increase) decrease in foreign exchange (assets)

406

45

Net increase (decrease) in foreign exchange (liabilities)

(68)

147

(614)

Interest received

43,24946,667

390,651

Interest paid

(1,549)(2,917)(13,991)

5,280

10,002

47,692880,162

18,074

7,950,158

Other
Subtotal
Income taxes paid
Net cash provided by (used in) operating activities

(136)
¥

880,026(721)¥

17,352(1,228)$

7,948,929

34

Consolidated Statements of Cash Flows
Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
For the years ended 31st March, 2021 and 2020

Thousands of U.S.
dollars (Note 1)
2021

Millions of yen
2021
2020
Cash flows from investing activities
Purchases of securities¥(144,950)¥(191,732)$ (1,309,276)

Proceeds from sales of securities

16,962

130,371

153,211

Proceeds from maturity of securities

112,220

109,227

1,013,639–

Increase in money held in trust–(6,000)Decrease in money held in trust–

13,000–Purchases of tangible fixed assets(2,432)(2,937)(21,967)

Purchases of intangible fixed assets(1,163)(1,872)(10,504)

Proceeds from sales of tangible fixed assets
Net cash provided by (used in) investing activities

439

806

3,965

(18,923)

50,863(170,924)

Cash flows from financing activities
Proceed from stock issuance for non-controlling interests
Cash dividends paid
Cash dividends paid for non-controlling shareholders

280

3,251

(3,908)(25,788)

(7)

(7)

(63)

Payment for non-controlling shareholders

(200)

–

(1,806)

Purchases of treasury stock

(95)

(0)

(858)

Proceeds from disposition of treasury stock

21

739

189

(2,776)(2,896)(25,074)

Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 27)
See accompanying notes to consolidated financial statements

35

360(2,855)

(143)

(169)

(1,291)

858,182

65,1497,751,621

801,973¥

1,660,156¥

736,824

7,243,907

801,973$ 14,995,537

 䝨䞊䝆

All significant intercompany accounts and transactions havebeen eliminated in consolidation. All material unrealized profit
included in assets resulting from transactions within theGroup is eliminated.

(3) Invest
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Notes to Consolidated Financial Statements
Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
For the Years Ended 31st March, 2021 and 2020

1. Basis of Presentation
Senshu Ikeda Holdings, Inc. (the “Company”) is a holding
company and conducts its operations through its subsidiaries
and affiliates. The Company and its subsidiaries (collectively,
the “Group”) maintain their books of account in accordancewith the provisions set forth in the Companies Act of Japan(the “Act”) and in conformity with accounting principles andpractices generally accepted in Japan, which are different incertain respects as to the application and disclosure
requirements of International Financial Reporting Standards.
The accompanying consolidated financial statements havebeen compiled from the consolidated financial statements
prepared by the Company as required by the Financial
Instruments and Exchange Act of Japan. Certain accounts
have been reclassified for the convenience of readers outside
Japan.
In preparing the accompanying consolidated financial
statements, Japanese yen amounts are presented in millionsof yen by rounding down figures below one million. As aresult, the totals in yen in the accompanying consolidated
financial statements do not necessarily agree with the sumsof the individual amounts.
The translation of yen amounts into U.S. dollar amounts is
included solely for the convenience of readers outside Japanand has been made at ¥110.71 = U.S.$1.00, the exchange
rate prevailing on 31st March, 2021. This translation should
not be construed as a representation that yen can beconverted into U.S. dollars at the above or any other rate.

2. Principles of Consolidation
The accompanying consolidated financial statements include
the accounts of the Company and its 20 (22 in 2020)
significant subsidiaries which it controls directly or indirectly.
Affiliates over which the Company exercises significant
influence in terms of their operating and financial policies
have been included in the accompanying consolidated
financial statements on an equity basis.
Change in the scope of consolidation
Senshu Ikeda Corporate Partners Co., Ltd. and Senshu Ikeda
Capital Yumejikomi Fund OI Investment Enterprise Limited
Partnership, all of which were consolidated subsidiaries of theCompany in the fiscal year ended 31st March,2020, were
excluded from the scope of consolidation from the fiscal year
ended 31st March,2021, due to completion of their liquidation
procedures.
The company has applied the equity method to its
investments in 2 affiliates for the years ended 31st March,
2021 and 2020, respectively.

The difference between the cost and the underlying equity inthe net assets of the consolidated subsidiaries measured atfair value at their respective dates of acquisition is presented
as “goodwill” or “negative goodwill”. Goodwill is amortized by
the straight-line method over a period of 5 years.
The balance sheet date of 7 subsidiaries is 31st December.
Appropriate adjustments have been made for significant
intervening transactions occurring during the period from 31st
December to 31st March.

3. Significant Accounting Policies(1) Trading account securities
Trading account securities are stated at fair value as of
the balance sheet date. Cost of trading accountsecurities sold is determined using the moving averagemethod.
(2) Securities
Non-trading securities are classified into three
categories: held-to-maturity debt securities, equity
securities of an unconsolidated subsidiary and availablefor-sale securities. Held-to-maturity debt securities arecarried at amortized cost, and the cost being determinedby the moving average method. Equity securities of an
unconsolidated subsidiary are stated at cost determinedby the moving-average method. Equity securities andinvestment trusts classified as available-for-salesecurities whose fair values are available are stated atfair value determined by the monthly average market
price during one month preceding the balance sheet dateand other securities are stated at fair value determinedbased on the quoted market price and other information
at the balance sheet date. Cost of sales of theseavailable-for sale securities is determined using themoving average method. Other securities, whose fairvalue is extremely difficult to determine, are stated atcost determined by the moving-average method.
Unrealized gain or loss on available-for-sale securities is
included in net assets, net of income taxes.
However, for consolidated subsidiaries engaged inbanking business, regarding the effect of exchange ratechanges on bonds among available-for-sale securities
denominated in foreign currencies, the effect on changes
in the market prices of foreign currencies is treated as
unrealized gain (loss), and other differences are treatedas gain (loss) on foreign exchange.

(4) Deriva
Deriva(5) Tangib
Deprecexceptstraighfollows
Build
Othe(6) Intang
Intangimethodinterna
based
Compa

(7) Reserv
A reseconsolbusinethe prehave dliquida(“bankror formthe samreserveclaims,expectguaranFor clabut areborrownecessthe bor
expectguaranFor othprimari
subseqEstimaon theperiodperiodThe Grits loanindepeGroup’
36
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ons have
lized profitn the(3) Investment securities held in money trusts
Investment securities that are part of trust assets in
independently managed money trusts with the primary
purpose to manage securities are stated at the fair value
as of the balance sheet date.

equity insured atpresented
ortized by

cember.
icant
from 31st

lue as oftaverageuity
availableties are
etermined
es of anetermined
es andetated atmarketsheet dateerminedformationseg the
se fair
ated atd.
ecurities is

ed inange rateecurities
n changes
ated ase treated(4) Derivatives
Derivatives are stated at fair value.
(5) Tangible fixed assets
Depreciation of tangible fixed assets of the Group,
except for leased assets, is calculated principally by thestraightline method. The principal useful lives are as
follows:
Buildings··················· 3 to 50 years
Other························2 to 20 years(6) Intangible fixed assets
Intangible fixed assets are amortized by the straight-line
method. Amortization of the cost of software intended forinternal use is calculated by the straight-line method
based on a useful life (5 years) determined by theCompany and its consolidated subsidiaries.
(7) Reserve for possible loan losses
A reserve for possible loan losses is provided byconsolidated subsidiaries engaged in the banking
business (the “banking subsidiaries”) in accordance withthe prescribed standards. For claims on borrowers who
have declared bankruptcy or have commenced special
liquidation proceedings or similar legal proceedings(“bankrupt borrowers”), or borrowers who are not legallyor formally insolvent but are regarded as substantially inthe same situation (“effectively bankrupt borrowers”), a
reserve is provided based on the book value of theclaims, after the write-off stated below, net of the
expected amount recoverable from collateral andguarantees.
For claims on borrowers who are not currently bankrupt
but are likely to become bankrupt (“potentially bankrupt
borrowers”), a reserve is provided at the amount deemednecessary based on the overall solvency assessment of
the borrowers and the amount of the claims, net of the
expected amount recoverable from collateral andguarantees.
For other claims, a reserve is projected and provided
primarily at the amount of estimated losses over a
subsequent one-year period or three-year period.
Estimated losses are calculated using a loss rate basedon the average historical loan-loss ratio over a certain
period obtained from historical loan losses for a one-year
period or three-year period.
The Group conducts self-assessments of asset quality at
its loan offices. The assessments are audited by the
independent credit audit section in accordance with theGroup’s policy and guidelines for the self-assessment ofasset quality. Based on the results of theseassessments, an appropriate reserve is provided for the
resulting losses and for write-offs of doubtful assets.

37 䝨䞊䝆

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For consolidated subsidiaries other than the banking
subsidiaries, a specific reserve for possible loan losses
at the total amount of loans deemed to be uncollectible
based on a solvency analysis of each loan, in addition toa general reserve at an amount calculated based on
historical experience, is provided.

(14) Accou
In the cCompa
expectthe fisc
Prior smethodaverageligible

For collateralized or guaranteed claims on bankrupt
borrowers and effectively bankrupt borrowers, theamount of the claims exceeding the estimated value ofcollateral and guarantees is deemed to be uncollectible
and is written off against the total amount of theoutstanding claims. These write-offs amounted to¥26,096 million ($235,714 thousand) and ¥28,177 million
for the years ended 31st March, 2021 and 2020,
respectively.
(8) Provision for employees’ bonuses
Provision for employees’ bonuses is calculated based onan estimated payment amount, which is attributable tothe fiscal year.
(9) Accrued retirement benefits for directors and audit &supervisory board members
Accrued retirement benefits for directors and audit &supervisory board members are provided at an amountthat would be required if all directors and audit &supervisory board members retired at the balance sheet
date.
(10) Reserve for reimbursements of deposits
Reserve for reimbursements of deposits is provided at an
estimate of the future payments to be made forreimbursement claims on deposits which were
derecognized and credited from liability to income basedon the Group’s historical experience.
(11) Reserve for point services
Reserve for point services, which is provided to meet
future use of credits granted to customers, is recorded in
the amount deemed necessary based on the estimatedfuture use of unused credits.
(12) Reserve for contingent losses
Reserve for contingent losses is provided at an estimateof the future loss on contingencies other than those
covered by other reserves or provisions.
(13) Reserve under special laws
Reserve under special laws consist of the financial
instruments transaction liability reserve of ¥8 million($72 thousand) as of 31st March, 2021, posted by
Senshu Ikeda Tokai Tokyo Securities Co., Ltd., whichwere calculated according to the specifications of Article
46-5 of the Financial Instruments and Exchange Act andArticle 175 of the Cabinet Office Ordinance Related to
the Financial Instruments Business, to prepare for losses
originating from incidents relating to the purchase andsale of securities or other transactions.

Actuarfollowinby theto 12 yremainSomedefinedby adoof yeartermina(15) Foreig
Assetsdenom
Japanebalanc(16) Leases
Leaseddo notlesseeperiods
valuesresidua

As less
Financ2008, eof ownaccounAs less
Financwhen ldo notlesseedeeme
amoun
March,(17) Reven
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of cashaccordon AccAccoun2019).

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ankingn lossesollectible
addition toed on(14) Accounting treatment for retirement benefits
In the calculation of retirement benefit obligation, theCompany applies the benefit formula basis in attributing
expected retirement benefits to periods until the end of
the fiscal year under review.
Prior service cost is amortized by the straight-line
method over a period of 11 years, which is within the
average estimated remaining years of service of theeligible employees.

krupt
the
value ofollectibleeto177 million
0,d based ontable tond audit &udit &
n amount&
nce sheetvided at anrme basedo meetecorded instimatedn estimate
hose

ncial
milliond by, whichof Article
e Act andlated tofor losses
ase and

Actuarial gain or loss is amortized commencing the year
following the year in which the gain or loss is recognizedby the straight-line method principally over a period of 11
to 12 years, which is within the average estimatedremaining years of service of the eligible employees.
Some of the consolidated subsidiaries calculate their net
defined benefit liability and retirement benefit expenses
by adopting the simplified method, assuming the amountof year-end retirement benefit payable due to voluntaryterminations as retirement benefit obligation.
(15) Foreign currency transactions
Assets and liabilities of consolidated subsidiaries
denominated in foreign currencies are translated into
Japanese yen at the exchange rates in effect at thebalance sheet date.
(16) Leases
Leased assets under finance lease arrangements which
do not transfer ownership of the leased assets to thelessee are depreciated over the respective lease contract
periods using the straight-line method with residual
values defined in the lease contracts, otherwise theresidual values is zero.
As lessee:
Finance leases which commenced prior to 1st April,
2008, except for those substantially requiring the transferof ownership of the leased assets to the lessee, areaccounted for as operating leases.

 䝨䞊䝆

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(1) Shares with a market priceAs of the ex-dividend date of each share (the day
after the last trading day with dividend rights), theCompany estimates and records accrued dividends
receivable based on the previous actual dividend or
the published forecast dividend per share.
(2) Shares without a market price
Dividends to be paid within the period normallyrequired after the effective date of a resolution
regarding dividends passed at a general meeting ofshareholders, a meeting of the board of directors, orother body with decision-making authority of theissuing company are recorded in the fiscal year that
includes the date of payment.

(22) Applic
from thtax shFor thesystemto the I
items tsystemsystemtax liab
laws bein ItemAccounin acco“PractiAccounTaxatio
System(18) Hedge accounting
Interest rate risk hedging
With respect to hedge accounting for the interest rate risk
arising from financial assets and liabilities of the banking
subsidiaries, the Group applies deferral hedge
accounting , under which gains or losses on derivatives
are deferred until maturity of the hedged transactions, as
stipulated in the Japanese Institute of Certified Public
Accountants (JICPA) Industry Committee Practical
Guidelines No. 24, 8th October, 2020.
Foreign exchange rate risk hedging
With respect to hedge accounting for derivativetransactions used to hedge the risk of financial assets
and liabilities denominated in foreign currencies of thebanking subsidiaries, the Group applies deferral hedge
accounting, under which gains or losses on derivatives
are deferred until maturity of the hedged transactions, as
stipulated in the JICPA Industry Committee Practical
Guidelines No. 25, 8th October, 2020. The Groupassesses the effectiveness of its currency swaps andforeign exchange swaps transactions, etc. entered into inorder to hedge the risk of fluctuation in foreign exchange
rates by comparing the foreign-currency amount of eachunderlying hedged item with the corresponding
foreigncurrency amount of the respective hedging
instruments.

As lessor:
Finance lease income and related cost are recognizedwhen lease payment is received. Finance leases which
do not transfer ownership of the leased assets to thelessee and commenced prior to 1st April, 2008 aredeemed to have been entered into contracts at theamount of the cost less accumulated depreciation at 31st
March, 2008.

(19) Cash flows
In preparing the consolidated statement of cash flows,
cash and deposits with the Bank of Japan are considered
to be cash and cash equivalents.

(17) Revenue recognition for share dividends
Regarding the revenue recognition for share dividends
distributed from other retained earnings (limited to casesof cash dividends), they are recorded as follows inaccordance with Paragraph 94 of “Practical Guidelines
on Accounting for Financial Instruments” (JICPA
Accounting System Committee Report No. 14, July 4,2019).

(21) Consolidated tax payment system
The Company and certain of its consolidated subsidiaries
have adopted the consolidated tax payment system inaccordance with the Corporation Tax Act (Act No. 34,
1965).

(23) Accou
the proare unAccouninvestm
Gain (ltrusts i
securit
distribu
is a losof bond(24) Signifi
1. Valuat(1) Amsta
Re($(2) Insig
ite(i)(20) Consumption taxes
Transactions are principally stated exclusive of nationaland municipal consumption taxes.

38 䝨䞊䝆

the dayhts), thedividends
ividend or

mally
ution
meeting ofrectors, orof thel year that

est rate risk
e bankingerivatives
actions, asPublicticaleassetss of theal hedge
rivatives
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acticaloup
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nt of eachging

h flows,
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national

ubsidiaries
stem inNo. 34,BKWP(22) Application of tax effect accounting for the transition
from the consolidated taxation system to the grouptax sharing system
For the items transitioned to the group tax sharing
system established under the “Act for Partial Amendment
to the Income Tax Act, etc.” (Act No. 8 of 2020) anditems that underwent revisions to the individual taxation
system upon the transition to the group tax sharing
system, the amounts of deferred tax assets and deferred
tax liabilities are recorded based on the provisions of tax
laws before amendment without applying the provisionsin Item 44 of the “Implementation Guidance on Tax EffectAccounting” (ASBJ Guidance No. 28, February 16, 2018)
in accordance with the treatment in Paragraph 3 of the“Practical Solution on the Treatment of Tax EffectAccounting for the Transition from the Consolidated
Taxation System to the Group Tax Sharing
System” (PITF No. 39, March 31, 2020).
(23) Accounting principles and procedures adopted when
the provisions of relevant accounting standards, etc.
are unclear
Accounting treatment for gain (loss) on cancellation of
investment trusts
Gain (loss) on cancellation and redemption of investment
trusts is recorded as “Interest and dividends on
securities.” In cases where the total amount of profit
distribution, etc. from investment trusts during the period
is a loss, the amount is recorded as “Loss on redemptionof bonds.”(24) Significant accounting estimates
1. Valuation of loans and bills discounted(1) Amount recorded in the consolidated financial
statements for the fiscal year under review
Reserve for possible loan losses ¥15,899 million($143,609 thousand)(2) Information for an understanding of the nature ofsignificant accounting estimates for the identified
items(i) Calculation method
Provision for possible loan losses of
consolidated subsidiaries engaged in banking
business is calculated by assessing theborrower classification based on the asset selfassessment standards and using a certain
calculation method according to the borrowerclassification as described in “3. Significant
Accounting Policies (7) Reserve for possible
loan losses.” 䝨䞊䝆



Although the financial conditions of borrowers
have deteriorated due to the rapid deteriorationof the economic environment caused by the
spread of COVID-19, the number ofbankruptcies has remained low due to theimplementation of fiscal and monetary policies,
flexible repayment terms and other funding
support from financial institutions, and there
were other structural changes that were notanticipated with the previous method of
calculating expected losses. In order to respondto such structural changes, the Company has
recognized an additional ¥4,513 million inreserve for possible loan losses as of March 31,
2021, based on the “deemed borrowerclassification” that takes into account thepossibility of a future downward shift in the
borrower classification.
(ii) Key assumptions
The key assumption in determining theborrower classification is “Outlook for future
performance of borrowers.” “Outlook for
performance of borrowers” is established basedon an individual assessment of each borrower’s
ability to earn a profit.
In considering the “deemed borrowerclassification,” the financial position stated infinancial statements of the borrowers (excluding
listed companies, etc.) to be obtained in thefiscal year ending March 31, 2022 is estimatedbased on certain economic recovery scenariosand forecasts of increase (decrease) inrevenues of the borrowers. The key
assumptions are as follows.

2. Recov(1) Amsta

Economic recovery
scenario

Forecasts of increase(decrease) in revenues ofborrowers

Assume that in FY2020 the economy wasin a trough, and that economic recovery will
begin after FY2021 as the impact of
COVID-19 will be controlled by expanding
vaccination
Assume that borrowers will be affected toalmost the same extent as indicated by theforecast of increase (decrease) in revenues
by industry announced by externalorganizations(iii) Impact on the consolidated financial statements
for the fiscal year ending March 31, 2022
If the assumptions used in the initial estimateschange due to the situation of the spread of
COVID-19, the future economic environment, orchanges in the business performance ofindividual borrowers, there may be a significant
impact on reserve for possible loan losses
stated in the consolidated financial statements
for the fiscal year ending March 31, 2022.

(2) In
sig
ite
(i)

(ii)

Net interest i

Fees and co

Credit cost39 䝨䞊䝆

orrowers
teriorationby theo they policies,nding
d thereere notofto respond
any hason inMarch 31,
er
the
n the

he
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tated in(excluding
d in theestimatedscenariosinnomy wasecovery will
ct of
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ead ofonment, ore ofsignificant
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atements
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2. Recoverability of deferred tax assets(1) Amount recorded in the consolidated financial
statements for the fiscal year ended March 31, 2021
Deferred tax assets (net) ¥2,751 million($24,848 thousand)(amount before offsetting with deferred tax
liabilities is ¥11,308 million ($102,140
thousand))(2) Information for an understanding of the nature ofsignificant accounting estimates for the identified
items(i) Calculation method
Deferred tax assets are recognized to theextent that it is possible to reduce the future tax
burden due to deductible temporary differences
and tax losses carried forward as of March 31,
2021, based on the classification of companies
as stipulated in the “Implementation Guidanceon Recoverability of Deferred Tax
Assets” (ASBJ Guidance No. 26, February 16,2018). The Company estimates taxable income
before adjusting temporary differences basedon future profitability.
In calculating future taxable income before
adjusting temporary differences, the earnings
plan included in the Fifth Medium-TermBusiness Plan (hereinafter referred to as the“Medium-Term Plan”) is adjusted to reflectearnings stress scenarios that take into accountfuture uncertainties, and tax adjustment items
that will arise in the future are added or
subtracted.
As the Company has adopted a consolidated
taxation system, the income of the entire groupfor consolidated taxation is estimated based on“Practical Solution on Tentative Treatment of
Tax Effect Accounting Under Consolidated
Taxation System (Part 1)” (PITF No.5, January
16, 2015) and “Practical Solution on Tentative
Treatment of Tax Effect Accounting Under
Consolidated Taxation System (Part 2)” (PITF
No. 7, January 16, 2015).
(ii) Key assumptions
The key assumptions used in estimating thetaxable income before adjusting temporary
differences of the consolidated subsidiaries
engaged in banking business for the future
period during which estimates can bereasonably made (recoverable period) of five
years are as follows.
Net interest income

Fees and commissions

Credit cost

The average value during the recoverable
period is assumed to be 0.2% lower thanthe FY2020 level
Assume that the average value over therecoverable period will be 0.9% lower thanthe FY2020 level, taking into account theearnings stress scenario in the earnings
plan included in the Medium-Term Plan
The average value during the recoverable
period is assumed to be 0.1% of the loanbalance for each year 䝨䞊䝆

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(iii) Impact on the consolidated financial statements
for the fiscal year ending March 31, 2022
If the assumptions used in the initial estimateschange due to the situation of the spread of
COVID-19 and the future economic
environment, there may be a significant impact
on deferred tax assets stated in the
consolidated financial statements for the fiscal
year ending March 31, 2022.
If the assumptions for future taxable income
before adjusting temporary differences during
the recoverable period change as shown below,
the estimated amount of impact (sensitivity) for
the fiscal year ended March 31, 2021, will be as
follows.

2. Accou- “AccoMea- “ImplFair
July- “AccoState- “ImplValu
19, M(1) Ov
Th
M
Ac
M
St
co
sta
es
m
et
ite
-

Assumption

Expected change

Taxable income
before adjusting
temporary differences¥1,000 million
decrease

Reversal of deferred
tax assets¥100 million to ¥300
million(25) New accounting pronouncements
1. Accounting standard for revenue recognition, etc.
- “Accounting Standard for Revenue Recognition” (ASBJ
Statement No. 29, March 31, 2020)- “Implementation Guidance on Accounting Standard for
Revenue Recognition” (ASBJ Guidance No. 30, March
31, 2020)(1) Overview
This is a comprehensive accounting standard
concerning the recognition of revenue. Revenue isrecognized by applying the following five steps.
Step 1: Identify the contract(s) with the customer
Step 2: Identify the performance obligations in thecontract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to theperformance obligations in the contract
Step 5: Recognize revenue when (or as) eachperformance obligation is satisfied(2) Planned date of application
The Company plans to apply this standard andguidance from the beginning of the fiscal year
ending March 31, 2022.
(3) Impact of applying this accounting standard, etc.
The amount of impact is under evaluation at the timethese consolidated financial statements are being
prepared.

(2) PlTh
guen(3) ImThthpr(26) Chang
The CoDisclos
No. 31statemnotes rincludeHowev
prescriaccounnot des(27) Addit

The CoAccounError C2020) ffiscal yaccounprovisi
uncleastatem40

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statements022
estimates
ead of

ant impact

the fiscal

ncome
s during
own below,
sitivity) for, will be as

f deferredn to ¥300

etc.
on” (ASBJ

andard for
30, March

ard
venue issteps.
stomerns in theentract
each

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year

rd, etc.
at the time
e beingBKWP

2. Accounting standard for fair value measurement, etc.
- “Accounting Standard for Fair Value
Measurement” (ASBJ Statement No. 30, July 4, 2019)- “Implementation Guidance on Accounting Standard for
Fair Value Measurement” (ASBJ Guidance No. 31,
July 4, 2019)- “Accounting Standard for Financial Instruments” (ASBJ
Statement No. 10, July 4, 2019)- “Implementation Guidance on Disclosures about Fair
Value of Financial Instruments” (ASBJ Guidance No.
19, March 31, 2020)(1) Overview
The “Accounting Standard for Fair Value
Measurement” and “Implementation Guidance on
Accounting Standard for Fair Value
Measurement” (“Fair Value Measurement
Standards, etc.”) were developed to enhancecomparability with international accounting
standards, and guidances and other rules were
established with regard to the method for fair value
measurement. Fair Value Measurement Standards,
etc. are applicable for fair value of the following
items:- Financial instruments under the “AccountingStandard for Financial Instruments”
In addition, “Implementation Guidance on
Disclosures about Fair Value of Financial
Instruments” was revised to include notes
regarding the breakdown of financial instruments
by level in the fair value hierarchy.
(2) Planned date of application
The Company plans to apply these standards andguidances from the beginning of the fiscal year
ending March 31, 2022.
(3) Impact of applying this accounting standard, etc.
The amount of impact is under evaluation at the timethese consolidated financial statements are being
prepared.
(26) Change in presentation method
The Company has adopted the “Accounting Standard forDisclosure of Accounting Estimates” (ASBJ Statement
No. 31, March 31, 2020) from the consolidated financial
statements for the fiscal year ended March 31, 2021, andnotes regarding significant accounting estimates areincluded in the consolidated financial statements.
However, in accordance with the transitional treatmentprescribed in the proviso to paragraph 11 of theaccounting standard, details for previous fiscal year are
not described in the notes to the financial statements.

(27) Additional Information

The Company has adopted the “Accounting Standard for
Accounting Policy Disclosures, Accounting Changes andError Corrections ” (ASBJ Statement No. 24, March 31,2020) from the consolidated financial statements for the
fiscal year ended March 31, 2021, and notes regarding
accounting principles and procedures adopted when theprovisions of relevant accounting standards,etc..areunclear are included in the consolidated financial
statements.

41 䝨䞊䝆

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4. Trading account securities
There were no valuation gain or loss on trading accountsecurities included in income before income taxes and noncontrolling interests at 31st March,2021
Valuation gain or loss on trading account securities included
in income before income taxes and non-controlling interests
were ¥(0) million for the year ended 31st March, 2020.

31st M

Equity securit
Bonds:

Governmen

Local gover

Corporate b
Subtotal
Other

5. Securities

Total

Securities at 31st March, 2021 and 2020 consisted of thefollowing:Thousands of
U.S. dollars

Millions of yen

31st M

Equity securit
Bonds:

2021

2020

2021

28,208 ¥26,419 $254,791

Governmen

Government bonds

33,50026,380302,592

Corporate b

Local government bonds

119,972

113,365

1,083,660

Corporate bonds

264,730

299,326

2,391,202

118,167

83,297

1,067,356

564,580 ¥548,789 $ 5,099,629¥

StocksBonds:

Other
¥

Total

Stocks in the above table include investments in affiliates of¥91 million ($821 thousand) and ¥120 million at 31st March,
2021 and 2020, respectively.
The securities loaned under unsecured securities lendingtransactions are included in Government bonds andCorporate bonds under “Securities” in the amount of ¥25,397
million ($229,401 thousand) and 23,171 million at 31st March,
2021 and 2020, respectively.

Local gover
Subtotal
Other
Total

31st M

Equity securit
Bonds:

Governmen

Local gover

Corporate b
Subtotal
Other
Total

There were no held-to-maturity debt securities at 31st
March, 2021 and 2020.

31st M

There were no held-to-maturity debt securities soldduring the years ended 31st March, 2021 and 2020.

Equity securit
Bonds:

Available-for-sale securities with fair value at 31st March,
2021 and 2020 were as follows:
Millions of yen

31st March, 2021
Equity securities

Acquisition
cost

Carrying value¥

22,267¥

13,605Governmen

Local gover

Corporate b
Subtotal
Other
Total

Bonds:
Government bonds

33,50033,521

Local government bonds

119,972

120,015

Corporate bonds

264,730

264,724

Subtotal

418,204

418,261

Other
Total

114,134¥

554,606

108,441¥

540,308

31st M

Equity securit
Bonds:

Governmen

Local gover

Corporate b
Subtotal
Other
Total

 䝨䞊䝆

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Millions of yen

ount
and non-includedinterests
20.

31st March, 2021

Difference

Unrealized
loss

Available-for-sale securities sold during the years ended
31st March, 2021 and 2020 were as follows:

6. Money

Millions of yen

8,662 ¥

8,716 ¥

(54)

Government bonds

(21)

䠉

(21)

Equity securities

Local government bonds

(42)

34

(76)

Bonds:

Equity securities¥

Unrealized
gain 䝨䞊䝆

2021

Bonds:

Corporate bonds
Subtotal
Other
¥

Total

Proceeds
from sales
¥

(276)

Government bonds

䠉

䠉

(373)

Local government bonds

䠉

䠉

䠉

Carrying value

5,693

6,324

(630)

Corporate bonds

9,938

8

(1)

14,298 ¥15,357 ¥(1,058)Subtotal

9,938

8

(1)

Valuation gain (lconsolidated

$

2021

11,270¥Total

23,965 ¥Acquisition
cost

Carrying value
¥

䠉

282
316

Other

Equity securities(0)6Millions of yen
31st March, 2020

Loss

1,766 ¥

(57)of theThousands of
U.S. dollars

Gain

2,756 ¥

20,419

¥

413

(9)

2,187 ¥

(10)

2020

Bonds:

Proceeds
from sales

Loss26,38026,344Equity securities

Local government bonds

113,365

113,458

Bonds:

302,592

Corporate bonds

299,326

299,388

Government bonds

Subtotal

439,072

439,191

Local government bonds

1,357

0

䠉

78,68076,334

Corporate bonds

8,358

25

(12)

1,067,356

Other
Total

¥

538,172¥

530,116

Subtotal
Other$ 5,099,629

Total

Millions of yen

iliates ofst March,

31st March, 2020
Equity securities

Difference¥

Unrealized
gain(1,069)Government bonds

36

49

(13)

Equity securities

Local government bonds

(93)

42

(136)

Bonds:

Corporate bonds

(62)

384

(446)

Government bonds

Subtotal

(119)

476

(596)

Local government bonds

2,346

4,111

(1,765)

8,055 ¥

11,487 ¥(3,431)2021¥

31st March, 2021
Equity securities

Acquisition
cost

Carrying value$

201,129$

122,888

Bonds:

1st March,cquisition
cost
13,605Government bonds

302,592

302,782

Local government bonds

1,083,660

1,084,048

Corporate bonds

2,391,202

2,391,148

Subtotal

3,777,472

3,777,987

Other

1,030,927$

Total

31st March, 2021

264,724
418,261
540,308

979,505$

4,880,390

Thousands of U.S. dollars

33,521
120,015

108,441

5,009,538

Equity securities

Difference$

Unrealized
gain

78,240 $Unrealized
loss

78,728 $(487)

Bonds:
Government bonds

(189)

䠉

(189)

Local government bonds

(379)

307

(686)

Corporate bonds
Subtotal
Other
Total

$

54

2,547

(2,492)

(514)

2,854

(3,369)51,422

57,122(5,690)129,148 $138,713 $(9,556)

䠉

䠉

䠉

9,716

25

(12)

118,687

1,549(6,246)

131,172 ¥

3,207 ¥

(6,297)Net unrealiz
31st March

Differences be
and fair valu

Deferred ta

Differences be
and fair valu

Gain

$

24,893 $15,951 $

(0)

䠉

䠉

䠉

Corporate bonds
Subtotal
Total

Thousands of U.S. dollars(38)

Proceeds
from sales

Otherat 31st1,631 ¥

7. Net Un
for-SaAvailable-fo

6,898 ¥

Other

2,769 ¥

Thousands of U.S. dollars

5,829 ¥

Total

sold
20.

¥

Unrealized
loss

Bonds:

endingdof ¥25,397
1st March,

¥

Gain

Government bonds

2,391,202

There wereat 31st Mar

Millions of yen

14,589254,791

1,083,660

Money heldof the follow
Money held

$

Loss

䠉

䠉

䠉

89,76672(9)89,76672(9)101,797

3,730

(81)

216,466 $

19,754 $(90)

Impairment losses on securities
Available-for-sale securities whose fair value significantly
declined from the acquisition cost are valued at fair value andlosses on devaluation of those securities are recognized in
the consolidated statement of operations unless the value isconsidered recoverable.
Losses on devaluation of securities for the years ended 31st
March, 2021 was ¥40 million ($361 thousand), which
consisted of ¥26 million ($234 thousand) on equity securitiesand ¥14 million ($126 thousand) on corporate bonds for theyear ended 31st March, 2021.
Determining whether the fair value is “significantly declined” isbased on the fair value declining by more than 50% or thecriteria considering the trend of the fair value during a certain
past period and credit risks of the issuers when the fair value
declined between 30% and 50% of the acquisition cost.

Amounts corre
non-control

Net unrealized gain (lsale securities, ne

8. Loans
MonitoLoans and
Loans andconsisted oBills discounte

Loans on bills

Loans on dee
Overdrafts
Total

Discounting
rather than
JICPA Indu
Group has
restrictions.
commercial
exchange b
at 31st Mar
thousand) a42 䝨䞊䝆

BKWP

rs ended

6. Money Held in Trust

Loss
¥

(0)

Money held in trust at 31st March, 2021 and 2020 consistedof the following:
Money held in trust for trading purposes
Thousands ofMillions of yen
2021

䠉
䠉

Carrying value(1)

Valuation gain (loss) included inconsolidated statements of income

(1)
(9)
¥

(10)

Loss
¥

(38)
䠉
䠉

¥

19,988 $16

47(6,297)Net unrealized gain (loss) on available-for-sale securities at
31st March, 2021 and 2020 consisted of the following:

$

2021

䠉

2021

2020

Differences between acquisition costand fair value:¥

Differences between acquisition costand fair value, net of taxes(0)

Thousands of
U.S. dollars

Millions of yen

14,298 ¥

8,055 $

129,148(3,554)(2,302)(32,101)

10,744

5,753

97,046

(0)

(1)

(0)

10,744 ¥5,752 $

Deferred tax liabilities

Loss

144

7. Net Unrealized Gain (Loss) on Availablefor-Sale Securities

Available-for-sale securities

dollars

180,661

There were no money held in trust owned for other purposes
at 31st March, 2021 and 2020.

(12)
¥

2021

20,001 ¥(12)(6,246)

U.S. dollars

2020

Amounts corresponding to
non-controlling interests
Net unrealized gain (loss) on available-forsale securities, net of taxes¥

97,046

䠉
(9)
(9)
(81)
$

(90)

cantlyvalue andnized ine value isnded 31stchsecuritiess for thedeclined” isor theg a certain
fair value
cost.

43

8. Loans and Bills Discounted and Risk
Monitored Loans
Loans and bills discounted:
Loans and bills discounted at 31st March, 2021 and 2020
consisted of the following:
Millions of yen
2021

2021

13,000 $75,359Loans on bills

41,75847,747377,183

Loans on deeds

4,017,174

3,642,718

36,285,556

224,255

260,038

2,025,607

Overdrafts
Total

At 31st March, 2021 and 2020, loans and bills discounted
included the portion of loans extended to original borrowers
based on loan participation agreements, as permitted by the
JICPA Accounting Committee Report No. 3, 28th November,
2014, in the amount of ¥8,003 million ($72,287 thousand) and¥11,693 million, respectively.

Loans past
which the preceived forwhich are n“delinquentContracts for overdraft facilities and loan commitments arecontracts under which the Group lends money to customers
up to their prescribed limits at the customers’request as longas there are no violations of any of the conditions in thecontracts. The aggregate unutilized balances within the limitsof these contracts totaled ¥759,036 million ($6,856,074
thousand) and ¥720,585 million at 31st March, 2021 and2020, respectively, including the contracts whose contractual
periods were either less than one year or revocable at any
time, in the amount of ¥737,192 million ($6,658,766
thousand) and ¥702,298 million, respectively.
Since many of these commitments expire without being fully
utilized, the unutilized amounts do not necessarily represent
future cash commitments. Most of these contracts include
provisions which stipulate that the consolidated subsidiaries
can reject customers’ requests or decrease the contract limits
for an appropriate reason, (for example, a change in financial
situation or a deterioration in customers’ creditworthiness).
At the inception of the contracts, the Group obtains collateralin the form of real estate, securities, and so forth, if deemednecessary. Subsequently, the Group, based on its internal
rules, performs periodic reviews of the customers’ businessresults and may take necessary measures such asreconsidering the terms of the contracts and/or requiring
additional collateral or guarantees.
Risk monitored loans:
Risk monitored loans which were included in loans and bills
discounted at 31st March, 2021 and 2020 consisted of thefollowing:Thousands of
U.S. dollars

8,343 ¥

Bills discounted

¥

2020

 䝨䞊䝆

¥ 4,291,531 ¥ 3,963,504 $ 38,763,716

Discounting of bills is accounted for as finance transactions
rather than as purchasing of bills in accordance with the
JICPA Industry Committee Practical Guidelines No. 24. The
Group has the right to sell or pledge such bills without any
restrictions. These include bankers acceptances bought,
commercial bills discounted, documentary bills and foreignexchange bills. The total face value of such outstanding bills
at 31st March, 2021 and 2020 totaled ¥8,485 million ($76,641
thousand) and ¥13,281 million, respectively.

Thousands of
U.S. dollars

Millions of yen
2021
Loans to bankrupt borrowers¥

Delinquent loans
Loans past due for 3 months or more

Restructured loans
Total

¥

2020

879 ¥

1,649 $

2021
7,939

28,241

24,997

255,089

70

175

632

5,804

5,568

52,42534,996 ¥32,391 $

316,105

Loans to bankrupt borrowers represent non-accrual loans toborrowers who are legally bankrupt as defined in Articles
96-1-3 and 96-1-4 of the Order for Enforcement of the
Corporation Tax Act (the “Tax Act”) (Article 97 of the 1965
Cabinet Order).
Delinquent loans represent non-accrual loans other than (i)loans to bankrupt borrowers and (ii) loans on which interest
payments have been suspended in order to assist or facilitate
the restructuring of borrowers who are experiencing financial
difficulties.

Restructure
support thefinancial difof the loans
the borrowe
suspending
which are n

The amounthe provisio

9. Foreig

Foreign exc
consisted o

Due from foreign

Foreign bills o

Foreign bills of

Total

10. Other

Other asset
following:

Investment in

Other receiva

Accrued incom

Prepaid expen
Other
Total

11. Tang

At 31st Mar
tangible fixe
thousand) a
Under the T
replacemen
to be deducto obtain ce
cost of tang
were ¥373
respectively 䝨䞊䝆

BKWP

ountedorrowers
ed by theovember,usand) andLoans past due for 3 months or more represent loans on
which the payment of principal and/or interest has not been
received for three months or more from the due date, andwhich are not classified as “loans to bankrupt borrowers” or“delinquent loans.”

ents areustomers
st as longn thethe limits
074
1 and
ontractual
at any6

eing fully
epresent
ncludesidiaries
tract limitsn financial
hiness).

collateral
deemednternalbusinessuiringand bills
d of theThousands of
U.S. dollars

$

$

2021
7,939
255,089 䝨䞊䝆

Restructured loans are loans which have been restructured tosupport the rehabilitation of borrowers who are encountering
financial difficulties, with the intention of ensuring the recoveryof the loans by providing more flexible repayment terms forthe borrowers (such as reducing the rate of interest or
suspending the payment of principal/interest, etc.) or loans
which are not classified in any of the above categories.

52,425loans torticleshee 1965than (i)interest
or facilitate
g financial

Assets pledged as collateral at 31st March, 2021 and 2020
consisted of the following:Thousands ofMillions of yen¥

Securities
Loans

The amounts presented in the table above are stated before
the provision of specific loan loss reserves.

9. Foreign Exchange Assets

U.S. dollars

2023

2021

2024

306,612 ¥242,231 $ 2,769,505

2025

1,044,944

䠉

9,438,569

2026

1,130

984

10,206Total

The liabilities secured by the above pledged assets at 31st
March, 2021 and 2020 consisted of the following:
Millions of yen
2021¥

3,371 ¥

U.S. dollars

2020

2021

14,546 $30,448

Payables under securities
lending transactions

10,323

䠉

93,243

Borrowed money

959,375

190,075

8,665,658

74

150

668

Other liabilities

Foreign exchange assets at 31st March, 2021 and 2020
consisted of the following:

10. Other Assets

At 31st March, 2021 and 2020, margins on futures contracts
in the amounts of ¥653 million ($5,898 thousand) and ¥730
million, guarantee deposits of ¥3,954 million ($35,714
thousand) and ¥4,337 million, deposits for futurestransactions of ¥- million ($- thousand) and ¥3million,
collateral money deposited for financial instruments of ¥98
million ($885 thousand) and ¥269 million and margins forCentral Counter Party of ¥20,000 million ($180,652 thousand)and ¥20,000 million were included in “Other assets”,
respectively.

Other assets at 31st March, 2021 and 2020 consisted of thefollowing:

13. Deposits

Thousands of
U.S. dollars

Millions of yen
2021
¥

2021

2020
$

4,735 ¥

4,762

Foreign bills of exchange bought

124

263

1,120

Foreign bills of exchange receivable

202

441

1,824

5,061 ¥

5,468

Due from foreign correspondent banks

¥

Total

$

42,76945,714

Thousands of
U.S. dollars

2021

2020

2021

21,039 ¥20,456 $190,037

Other receivables

28,81522,185260,274

Accrued income

4,098

4,079

37,015¥Prepaid expenses
Other
Total

15. Forei

Foreign exc
consisted oForeign bills s
Foreign bills o
Total

16. Other

Other liabili
following:Accrued expe

Unearned inco

Millions of yen
Investment in leased assets

Year ending 3
2022

2020

Other assets

Deposits

The aggreg
subsequent

2021

Thousands of

¥

781

644

7,054

29,22230,523263,950

83,958 ¥77,889 $758,359632
316,105

12. Assets Pledged

Deposits at 31st March, 2021 and 2020 consisted of thefollowing:
Millions of yen
Current deposits

At 31st March, 2021 and 2020, accumulated depreciation of
tangible fixed assets were ¥54,788 million ($494,878
thousand) and ¥54,237 million, respectively.
Under the Tax Act, capital gains arising from the exchange orreplacement of assets under certain conditions are permitted
to be deducted from the cost of tangible fixed assets in orderto obtain certain tax benefits. The amount deducted from thecost of tangible fixed assets at 31st March, 2021 and 2020
were ¥373 million ($3,369 thousand) and ¥363 million,
respectively.

¥

2021

2020

256,917 ¥

209,725 $Thousands of
U.S. dollars

2021
2,320,630

Ordinary deposits

3,139,734

2,671,170

28,359,985

Savings deposits

23,96623,354

216,475

Deposits at notice

20,41912,667

184,436

1,937,067

2,017,194

17,496,766

30,74053,773Time deposits

11. Tangible Fixed Assets

Accrued incom
Other

Other deposits
Total¥ 5,408,845 ¥ 4,987,885 $

277,662
48,855,975

14. Borrowed Money
Borrowed money at 31st March, 2021 and 2020 consisted ofborrowings from the Bank of Japan and certain other financial
institutions.
The average interest rate applicable to borrowed money at
31st March, 2021 and 2020 were 0.00% and 0.08%,
respectively.

Total

The amoun¥9 million ($and 2020, r
obligations
before andaverage int
2020 with m
March, 202

The aggreg
subsequentYear ending 3
2022
2023
2024
2025
2026

2027 and ther
Total

44

 䝨䞊䝆

nd 2020BKWP

 䝨䞊䝆The aggregate annual maturities of borrowed money
subsequent to 31st March, 2021 were summarized as follows:Year ending 31st March,Thousands of
U.S. dollars

Millions of yen¥$

834,918

7,541,486

Thousands of

2022

U.S. dollars

2023

1,555

14,0452021

2024

72,025650,573$ 2,769,505

2025

64,470582,332

9,438,569

2026

255

2,303

10,206Total

at 31stThousands of
U.S. dollars

2021

$

30,448¥668

contractsnd ¥73014n,of ¥98
ns forthousand)”,Foreign exchange liabilities at 31st March, 2021 and 2020
consisted of the following:

428 ¥
58

433 $
122

3,865
523

¥

487 ¥

556 $

4,398

Total

16. Other Liabilities
Other liabilities at 31st March, 2021 and 2020 consisted of thefollowing:

¥

Other

2,320,630

28,359,985
216,475
184,436

17,496,766
277,662

48,855,975

Total

¥

45

2,465 $

21,362

16,937

16,596

152,985

654

741

5,907

34,46331,515311,290

54,420 ¥51,320 $491,554

The aggregate annual maturities of lease obligations
subsequent to 31st March, 2021 were summarized as follows:Year ending 31st March,

oney at%,2,365 ¥

The amounts of lease obligations included in “Other” were
¥9 million ($81 thousand) and ¥5 million at 31st March, 2021
and 2020, respectively. The average interest rates on leaseobligations at 31st March, 2021 with maturity dates on or
before and subsequent to 31st March, 2022 were 3.00%.The
average interest rates on lease obligations at 31st March,2020 with maturity dates on or before and subsequent to 31st
March, 2021 were 3.00%.

2022

nsisted of
er financial

2021

2020

1

The consolidated subsidiaries have adopted funded defined
benefit plans to cover the payment of retirement benefits toemployees.
As for the defined benefit pension plans (funded) of theconsolidated subsidiaries, lump-sum benefits or pensions areprovided depending on the service years, etc. Retirement
benefit trust is established for the defined benefit pension
plan.

$

(4) Retirem
follow

2021

2020

2021

36,616 ¥37,963 $

330,737

Service cost

1,068

1,195

9,646

Interest cost

140

153

1,264

Actuarial gain or loss incurred
during the year

(57)

(805)

(514)

Payment of retirement benefits(1,854)(1,909)(16,746)

15

19

135

35,928 ¥36,616 $Retirement benefit obligation at
beginning of the year

Retirement benefit obligation at
end of the year

Millions of yen
Pension plan assets at
beginning of the year

2021

10,770(3,081)

97,281

9

Contributions from employer

189

1,328

1,707

(1,841)(1,600)(16,629)

59,254 ¥49,064 $535,218

Payment of retirement benefits
Pension plan assets at end of
the year

1

9
9
䠉
$

2020

9,664

18

9

2021

Actuarial gain or loss incurred
during the year

18

81

¥

Thousands of
U.S. dollars

443,1752

䠉

324,523

1,089

2

¥

¥

(2) Reconciliation of the beginning balance to theending balance of pension plan assets

2023

Total

¥

Other

2024

2027 and thereafterThousands of
U.S. dollars

Millions of yen

51,329 $1

Net amount oasset on cobalance she(1) Reconciliation of the beginning balance to theending balance of retirement benefit obligation

1,070

2026

Unfunded reti
obligation

Net amount oon consolid
sheets

49,064 ¥2025

Funded retirem
obligation
Pension plan

As for lump-sum payment plans of the consolidated
subsidiaries (which are unfunded plans, but after theestablishment of retirement benefit trust scheme, havebecome funded plans), lump-sum payments are made as
retirement benefits depending on the service years, etc.
Certain consolidated subsidiaries have adopted lump-sum
payment plans (all unfunded) as defined benefit plans, where
net defined benefit liability and retirement benefit expenses
are calculated by the simplified method.

Expected return on plan assets

Thousands of
U.S. dollars

Millions of yen¥(3) Recon
beneficonso
benefiOutline of the retirement benefit plan adopted by theCompany

Thousands of
U.S. dollars

Millions of yen
2021

Accrued income taxes

2021

2021

2020

Foreign bills sold¥
Foreign bills of exchange payable

Unearned income

ousands of
S. dollars

Thousands of
U.S. dollars

Millions of yen
2021

Accrued expensesof the8,790,759

15. Foreign Exchange Liabilities

93,243
8,665,658$

973,225

17. Retirement Benefit Plans



¥Net defined be
Net defined beService cost
Interest cost

Expected retu
assetsAmortization oAmortization ocost

Net periodic rebenefit expe
defined ben
plans(5) Remea
in otheRemea
other cconsistPrior service c
Actuarial gain
Total 䝨䞊䝆

BKWP

 䝨䞊䝆(3) Reconciliation of the ending balance of retirement
benefit obligation and pension plan assets to theconsolidated balance sheet amounts of net defined
benefit liability and asseteThousands ofd defined
nefits tothensions are
ement
ensioneave
ade asetc.
mp-sumns, where
xpensesthetion

Thousands of
U.S. dollars

Millions of yen
2021
Funded retirement benefit
obligation
Pension plan assets¥

Unfunded retirement benefit
obligation
Net amount of liability andasset on consolidatedbalance sheets¥

Net defined benefit liability
Net defined benefit asset
Net amount of liability and asset
on consolidated balance
sheets¥¥

330,737
9,646
1,264
(514)
(16,746)135$

324,523

theThousands of
U.S. dollars

$

$

2021
443,175

1,707(16,629)(12,587)(211,923)

136

139

1,228

(12,448) $ (210,685)
Thousands of
U.S. dollars

2021

2020

2021

136 ¥
(23,462)

139 $
1,228
(12,587)(211,923)(12,448) $ (210,685)(4) Retirement benefit expenses consisted of thefollowing:Thousands of
U.S. dollars

Millions of yen
2021
¥

2021

2020

1,068 ¥

1,195 $

9,646

140

153

1,264

(1,070)(1,089)(9,664)

Amortization of actuarial loss

(120)

294

(1,083)

Amortization of prior service
cost

(262)

(262)

(2,366)

Service cost
Interest cost
Expected return on plan
assetsNet periodic retirement
benefit expenses fordefined benefit pension
plans

¥

291 $

(243) ¥

(2,194)(5) Remeasurements of defined benefit plans included
in other comprehensive income
Remeasurements of defined benefit plans included inother comprehensive income (before related tax effects)
consisted of the following:

9,664
97,281(23,462)(23,325) ¥Millions of yen

Thousands of

2021

36,477 $ 323,286(49,064)(535,218)

Millions of yen

2021

$

U.S. dollars

2020

35,791 ¥(59,254)(23,325) ¥(6) Remeasurements of defined benefit plans includedin accumulated other comprehensive income
Remeasurements of defined benefit plans included inaccumulated other comprehensive income (before
related tax effects) consisted of the following:Thousands of
U.S. dollars

2021

2020

2021

Prior service cost
Actuarial gain or loss¥

(262) ¥
10,707(262) $
(1,982)(2,366)
96,712

Total¥

10,445 ¥(2,244) $94,345

Millions of yen
2021
Unrecognized prior service
cost
Unrecognized actuarial gain or
loss

¥

¥

Total

U.S. dollars

2021

2020
(655) $

(3,549)(10,972)(265)(99,105)(11,365) ¥(920) $ (102,655)(393) ¥

(7) Matters related to pension plan assets
1) Ratio of the main components in the total pension plan
assets were as follows:
2021

2020

Bonds

15%

18%

Stocks58%

50%

Short-term investment fundincluding cash and deposits

6%8%Life insurance company
general accounts

4%4%

Others

17%

20%

Total

100%

100%

Note:
Total pension plan assets included retirement benefit trust ofwhich securities were contributed for the pension plan, which
accounts for 38% and 32% of the total at 31st March, 2021 and2020, respectively.

2) Setting of long-term expected rates of return on plan
assetsFor the purpose of determining the long-term
expected return on plan assets, the present andanticipated allocation of plan assets and the present
and expected long-term rates of return on various
assets composing the plan assets are taken into
account.
(8) The assumptions used for actuarial calculations
2021
Discount rate

2020

0.00%-0.65%

0.00%-0.65%

Expected rate of return on plan
assets2.5%

2.5%

Expected rate of salary increase

1.76%-3.99%

1.79%-4.34%

18. Asset Retirement Obligations
Notes concerning asset retirement obligations are omitted
due to lack of significance of its total amount.

535,218

19. Contingent Liabilities
Contingent liabilities for guarantee of corporate bonds
included in “Securities,” which were issued by private
placement (Article 2, Paragraph 3 of the Financial
Instruments and Exchange Act of Japan) amounted to¥26,795 million ($242,028 thousand) and ¥24,847 million at
31st March, 2021 and 2020, respectively.



20. Share

Japanese bcomply withthat neither
available fo
or eliminate
which is at
cash divide
earnings as
fiscal period
aggregate aaccount equalso provide
in capital anof share cashareholde
subject to th

The maxim
dividends isfinancial sta
the Act.

(1) Class
stock
Movem
class pended
follows

Year ended
March, 20

Outstanding shCommon stFirst series of sepreferred stock

Total

Treasury stoc
Common st
Total

Notes:
1. Increase
shares) w
of Directo
from the s
one unit (2. Decrease
shares) co
acquisitio
shares lestransfer dYear ended
March, 20

Outstanding shCommon stFirst series of sev
preferred stock

Total

Treasury stoc
Common st
Total

46

 䝨䞊䝆

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ncludedmeuded infore

20. Shareholders’ Equity

Thousands of
U.S. dollars

2021

$

(3,549)(99,105)$ (102,655)

ension plan
2020
18%
50%
8%
4%
20%
100%

rust ofwhich
2021 andn on planmandpresent
arious
into

tions
2020

.00%-0.65%
2.5%.79%-4.34%

omitted 䝨䞊䝆Japanese banks, including the Company, are required tocomply with the Banking Act and the Act. The Act stipulates
that neither additional paid-in capital nor the legal reserve isavailable for dividends, but that both may be used to reduceor eliminate a deficit. Under the Banking Act, an amountwhich is at least equal to 20% of the aggregate amount ofcash dividends and certain appropriations of retained
earnings associated with cash outlays applicable to eachfiscal period is to be appropriated to the legal reserve until theaggregate amount of the legal reserve and the capital surplus
account equals 100% of the amount of share capital. The Act
also provides that if the aggregate amount of additional paidin capital and the legal reserve exceeds 100% of the amountof share capital, the excess may be distributed to theshareholders either as a return of capital or as dividends
subject to the approval of the shareholders.
The maximum amount which the Company can distribute as
dividends is calculated based on the non-consolidated
financial statements of the Company and in accordance with
the Act.
(1) Class and number of shares issued and treasury
stock
Movements in common stock, first series of seventhclass preferred stock and treasury stock during the years
ended 31st March, 2021 and 2020 were summarized asfollows:
Number of shares (in thousands)
Year ended 31st
March, 2021

31st March,
1st April,
2021
2020
Increase Decrease

Note

Outstanding shares:

Common stock
First series of seventh-classpreferred stock

Total
Treasury stock:
Common stock
Total

–

–

281,008

25,000––25,000306,008––

306,008

277

–
602

75

804 1 and 2

277

602

75

804

Note

Outstanding shares:

Common stockds
teFirst series of seventh-classpreferred stock

Total

d to
million at

47

Treasury stock:
Common stock
Total

The stock option outstanding at 31st March, 2021 was asfollows:
Persons granted

Number of shares (in thousands)
31st March,
1st April,
2020
2019
Increase Decrease(2) Stock subscription rights
The Company resolved to grant stock subscription rights(stock option) to certain directors and executive officers
of its subsidiaries at the Board of Directors’ meeting heldon, 31st July, 2020, 30th July, 2019, 31st July, 2018,
31st July, 2017, 27th July, 2016, 29th July, 2015, 30th
July, 2014, 31st July, 2013, 31st August, 2012, 28th July,
2011 and 24th February, 2011.
The balance of stock subscription rights granted for stock
option program were ¥76 million ($686 thousand) and¥79 million at 31st March, 2021 and 2020, respectively.
Stock option related expenses for the years ended 31st
March, 2021 and 2020 amounted to ¥19 million ($171
thousand) and ¥17 million, respectively.

Date of resolution

281,008

Notes:
1. Increase in treasury stock of common stock (602 thousand
shares) was due to purchase based on resolution of the Boardof Directors (600 thousand shares) and acquisition of sharesfrom the shareholders who owned fractional shares less than
one unit (2 thousand shares)
2. Decrease in treasury stock of common stock (75 thousand
shares) consisted of disposal of shares following theacquisition request from the shareholders who owned fractional
shares less than one voting right (0 thousand shares) andtransfer due to exercise of stock option (75 thousand shares) .
Year ended 31st
March, 2020

Notes:
1. The number of treasury stock as of 1st April, 2019 included theCompany’s shares owned by the Employees’ Shareholder
Trust of 1,546 thousand shares.
2. Increase in treasury stock of common stock (0 thousand
shares) was due to acquisition of shares from the shareholders
who owned fractional shares less than one unit (0 thousand
shares).
3. Decrease in treasury stock of common stock (1,569 thousand
shares) consisted of disposal of shares following theacquisition request from the shareholders who owned fractional
shares less than one voting right (0 thousand shares),transfer
due to exercise of stock option (23 thousand shares) andtransfer to the Shareholders Association (1,546 thousand
shares).

281,008––

281,008

25,000––25,000306,008––

306,008

1,845

0

1,569

277 1,2 and 3

1,845

0

1,569

277

Number of stock option
by type of shares (*)

24th February, 2011
Directors of thesubsidiaries:

22

16

Executive officers of
the subsidiaries: 19

Executive officers of
the subsidiaries: 18

Common stock:

Common stock:

84,78072,760Date of grant

15th March, 2011

31st August, 2011

Vesting conditions

To exercise within 10
days after retirement

To exercise within 10
days after retirement

Applicable service
periodFrom 15th March, 2011 to
the date of retirement

From 31st August, 2011 to
the date of retirement

Exercise period

From 16th March, 2011
to 31st July, 2041

From 1st September,2011 to 31st July, 2041

31st August, 2012

31st July, 2013

Date of resolution
Persons granted

Number of stock option
by type of shares (*)

Directors of thesubsidiaries:

10

Directors of thesubsidiaries:

Number of sto
by type of s
Date of grantVesting condi

Applicable serperiodExercise perio

Date of res

Persons grant

Number of sto
by type of s
Date of grantVesting condi

Applicable serperiodExercise perio

Date of res

Persons grant

Date of grantVesting condi

Applicable serperiodExercise perio

Date of res

Persons grant

Number of sto
by type of s
10

Executive officers of
the subsidiaries: 16

Executive officers of
the subsidiaries: 16

Common stock:

Common stock:69,500Date of res

Persons grant

Number of sto
by type of s

28th July, 2011
Directors of thesubsidiaries:

53,800Date of grant

1st October, 2012

2nd September, 2013

Vesting conditions

To exercise within 10
days after retirement

To exercise within 10
days after retirement

Applicable service
periodFrom 1st October, 2012 to
the date of retirement

From 2nd September, 2013
to the date of retirement

Exercise period

From 2nd October, 2012
to 31st July, 2042

From 3rd September,2013 to 31st July, 2043

Date of grantVesting condi

Applicable serperiodExercise perio(*) The numof shares
common 䝨䞊䝆

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ncluded theholder

Persons granted

Date of resolution

sandhareholders
ousandthousandeed fractionals),transfer
) and
usand

Common stock:

Common stock:

Date of grant

28th August, 2014

1st September, 2015

Vesting conditions

To exercise within 10
days after retirement

To exercise within 10
days after retirement

Applicable service
periodFrom 28th August, 2014 to

From 1st September, 2015

the date of retirement

to the date of retirement

Exercise period

From 29th August, 2014
to 31st July, 2044

From 2nd September, 2015
to 31st July, 2045

Number of stock option
by type of shares (*)

16

72,760t, 2011e within 10
er retirement

ugust, 2011 tof retirement

uly, 201310

officers of
diaries: 16

tock:

53,800mber, 2013

e within 10
er retirementptember, 2013of retirement

eptember,
1st July, 2043

51,80031st July, 2017
Directors of the
8
subsidiaries:

8

Executive officers of
the subsidiaries: 17

Executive officers of
the subsidiaries: 20

Common stock:

Common stock:

94,80030th August, 2016

31st August, 2017

To exercise within 10
days after retirement

To exercise within 10
days after retirement

Applicable service
periodFrom 30th August, 2016 to
the date of retirement

From 31st August, 2017 to

Exercise period

From 31st August, 2016
to 31st July, 2046

From 1st September,2017 to 31st July, 2047

Date of resolution

31st July, 2018
Directors of thesubsidiaries:

the date of retirement

30th July, 2019
Directors of the
6
subsidiaries:

6

Executive officers of
the subsidiaries: 18

Common stock:

Date of grant

30th August, 2018

28th August, 2019

Vesting conditions

To exercise within 10
days after retirement

To exercise within 10
days after retirement

Applicable service
periodFrom 30th August, 2018 to
the date of retirement

From the 28th August, 2019
to the date for retirement

Exercise period

From 31st August, 2018
to 31st July, 2048

From the 29th August,2019 to 31st July, 2049

Persons granted

Common stock:
117,400
58,500

28th
July,
2011

31st March, 2020Outstanding

31st
July,
2013

30th
July,
2014

Date ofresolution

1,100

1,240

1,700

6,200

12,200Granted

–

–

–

–

–

Forfeited

–

–

–

–

–

Vested

–

–

–

–

2,600

1,100

1,240

1,700

6,200

9,600

–

–

–

–

–

31st March, 2021Outstanding
Vested:31st March, 2020Outstanding
Vested

–

–

–

–

2,600

Exercised

–

–

–

–

2,600

Forfeited

–

–

–

–

–

–

–

–

–

–

31st March, 2021Outstanding
Date ofresolution

27th
July,
2016

31st
July,
2017

31st
July,
2018

30th
July,
2019

12,70039,80046,80054,700117,400

–

–

–

–

–

GrantedForfeited
31st March, 2021Outstanding

–

–

–

–

–

3,600

12,00014,80014,20028,0009,100

27,80032,00040,50089,400

Vested:31st March, 2020Outstanding

–

–

–

–

–

Vested3,600

12,00014,80014,20028,000Exercised

3,600

12,00014,80014,20028,000Forfeited

–

–

–

–

–

–

–

–

–

–

31st March, 2021Outstanding
Date ofresolution

7

Executive officers of
the subsidiaries: 17
Number of stock option
by type of shares (*)

Common stock:156,300

Date of grant

28th August, 2020

Vesting conditions

To exercise within 10
days after retirement

Applicable service
periodFrom the 28th August, 2020
to the date for retirement

Exercise period

From the 31st August,2020 to 31st July, 2050(*) The number of stock options is converted into the numberof shares after the one-for-five reverse stock split ofcommon stock on 1st August, 2012.

31st March, 2020Outstanding

31st
July,
2020

Date ofresolution
Exercise
price

Average stock
price at
exercise

Date ofresolution
Exercise
price

Average stock
price at
exercise
Fair value
price atgrant date
Date ofresolution
Exercise
price–Forfeited–

Vested–156,300

Vested:–Vested–Exercised–

Forfeited–

31st March, 2021Outstanding

Fair value
price atgrant date

Fair value
price atgrant date

156,300

31st March, 2020Outstanding

Average stock
price at
exercise

Average stock
price at
exercise

Granted

31st March, 2021Outstanding

Exercise
price

Fair value
price atgrant date

29th
July,
2015

Non-vested:
31st March, 2020Outstanding

Price inform

31st
August,2012

Non-vested:

31st July, 2020
Directors of thesubsidiaries:

24th
February,2011

Non-vested:

VestedNumber of stock option
by type of shares (*)

Date of resolution

Date ofresolution

83,100

Vesting conditions

eptember,
1st July, 2041

f the
ries:

27th July, 2016
Directors of thesubsidiaries:

Executive officers of
the subsidiaries: 18

officers of
diaries: 18

tock:

55,900Date of grant

was as

f the
ries:

10

Number of stock option
by type of shares (*)

Persons granted

uly, 2011

The stock option activity is as follows:

29th July, 2015
Directors of the10
subsidiaries:

Executive officers of
the subsidiaries: 14

Date of resolution

d for stocknd) andpectively.
ded 31stn ($171

30th July, 2014
Directors of thesubsidiaries:

Executive officers of
the subsidiaries: 15

Persons grantedtion rights
e officers
eting held
2018,15, 30th, 28th July, 䝨䞊䝆Note:
The impstock onThe method
option granfollows:
Measureme
Major funda
fair value–(*) The number of stock options is converted into the numberof shares after the one-for-five reverse stock split ofcommon stock on 1st August, 2012.

48

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Price information is as follows:
30th
July,
2014

0

12,200

–

–

–

–

–

2,600

0

9,600

–

–

–

2,600

–

2,600

–

–

–

–
30th
July,
2019

0

117,400

–

–

–

–

0

28,000089,400––028,000028,000––––Date of resolution

Date ofresolution
Exercise
price

¥

1 ¥

1 ¥

1 ¥

1 ¥

1

Average stock
price at
exercise

¥

– ¥

– ¥

– ¥

– ¥

158

Fair value
price atgrant date

¥

490 ¥

535 ¥

449 ¥

430 ¥

497

31st
July,
2018

30th
July,
2019

29th
July,
2015

Date ofresolution

27th
July,
2016

31st
August,
2012

31st
July,
2017

31st
July,
2013

30th
July,
2014

31st
July,
2020

¥

1 ¥

1 ¥

1 ¥

1 ¥

1 ¥

1

Average stock
price at
exercise

¥

158 ¥

158 ¥

158 ¥

158 ¥

158 ¥

䠉

Fair value
price atgrant date

¥

474 ¥

410 ¥

353 ¥

325 ¥

140 ¥

132

Date ofresolution

24th
February,
2011

Exercise
price$0.00 $

0.00 $

0.00 $

0.00 $

0.00

Average stock
price at
exercise

$

– $

– $

– $

– $

1.42

Fair value
price atgrant date$

4.42 $

4.83 $

4.05 $

3.88 $

4.48

31st
July,
2018

30th
July,
2019

31st
August,
2012

31st
July,
2013

31st July,2020

23. Other

28.867%

Estimated remaining outstanding period *2

Exercise
price

28th
July,
2011



Volatility of stock price *1

24th
February,
2011

28th
July,
2011

 䝨䞊䝆

30th
July,
2014

4.731 years

Estimated dividend *3

4.545%

Interest rate with risk free *4(0.090%)*1 Actual stock price during the period (from 5th December,2015 to 28th August, 2020) corresponding to the estimatedremaining outstanding period*2 For each director or executive officer in office, thedifference between “the average term of office of retired
directors or executive officers” and “the years in office ofthe director or executive officer at the time stock options
were granted” was calculated, and if said difference wasless than 0.8 years, the average of the estimatedremaining outstanding period was calculated using 0.8
years, by taking into account the period remaining to thenext annual shareholders’ meeting.
*3 ¥7.5 ($0.06) of latest annual dividend /¥165 ($1.49) ofstock price on the base date
*4 Yield of Japanese government bonds approximating theestimated remaining outstanding period
In estimating the vested number of stock options, theCompany basically reflects only the actual forfeited number,since it is difficult to make a reasonable estimate on the future
forfeited number.

21. Other Operating Income

29th
July,
2015

Date ofresolution

27th
July,
2016

31st
July,
2017

31st
July,
2020

Exercise
price$0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

0.00

Average stock
price at
exercise$

1.42 $

1.42 $

1.42 $

1.42 $

1.42 $

䠉

Fair value
price atgrant date$

4.28 $

3.70 $

3.18 $

2.93 $

1.26 $

1.19

Note:
The impact of the one-for-five reverse stock split of common
stock on 1st August, 2012 is taken into consideration.

Other operating income for the years ended 31st March, 2021
and 2020 consisted of the following:Thousands of
U.S. dollars

Millions of yen
2021
Gain on sales of securities andtrading account securities
Other

¥

2,034 ¥
499

4,973 $
1,316

18,372
4,507

Total

¥

2,533 ¥

6,290 $

22,87922. Other Income
Other income for the years ended 31st March, 2021 and 2020
consisted of the following:
2021
Gain on sales of equity securities ¥Gain on money held in trust
Other
Total

Loss on sales
Other
Total

24. Other

Other expe
2020 consis

Write-offs of loa

Loss on sales

Loss on devalua

Loss on mone

Provision for c
Other
Total

Note:
“Other”for th
includes ¥5time costs a
fundamenta
subsidiary,

25. Divid

Cash divid
March, 202
Resolution
2020
Type ofstock

Thousands of
U.S. dollars

Millions of yen

The method for estimating the fair value price of 2020 stock
option granted in the year ended 31st March, 2021 were as
follows:
Measurement method: Black-Scholes model
Major fundamental factors and assumptions used to measurefair value

2021

2020

Other opera
2021 and 2¥

1,862 ¥

2020
1,782 $

2021
16,818

111

184

1,002

12,556

12,077

113,413

14,530 ¥14,044 $131,243

Commonstock

3First series ofseventh-classpreferred stock3

Resolution
Type ofstock
CommonstockFirst series ofseventh-classpreferred stock

e numbert of49 䝨䞊䝆

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July,2020

23. Other Operating Expenses

28.867%4.731 years
4.545%

Other operating expenses for the years ended 31st March,
2021 and 2020 consisted of the following:(0.090%)Thousands ofMillions of yen

cember,estimatederetiredoffice ofoptions
nce wasdng 0.8g to thehenumber,n the futurearch, 2021
Thousands of
U.S. dollars

2021

$

¥

10 ¥
14

8,778 $
57

90
126

Total

¥

24 ¥

8,835 $

216

18,372
4,507
22,879$$2021
16,818
1,002
113,413131,243

Cash divid
ended 31st
the end of

Source ofdividends

Types of stock

Effective date

Types of sto

Common stock

Retained earnings 31st March, 2021 24th June, 2021

Record dateCommon stoc

First series of seventh-classpreferred stock

Retained earnings 31st March, 2021 24th June, 2021

First series of seventh
preferred stock

Dividend amountMillionsof yenTypes of stock

Dividends per share

Thousands of
U.S. dollars

Yen

U.S. dollars

Types of sto

1,050 $

9,484 ¥

3.75 $

0.03

Common stoc

24. Other Expenses

First series of seventh-classpreferred stock

¥

375 $

3,387 ¥

15.00 $

0.13

First series of seventh
preferred stock

Other expenses for the years ended 31st March, 2021 and2020 consisted of the following:

Cash dividends paid during the fiscal year ended 31st
March, 2020

Thousands of
U.S. dollars

Millions of yen

2021

2020

1,583 ¥

3,250 $

Loss on sales of equity securities

7

144

63

Loss on devaluation of equity securities

104

1,243

939

Loss on money held in trust

131

140

1,183

Provision for contingent losses

297

74

2,682

Other
¥

Total

14,29817,328

12,164

156,517

19,453 ¥17,017 $175,711

Note:“Other”for the year ended 31st March, 2021 and 2020
includes ¥57 million ($514 thousand) and ¥136 million of onetime costs associated with branch relocations based on afundamental review of branch functions at the banking
subsidiary, The Senshu Ikeda Bank.

Cash dividends paid during the fiscal year ended 31st
March, 2021
Resolution by annual shareholders’ meeting on 25th June,
2020
Recorddate

Effective Millions
dateof yenThousands of
U.S. dollars

Yen

U.S.
dollars

Commonstock

31st March, 26th June,
¥
2020
2020

1,052 $

9,502 ¥

3.75 $

0.03

First series ofseventh-classpreferred stock

31st March, 26th June,
¥
2020
2020

375 $

3,387 ¥

15.00 $

0.13

Resolution by Board of Directors on 12th November, 2020

Dividend amount Dividends per share

Type ofstock

Resolution by annual shareholders’ meeting on 25th June,
2019
Dividend amount Dividends per share
Type ofstock

Recorddate

Effective Millions
dateof yenCommonstock

31st March, 26th June,
¥
2019
2019

First series ofseventh-classpreferred stock

31st March, 26th June,
¥
2019
2019

Thousands of
U.S. dollars

2,105 $ 19,342 ¥375 $3,445 ¥

Yen

U.S.
dollars

7.50 $

0.06

15.00 $

0.13

Millionsof yenU.S.
dollars

Recorddate

Effective
date

Commonstock

30th
September,2020

1st December,¥
2020

1,053 $

9,511 ¥

3.75 $

0.03

First series ofseventh-classpreferred stock

30th
September,2020

1st December,
¥
2020

375 $

3,387 ¥

15.00 $

0.13

Thousands of
U.S. dollars

Yen

26. Cash

A reconcilia
accompany
equivalents
cash flows
as follows:

Cash and due
Deposits othewith the Ban

Note:
The amount of cash dividends on common stock by resolution ofannual shareholders’ meeting on 25th June, 2019 included the¥11 million ($101 thousand) in cash dividends on the Company’s
shares owned by the Employees’ Shareholder Trust.

27. Lease

Resolution by Board of Directors on 14th November, 2019a.

Dividend amount Dividends per share

25. Dividends

Type ofstock

Thousands of
U.S. dollars

Cash dividends with record dates falling in the fiscal year
ended 31st March, 2021 and effective dates coming after
the end of the fiscal year¥

Dividend amount Dividends per share

1 and 2020

Common stock

Write-offs of loans and bills discounted ¥ting the

2021

2020

Loss on sales of debt securities
Other

2021

49) of$

2021

U.S. dollars 䝨䞊䝆Type ofstock

Recorddate

Effective
dateMillionsof yenCommonstock

30th
September,2019

2nd December,¥
2019

1,052 $

9,666 ¥First series ofseventh-classpreferred stock

30th
September,2019

2nd December,
¥
2019

375 $

3,445 ¥

FinancU.S.
dollars

As Les3.75 $

0.03

15.00 $

0.13

InformasignificThousands of
U.S. dollars

Cash and cas

Yen

b.

Note:
The amount of cash dividends on common stock by resolution ofBoard of Directors on 14th November, 2019 included the ¥1
million ($9 thousand) in cash dividends on the Company’s shares
owned by the Employees’ Shareholder Trust.

Opera

As LesFutureoperatias follo

Year ending 3

2022
2023 and ther
Total

50

 䝨䞊䝆

BKWP

iscal year
ming after

Cash dividends with record dates falling in the fiscal year
ended 31st March, 2020 and effective dates coming after
the end of the fiscal year

ective date 䝨䞊䝆Source ofdividends

Types of stock

Record date

Effective dateJune, 2021

Common stock

Retained earnings 31st March, 2020 26th June, 2020

June, 2021

First series of seventh-classpreferred stock

Retained earnings 31st March, 2020 26th June, 2020
Dividend amount

per share

U.S. dollars

Millionsof yenTypes of stock

Dividends per share

Thousands of
U.S. dollars

Yen

U.S. dollars

$

0.03

Common stock¥

1,052 $

9,666 ¥

3.75 $

0.03

$

0.13

First series of seventh-classpreferred stock

¥

375 $

3,445 ¥

15.00 $

0.13

d 31sth June,ds per share

50 $

00 $

U.S.
dollars

0.13

solution ofuded theCompany’sr, 2019

ds per share

75 $

00 $

2021

2021

2020

Cash and cash equivalents¥ 1,660,156 ¥

807,879 $ 15,097,470(11,285)(5,905)(101,932)

801,973 $ 14,995,537

27. Leasesa.

U.S.
dollars

Information on finance leases is omitted due to lack ofsignificance.

0.13

b.

2021

2020

2021

10,632 ¥10,138 $96,034

Tax loss carryforwards

¥

5,891

8,124

53,211

Loss on devaluation of securities

2,777

2,784

25,083

Depreciation

586

657

5,293

Provision for employees’ bonuses

509

370

4,597

Impairment loss

199

201

1,797

Net defined benefit liability

46

47

415

Net unrealized loss on available-forsale securities

Other
Gross deferred tax assets
Valuation allowance for tax loss
carryforwards (Note)
Valuation allowance for total
deductible temporary differences

3

175

27

2,983

3,119

26,944

23,63025,618

213,440(3,843)(6,532)(34,712)(8,478)(6,085)(76,578)

Valuation allowance subtotal(12,321)(12,617)(111,290)

Total deferred tax assets

11,30813,000102,140

Net defined benefit asset(4,422)(950)(39,942)Net unrealized gain on available-forsale securities(3,603)(2,312)(32,544)(5,844)

Stocks returned of retirement
benefit trust

(647)

(647)

Non-taxable accrued dividend income

(90)

(107)

(812)

Other

(44)

(54)

(397)

(8,808)(4,072)(79,559)

2,500 ¥

8,927 $

22,581

Total deferred tax liabilities

Operating leases

Net deferred tax assets

As Lessee

solution ofhe ¥1ny’s shares

Thousands of
U.S. dollars

Millions of yen

Deferred tax liabilities:

Finance leases
As Lessee

0.03

Future minimum lease payments under non-cancellable
operating leases subsequent to 31st March, 2021 wereas follows:Year ending 31st March

51

Thousands of
U.S. dollars

Millions of yen¥ 1,671,441 ¥The tax effect of temporary differences which gave rise tosignificant portions of the deferred tax assets and liabilities at
31st March, 2021 and 2020 consisted of the following:Reserve for possible loan losses

A reconciliation of cash and due from banks in theaccompanying consolidated balance sheets to cash and cash
equivalents in the accompanying consolidated statements ofcash flows at 31st March, 2021 and 2020 were summarized
as follows:

Cash and due from banks
Deposits other than deposits
with the Bank of Japan

Income taxes applicable to the Company and its domestic
subsidiaries comprise corporate tax, inhabitants’ taxes andenterprise tax which, in the aggregate, resulted in a statutory
tax rate of 30.6% for the years ended 31st March, 2021 and2020, respectively.

Deferred tax assets:

26. Cash and Cash Equivalents

0.06

28. Income Taxes

Thousands of
U.S. dollars

Millions of yen

2022
2023 and thereafter

¥

897
5,320

$

8,102
48,053

Total

¥

6,218

$

56,164¥BKWP

 䝨䞊䝆Note:
Tax loss carryforwards and deferred tax assets by expiration ofcarryforward are as follows:

Fiscal year ended 31st March, 2021

29. Comprehensive Income
Reclassification adjustments and tax effect amounts of othercomprehensive income for the year ended 31st March, 2021
and 2020 were as follows:
Thousands ofMillions of yen
Oneyear orless
Tax losscarryforwards

After oneyear
through
two years

0

After two After three
years
years
throughthroughthree years four years

104–

After four
years
throughfive years

4,710

16

After
five
years

Total

1,059

5,891

(*1)

Valuation
allowance

–

(101)

–

(2,917)–(824)

Deferred tax
assets

0

3

–

1,792

16

235 (*2)2,047(3,843)

Millions of yen
2021

U.S. dollars

2021

2020

Unrealized gain (loss) on
available-for-sale securities:
Amount for the year

Thousands of U.S. dollars
After oneyear
through
two years

0939

After two After three
years
years
throughthroughthree years four years

After four
years
throughfive years

After
five
years

Total

144

9,565

53,211

Tax losscarryforwards(*1)

Valuation
allowance
Deferred tax
assets

–

(912)

0

27

–

42,543– (26,348)––

16,186144(7,442)(34,712)2,122 (*2)18,489(*1) Amounts of tax loss carryforwards are multiplied by thestatutory tax rate.
(*2) Deferred tax assets of ¥5,891 million ($53,211 thousand)are recorded for tax loss carryforward of ¥2,047 million($18,489 thousand). This tax loss carryforward is deemed
to be recoverable as it is expected that there will betaxable income in the future.

8,225 ¥

(8,423) $74,293(17,902)

Reclassification adjustment(1,982)

4,356

Amount before tax effect

6,242(4,066)56,381

Tax effect amount(1,251)

534(11,299)

Net unrealized gain (loss) on
available-for-sale securities

4,990(3,531)45,072

A reconciliation of the statutory tax rate to the effective tax
rate for the years ended 31st March, 2021 and 2020 were as
follows:
2021

2020

Statutory tax rate

30.6%

30.6%

Permanently non–taxable income

(0.0)

(0.0)

Permanently non–deductible expenses

0.4

0.8

Per capita portion of inhabitants’ taxes

1.4

2.1

Valuation allowance(1.6)(13.4)

Amortization of goodwill

0.1

0.2

Consolidation adjustment to gain on salesof shares of consolidated subsidiaries

0.3

1.6

Tax rate difference with consolidated subsidiaries

1.0

1.6

Effects of tax examination

䠉

(1.5)

Other

(0.0)

0.4

Effective tax rate

32.2%

22.4%

Amount for the year

(77)

(371)

(695)

Reclassification adjustment

131

322

1,183

Amount before tax effect

53

(49)

478

Tax effect amount

(16)

15

(144)

Net unrealized gain on
deferred hedges

37

(34)

334

Outsidecustomers
Intersegment
income¥97,796

Segment
profitSegment
assetsSegment
liabilities
Others:Depreciation
Interest
incomeInterest
expenseExtraordinary
gain
Extraordinaryloss
Tax expense

Remeasurements of defined
benefit plans:
Amount for the year

10,827(2,276)

Reclassification adjustment

(382)

31

(3,450)

Amount before tax effect

10,445(2,244)

94,345

Tax effect amount(3,194)686(28,850)

Remeasurements ofdefined benefit plans
Total other comprehensive income

B
Ordinary
income:Total¥

Unrealized gain (loss) on deferred hedges

Oneyear orless

¥

7,250

(1,558)65,486

12,279 ¥(5,124) $110,911

30. Segment Information and RelatedInformation(1) Segment Information
The Group's reportable segments are determined on thebasis that separate financial information for suchsegments is available and examined periodically by the
Board of Directors to make decisions regarding theallocation of management resources and assess thebusiness performances of the segments within theGroup. The Group mainly provides banking services andoperate other financial services including leasing. The
Group sets two reportable segments of banking businessand leasing business.
Banking business engages in banking services andcredit guarantee services, while leasing businessengages in leasing and other services, etc..
(2) Basis of measurement for reported segment profit(loss), segment assets, segment liabilities and othermaterial items
The accounting methods used for reportable businesssegments are presented in accordance with Note
3,“Significant Accounting Policies”. The reportablesegment profit figures are based on operating profit.
Income arising from intersegment transactions is basedon arm’s length prices.

Increase intangible andintangible
fixed assets

Notes:
1. Ordinary
included i
income) is
companie
2. “Other” inthe reportand secur
3. Adjustme(1) Adjus
the e(2) Adjus
is the(3) Adjus
¥30,6
trans
(4) Adjus
the e(5) Adjus
the e(6) Adjus
the e
4. Segment
ordinary in
represent“Other ex
Therefore
profit, is rethe additio(3) Information about reportable segment profit (loss),segment assets, segment liabilities and othermaterial items
Segment information for the fiscal years ended March
31, 2021 and 2020 was summarized as follows:52 䝨䞊䝆

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 䝨䞊䝆Millions of yen

Thousands of$$

U.S. dollars

2021(17,902)56,381(11,299)
45,072
(695)
1,183
478
(144)

Banking

Leasing

Reportable segments
Other

Total

Total

Outsidecustomers
Intersegment
incomeSegment
profitSegment
assetsSegment
liabilities
Depreciation

Increase intangible andintangible
fixed assets¥

63,461¥

12,017¥75,479

¥

5,849

¥

81,328¥

䠉

¥81,328

2,036

220

2,257

1,961

4,218

(4,218)

䠉

65,498

12,23877,736

7,810

85,547(4,218)81,328

7,484

209

7,694

496

8,190

(476)

7,714

6,672,874

33,292

6,706,167

30,061

6,736,228(30,679)

6,705,548

6,440,986

31,562

6,472,548

16,635

6,489,184(30,678)

6,458,505(3,450)(28,850)
65,486110,911ned on thechly by theg thess thethervices andng. Theg business

s and
ss

t profit
and otherusinessote
able
profit.
is basedt (loss),
er

March
s:

53

Other

Total

Total

Outsidecustomers
Intersegment
income

Total
Segment
profit(loss)
Segment
assetsSegment
liabilities

3,826

1,286

5,113

93

5,207

䠉

5,207

43,55579

43,63599

43,735(610)

43,124

1,269

103

1,372

69

1,441

(135)

1,306

47

0

47

䠉

47

(19)

27

105

4

110

4

114

䠉

114

2,070

115

2,186

272

2,458

䠉

2,458

3,595

2,306

1,226

3,532

62

3,595

䠉

Notes:
1. Ordinary income (“Total income” less extraordinary gain
included in “Other income” in the consolidated statements ofincome) is presented in place of net sales of operatingcompanies of other industry groups.
2. “Other” includes business segments which are not included in
the reportable segments and comprises credit cards businessand securities business.
3. Adjustments are as below:(1) Adjustment of segment profit of negative ¥476 million isthe elimination of intersegment transactions.
(2) Adjustment of segment assets of negative ¥30,679 million
is the elimination of intersegment transactions.
(3) Adjustment of segment liabilities of negative¥30,678million is the elimination of intersegment
transactions.
(4) Adjustment of interest income of negative ¥610 million isthe elimination of intersegment transactions.
(5) Adjustment of interest expense of negative ¥135 million isthe elimination of intersegment transactions.
(6) Adjustment of extraordinary gain of negative ¥19 million isthe elimination of intersegment transactions.
4. Segment profit is reconciled to ordinary profit, which represents
ordinary income less ordinary expenses. Ordinary expenses
represent “Total expenses” less extraordinary loss included in“Other expenses” in the consolidated statements of income.
Therefore, consolidated segment profit, which shows ordinary
profit, is reconciled to “Income before income taxes” throughthe addition/deduction of extraordinary gain/loss, net.

Depreciation

Ordinary
income:¥71,679¥11,425¥

83,105

¥

5,115

¥

88,221¥

䠉¥88,221

1,703

148

1,852

2,043

3,895

(3,895)

䠉

73,383

11,574

84,958

7,158

92,117(3,895)88,221

5,744

(64)

5,680

(307)

5,372

(425)

4,946

5,462,090

33,166

5,495,257

27,1095,522,367(29,811)

5,492,555

5,244,499

31,5285,276,028

13,9485,289,976(29,793)5,260,182

Outside$customers
Intersegment
income

Total
Segment
profitSegment
assetsSegment
liabilities

60

58

Others:
4,396

1,288

5,685

98

5,784

䠉

5,784

45,37033

45,404152

45,556(571)

44,985

2,615

101

2,716

73

2,790

(134)

2,655

380

0

380

䠉

380

(17)

363

254

4

259

8

267

䠉

267

Tax expense

928

15

943

190

1,134

䠉

1,134

Increase intangible andintangible
fixed assets

3,302

1,676

4,979

55

5,034

(225)

4,809

Interest
incomeInterest
expenseExtraordinary
gain
Extraordinary
loss

Ba

Adjustment Consolidated

Others:

97,796
94,345

Leasing

Ordinary
income:Others:Interest
incomeInterest
expenseExtraordinary
gain
Extraordinaryloss

Banking

Adjustment Consolidated

Ordinary
income:Tax expense

334

2020

Reportable segments

Total

74,293

Millions of yen

2021

s of otherrch, 2021

Notes:
1. Ordinary income (“Total income” less extraordinary gain
included in “Other income” in the consolidated statements ofincome) is presented in place of net sales of operatingcompanies of other industry groups.
2. “Other” includes business segments which are not included in
the reportable segments and comprises credit cards businessand securities business.
3. Adjustments are as below:(1) Adjustment of segment profit of negative ¥425million is theelimination of intersegment transactions.
(2) Adjustment of segment assets of negative ¥29,811million
is the elimination of intersegment transactions.
(3) Adjustment of segment liabilities of negative¥29,793million is the elimination of intersegment
transactions.
(4) Adjustment of interest income of negative ¥571million isthe elimination of intersegment transactions.
(5) Adjustment of interest expense of negative ¥134million isthe elimination of intersegment transactions.
(6) Adjustment of extraordinary gain of negative ¥17million isthe elimination of intersegment transactions.
4. Segment profit is reconciled to ordinary profit, which represents
ordinary income less ordinary expenses. Ordinary expenses
represent “Total expenses” less extraordinary loss included in“Other expenses” in the consolidated statements of income.
Therefore, consolidated segment profit, which shows ordinary
profit, is reconciled to “Income before income taxes” throughthe addition/deduction of extraordinary gain/loss, net.

Depreciation
Interest
incomeInterest
expenseExtraordinary
gain
Extraordinaryloss
Tax expense
Increase intangibleandintangible
fixed
assets

Notes:
1. Ordinary
included i
income) is
companie
2. “Other” inthe reportand secur
3. Adjustme(1) Adjus
is the(2) Adjus
thous(3) Adjus
thous(4) Adjus
thous(5) Adjus
thous(6) Adjus
thous
4. Segment
ordinary in
represent“Other ex
Therefore
profit, is rethe additio 䝨䞊䝆

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 䝨䞊䝆(5) Information on impairment loss on fixed assets foreach reportable segment

Thousands of U.S. dollars
2021
Leasing

Total

Other

Total

Adjustment

2021

Consolidated

Ordinary
income:䠉¥88,221

,895)

䠉

,895)

88,221

(425)

4,946

,811)

5,492,555,793)

5,260,182

Outside$customers
Intersegment
income

Total
Segment
profitSegment
assetsSegment
liabilities(8) Relatea. Info
For the yea

Millions of yen

Reportable segments
Bankingment Consolidated

Reportable segments
573,218$ 108,544 $

681,772$ 52,831 $

734,603$

18,3901,987

20,386

17,712

38,099(38,099)䠉

591,617

110,541

702,158

70,544

772,712(38,099)734,603

67,6001,887

69,496

4,480

73,977(4,299)69,677

䠉

$734,603

Banking
Impairment loss

¥

Other

Leasing
3 ¥

2 ¥

Total
– ¥

6

Millions of yen
2020

60,273,453

300,71360,574,175

271,529

60,845,704(277,111)

60,568,584

58,178,899

285,087

58,463,986

150,257

58,614,253(277,102)

58,337,142

34,558

11,61546,183840

47,032

䠉

47,032Thousands of U.S. dollars

393,415713

394,137894

395,041(5,509)389,5222021

11,462930

12,392623

13,015(1,219)

11,796

424

0

424

䠉

424

(171)

243

948

36

993

36

1,029

䠉

1,029

Tax expense

18,697

1,038

19,7452,456

22,202

䠉

22,202

Increase intangibleandintangible
fixed
assets

20,82911,07331,903560

32,472

䠉

32,472

Banking¥

Other

Leasing

99 ¥

5,784

(571)

44,985

(134)

2,655

(17)

363

䠉

267

䠉

1,134

(225)

4,809

gain
ments ofng

ncluded inbusinessmillion is the811milliontmillion is

4million is

7million isrepresents
xpensesncluded inincome.
s ordinary
throught.

Depreciation
Interest
incomeInterest
expenseExtraordinary
gain
Extraordinaryloss

Notes:
1. Ordinary income (“Total income” less extraordinary gain
included in “Other income” in the consolidated statements ofincome) is presented in place of net sales of operatingcompanies of other industry groups.
2. “Other” includes business segments which are not included in
the reportable segments and comprises credit cards businessand securities business.
3. Adjustments are as below:(1) Adjustment of segment profit of negative $4,299 thousandis the elimination of intersegment transactions.
(2) Adjustment of segment assets of negative $277,111
thousand is the elimination of intersegment transactions.
(3) Adjustment of segment liabilities of negative $277,102
thousand is the elimination of intersegment transactions.
(4) Adjustment of interest income of negative $5,509
thousand is the elimination of intersegment transactions.
(5) Adjustment of interest expense of negative $1,219
thousand is the elimination of intersegment transactions.
(6) Adjustment of extraordinary gain of negative $171
thousand is the elimination of intersegment transactions.
4. Segment profit is reconciled to ordinary profit, which represents
ordinary income less ordinary expenses. Ordinary expenses
represent “Total expenses” less extraordinary loss included in“Other expenses” in the consolidated statements of income.
Therefore, consolidated segment profit, which shows ordinary
profit, is reconciled to “Income before income taxes” throughthe addition/deduction of extraordinary gain/loss, net.

¥

For the yea

Reportable segments
Impairment loss

Income fromexternalcustomers

– ¥

Total
– ¥

99

Others:䠉

Income fromexternalcustomers¥

Reportable segments
Banking
Impairment loss

$

Other

Leasing

27 $

18 $

Total
– $

54

(6) Information on amortization of goodwill and its
remaining balance for each reportable segment

Note:“Incomefinancia

For the yea

Millions of yen
2021
Reportable segments
Banking
Amortization of
goodwill¥
Remaining balance ¥OtherLeasing
– ¥
– ¥

27 ¥
27 ¥

Total
– ¥
– ¥

27
27

Millions of yen
2020
Reportable segments
Banking
Amortization of
goodwill¥
Remaining balance ¥OtherLeasing
– ¥
– ¥

27 ¥
55 ¥

Total
– ¥
– ¥

27
55

Income fromexternal$customersb. Info
(i) I
I
a
a
i
2

(ii) TIbJ
c2

Thousands of U.S. dollars
2021
Reportable segments
Banking
Amortization of
goodwill$
Remaining balance $Leasing
–
–

243 $
243 $

Other

Total
–
–

(7) Information on gain on negative goodwill for eachreportable segment
There is no information to be reported on gain on
negative goodwill.

243
243

c. Info
Info
pre
cus
con
202

54

 䝨䞊䝆

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 䝨䞊䝆sets for(8) Related informationa. Information about services
For the year ended 31st March, 2021

31. Related Party Transactions
Transactions between a consolidated subsidiary andrelated parties:

Millions of yen
Securities trading

Lending

Total

¥

6

and investment

Leasing

Other

Total

Income fromexternalcustomers¥ 39,549 ¥5,360 ¥ 12,016 ¥ 24,402¥

81,328For the year ended 31st March, 2020
Millions of yen

Total

¥

Securities trading

99

Lending
Income fromexternalcustomers

Total

$

54

d its
ment

and investment¥ 39,291 ¥Leasing

Other

10,717 ¥ 11,412 ¥ 26,800

Total
¥

SHIBUHICHI CO., LTD.
A director of the Company, Yasuki Hosomi and his relatives
directly owned 100% shares in SHIBUHICHI Co., Ltd.
(“SHIBUHICHI”). SHIBUHICHI was located in Ikeda-city,
Osaka, records share capital of ¥3 million ($27 thousand) andis engaged in the property leasing business. Transactions
and balances with SHIBUHICHI as of 31st March, 2021 and2020 were summarized as follows.
There were no transactions and balances with SHIBUHICHI
as of 31st March,2021.
2020

88,221
Transactions

Note:“Income” is presented in lieu of net sales presented by nonfinancial companies.

Type oftransaction
Loan

Millionsof yen¥BalancesThousands of
U.S. dollars– $Thousands of U.S. dollars
Securities trading

Lending
Total

¥
¥

27
27

Total

¥
¥

27
55

Total
243
243

or eachon

55

and investment$

Leasing

Other

Total

48,414 $ 108,535 $ 220,413 $ 734,603

b. Information about geographical areas(i) Income
Information about income has not been presented
as income from external customers inside Japanaccounts for more than 90% of the consolidated
income for the years ended 31st March, 2021 and2020.
(ii) Tangible fixed assets
Information about tangible fixed assets has notbeen presented as tangible fixed assets inside
Japan accounts for more than 90% of theconsolidated tangible fixed assets at 31st March,
2021 and 2020.
c. Information about main customers
Information about main customers has not beenpresented as there is no income from particularcustomer which accounts for more than 10% of theconsolidated income for the years ended 31st March,
2021 and 2020.

Millionsof yenLoans on¥deeds

Thousands of
U.S. dollars

303 $

2,784

¥

0 $

0

Unearned¥
income0 $0AccruedincomeFor the year ended 31st March, 2021

Income fromexternal$ 357,230
customers–

Account
name

The conditions of the loan transactions were determinedbased on the general conditions of similar transactions withthird parties.

32. Financial Instruments and Related
Disclosures
1.

General Information(1) Policy for financial instruments
The Group, whose core operation is The Senshu Ikeda
Bank, Ltd. (the “Bank”), is engaged in the various
financial services as a regional financial institution. The
Group holds financial assets and liabilities which are
subject to fluctuations in the interest rates and market
prices in the principal businesses such as deposit-taking
and lending services and market activities including
securities investment. In order to serve for setting up
strategic targets in response to the changes in market
environments, the Group conducts integrated asset andliability management (“ALM”) and utilizes derivative
contracts as a part of ALM.



(2) Conten
Financloans twhich anonperrate moprincip
investm
purposfor-saleand traexposeassocia
exchanDepos
to liquiadditioliquidity
when tcircumfund atadditioof fluct
The Grcustomcontrolpart ofgains),
securitthe crenonperrisk ari
prices,(3) Risk m
The Grindepemanagsystemrisk coand theintegraadditio“ALM Crisk proissuesmatters
accordmanaga. Inte
The
acc
vari
Gro
risk
mar
risk
cap
and
(cap

 䝨䞊䝆

y andrelativestd.
a-city,usand) andactions
2021 and

BUHICHI

Thousands of
U.S. dollars

$

2,784

$

0

$

0

mined
ons withhu Ikeda
ustion. Thech aremarketosit-taking
uding
ing upmarketasset andativeBKWP(2) Contents of financial instruments and their risks
Financial assets held by the Group mainly consist ofloans to domestic corporate and individual customers,
which are exposed to credit risk arising from customers’
nonperformance of contractual obligations and interest
rate movement risk. Securities held by the Groupprincipally consist of equity securities, debt securities andinvestment trusts, which are held for pure investment
purpose and strategic investment purpose as availablefor-sale securities and partially, for holding to maturity
and trading purposes. These financial assets are
exposed to credit risk of issuers and market risk
associated with interest rates, stock prices and foreignexchanges.
Deposits which are major financial liabilities are exposed
to liquidity risk that unexpected cash flow might arise. In
addition, other fund raising sources are exposed to theliquidity risk that necessary fund might not be secured
when the Group fails to utilize the market under certain
circumstances, or that the Group might be obliged tofund at more unfavorable interest rates than normal. In
addition, these financial liabilities are exposed to the riskof fluctuations in interest rates as well as financial assets.
The Group uses derivative contracts to meet thecustomers’ needs and principally as a means of risk
control over the assets and liabilities. In addition, as apart of trading activities (to earn short-term trading
gains), futures instruments including equity and debt
securities are utilized. These derivatives are exposed tothe credit risk (counterparty risk) arising from customers’
nonperformance of contractual obligations and market
risk arising from the fluctuations in interest rates, stock
prices, foreign exchanges, etc.
(3) Risk management system for financial instruments
The Group has established the risk control department
independent from front offices and defines basic risk
management policies. Specifically, the risk management
system and various rules including the basic policy onrisk control are determined by the Board of Directors,
and the responsible functions by risk categories and theintegrated risk control function are clearly defined. In
addition, the “Risk Management Committee” and the“ALM Committee” have been established to monitor therisk profiles of the Group and discuss management
issues as well as risk control measures. And suchmatters are reported to the Board of Directors andaccordingly, effective risk management system at the
management level is structured.
a. Integrated risk management
The Group conducts integrated risk management inaccordance with the basic policy on risk control andvarious integrated risk control rules. Specifically, theGroup conducts integrated control by identifying therisks assessed by risk categories such as credit risk,
market risk and others including credit concentration
risk not considered in the computation process of thecapital ratio and interest rate risk of banking accounts
and compares them with management capacity(capital).

 䝨䞊䝆

b. Credit risk management
The Group analyzes and controls the credit portfolioin accordance with the Company’s policy on credit
risk control and various credit risk control rules. The
Group maintains and operates a system ofinvestigation, internal rating, asset self-assessment inmonitoring individual transactions.

(ii) D
W
C
s
d
t
a
m

These credit control procedures are performed byeach operating office, credit investigation department
and risk control departments of the Bank. With
respect to credit risk of issuers of securities andcounterparty risk of derivative transactions, the risk
control departments of the Bank monitor theidentification of credit information and fair values. In
addition, the risk control department of the Company
reports on a regular basis to the Board of Directors of
the Company.
Furthermore the internal audit departments audit thestatus of credit control.
c. Market risk management(i) Market risk management
The Group controls market risk arising fromfluctuations in interest rates, stock prices, foreignexchanges, etc. in accordance with the Company’s
policy on market risk control and various market
risk control rules. Specifically, the risk control
department of the Company identifies the volume
of market risk using the Value-at-Risk (VaR)
method and monitors compliance with the risk
limits resolved by the Board of Directors throughcontinuous monitoring system. For securities, inaddition to above risk limit control policy, theGroup has established and managed loss cut
rules. The relevant information is periodicallyreported by the risk control department to the Risk
Management Committee and the Board of
Directors.
The ALM Committee identifies and confirms the
make-up of assets and liabilities and interest raterisk and discusses future measures. Specifically,
the responsible department of the Company for
ALM identifies comprehensively interest rates andperiods of financial assets and liabilities andmonitors using gap analysis and interest ratesensitivity analysis to secure stable andcontinuous earnings.
The Bank executes foreign exchange transactions
and foreign currency bond investments, which areexposed to foreign exchange risk, but thesubsidiary strives to minimize foreign exchange
risk by balancing the foreign exchange positions
where possible.

(iii)Q
T
f
b
e
t
T
a
(
i
b
T
w
a
M
w
(
T
m
a
(
a
H
m
m
m
m

d. Liqu
rais
The
acti
liqu
rule
ALM
the
on a
liqu
inst
term
env

56

 䝨䞊䝆

portfolion creditles. The

essment in

med byepartmentWithandthe riskealues. In
Company
irectors ofaudit theoms, foreign
Company’s
marketontrole volumeVaR)
he riskthroughrities, in, the
ss cutcallyo the Riskof

rms theerest rate
ecifically,
any forrates andandrate

ansactions
which areechangepositions57BKWP(ii) Derivative transactions
With respect to derivative transactions, theCompany has established an internal control
system including segregation of duties of thedepartments responsible for execution oftransactions, risk control and operation
administration and complies with the various
market risk control rules.
(iii)Quantitative information of market risk
The Group monitors the value at market risk offinancial instruments, such as deposits, loans andbills discounted and securities, using VaR
everyday as the change in market risk is larger
than other risks.
The Group calculates the value at market risk
according to the variance-covariance approach(holding period–120 business days, confidence
interval–99.0%, and observation period–240
business days).
The value of market risk on financial instrumentswas ¥11.2 billion ($101.1 million) for interest rateand ¥8.3 billion ($74.9 million) for stocks at 31st
March, 2021. The value of market risk as a wholewith correlation in consideration was ¥24.2 billion($218.5 million).
The Group carries out back-testing to compare themodel-calculating VaR of securities on the banking
activities which influenced by market fluctuation(holding period–one business day) with real gain
and loss in order to verify their accuracy.
However, VaR, which calculates the value ofmarket risk based on past fluctuations in themarket, sometimes cannot calculate the value ofmarket risk accurately under the condition thatmarket environment changes abruptly.
d. Liquidity risk management associated with fundraising
The Group conducts liquidity risk control for funding
activities in accordance with the Company’s policy on
liquidity risk control and various liquidity risk control
rules. Specifically, the department responsible for
ALM and the treasury department of the Bank identify
the investment and funding status of the whole Groupon a timely basis and control liquidity risk by securingliquidity of the assets, diversifying the funding
instruments and adjusting the short-term and longterm funding balances considering the market
environments to secure stable fund management.

 䝨䞊䝆

The risk control department identifies its response
capability if liquidity risk is revealed throughmonitoring periodically the amount of liquid reserve
assets that can be readily converted into cash,
monitors the appropriateness of its fund management
and reports it to the Risk Management Committee
and the Board of Directors.

Cash and due(4) Supplementary explanation about fair value offinancial instruments
The fair value of financial instruments include, in addition
to the value determined based on the market price, avaluation calculated on a reasonable basis if no market
price is available. Since certain assumptions are used in
calculating the value, the result of such calculation mayvary if different assumptions are used.
2.

The carrying value, the fair value and the difference as of 31st
March, 2021 and 2020 are summarized in the following
tables:
Note that securities such as unlisted equity securities forwhich fair value is extremely difficult to determine were notincluded in the following tables (See (Note 2) below):
Millions of yen
31st March, 2021
Cash and due from banks

Fair value
9,414

䠉

Monetary claims bought (*1)

79

79

䠉

䠉

䠉

䠉

20,001

20,001

䠉

554,606

554,606䠉

Trading account securities:

Securities:
Loans and bills discounted

4,291,531

Foreign exchange assets (*1)

4,277,374

4,286,752

5,061

5,061

9,377
0

Total assets¥ 6,537,981 ¥ 6,547,359 ¥9,377

Deposits
Payables under securities
lending transactions
Borrowed money¥ 5,408,845 ¥ 5,408,823 ¥(21)

Foreign exchange liabilities
Total liabilities

10,323
973,225

10,323
973,218487

487¥ 6,392,881 ¥ 6,392,853 ¥

䠉
(7)
䠉
(28)

Derivative transactions (*2)
To which hedge accounting is
not applied

Available-fo

Loans and bill

Reserve for p

Foreign excha
Total assets
Deposits

Borrowed mon

Foreign excha

Total liabilities

Derivative tran

To which he
not applie

To which heapplied

31st M

Cash and due

Call loans andMonetary claim

Trading accou

Trading s

Money held in

Available-fo

Loans and bill

Reserve for p

Foreign excha
Total assets

Deposits
Payables undlending tran
Borrowed mon

Foreign excha¥

To which hedge accounting isappliedTotal derivative transactions

Securities

Securities:(14,157)

Reserve for possible loan losses (*1)

Trading s

Money held in

䠉

9,414

Available-for-sale securities

Trading accou

Difference

Call loans and bills bought

Money held in trust

Monetary claim

Total derivativ¥ 1,671,441 ¥ 1,671,441 ¥Trading securities

Call loans andPayables undlending tran

Fair value of financial instruments

Carrying
value

31st M

¥

33 ¥

33 ¥

䠉

(306)

(306)

䠉

(272) ¥

(272) ¥

䠉

Total liabilities

Derivative tran

To which he
not applie

To which heappliedTotal derivativ

 䝨䞊䝆

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sponseMillions of yen

reservesh,nagement
mmittee

Carrying
value

31st March, 2020
Cash and due from banks¥

䠉Call loans and bills bought

6,651

6,651

䠉

Monetary claims bought (*1)

99

99

䠉

Trading account securities
Trading securities

50

50

䠉

19,98819,988

䠉

538,172

538,172䠉Securities

in addition
rice, ao marketre used intion may

Available-for-sale securities
Loans and bills discounted

3,963,504(9,671)

Reserve for possible loan losses (*1)

Foreign exchange assets (*1)

e as of 31stwing

3,953,832

3,955,576

1,743

5,468

5,468

0

Total assets¥ 5,332,144 ¥ 5,333,888 ¥1,743

Deposits¥ 4,987,885 ¥ 4,987,851 ¥(34)

Payables under securities
lending transactions
Borrowed money
Foreign exchange liabilities
Total liabilities

䠉

䠉

䠉

209,104

209,087

(17)

556

556

䠉

¥ 5,197,546 ¥ 5,197,494 ¥

(52)

¥

149 ¥

149 ¥

䠉

49

49

䠉

¥

199 ¥

199 ¥

䠉

Derivative transactions (*2)

es forere not):

To which hedge accounting is
not applied
To which hedge accounting isappliedTotal derivative transactions

Difference¥

Difference

807,879 ¥Money held in trust

e ofFair value

807,879 ¥Thousands of U.S. dollars

䠉
䠉
䠉
䠉
䠉
䠉

Carrying
value

31st March, 2021
Cash and due from banks

Fair value

Difference$ 15,097,470 $ 15,097,470 $䠉

Call loans and bills bought

85,03285,032䠉

Monetary claims bought (*1)

713

713

䠉

Trading account securities:
Trading securities
Money held in trust

䠉

䠉

䠉

180,661

180,661䠉

5,009,538

5,009,538

䠉

38,635,841

38,720,549

84,69845,71445,7140

Securities:
9,377
0
¥

9,377

¥

(21)
䠉
(7)
䠉

¥

(28)

Available-for-sale securities
Loans and bills discounted

38,763,716(127,874)

Reserve for possible loan losses (*1)

Foreign exchange assets (*1)
Total assets$ 59,055,017 $ 59,139,725 $ 84,698

Deposits
Payables under securities
lending transactions
Borrowed money$ 48,855,975 $ 48,855,776 $Foreign exchange liabilities
¥

䠉
䠉

¥

䠉

Total liabilities

93,2438,790,759

93,2438,790,696

4,398

4,398

$ 57,744,386 $ 57,744,133 $

(189)
䠉
(63)
䠉
(252)

Derivative transactions (*2)
To which hedge accounting is
not applied$
To which hedge accounting isappliedTotal derivative transactions

$

298 $

298 $

䠉

(2,763)(2,763)

䠉

(2,456) $(2,456) $䠉 䝨䞊䝆

(*1) General and specific reserves for loan losses
corresponding to loans are deducted. With respect toreserve for loan losses related to monetary claims bought
and foreign exchange assets, carrying value is shown,net of reserve, since the amount is insignificant.
(*2) Derivative transactions include all derivatives recorded inother assets and other liabilities. Assets and liabilities
arising from derivative transactions are shown on a net
basis.

Securities
The fair val
quoted mar
determined
provided byof investme
assets valu
bonds issue
as loans. N
purposes is(Note 1) Valuation method for the fair value of financial
instruments

Assets:Cash and due from banks
The carrying value of due from banks without maturities ispresented as the fair value since the fair value approximatesthe carrying value. The carrying value of due from banks withmaturities is presented as the fair value since the fair value
approximates the carrying value due to remaining maturitiesof less than one year.
Call loans and bills bought
The carrying amount is presented as the fair value since thefair value approximates the carrying amount because thecontractual term is short (less than one year).
Monetary claims bought
Receivables related to factoring business are computed in thesame manner as loans.
Trading account securities
The fair value of securities such as debt securities held for
trading is determined using the quoted market price or the
price provided by counterparty financial institutions.
Money held in trust
For securities that are invested as part of trust assets in an
independently managed money trust with securities
management as the primary purpose, the fair value of equity
securities is determined using quoted market prices and thefair value of debt securities is determined using quoted
market prices or the prices provided by counterparty financial
institutions. Note that information on money held in trust byholding purpose is disclosed in Note 6.

Loans andThe carryin
which reflec
the fair valu
value as lonchanged sigof the loans
the aggrega
types of loa
using the inoriginated.
contractual
value since
Loan losses
bankrupt or
estimated b
expected fu
collected froof these item
currently expresented awhich do noloans are lim
presented athe carrying
schedule an

Foreign ex
Foreign exc
with other band travele
on notes us
carrying val
since the fa
being depo
(less than oLiabilities:

Deposits
The amoun(i.e., the ca
the demand
determined
flows, groupused is theaccepted deremaining m
one year) isapproximat

58 䝨䞊䝆

pect toms bought
shown,.
ecorded inbilities
on a net

rities isoximatesbanks with
air value
maturities

since these theuted in theheld fore or thets in anof equitys and theoted
y financial
trust byBKWP

Securities
The fair value of equity securities is determined using thequoted market prices and the fair value of debt securities isdetermined using the quoted market prices or the prices
provided by counterparty financial institutions. The fair valueof investment trusts is determined based on the published net
assets value. The fair value of privately placed guaranteedbonds issued by the Bank is determined in the same manner
as loans. Note that information on securities by holding
purposes is disclosed in Note 5.
Loans and bills discounted
The carrying value of the loans with floating interest rates,
which reflect short-term market interest rates, is presented as
the fair value since the fair value approximates the carrying
value as long as the creditworthiness of the borrower has notchanged significantly since the loan origination. The fair valueof the loans with fixed interest rates is determined based on
the aggregated value of principal and interest by categories oftypes of loans, internal ratings and maturities discounted
using the interest rate assumed if the same loans were newly
originated. The carrying value of the loans with shortcontractual terms (less than one year) is presented as the fairvalue since the fair value approximates the carrying value.
Loan losses on receivables from bankrupt, effectively
bankrupt or likely to become bankrupt borrowers are
estimated based on factors such as the present value of
expected future cash flows or the expected amount to becollected from collateral and guarantees. Since the fair valueof these items approximates the carrying value, net of thecurrently expected loan losses, such carrying value ispresented as the fair value. The carrying value of the loans
which do not have defined repayment due dates because theloans are limited to within the amount of pledged assets ispresented as the fair value since the fair value approximatesthe carrying value considering the expected repayment
schedule and interest rate conditions.
Foreign exchange assets
Foreign exchange assets consist of foreign currency deposits
with other banks (due from other foreign banks), export bills
and traveler’s checks, etc., (purchased foreign bills) and loans
on notes using import bills (foreign bills receivables). The
carrying value of these items is presented as the fair value,
since the fair value approximates the carrying value due tobeing deposits without maturity or having short contract terms(less than one year).
Liabilities:
Deposits
The amount payable on demand as of the balance sheet date(i.e., the carrying value) is considered to be the fair value ofthe demand deposit. The fair value of time deposits isdetermined using the discounted present value of future cash
flows, grouped by certain maturity lengths. The discount rateused is the interest rate that would be applied to newly
accepted deposits. The carrying value of deposits whose
remaining maturity is within the short-term period (less than
one year) is presented as the fair value since the fair value
approximates the carrying value.

59 䝨䞊䝆

Payables under securities lending transactions
The carrying value is presented as the fair value since the fairvalue approximates the carrying value due to remaining
maturities of less than one year.

(Note 3) Rep
sec

Borrowed money
The carrying value of floating rate borrowed money ispresented as fair value. This is because it reflects the market
interest rate in the short-term period, also thecreditworthiness of the Company and the consolidated
subsidiaries have not significantly changed since theborrowed money was originated and accordingly fair value
approximates the carrying value. The fair value of fixed rateborrowed money is calculated as the present value of
expected future cash flows from the aggregated value ofprincipal and interest (the aggregated value of principal andinterest using the interest rate swap rate, in case ofborrowings subject to special treatment of hedge accounting
for interest rate swaps) on these borrowings grouped bycertain maturity lengths, which is discounted at an interest
rate applicable to similar borrowings. The carrying value ofborrowed money whose remaining maturity is due within the
short-term period (less than one year) is presented as the fairvalue since the fair value approximates the carrying value.
Foreign exchange liabilities
Foreign exchange liabilities consist of foreign bills sold andforeign bills payable. The carrying value is presented as thefair value since the fair value approximates the carrying value
due to remaining maturities of less than one year.

31st MDue from ban

Call loans andMonetary claim
Securities:

Available-fowith matu

Governm

Local gov

Corporate
Other

Loans and bill

Foreign excha
Total

31st MDue from ban

Call loans andMonetary claim
Securities:

Available-fowith matu

Derivative transactions:

GovernmSee Note 33.

Corporate

Local gov
Other

(Note 2) Financial instruments whose fair value is extremely
difficult to determine at 31st March, 2021 and 2020 wereas follows: These securities are not included
in“Securities” under “Assets” as part of the fair value
information of financial instruments.
Thousands of
U.S. dollars

Millions of yen
2021

2021

2020

Unlisted equity securities (*1) (*2) ¥5,849 ¥

5,880 $

52,831

Investments in partnerships (*3)

4,027

4,610

36,374

Other
Total

¥

5

5

9,881 ¥

10,496 $45
89,251(*1) No market price is available for unlisted equity securities
and the fair value is not disclosed since it is extremely
difficult to determine the fair value.
(*2) The Company recognized impairment losses on unlisted
equity securities in the amount of ¥77 million ($695
thousand) and ¥40 million for the years ended 31st
March, 2021 and 2020, respectively.
(*3) The fair value of investments in partnerships, whose
assets consist of securities such as unlisted equity
securities for which fair value is extremely difficult todetermine, is not disclosed.

Loans and bill

Foreign excha
Total 䝨䞊䝆

nce the fairning

ishe market

tede
ir value
xed rateof
ue of
cipal andccountinged bynterestvalue ofwithin theas the fairg value.

BKWP

Millions of yen
Due inone yearor less

31st March, 2021
Due from banks

Thousands of
U.S. dollars

$

$

2021
52,83136,37445
89,251Millions of yen
Due after
three years
throughfive years䠉 ¥䠉

31st March, 2020
Due from banks

Due after
one yearthroughthree years

Due inone yearor less¥

747,450 ¥Due after
three years
throughfive years

31st MaDue from ban

Call loans and䠉 ¥䠉Monetary claim
Securities:

Call loans and bills bought

9,414

䠉

䠉

Call loans and bills bought

6,651

䠉

䠉

Monetary claims bought (*1)

79

䠉

䠉

Monetary claims bought (*1)

99

䠉

䠉

93,48892,700101,448

87,817

148,690

96,264

Available-fo
securities

93,48892,700101,448

87,817

148,690

96,264

Local gov

Government bonds

10,0004,300

19,000Government bonds

16,30010,000䠉

Corporate

Local government bonds

25,252

28,29042,493

Local government bonds

6,915

39,674

48,461

Corporate bonds

58,16557,05033,431

Corporate bonds

64,07998,39845,314

Other
Loans and b(*1, 2)Foreign excha

Securities:
Available-for-sale securities
with maturities:

Other

71

3,059

6,524

838,278

654,432

532,836

5,061

䠉

䠉

¥ 2,567,136 ¥

747,132 ¥Loans and bills discounted (*1, 2)
Foreign exchanges assets
Total

31st March, 2021

634,284

Securities:
Available-for-sale securities
with maturities:

Other

523

616

2,489

784,137

655,281

467,083

5,468

䠉

䠉

¥ 1,631,625 ¥

803,971 ¥Loans and bills discounted (*1, 2)
Foreign exchanges assets
Total

Millions of yen

Millions of yen

Due after
Due after
five years seven years
throughthroughseven years ten years

Due after
Due after
five years seven years
throughthroughseven years ten years¥

Due after
ten years

31st March, 2020

Due after
ten years䠉 ¥䠉

Due from banks

䠉 ¥

䠉 ¥

䠉

Call loans and bills bought

䠉

䠉

䠉

Call loans and bills bought

䠉

䠉

䠉

Monetary claims bought (*1)

䠉

䠉

䠉

Monetary claims bought (*1)

䠉

䠉

䠉

56,15549,644

101,681

19,68853,771

78,22356,15549,644

101,681

19,68853,771

78,223䠉䠉䠉Securities:
Available-for-sale securities
with maturities:¥

Securities:
Available-for-sale securities
with maturities:

䠉

䠉

䠉

Government bonds

Local government bonds

8,100

15,568䠉

Local government bonds

5,100

12,768䠉Corporate bonds

19,347

11,051

85,465

Corporate bonds

12,5889,151

69,483Loans and bills discounted (*1, 2)
Foreign exchanges assets
Total

28,70823,025

16,215411,333

519,414

1,306,236

䠉

䠉

䠉
¥

467,488 ¥569,059 ¥ 1,407,917

Other
Loans and bills discounted (*1, 2)
Foreign exchanges assets
Total

2,000

31,852

8,739

345,794

390,757

1,292,572

䠉

䠉

䠉
¥

365,482 ¥Governm

Total

563,347

䠉 ¥

Other

r valueDue after
one yearthroughthree years¥ 1,620,812 ¥Government bonds

emely2020 were

(Note 3) Repayment schedule of monetary receivables andsecurities with contractual maturities

Due from banks

old anded as theying value 䝨䞊䝆444,529 ¥ 1,370,795

31st MaDue from ban

Call loans andMonetary claim
Securities:

Available-fo
securities

Governm

Local gov

Corporate

Other
Loans and b(*1, 2)Foreign excha
Total(*1) Loans a
do not¥27,87bankrubankrurespect
collecte(*2) Overdr
year orsecurities
remelyn unlisted
695
31st

whose
uity
ult to60 䝨䞊䝆

BKWP

 䝨䞊䝆Thousands of U.S. dollars

Due after
three years
throughfive years

Due from banks
Call loans and bills bought¥䠉Monetary claims bought (*1)

䠉Securities:

31st March, 2021

$ 14,640,158 $Due after
three years
throughfive years(Note 4) Repayment schedule of bonds, borrowed money andother interest bearing liabilities.
Millions of yen
Due in one
year orless

Due after
one yearthroughthree years䠉

85,032䠉䠉

31st March, 2021

713

䠉

䠉

¥ 5,182,945 ¥

188,507 ¥15,077

844,440

837,322916,339

Deposits (*1)
Payables under securities
lending transactions
Borrowed money

10,323
834,918

䠉
73,580䠉
64,725

Total¥ 6,028,187 ¥

262,088 ¥

79,802

96,264844,440

837,322916,339

Government bonds

90,326

38,840171,619

96,264

Local government bonds

228,091

255,532

383,822

Corporate bonds

525,381515,310

301,969

Millions of yen

641

27,63058,928

7,571,836

5,911,227

4,812,898

45,714䠉䠉

Due after
Due after
five years seven years
throughthroughseven years ten years䠉48,46145,3142,489
467,083䠉

Other
Loans and bills discounted(*1, 2)Foreign exchanges assets$ 23,187,932 $ 6,748,550 $ 5,729,238

Total

563,347

Due after
ten years¥䠉䠉䠉
78,22378,223䠉䠉
69,483
8,739
1,292,572
䠉¥ 1,370,795

Thousands of U.S. dollars

31st March, 2021
Due from banks
Call loans and bills bought
Monetary claims bought (*1)
Securities:
Available-for-salesecurities with maturities:
Government bonds

Due after
Due after
five years seven years
throughthroughseven years ten years
$

¥

Total

¥

䠉 $

䠉

䠉

䠉

䠉

䠉

䠉

䠉

507,226

448,414

918,444507,226

448,414

918,444䠉䠉䠉

73,164

140,619

䠉

Corporate bonds

174,753

99,819771,971

Other
259,308
Loans and bills discounted
3,715,409(*1, 2)Foreign exchanges assets
䠉

207,975

146,463

4,691,662

11,798,717

䠉䠉$ 4,222,635 $ 5,140,086 $ 12,717,161

31st March, 2020

䠉

䠉
䠉

䠉
䠉

䠉
䠉

Total

176 ¥

192 ¥

䠉

(*1) Demanor less”
DeposithousanmaturitDue after
one yearthroughthree years

Due after
three years
throughfive years¥ 4,744,304 ¥
112,149

199,033 ¥2,978

18,543
93,976

Total¥ 4,856,454 ¥

202,011 ¥112,519

Millions of yen
Due after
Due after
five years seven years
throughthroughseven years ten years
¥

Total

¥

Deposits (*1)
Payables undlending transBorrowed mon

192 ¥Due in one
year orless

Deposits (*1)
Borrowed money

Total

176 ¥

Deposits (*1)
Borrowed money

31st March, 2020

31st M

Deposits (*1)
Payables undlending transBorrowed mon

31st MDue after
ten years

Millions of yen䠉 $(*1) Loans and bills discounted and monetary claims bought
do not include ¥28,999 million ($261,936 thousand) and¥27,878 million of receivables such as those due frombankrupt, effectively bankrupt or likely to becomebankrupt borrowers at 31st March, 2021 and 2020,
respectively, since it is not certain when they can becollected or redeemed.
(*2) Overdraft accounts of loans are shown under “Due in one
year or less.”

61

31st March, 2021
Deposits (*1)
Payables under securities
lending transactions
Borrowed money

Due after
ten years

Local government bonds

Total

Due after
three years
throughfive years

䠉 $Available-for-salesecurities with maturities:䠉¥

Due inone yearor less

Due after
one yearthroughthree years

Due after
ten years

257 ¥

251 ¥

䠉

䠉

䠉
䠉

257 ¥

251 ¥

䠉

33. Deriv

1. Derivati
not app

With resnot appl
value anmethodamounts
derivativ 䝨䞊䝆

BKWP

 䝨䞊䝆ney andThousands of U.S. dollars

Due after
three years
throughfive years¥

15,077
䠉
64,725¥31st March, 2021

$ 46,815,508 $ 1,702,709 $Total$ 54,450,248 $ 2,367,338 $䠉
584,635
720,820

Thousands of U.S. dollars
Due after
Due after
five years seven years
throughthroughseven years ten years

Due after
ten years

$

䠉
䠉

Total

$

䠉

(*1) Demand deposits were disclosed under “Due in one year
or less” of deposits.
Deposits did not include ¥21,946 million ($198,229
thousand) and ¥25,495 million of time deposits beyond
maturity at 31st March, 2021 and 2020, respectively.

䠉¥18,543
93,976¥

112,519

Due after
ten years¥䠉664,619䠉䠉䠉(1) Currency related derivatives at 31st March, 2021
and 2020

1,589 $

1,734 $

䠉

䠉
䠉

䠉
䠉

䠉
䠉

1,589 $

1,734 $

䠉

33. Derivatives
1. Derivative transactions to which hedge accounting is
not appliedWith respect to derivatives to which hedge accounting is
not applied, contract amount or notional principal, fairvalue and related valuation gain or loss and computation
method of fair value are as follows. Note that contract
amounts do not represent the market risk exposure ofderivative transactions.

2. Derivati
appliedMillions of yen
Contract amount/notional principal

136,184

Deposits (*1)
Payables under securities
lending transactions
Borrowed money

Due after
three years
throughfive years¥

93,2437,541,486

79,802

Due after
ten years¥

Due in one
year orless

Due after
three years
throughfive years

Deposits (*1)
Payables under securities
lending transactions
Borrowed money

31st March, 2021¥

Due after
one yearthroughthree years

31st March, 2021Over
one year

Total

Fair
value

Valuation
gain (loss)

Over-the-counter transactions:

Currency swaps
Forward foreignexchange contracts:
Selling¥ 51,506 ¥ 45,099 ¥

83 ¥

83

3,744

11

(173)

(173)

Buying

2,910

–

123

123

Selling

38,51526,369(885)

889

Buying38,51526,369

885

(463)

33 ¥

459

Currency options:

Total

– ¥

–

Millions of yen

With resapplied,value athedge afair valu
notional
exposur(1) Inte
and
The
Mar

(2) Cur
and3

Contract amount/notional principal
31st March, 2020

Over
one year

Total

Fair
value

Valuation
gain (loss)

Currency swaps
Forward foreignexchange contracts:
Selling

Hedge accounting
methodOver-the-counter transactions:¥ 59,500 ¥ 45,391 ¥

142 ¥

142

7,421

䠉

(85)

(85)

Buying

5,925

䠉

92

92

Selling

43,32529,697(1,132)859

Buying43,32529,697

1,132

(397)

Deferralhedge
accounting

Currency options:

Total

–

– ¥

149 ¥

Total

611

3

Thousands of U.S. dollars
Hedge accounting

Contract amount/notional principal
31st March, 2021

methodOver
one year

Total

Fair
value

Valuation
gain (loss)

Over-the-counter transactions:

Currency swaps$ 465,233 $ 407,361 $Forward foreignexchange contracts:
Selling
33,81899749 $Deferralhedge
accounting

749(1,562)(1,562)

Buying26,284

–

1,111

1,111

Selling

347,890

238,180(7,993)

8,029

Buying347,890

238,180

7,993(4,182)

Total

Currency options:

Total

–

– $

298 $ 4,145

3

Hedge accounting
methodNotes:
1. Transactions in the table above are stated at the fair value
and the related valuation gain (loss) is reported in the
consolidated statement of operations.
2. The fair value is determined by using the discounted cash
flow method or others.

Deferralhedge
accounting

Total

62

 䝨䞊䝆

BKWP

ch, 2021

2. Derivative transactions to which hedge accounting isappliedValuation
gain (loss)

3 ¥

83

3)

(173)

3

123

5)

889

5

(463)

3 ¥

459

With respect to derivatives to which hedge accounting isapplied, contract amount or notional principal and fairvalue at the balance sheet date by transaction type andhedge accounting method and computation method of thefair value are as follows. Note that contract amount or
notional principal does not represent the market risk
exposure of derivative transactions.

142

5)

(85)

2

92

2)

859

2

(397)

9 ¥

611

Millions of yen

Hedge accounting

Transaction Major hedged
type
item

DeferralCurrency
swaps
hedge
accounting
Forwardforeignexchange
contracts
Total

Over
one year

Total

Fair
value

Loans
denominated inforeign currencies¥ 6,432 ¥ 5,314 ¥method

49 $

749

62)

(1,562)

11

1,111

93)

8,029

93

(4,182)98 $ 4,145

–

(306)

–
–

–
– ¥

–
(306)

Millions of yen

unted cash

63

Transaction Major hedged
type
item

DeferralCurrency
swaps
hedge
accounting
Forwardforeignexchange
contracts
Total

Over
one year

Total

Fair
value

Loans
denominated inforeign currencies¥ 9,587 ¥ 4,146 ¥–31st March, 2021

–
–

–
– ¥

49

–
49

Thousands of U.S. dollars
Contract amount/notional principal

Hedge accounting
methode fair value
in the2020

782.13 ¥729.15 $Transaction Major hedged
type
item

DeferralCurrency
swaps
hedge
accounting
Forwardforeignexchange
contracts
Total

2021
7.06

Basic

15.51

11.40

0.14

Diluted

15.24

11.39

0.13

Net income:Common stock

¥

7.5 ¥

7.5 $

0.06

First series of seventh-class preferred stock

¥

30 ¥

30 $

0.27

Net assets per share as of 31st March, 2021 and 2020 werecomputed based on the following information:
Thousands of
U.S. dollars

Millions of yen

31st March, 2020

Hedge accounting

U.S. dollars

2021
¥

Over
one year

Total

Fair
value

Loans
denominated inforeign currencies–$ 58,097 $ 47,999 $ (2,763)

–
–

–
–
– $ (2,763)

Net income att
owners of th

Dividends for firstpreferred stock
by Board of Di

Dividends for firstpreferred stock
the regular ge

34. Amounts per Share

Cash dividends

Contract amount/notional principal

Contract amount/notional principal

gain (loss)

Net incomeand 2020 w

Yen(2) Currency related derivatives at 31st March, 2021
and 2020

lars

Valuation

Derivatives in the table above are mainly accounted for hedge
accounting (deferral hedge accounting) in accordance withJICPA Industry Committee Practical Guidelines No.25“Accounting and Auditing Treatment Relating to the Adoptionof the Accounting Standard for Foreign Currency
Transactions for Banks.” The fair value is determined byusing the discounted cash flow method.

Net assets

method2 ¥

Amounts per share at 31st March, 2021 and 2020 and for theyears then ended were summarized as follows:(1) Interest related derivatives at 31st March, 2021
and 2020
There were no interest related derivatives at 31st
March,2021 and 2020.

31st March, 2021
Valuation
gain (loss) 䝨䞊䝆

2021

2020

2021

Amounts not acommon sto

Net income attri
parent attribu

Average outsta
of shares of(Unit: thousa

Diluted net inco
after adjustin

Dividends for fi
seventh-clas
based on theof Directors

Dividends forseventh-cla
based on th
regular gen
meeting

Adjustment toto owners o

247,042 ¥232,373 $ 2,231,433

Payment for first series ofseventh-class preferred stock

Number of instock (Uni(25,000)(25,000)(225,815)

Of which, sto

Dividends for first series ofseventh-class preferred stock

(375)

(375)

(3,387)

Stock subscription rights

(76)

(79)

(686)

Total net assets¥

Of which, for firstpreferred stoc

Summary of poten
calculation of ddue to their an

Non-controlling interests(2,434)(2,223)(21,985)

Amounts to be deducted from total net assets(27,886)(27,677)(251,883)(Unit: thousa

Net assets attributable to common stock
as of 31st March, 2021 and 2020¥

219,156 ¥

204,696 $ 1,979,550

Number of shares of common stock as of 31st
March, 2021 and 2020 used to compute net
asset per share (Unit: thousand shares)

280,204

280,731

Note:
Cash diproposeyear.

For thedilutedown shacategorstock toof shareassets p
included
number

The ave
subtracdilutedwas 5832020 an
31st Ma 䝨䞊䝆

BKWP

d for hedge
nce with25
Adoption

Net income per share for the years ended 31st March, 2021
and 2020 were computed based on the following information:

ed by

Net income attributable toowners of the parent for the year

and for the
U.S. dollars
2021

$

7.06
0.14
0.13

$

0.06

$

0.27

020 wereThousands of
U.S. dollars

2021$ 2,231,433(225,815)(3,387)(686)(21,985)(251,883)$ 1,979,550

 䝨䞊䝆Thousands ofMillions of yen
2021¥

U.S. dollars

2021

2020

5,103 ¥

3,943 $

46,093

Dividends for first series of seventh-classpreferred stock based on the resolution
by Board of Directors

(375)

(375)

(3,387)

Dividends for first series of seventh-classpreferred stock based on the resolution at
the regular general shareholders’ meeting

(375)

(375)

(3,387)

Amounts not attributed tocommon stock share

(750)

(750)

(6,774)

Net income attributable to owners of theparent attributable to common stock ¥4,353 ¥

3,193 $

39,318Average outstanding numberof shares of common stock(Unit: thousand shares)

280,578

280,142Dividends for first series ofseventh-class preferred stock
based on the resolution by Boardof Directors

375

–

3,387

Dividends for first series ofseventh-class preferred stock
based on the resolution at theregular general shareholders’meeting

375

–

3,387

750 ¥

– $

6,774

Diluted net income per shareafter adjusting potential shares

Adjustment to net income attributableto owners of the parent¥

Number of increased common
stock (Unit: thousand shares)
Of which, stock subscription rights
Of which, for first series of seventh-classpreferred stock
Summary of potential shares excluded from thecalculation of diluted net income per share
due to their anti-dilutive effect(Unit: thousand shares)

54,187

236

308

236

53,879489,449–
first series of–seventh-classpreferred stock
53,879Note:
Cash dividends per share represent the cash dividends
proposed by the Board of Directors as applicable to the fiscal
year.
For the purpose of calculation of net income per share anddiluted net income per share after adjusting potential shares,
own shares held in trust recorded as treasury stock under the
category of shareholders’ equity were included in treasury
stock to be subtracted from the average outstanding numberof shares. Likewise, for the purpose of calculation of net
assets per share, these own shares held in trust were
included in treasury stock to be subtracted from the total
number of outstanding shares at the end of the fiscal year.
The average outstanding number of shares of treasury stock
subtracted for the calculation of net income per share anddiluted net income per share after adjusting potential shares
was 583 thousand shares for the year ended 31st March,2020 and there were no treasury stocks for the year ended
31st March, 2021.

64

Report of Independent Auditor
Senshu Ikeda Holdings, Inc.

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71

Non-consolidated Financial Information of The Senshu Ikeda Bank (Unaudited)
Non-consolidated Balance Sheets (Unaudited)
The Senshu Ikeda Bank, Ltd.
As of 31st March, 2021 and 2020

Thousands of U.S.
dollars (Note 1)
2021

Millions of yen
2021
2020

AssetsCash and due from banks
Call loans and bills bought
Monetary claims bought
Trading account securities
Money held in trust
Securities
Loans and bills discounted
Foreign exchange assets
Other assets
Tangible fixed assets
Intangible fixed assets
Prepaid pension cost
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Reserve for possible loan losses
Reserve for possible investment losses
Total assets¥¥

1,665,017
9,414
79
–
20,001
571,287
4,311,595
5,061
43,05632,108
4,573
12,097
5,286
7,388(12,825)–
6,674,143¥

804,194
6,651
99
50
19,988566,004
3,983,560
5,468
36,76333,247
5,139
11,6678,440
8,210(8,188)(1,934)
5,479,366$ 15,039,445
85,032713–
180,661
5,160,211
38,944,946
45,714
388,907
290,018
41,306109,267
47,746
66,732(115,843)–$ 60,284,915

5,420,391
29,300
10,323962,961487
24,718
1,458¥

5,007,681
27,800–
198,571556
24,4191,014$ 48,960,265
264,655
93,243
8,698,048
4,398
223,267
13,169

4

4

36

392
57
1,171
7,388
6,458,655

519
56
873
8,210
5,269,708

3,540
514
10,577
66,73258,338,496

61,38588,86255,164205,413
10,208(133)
10,075215,488
6,674,143

61,38588,862
54,180204,429
5,399
(170)
5,228
209,657
5,479,366

554,466
802,655498,274
1,855,415
92,204(1,201)91,003
1,946,418$ 60,284,915¥

Liabilities and net assets
Liabilities
Deposits
Negotiable certificates of deposit
Payables under securities lending transactions
Borrowed money
Foreign exchange liabilities
Other liabilities
Provision for employees’ bonuses
Accrued retirement benefits for directors and audit & supervisoryboard members
Reserve for reimbursement of deposits
Reserve for point services
Reserve for contingent losses
Acceptances and guarantees
Total liabilities
Net assets
Shareholders’ equity:
Capital stock
Capital surplus
Retained earnings
Total shareholders’ equity
Net unrealized gain (loss) on available-for-sale securities
Net unrealized gain (loss) on deferred hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

¥

¥

¥

72

Non-consolidated Statements of Operations (Unaudited)
The Senshu Ikeda Bank, Ltd.
For the years ended 31st March, 2021 and 2020

Millions of yen
2021
2020

Thousands of U.S.
dollars (Note 1)
2021

IncomeInterest income:Interest on loans and bills discounted
Interest and dividends on securities
Other interest income
Fees and commissions
Other operating income
Recoveries of written-off claims
Gain on sales or disposal of fixed assets
Other income
Total income¥

39,6293,910
603
16,063
906
310
27
2,400
63,853¥39,325
5,922
616
17,398
4,949
585
363
2,634
71,796$357,953
35,3175,446
145,090
8,183
2,800
243
21,678576,759

Expenses
Interest expenses:
Interest on deposits
Interest on borrowings and rediscounts
Other interest expenses
Fees and commissions
Other operating expenses
General and administrative expenses
Loss on sales or disposal of fixed assets
Loss on impairment of fixed assets
Other expenses
Total expenses
Income before income taxes
Income taxes
Current
Deferred
Total income taxes
Net income

73

¥

1,086
62
122
9,133
24
40,57355
37,672
58,734
5,119

1,450
218
949
9,357
8,835
42,11223
99
5,480
68,526
3,269

9,809
560
1,101
82,494216
366,479496
27
69,298
530,521
46,237

(742)
1,971
1,229
3,890

(190)
204
14
3,254

(6,702)
17,803
11,10135,136¥$

https://www.senshuikeda-hd.co.jp/

https://www.sihd-bk.jp/

SENSHU IKEDA TOKAI TOKYOSECURITIES CO.,LTD.
18-14,Chayamachi,Kita-ku,Osaka 530-0013,Japan
Phone:81-(0)6-6485-0031
https://www.sittsec.co.jp/