Mizuho Leasing Co., Ltd.

Integrated report2020

Challenging for Further Leap
Forward & Value Creation

Sixth Mid-term Management Plan
The Group has rolled out the Sixth Mid-termManagement Plan covering a five-year period
from April 2019.
Under the plan, we will continue topromote business together with clients andinitiatives in focus areas in response tochanges in social and industrial structuresthat have been implemented to date. At thesame time, we will offer new solutions as abusiness development partner for clients inwidely expanded business fields in Japan andoverseas through alliances with strategic
business partners and take on the challengeo f c o - c re a t i n g v a l u e w i t h c l i e n t s a n d
expanding business overseas with new
business bases.

Desired Future Image ofthe Mizuho Leasing GroupHow the Group should be andstakeholders the Group should consider
Corporate Philosophy

Mindset of each employee

We aim to be a Group which
Action Guidelines

The Three

Clients

Employees

Shareholders

SocietyCs

contributes to society by offeringvalued financial services which leadto future prosperity.

Management Policy

Challenge

1. Respond to customers’ needs and provide precise

and prompt services by combining the Group’s total
strength.

Change2. Endeavor to further enhance the Group’s reputationand credibility among shareholders and in the market.

3. Strive to create a dynamic corporate culture full of

VisionValue-creating company tackling challenges together with clients
Flow for realization of the visionenergy and vitality in which proactive, ambitious humanresources are fostered and promoted.

Create4. Comply with the law and its spirit, and aim to be a

Thorough client-oriented
approachPromote business
together with clients astheir partner

Group which always recognizes its social responsibility

Tackle new businessdomains transcending
the framework offinancing

Fulfill corporate social
responsibility

and secures understanding and sympathy from society.

Editorial Policy

CONTENTS
Value Creation by the Mizuho Leasing Group
03
07
09
11

Trajectory of the Mizuho Leasing Group
Financial/Non-ﬁnancial Highlights
11-year Financial Summary
Mizuho Leasing Group’s Value Creation Process

Growth Strategy
President’s Commitment
Sixth Mid-term Management Plan (FY2019 to FY2023)
Topics in FY2019
Business Strategy under the Sixth Mid-termManagement Plan
23 Examples of Co-creation of Value with Clients
25 Reinforcement of Management Base
26 Funding Policies

13
17
19
21

01

Strength to Support Growth
27 CSR Activities of the Mizuho Leasing Group:
Toward Sustainable Growth
29 Management Structure
31 Corporate Governance
33 Message from Outside Director
35 Compliance and Risk Management
38 Dialogue with Shareholders and Investors
39 Human Resource Strategy
44 Environmental and Social Activities

This report contains the Mizuho Leasing Group’s financial information as well as nonfinancial information including management strategies, environment, social andcorporate governance (ESG) to help stakeholders have a better understanding of theGroup’s business activities. When we edited this Report, we referred to certain
guidelines including “ International <IR> Framework ” issued by the International
Integrated Reporting Council (IIRC), and explained the Group’s value-creating activities
over the medium to long-term in an easy-to-understand and simple manner.

Composition of communication tools
Website: www.mizuho-ls.co.jp

Overview

Integrated Report (Japanese and English)

Consolidated Financial Data andCorporate Information
46 Analyses on Business Conditions and Results ofOperations
49 Business Risks and Other Risks
51 Consolidated Financial Statements
90 Corporate Information
92 Stock Information

Details

Securities
ReportReport for Shareholders(Japanese and English)

Report on Corporate
Governance

Financial Results(Japanese and English)

CSR Activities(Website)

Financial information

Reporting Period
From April 2019 to March 2020 (including some
activities that occurred outside this period)

Entities Covered
This report covers the entire Mizuho Leasing
Group.

Notes concerning Future Forecast
This report contains management policies andfuture business performance based on theinformation on hand at the time of the preparationof this report. These statements may containcertain risks and uncertainties, and as such do
not guarantee that such policies and performance
will be achieved. Please be advised that any
predictions for the future made in this report may
differ significantly from the actual results due tovarious factors.

Non-financial information
02

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Trajectory of the Mizuho Leasing Group

The Mizuho Leasing Group has developed its operations primarily in leasing and installment
sales̶the financing of physical items. In addition to financing related to capital expenditure,including industrial and factory equipment, information and communication equipment andmedical equipment, we are expanding the scope of our business activities through initiatives
in businesses to involve in commercial distributions and a broad range of financial sectors andthrough M&A activities, as we proactively engage in business in Japan and overseas.

2,090.3
2,090.3
2,021.42,021.4

1,683.01,683.0
1,608.71,608.7
1,581.01,581.0

Net Income Attributable to Owners of the Parent (Millions of yen)
Operating Assets (Billions of yen)
*The graph shows results from FY2004 onwards after the Company’s listing.

1,211.31,211.3

953.7 953.7
813.5 813.5

1,092.21,092.2
1,031.21,031.2

928.6 928.6

Acquires shares in Mizuho-Toshiba
Leasing Company, Limited.

9,0259,025

8,9208,920

985.0 985.0
935.2 935.2

13,643
13,643

12,414
12,414
11,60911,609
11,144
11,144
10,531
10,531

Acquires shares of Dai-ichi Leasing Co., Ltd.

Designated an issue on theFirst Section of the Tokyo
Stock Exchange.

8,9848,984
7,9817,981
Shares listed on the Second
7,7997,799
2004

16,594
16,594

1,343.01,343.0
1,263.11,263.1
2012

2006
2005

17,512
17,512

1,432.31,432.3

7,0197,019

Section of the Tokyo Stock
Exchange.

5,5915,591
4,2964,296
3,3483,348

2004

2004

The Group’sContributions toSociety

03

2005

2005

2006

2006

2007

2007

2008

2008

2009

2009

2010

2010

2011

2011

2012

2012

2013

2013

2014

2014

2015

2015

2016

2016

2017

2017

2018

2018

2019

2019

Sustained growth of companies,
industries & technologies

Establishment of social
infrastructure

Globalization/improvement in
mobility

Health & welfare

Climate change, environmentalload reduction

1969 Mizuho Leasing Company is established
as a general leasing company under an
initiative by The Industrial Bank of Japan, Ltd.
(now Mizuho Bank, Ltd.), with the participationof major companies representing Japaneseindustries.

1972 Begins vendor leases of construction equipment as a pioneer in that field.
1993 Establishes a subsidiary specialized in realestate leasing.

Begins leasing business in Thailand in 1 9 9 2,
the Philippines in 1 9 9 8, China in 2 0 0 8, andIndonesia in 2010. Participates in aircraft operating lease business in 2016.

2000 Business department specializing in medical and welfare services is established.

2012 Business department specializing in environmental business promotion is established.

04

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Trajectory of the Mizuho Leasing GroupNet Income Attributable to
Owners of the Parent

30,000March 2019
Enters into capital and business alliance with Mizuho Bank, Ltd., and alliancein leasing and financing business with Marubeni Corporation.
- Becomes an equity-method affiliate of the Mizuho Financial Group, Inc.
- Acquires shares of Mizuho Marubeni Leasing Corporation, beginning joint
management with Marubeni Corporation.

(Millions of yen)

Enhancing overseas asset
financing business

October 2019
Company name is changed from IBJ Leasing Co., Ltd. to Mizuho Leasing
Co., Ltd.

Alliance with Mizuho

March 2020
Acquires equity interests of PLM Fleet, LLC, the largest U.S. frozen/
refrigerated trailer leasing and rental company, and of Aircastle Limited,a major U.S. aircraft leasing company, launching joint management ofoverseas asset financing business with Marubeni Corporation.

Corporate value
Expanding client baseof mid-sized& smaller companies

April 2020

17,512Acquires shares of RICOH LEASING COMPANY, LTD., launching businessalliance with Ricoh Company, Ltd. and RICOH LEASING COMPANY, LTD.

The Group’s Accumulated Strengths

2017

2018

05

2019

High expertise andStrong relationship withextensive know-how

large and mid-sized

to solve clients’ issues

corporate clients

Well-balanced portfolio

Strong fundraising base2023(Target)

06

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Financial/Non-financial Highlights

The Mizuho Leasing Group comprises Mizuho Leasing,
31 consolidated subsidiaries and six equity-method affiliates (as of March 31, 2020). Centered on this structure,
we provide wide-ranging financial and business services,
including leasing, installment sales and loans in Japanand overseas by utilizing our understanding of equipment
and extensive financial expertise.
Leasing and Installment Sales

Leasing andInstallment Sales

30%

68%

Number of employees■ MaleBalance in the global area

■ Female(Non-consolidated/persons)

800
700

FY2019Gross profit

600¥50.5 Billion¥34.2 billion

FY2019 Gross profit

Financing

573

500

594

184

201

389

393

621

661

687
253

245

217

¥142.5 billion

400¥234.8 billion

300
200

Financing and Other¥16.4 billion

FY2019 Gross profit

Other

100

2%

0

2015

2016

2017

2018

Net income attributable to owners of the parent

Operating assets

Number of women in managerial posts(Billions of yen)(Billions of yen)(Non-consolidated/persons)

20

16.6
15

11.6

12.4

17.5

2,500

2019

2018

2019

Reuse rate* (FY2019)12

2,021.4

2,000

13.6

434

416

404

1,581.0 1,608.7

2,090.3

1,683.0

10

10

72 %

8

1,500
6

10
1,000

4
5

0

500

2015

2016

2017

2018

2019

Annual dividend per share/dividend payout ratio■ Annual dividend per share

0

12

60

22.0

70

78

2018

2019

21.9

22.7

20

8

07

2017

2018

2019

2018

2019

9.5

9.4

9.8

9.6

0

Composition of the Board of Directors■ Female(End of June 2020)

15

8
8

6

5

6

6

4

2016

11 directors
7 outside directors, 1 female director

10

6

2015

* Reuse rate: Number of equipment sold ÷ Number of equipment for which
the lease term or re-lease term has expired

12

2
2016

2017

14

9

2015

2016

16

11

40

0

2015

(Non-consolidated/persons)

10.3
20.1

0

1

2

Number of employees who took childcare leave

82

10

22.0

2017

■ Male

100

64

2016

Dividend payout ratio (%)
(%)

60

2015

ROE

(yen)

80

2

3

2

2017

2018

2019

0

5

6

6

5

7
Outside directors

1
2015

2016

2017

2018

2019

Ratio of outside directors 64%
08

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

11-year Financial Summary

Consolidated Financial Results
FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019

Revenues

263,598

256,059

270,066

352,492

354,779

353,733

364,174

429,405

399,738

384,893539,241

Gross profit before funding costs

36,72036,54936,57944,27043,00541,60944,80344,90445,15752,59660,263Funding costs

7,213

5,459

5,286

6,596

6,426

6,338

6,361

5,697

6,959

8,467

9,744

Gross profit

29,50631,09031,29337,67336,57935,271

38,441

39,20638,197

44,12850,519Selling, general and administrative expenses

18,24815,646

20,601

23,007

19,877

17,325

20,86821,244

19,034

21,21424,243Operating income

11,257

15,444

10,691

14,665

16,701

17,946

17,573

17,962

19,162

22,913

26,275

Net income attributable to owners of the parent

7,019

9,025

4,296

8,920

10,531

11,144

11,60912,414

13,643

16,594

17,512

1,017,099

1,028,020

1,332,963

1,372,246

1,462,183

1,551,704

1,718,720

1,752,284

1,821,501

2,161,872

2,348,416

935,223

928,633

1,211,268

1,263,116

1,343,046

1,432,299

1,581,025

1,608,718

1,683,005

2,021,368

2,090,305

553,541

546,185

755,139780,234

809,499878,693

958,353

950,318

983,590

1,160,218

1,327,723

Installment sales receivable

107,487

94,514112,243

113,939

133,267

153,910

147,455

137,820

138,592

145,888

139,715Loans

237,414

241,925

295,008

320,143

359,530

361,067

377,933

348,085

360,073

469,135

400,999

Operational investment securities

36,77946,00848,876

48,79840,74938,627

97,283

172,493

196,860

239,814

221,866

Long-term receivables

14,082

10,397

19,15318,502

11,404

8,947

10,393

3,331

2,440

3,432

5,448

Interest-bearing debt

868,631877,629

1,133,481

1,176,464

1,226,274

1,309,951

1,465,584

1,492,438

1,536,240

1,834,757

2,000,636

Equity63,342

69,392

74,71784,905

109,840

123,297

132,786

141,755

154,632

182,159

195,780

193.91

249.33118.71

246.43264.75261.32272.20291.08319.91388.64360.491,709.86

1,889.18

1,954.63

2,218.77

2,458.28

2,764.23

2,978.61

3,202.27

3,492.55

3,553.92

3,829.02

44.00

46.00

48.00

50.00

54.00

56.00

60.00

64.00

70.00

78.00

82.00

Return on equity (ROE)

12.0

13.9

6.2

11.8

11.4

10.0

9.5

9.4

9.6

10.3

9.8

Return on assets (ROA)

1.2

1.6

0.9

1.1

1.2

1.3

1.1

1.1

1.1

1.2

1.2

Equity ratio

6.1

6.7

5.3

5.9

7.2

7.6

7.4

7.8

8.2

8.0

7.9

766

765

1,073

1,050

1,036

1,050

1,072

1,053

1,081

1,627

1,745

For the year: (Millions of yen)

At year-end: (Millions of yen)
Total assets
Operating assets
Lease*

Per share data: (Yen)
Net income
EquityDividends

Key indicators: (%)

Other (Number of persons)
Number of employees*After subtraction of deferred profit on installment sales

09

10Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Mizuho Leasing Group’s Value Creation Process

Business model

The Group’s strengths

Services/solutions provided

Stakeholders

Solution to social issues

Clients

promotion of clients’ businesses

t
st
m
en

range of services to meetclients’ needst

Focus areas

Se

ng

rv

ci

ic

an

e

fin

bu

e

si

as

ne

Le

ss

Creation of high added value

Business domains

Orientation to services

Well-balanced portfolio

Cooperation with business partners
Strong fundraising baseEnvironment
and Energy

Medical and
Healthcare

Real Estate

GlobalAircraft

Manufacturers
Trading companies

Value creation for stakeholders

Eq

en
em

ui

ty

ag

Shareholders

Sustainable increases ofcorporate value andshareholder returns

Society

Solving social issues andpracticing corporate social
responsibility through our businesses

Employees

Creation of environment and systems
where all employees are provided witha meaningful and engaging workplace

Development of asustainable society

in

an
m

ve

ss

ne

Strong relationship withlarge and mid-sizedcorporate clients

Strong cooperative
framework with Mizuho

Providing flexible and a widesi

Orientation to businesses

Offer of solutions contributing to

BuHigh expertise andextensive know-how tosolve clients’ issues

Technology

Finance
etc.

11

12

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

President’s Commitment

We will continue to provide valued
financing and business services inpursuit of a prosperous future together
with clients.

Social Mission to Be Fulfilled by
the Mizuho Leasing GroupI am Shusaku Tsuhara. I assumed the office as President
and CEO in June 2020.
First of all, I would like to express my deepest sympathy
for those infected with COVID-19 and their families. I
would also like to pay my sincere respect to medical professionals and other people doing their best daily to prevent the spread of infections. I am most grateful for all ofthem. The Group gives top priority to the safety of clientsand employees, and continue to provide financial andbusiness services, in an effort to hold down expansion of
the epidemic by taking such measures as working fromhome and staggered commuting.
The global spread of COVID-19 has dealt a heavy blow
to economic activities at home and abroad, bringing about
great changes in society as well as in the manner of people’s actions and thoughts. As physical contact and communication are restricted to protect human lives that matter
most, companies face the need to have second thought
about their own business models and the way of business
management, including their products, services, supply
chains, and employees’ working systems.
Already, changes are underway in the social and industrial structures against the background of fewer children and aging society, globalization, and digitalization.
Coupled with changes brought on by COVID-19, I believethese shifts will become complicated and progress at anaccelerating pace. From now on, it will become more difficult to have a precise view of future prospects, and wewill see less opportunities for the past successful judgment and response to be an optimal option as they used
to be.
13

Although we are in such a situation, the management
side is always required to steer a company in the bestway. To this end, I think we need to “reset ourselves andpursue the essential value of services we provide.” From
our perspective, it is to “meet the needs of clients andprovide valued financial and business services” and tothoroughly comply with “Challenge,” “Change” and “Create” as listed in our Action Guidelines.
As leasing companies face less business restrictions
than other financial firms, we can offer a wide array ofservices matching the needs of clients. Above all, theGroup is strong in that we help clients resolve problems
they face in their accounting, financing and business duties by using our extensive knowledge of “Mono” (equipment & properties) and high-level financial know-how.
Clients of the Group are diverse in business lines andsize. There is no magic wand that can resolve clients’problems with a single solution. I believe the presentGroup exists as a result of our repeated practices of getting close to each client taking on challenging tasks ofhelping them resolve their problems, and going throughchanges and new value creations.
In the age of “coexisting with COVID-19” or in a “postCOVID-19” era we are going to greet, digitalization will
make headway further, and it will become necessary toundertake business management based on a new senseof value that has irreversibly transformed the conventional
one through the pandemic. Everyone is going to tread
uncharted territory. I believe it the Group’s social mission
in these difficult circumstances to take on “Challenge,”
bring about “Change” and “Create” value leading to aprosperous future together with clients.

President and CEO

Mid-term Management Plan
The Group is also in the midst of change. We face a situation where it is difficult to expect growth relying only on
traditional financing and leasing due to the maturing of thedomestic market, the environment of continued low interest rates, and other factors. In order for the Group to growfurther, it becomes necessary to provide services in areas
where social importance is rising, such as medical andhealthcare, environment and energy; undertake businesses focused on the value of use of “Mono” (equipment &properties), including those based on subscription contracts and sharing economy; offer service business using
digital technology; promote business taking risks on assets and business activities; and take in overseas markets
further, among others. Based on that recognition, we havestarted the Sixth Mid-term Management Plan covering afive-year period from fiscal 2019 to fiscal 2023. Under theplan, we are seeking to achieve the following numericaltargets in the final year: “¥30.0 billion in net income attrib-

utable to owners of the parent,” “tripling the balance in the
global area from that at the end of March 2019,” and “25%or more in the consolidated dividend payout ratio.” For the
purpose, we are promoting joint projects with clients, undertaking businesses in focus areas (environment andenergy, medical and healthcare, real estate, global, aircraft,
and technology) in view of changes in the social and industrial structures, and taking on the challenge of expanding our business foundation and of advancing into new
business areas through alliances with strategic business
partners, including the Mizuho Financial Group andMarubeni Group.
Building basis for medium- to long-term growthIn fiscal 2019, the first year of the plan, we focused on building alliances with the Mizuho Financial Group and MarubeniGroup, and steadily executed business strategies listed in
the Sixth Mid-term Management Plan. As a result, we
registered ¥17.5 billion in net income attributable to ownersof the parent, achieving a record-high profit for the seventhstraight year and getting off to a promising start.
14

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

President’s Commitment

We changed our company name to “Mizuho Leasing
Company, Limited” in October 2019 after third-party allotment of new shares to Mizuho Bank, Ltd., and havesince been operating as the Mizuho Financial Group’s
sole equity-method affiliate engaged in leasing business.
By strengthening alliances as a Mizuho Financial Group
member with other Group companies, opportunities haveincreased for making deeper proposes contributing tobusiness promotion of clients. In the environment andenergy area for example, we organized financing
schemes for solar and biomass-based power generation
projects in cooperation with Mizuho Bank. In the real estate area, we participated in a major financing project for
REIT property acquisition in partnership with the Mizuho
Bank and Mizuho Securities. Through these deals, weare feeling a good response. Although these results are
just a part of our track record, we believe that we can expand our business foundation further by providing clientsof the Mizuho Financial Group with know-how cultivatedby our own Group through cooperative projects.
We are also moving into overseas markets and new
fields. In the alliance with the Marubeni Group, we haveacquired an equity stake in PLM Fleet, LLC, the largest
U.S. leasing and rental company for refrigerated trailers,from Marubeni Corporation to expand the business foundation of the global area, launching joint management.
15

Moreover, we have acquired an equity stake in Aircastle
Limited, a major U.S. aircraft leasing company with which
we cooperated through a joint venture since 2016, jointlywith Marubeni Corporation, setting our eyes on the medium- to long-term future of the aircraft leasing businessthat supports economic growth and people’s affluent
lives through the transportation of people and goods. We
expect to take on challenges for business in the future in
regions and business areas our Group was not committed to.
In addition, we acquired an equity stake in RICOH LEASING COMPANY, LTD. in April 2020, launching a businessalliance with Ricoh Company, Ltd. and Ricoh Leasing.
Ricoh Leasing is a comprehensive leasing firm providing
some 400,000 clients, mainly small and mid-sized enterprises (SMEs), with various financial services including
vendor finance. As the Company is engaged mainly inwholesale leasing for large and medium-sized companies, our client base and business areas do not overlap
many of these aspects of the partner, and we can thus
expect a high level of functional complementarity. We intend to accelerate the Group’s growth through the common use of the partner’s know-how on vendor financeand financial services for retail leasing as well as the partner’s infrastructure.

Toward a more resilient organization
In fiscal 2019, we took various initiatives that form thebasis of the Group’s future growth. In order to havethem get firmly on track to growth, we need more resilient organizational management responding to expanding business fields. For the purpose, we are striving to
improve our corporate governance system further andestablish a business structure featuring greater “digitalization.”
In an effort to separate management supervision andexecution, and thereby enable supervision and advice
on the execution of duties from a broad perspective, we
make it a rule to have outside directors well versed invarious business areas occupy a majority of our Boardof Directors. Through these processes, we have a system in place where multifaceted verification of agenda
items and profound discussions are ensured. We arethus working to improve transparency and effectivenessof the decision-making process at the Board of Directors meetings.
It is also important to establish an environment inwhich each and every employee can fully display his/herability. We have already launched initiatives for flexible
working styles free from the constraints of places andtime, including staggered commuting and working fromhome as well as computerization of internal work processes. In the future, we will pursue a more productive
and resilient organization by examining how we can set
up the best organizational structure and optimal business processes through the better use of AI and IT.

Shareholder returns
The Company’s basic policy on shareholder returns is
to pay dividends in accordance with business performance in an attempt to improve profitability. At thesame time, as a financial service provider, the amountof shareholders’ equity is one of the important factors toincrease corporate value. Therefore, we intend to pay
dividends while maintaining a balance between shareholder returns and shareholders’ equity. We plan tocontinue paying steady dividends. Retained earnings
are effectively utilized as funds for future growth in an
attempt to further expand our business base and increase ROE over the medium to long term.
In line with this policy, we continued to increase
shareholder return in fiscal 2019 by raising the annual
dividend ¥4 to ¥82 per share (including a commemorative dividend), with the dividend payout ratio of 22.7%.

As for fiscal 2020, we are scheduled to increase theannual dividend per share ¥2 to ¥84 to continue steadypayout in anticipation of greater net income attributableto owners of the parent, although we face severe economic conditions stemming from the COVID-19 pandemic.

Net Income Attributable to Ownersof the Parent(Billions of yen)

Annual Dividend per Share
(yen)

18.0

84
82

17.5
78
16.6

2018

2019

2020

(forecast)

2018

2019

2020

(forecast)Creating higher added value
to walk with clients
For the Group to attain sustained growth, it is necessary
to create value shared with stakeholders such as clients, shareholders, society, and employees. We expect
to continue growing while contributing to resolving social issues through the provision of flexible solutions
available only from our Group owing to the multiple
characters of both financial and business companies.
We believe that “cooperation” with our alliance partners
will become more important in the future. We are conducting cooperation with a variety of partners, including
manufacturers, trading houses and financial institutions.
This is because we are convinced that we will be able
to provide a broader array of valued services by combining expertise possessed by respective partners with
our know-how on “Mono” (equipment & properties) andfinance. Amid dramatically changing business environments, clients’ needs for improved business models are
expected to keep growing further, such as for establishment of enduring production and service systems, andfor improvement in the working environment. We will
endeavor to realize a sustainable society and enhance
corporate value through the provision of valued services
close to clients.
16

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Sixth Mid-term Management Plan (FY2019 to FY2023)～ Value-creating company tackling challenges together with clients ～The Group has launched the Sixth Mid-term Management Plan covering a five-year period
from fiscal 2019. Under the plan, our vision is a “value-creating company tackling challenges
together with clients.” We will seek to take on the challenge of co-creating value with clientsand undertaking new businesses in expanding business fields at home and abroad by fusing initiatives for new business strategies responding to the sophistication of clients’ businessmodels and for businesses in focus areas seizing the opportunity of changes in the social andindustrial structures with strategic initiatives through cooperation with the Mizuho Financial
Group, Marubeni Group, etc.
Moreover, we will seek to grow the Group further by continuing to reinforce the managementbase in response to the expansion of business fields, with focus on “strengthening group governance,” “improving operational productivity,” “HR strategy,” and “increasing sophistication ofrisk-return management.”

Overview of business strategies

Overview of management base reinforcement

Providing solutions that contribute tofinancial and business strategies
for all our clients
Enhancing lease financing businessby expanding client base
Evolving New Business Strategies
Service business
Managing joint ventures with clients●Strengthening ties within the GroupStrengthening group governance

Cooperation with strategic business
partners●Consolidating functions within the Group

Improving operational
productivity

Mizuho Financial Group●Sweeping review of business promotion system●Improving operational efficiency and sophistication by utilizing IT●Revise the personnel and remuneration systems

One of the largest client
bases in Japan and overseas
Strong ties between Group
companies including banks,
trust banks, and securities
firms●Recruiting and developing highly specialized personnel

Strengthening &expanding leasefinancing business

HR strategy

Jointly implementing
New Business
Strategies

Increasing sophistication ofrisk-return management●Sophisticate human resource portfolio management●Promoting diversity and work style reform●Risk management●Portfolio management●Financial ALM

Supporting clients’commercial distribution

Marubeni
Continuing initiatives in focus areas

Overseas network

Environment
and energy

Real estate

AircraftWide range of leasefinancing products fromgeneral trading company

GlobalMedical andhealthcare

Technology

Enhancing overseas
lease financing
businesses

Consolidated targets for final fiscal year (FY2023)
Net income attributableto owners of the parent

Balance in the global area
compared with that at theend of March 2019

Dividend payout ratio¥30 billion

TripleAim for 25% or more

Investing in
new overseas
businesses(Billions of yen)

30.0

(Target)(Target)25.0%

Triplefrom end of
March 2019
(Result)

22.7%

16.6 17.5
12.4(Result)

13.6¥234.8

Expand and grow fields of business within and outside Japan¥142.5

20.1%

billion

FY2016 FY2017 FY2018 FY2019(result)

17

billionFY2023(target)March 31,2019

March 31,2020

March 31,2024

FY2018FY2019FY202318

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Topics in FY2019

Alliance/Cooperation with Mizuho
We have focused on building an alliance systemand promoting business in cooperation with
Mizuho since entering into a capital and businessalliance with Mizuho Bank in March 2019. Taking
advantage of know-how on “Mono” (equipment &properties) and expertise in commercial distribution and business cultivated by the Group, we
have proposed solutions contributing to businesspromotion for Mizuho clients through bilateral
cooperation. We have steadily achieved results ofcooperation in focus areas listed in the Sixth Midterm Management Plan as fields where growth isexpected. They include alliances in renewable energy projects in the environment and energy sector, and participation in major financing projects
for REIT property acquisition based on the groupalliance power in the real estate sector.
As a result, actual contracts concluded (on amanagement accounting basis) through the alliances in fiscal 2019 showed a hefty gain of about¥300.0 billion from fiscal 2018.
The Group will seek to accelerate this cooperation system in pursuit of the expansion of business areas.

Business alliance with Ricoh & Ricoh Leasing
Key points of alliances & cooperation
Promote business by using one of the largest client bases in Japan and overseas
Expand business cooperation in focus areas where growth is expected
Utilize strong ties between Group companies including banks, trust banks, & securities firms

Business base expansion

The Company, Ricoh Company, Ltd. and RICOHLEASING COMPANY, LTD. held rounds of talks
with a view to enhancing their existing businesses
through the use of respective strengths, businessfoundations, etc., and creating new business opportunities through the use of the trio’s respective
know-how and infrastructure, among other purposes. As a result, the three parties shared therecognition that they would be able to build relationships contributing to improving each partner’s
corporate value by fusing their respective strengths
and promoting business cooperation. Based on
the perception, we concluded a business alliance
contract in March 2020. In April 2020, we acquired
a 20% equity stake in Ricoh Leasing, initiating thebusiness alliance.
We believe that we will be able to achieve further
growth by a high level of functional complementarity because there are few overlapping aspects inthe client base and business areas between the
Company whose business base centers on wholesale leasing for large and medium-sized firms, andRicoh Leasing whose business base is focused on
vendor finance for small and mid-sized enterprises(SMEs).

Client base mainly consists of
SMEs Approx.
400 thousand clients(98% are SMEs)

Strong relationship with largeand medium-scale companies

Expertise in vendor financegained through transactions
with approx. 6,000 vendors

Offering solutions to issues
concerning clients’ balance
sheets and business strategies

Operational structure which enables
processing large volume of contracts
with greater efficiency and quality, suchas an operational process with IT

Actions in focus areas as well
as expanding business fields

Strengthen existing business andcreate new business opportunities

Expanding overseas asset financing business
Acquired equity stake in Aircastle Limited

Acquired equity stake in PLM Fleet, LLC

The Group acquired all shares in Aircastle Limited (hereinafter “Aircas-

In March 2020, the Group acquired a 50% equity stake in PLM Fleet,tle”), a major U.S. company engaged in global aircraft operating leases,

LLC, the Marubeni Group’s wholly owned subsidiary engaged in the

jointly with Marubeni Corporation in March 2020. As a result, the Groupleasing and rental business for refrigerated trailers in the U.S., launchingpossesses a 25% equity stake in Aircastle, launching joint business op-

joint business operations with Marubeni Corporation.

erations.
Aircastle is a leading company operating globally. It is strong in mar-of refrigerated trailers, possessing 30 bases across the U.S. Its earn-keting and repossession capabilities as well as possessing a broadings performance is stable against the background of steady demand

global network and high-level aircraft management capabilities.

for frozen/refrigerated goods transport in the U.S., and steady growth

The Group will strive to boost its presence in the global leasing mar-19

PLM is the largest U.S. company specialized in the leasing and rental

in performance is expected to continue.

ket by expanding its business foundation through the acquisition of a

The Group will seek to expand its business base further and boost its

solid aircraft leasing platform, setting its eyes on medium- to long-termpresence in the global market through joint asset financing business inmarket expansion.

North America with Marubeni Corporation.

20

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Business Strategy under the Sixth Mid-term Management Plan

Focus Areas

Sales Strategies□ Develop businesses in response to system reform and theEnvironment
and Energy

trend toward local production and use of power□ Engage in initiatives to invest in energy infrastructure□ Enter renewable energy business□ Provide energy-saving solutions□ Engage in initiatives with medical equipment manufacturers

such as pay-per-use services

Medical and
Healthcare□ Meet investment needs of medical and nursing care services

leveraging IoT□ Engage in initiatives targeting overseas hospitals□ Participate in community development with clients torevitalize local economies

New Business Strategies● Pursue joint businesses with energy suppliers, etc., make useof know-how in renewable energy/energy-saving solutions, andpromote cooperation with administrative authorities/municipalities● Promptly seize business opportunities from development & spread of
new technologies, among other means● Initiatives for business-risk-taking businesses● Provide products and services with high value added throughapplications by proxy for various subsidy programs, and throughalliances, etc. with manufacturers and others● New alliances with domestic medical/nursing care/healthcare

equipment manufacturers, expansion of service business of selling
medical/nursing care equipment● Promote businesses that meet growing needs for labor saving andfor greater efficiency in management of hospitals/facilities and useof related assets● Grasp needs for capital investment by medical institutions outside
Japan in cooperation with overseas subsidiaries of domestic
manufacturers, local vendors abroad, etc.
● Respond to rapidly aging population with low birthrate in alliancewith medical/healthcare service operators, etc.
● Respond to rising societal needs in such areas as logistics facilities,□ Enhance real estate leasing in areas with high societal needs

Real Estate□ Provide bridge functions for REITs in Japan□ Invest in overseas real estate funds□ Jointly invest in good properties with major developers□ Expand transactions with non-Japanese companies

Global□ Grasp Japanese companies’ needs for capital investment

and overseas business deployment□ Roll out joint overseas lease financing business with

Marubeni Corporation□ Aircraft operating lease businessAircraftchildcare/nursing care, etc.

● Expand opportunities for provision of bridge functions, seizing on an

expected increase in needs for the matching service that fills gaps
between the time of property acquisition and that of sales● Seize business opportunities, including investments in overseas realestate, etc. by major domestic developers, trading companies, andother companies.
● Carefully select excellent property expected to produce high-level
rent, increased value, etc., and execute joint investments● Grasp business opportunities setting eyes on medium- to long-term

growth of aircraft market□ Enter businesses related to engines, parts, and other aircraft● Grasp increased needs of airlines for improving efficiency in engine/

Call Option)

Service business,
subscription, sharing
economy, pay-per-use,
etc.

Managing joint ventureswith clients
Creating investment
opportunities by
sharing risks withclients as business
partnervendors overseas● Expand client base through partnership and other means ofcooperation with Mizuho● Promote cooperation in new business/areas, and take in captive
businesses through Mizuho Marubeni Leasing Corporation□ Aircraft-backed collateralized loans□ Set up and sell JOLCO (Japanese Operating Leases with

Support clients build
new business models
by adding service
function● Tap leading local companies and end-customers of Japanese● Hone skills in organizing aircraft-backed collateralized loans forperipherals

Service businessprofitability improvement

parts replacement and maintenance, enter aircraft peripherals
businesses● Grasp diversified investment needs of clients of our Company andbanking/securities partners, and set up and sell JOLCO under morediversified conditions than before

Supporting clients’commercial distribution
Support clients for
production/sales
management and cost
reduction by being
involved in their supply
chains● Develop businesses combining lease financing, etc., services, andTechnology

21□ Realize sustainable business models based on DX□ Create and incubate new businesses

data technology● Create new businesses through open innovation with our Company,

clients and startups possessing advanced/innovative technologies● Support growth of startups by escorting, partnering, etc.

22

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Examples of Co-creation of Value with Clients

Environment
and Energy

Medical and
Healthcare

23

Large wind power generation facility leased in cooperation
with Mizuho
DAIWA ENERGY Co., Ltd of the Daiwa House Group is promoting energy conservation,
introduction of renewable energy, and other measures to help realize a carbon-freesociety, focusing mainly on the use of renewable energy based on “wind, solar andwater.” Daiwa Energy is undertaking a major wind power project called “DREAM Wind
Ehime Seiyo” envisaging output of 16,000 kW and planned annual generation of
about 35,000 MWh (equivalent to electricity consumed by some 8,000 generalhouseholds per year*). Ahead of the launch of the project, the Company proposed, incooperation with Mizuho Bank, an optimal scheme for introducing wind power facility
for the project based on expertise and financial know-how we have cultivated in the
renewable energy sector, and the proposal was adopted.

Property bridge schemes proposed for acquisition ofhealthcare research facilities
Real Estate“ Shonan Health Innovation Park (hereinafter Shonan iPark) ” is a science park

* Assuming a general household’s total power consumption to be 4,432 kWh a year

established by Takeda Pharmaceutical Company Limited, a globally operating pharmacompany. Research space offered by the park is taken up by companies andorganizations of a broad array of business lines and sizes from industry, academia
and government, including pharma makers, firms related to next-generation medical
treatment, artificial intelligence, medical equipment, venture capital companies, andadministrative bodies. The park thus functions as a domestic base for promoting
open innovation concerning healthcare.
This time around, Industrial & Infrastructure Fund Investment Corporation, the only
REIT for industrial real estate in Japan, used a real estate bridge scheme proposed by
our Group company in acquiring an equity stake in Shonan iPark. The Group favoredthe idea that the REIT&Shonan iPark sought to“Build a Life-science Ecosystem that isopen to the world ” by improving the value of park facilities through the equity
acquisition, and thereby offered the bridge scheme through our Group company.

New rental system jointly set up for “Nemuri SCAN,” a healthmonitoring device for medical and nursing care facilities

Supporting IT and digital infrastructure development inThailand with leasing services

Use and introduction of IoT are being promoted in the medical and healthcare sector,
which faces the challenging issues of growing elderly people requiring medical andnursing care, and the shrinking labor population.
Teaming with Paramount Bed Co., Ltd., a major domestic manufacturer and sellerof beds for medical and nursing care, we are providing health-monitoring service bysetting up a rental scheme for “Nemuri SCAN,” which helps to monitor the physicalconditions of users, including maintenance and other services.
“Nemuri SCAN” is a sheet-type sensor capable of remotely monitoring in real time
the user’s breathing/heart rates, sleeping condition, awakening, sitting up, getting out
of bed, and other activities. It can be used at medical and nursing homes, etc. fornighttime monitoring, understanding of living conditions, and other purposes. The
device contributes to improving the user’s safety, reducing the burden on caregivers
and saving manpower at such facilities.

GlobalIn a bid to achieve further growth, the Thai government has been working on thedigital transformation of the economy and society, defining the digital sector as apriority industry.
Internet Thailand Public Company Limited, a major Thai cloud service provider, hasentered into a lease agreement with Krung Thai IBJ Leasing Co., Ltd., our local
subsidiary in Thailand, to invest in the reinforcement of information technology (IT)infrastructure such as data center equipment as a way to respond to digitalization to
improve both efficiency and efficacy of the Thai business.
By fully utilizing finance solutions that the Mizuho Leasing Group can offer, we will
support the promotion of IT infrastructure development in Asia, our focus region, tocontribute to further economic development there.

24

Value Creation by the Mizuho Leasing Group

Reinforcement of Management Base

Key points for reinforcing management base in the Sixth Mid-term Management Plan

Expand and grow fields of business within and outside Japan

Strengthening
group governanceImproving
operational
productivity

Strengthening ties within theGroup
Consolidating functions within theGroup
Sweeping review of businesspromotion system
Improving operational efficiency
and sophistication by utilizing IT
Revise the personnel andremuneration systems

HR strategy

Recruiting and developing highly
specialized personnel
Sophisticate human resource
portfolio management
Promoting diversity and work
style reform

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Funding Policies

In order to achieve further growth for the Group, we will strengthen measures to reinforce
the management base in response to the expansion of business fields of business within andoutside Japan, namely: strengthening group governance, improving operational productivity, HR
strategy, and risk-return management.

Measures

Growth Strategy

Key points● Building a network that maximizes synergy

among the Group companies in response todiversification of business fields● Facilitating integrated management byconsolidating overlapping functions within theGroup● Rebuild business promotion system by reviewing

work processes, rules and organizations, andimproving infrastructure● Improve operational efficiency by utilizing IT andfocus on creation of new value added● Establish evaluation and remuneration systems

to promote Challenges● Enhance personnel in specialized areas
in response to business globalization anddiversification● Efficiently utilizing human resources● Accommodate diverse working styles by
incorporating telework, supporting flexible
working styles, work-life balance, etc.

Funding Policies
The Mizuho Leasing Group offers wide-ranging
financial services to meet clients’ needs throughfunding that ensures stability and curtails costs.
The Group also raises funds based on its annual
cash plans and in a flexible manner that responds
to fluctuations in the financial environment basedon its comprehensive asset liability management(ALM) policies.
When procuring funds, we use a combinationof borrowings from financial institutions and raisingfunds in the market, thereby achieving a balance
between short- and long-term funding.
We borrow funds from more than 100 financial
institutions, including city banks and regionalbanks, as well as insurance companies, and we
maintain stable transactions with these institutions.
In addition, the Group had concluded overdraft
agreements and commitment line agreements inthe total amount of ¥717.8 billion with 51 financial
institutions as of the end of fiscal 2019. The aim is
to secure flexible fundraising and liquidity at timesof deterioration in the fundraising environment.
The unused balance under these agreements is¥473.9 billion, which ensures sufficient liquidity.
The Company and subsidiary Mizuho-Toshiba
Leasing have issue limits for commercial paperof ¥650.0 billion and ¥150.0 billion, respectively.
The Company also actively uses corporate bonds.
It procured ¥45.0 billion through bonds withmaturities of 3 to 10 years in fiscal 2019.
With regard to ALM operations, the Company’s
PM/ALM Committee, consisting of members who
are officers in charge of relevant departments,
holds monthly meetings to discuss the financing
means that are most suitable for the portfolio
composition and interest-rate outlook, and decideon the management policy. We also perform
detailed analyses of the impact of interest rate
volatilities on the present value of assets andliabilities, using indicators such as delta1 and value
at risk (VaR)2, and engage in flexible operations toensure smooth funding and cost control.

Interest-bearing Debt
■ Long-term borrowings ■ Short-term debt
■ Securitized bonds and receivables ■ Commercial paper(Billions of yen)

2,000.6

2,000

669.1

1,834.8
609.8

1,536.2

1,500

453.8
266.6
221.4
162.8

1,000

256.7

302.2

270.7

808.2
701.4

648.9
500

0

2017

2018

2019

Direct funding

Indirect funding

47%

53%

Commercial
paper,
corporatebonds, etc.

MizuhoGroup
9%Interest-bearing debt as ofthe end of FY2019

Regionalbanks
24%¥2 , 000.6 billion

City banks
6%

Life insurancecompanies, etc.
14%

Credit Rating
Risk management

Increasing
sophistication ofrisk-return
management

support the expansion of business fields● Implementing Group-wide risk capital

Portfolio management

Financial ALM

25● Promoting strategic capital management tomanagement to establish the optimal portfolio
by clarifying and identifying risks and returns● Implementing flexible financial ALM attuned todiverse portfolios

Terms
1 Delta: An indicator to show how much the present valueof assets and liabilities changes in the case of increases ininterest rate
2 Value at risk (VaR): A method under which calculations
are made, based on past statistics, to quantify how muchloss in the position of the portfolio held would be incurred
during a certain period of time with certain probabilities in
the case of unfavorable market situations and ascertain the
maximum amount of potential loss as risk exposure.

Mizuho Leasing has obtained credit ratings from Rating
and Investment Information, Inc. (R&I) and Japan Credit
Rating Agency, Ltd. (JCR) to evaluate its creditworthiness.
Rating and Investment
Information, Inc. (R&I)

Japan Credit Rating
Agency, Ltd. (JCR)

Long-term rating Short-term rating

Long-term rating

A

a-1

A+
26

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

CSR Activities of the Mizuho Leasing GroupWe aim to be a Group
which contributes tosociety by offering valued
financial services whichlead to future prosperity.

E
Clients

Contribution to thedevelopment of clients’business activities

Enhancement of corporate
governanceG

SocietyComplianceDialogue with shareholders
and investors

Shareholders

E

Social contribution activities
through businessS

Initiatives for reducing
environmental load
Respecting the human rightsof each employee

S
Employees

E Environment

27

S

Provision of optimal solutions
tailored to changes in the timeand environment

S Social

Securing and cultivating
human resources with diverse
perspectives and values
Organizational management tocreate a vibrant environment inwhich employees feel satisfied
with their jobs

G Governance

Sustainable economic
development

Realization of a sustainable society

Corporate Philosophy

Efforts of the Group to achieve sustainable growth

The businesses of the Mizuho Leasing Group, including financing, the management ofequipment, insurance, and overseas businesses, are closely connected with the economy,society and the environment in various aspects. The Mizuho Leasing Group aims to develop asustainable society and increase corporate value by resolving social issues through its businessand creating values shared with various stakeholders including “clients,” “shareholders,” “society”
and “employees.”

Creation of shared value with stakeholders through the businessToward Sustainable Growth

Contribution to industrial andtechnological advancement

Creation of productive andhigh-quality employment
opportunities

Prosperous living

Maintenance of a healthy
global environment

28

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

GovernanceManagement Structure
Board of Directors

President and CEO

Senior Managing Director

Managing Director

Managing Director

Outside Director (Chairman of the Board of Directors) Outside Director

Shusaku Tsuhara

Shinichiro Maruyama

Hidehiko Kamata

Yasuhisa Fujiki

Daisaku Abe

Takao Komine

April 2009

April 2010

General Manager of Corporate Banking Division No. 1 4 ofMizuho Corporate Bank, Ltd.
Executive Officer, General Manager of the Corporate Business
Unit (Large Corporations)
June 2012 Executive Officer, General Manager of Planning Department of the Company
June 2013 Director, Executive Officer, General Manager of Planning
Department of the Company
April 2015 Managing Director, Managing Executive Officer, General
Manager of Corporate Planning Department of the Company
June 2015 Managing Director, Managing Executive Officer, General
Manager of Business Co-ordination Department of the Company
April 2017 Managing Director, Managing Executive Officer of the Company
February 2018 Managing Director, Managing Executive Officer, CFO of theCompany
June 2020 Senior Managing Director, Senior Managing Executive Officer,
CFO of the Company (present position)

April 1984 Joined the Company
March 2008 Manager of Corporate Business Department (Tokyo Regional
No. 4) of the Company
April 2009 Manager of Corporate Business Department (Tokyo Regional
No. 1) of the Company
April 2014 Executive Officer, Manager of Corporate Business Department(Tokyo Regional No. 1) of the Company
April 2015 Executive Officer of the Company
April 2016 Managing Executive Officer of the Company
June 2019 Managing Director, Managing Executive Officer of the Company(present position)

April 2011

April 2007

July 1969 Joined the Economic Planning Agency
June 1998 Director General, Prices Bureau of Economic Planning Agency
July 1999 Director General, Research Bureau of Economic Planning Agency
January 2001 Director General, National and Regional Planning Bureau of
Ministry of Land, Infrastructure and Transport
April 2003 Professor, Graduate School of Social Science, Hosei University
April 2008 Professor, Graduate School of Regional Policy Design, Hosei University
June 2009 Outside Director (part-time) of the Company (present position)
April 2010 Senior Research Fellow, Japan Center for Economic Research
May 2012 Trustee, Senior Research Fellow, Japan Center for Economic
Research (present position)
April 2017 Professor, Faculty of Regional Development, Taisho University
April 2020 Professor, Institute of Regional Development, Taisho University(present position)

Outside Director

Outside Director

Outside Director

Outside Director

Outside Director

Naofumi Negishi

Hirofumi Hagihira

Mari Sagiya

Takehito Miyaguchi

Hajime Kawamura

April 1971
June 2003

April 1977

April 1985
July 2002
July 2005
July 2014

April 2005
June 2007

April 1981
April 2012

April 2010
April 2012
April 2015
June 2015
April 2017
April 2019
June 2019
June 2020

General Manager of Executive Secretariat of Mizuho Financial
Group, Inc.
Executive Officer, General Manager of Executive Secretariat ofMizuho Financial Group, Inc.
Managing Executive Officer, Director in charge of BranchBusiness Promotion of Mizuho Bank, Ltd.
Senior Managing Executive Officer of Mizuho Financial Group, Inc.
Member of the Board of Directors, Senior Managing Executive Officer
and Head of Compliance Group of Mizuho Financial Group, Inc.
Deputy President, Head of Business Promotion of Mizuho Bank, Ltd.
Deputy President Executive Officer, Chief CSR Officer of theCompany
Deputy President, Deputy President Executive Officer, Chief
CSR Officer of the Company
President and CEO of the Company (present position)

Joined Sekisui Chemical Co., Ltd.
Director (Commissioned General Manager of Corporate Finance& Accounting Department) of Sekisui Chemical Co., Ltd.
October 2008 Director, Executive Vice President, Assistant to the President
and CFO (In charge of Corporate Communication Department
and Corporate Finance & Accounting Department) of Sekisui
Chemical Co., Ltd.
March 2009 President and Representative Director of Sekisui Chemical Co., Ltd.
March 2015 Chairman & Representative Director of Sekisui Chemical Co., Ltd.
June 2017 Chairman and Director of Sekisui Chemical Co., Ltd.
June 2018 Executive Advisor of Sekisui Chemical Co., Ltd.
(present position)
June 2019 Director of the Company (part-time) (present position)

April 2012

Joined the Ministry of International Trade and Industry (MITI)(now: Ministry of Economy, Trade and Industry, “METI”)
Director of Industrial Policy Planning Industrial Policy Bureau,
MITI
April 1994 Director of Cooperative Division, Small and Medium Enterprise
AgencyJune 1999 Director of Consumer Goods Division, Consumer Goods Industry
Bureau, MITI
December 2000 General Manager of Paris Center Office, Japan External Trade
Organization (JETRO)
October 2003 Associate Vice President of Japan Nuclear Energy Safety
Organization
April 2009 Executive Director of Japan Petroleum Development Association
June 2019 Director of the Company (part-time) (present position)
June 1989

April 2012
July 2013
April 2014
April 2018
April 2019
June 2019
April 2020

Joined IBM Japan, Ltd.
Director of IBM Japan, Ltd.
Vice President, General Business of IBM Japan, Ltd.
Vice President, Head of Strategy, Marketing & Communicationsof SAP Japan Co., Ltd.
January 2016 Vice President, Marketing of salesforce.com Co., Ltd.
June 2019 Director of the Company (part-time) (present position)
June 2019 Independent Director of Kokusai Pulp & Paper Co., Ltd. (present
position)
March 2020 Director, MonotaRO Co., Ltd. (present position)

General Manager of Corporate Banking Division No.1 5 ofMizuho Corporate Bank, Ltd.
Executive Officer, General Manager of International Coordination
Division of Mizuho Corporate Bank, Ltd.
Executive Officer, General Manager of International Coordination
Division of Mizuho Bank, Ltd.
Managing Executive Officer (in charge of Consumer, Health, Care, Telecom,
Media, Technology, Specific Global Corporations) of Mizuho Bank, Ltd.
Managing Executive Officer of the Company
Managing Executive Officer, Chief Compliance Officer (CCO)
and Chief Risk Officer (CRO) of the Company
Managing Director, Managing Executive Officer, Chief Compliance Officer(CCO) and Chief Risk Officer (CRO) of the Company
Managing Director, Managing Executive Officer, Chief Compliance Officer(CCO) and General Manager of Strategic Investment Department of theCompany (present position)

General Manager of Beijing Branch of Mizuho Corporate Bank, Ltd.
Executive Officer of Mizuho Corporate Bank, Ltd.
Deputy Chairman & President of Mizuho Corporate Bank (China), Ltd.
June 2012 Senior General Manager of Mizuho Corporate Bank, Ltd.
Chairman of Mizuho Corporate Bank (China), Ltd.
October 2015 Adviser of Mizuho Research Institute Ltd.
Adviser of Mizuho Bank (China), Ltd.
June 2017 Audit & Supervisory Board Member of the Company
June 2020 Director of the Company (present position)

April 2009
June 2012
April 2013
July 2013
June 2014
April 2019
June 2019
June 2020

April 2013
April 2014
April 2016
April 2018
April 2019
June 2020

Corporate Auditors
Outside Audit & Supervisory Board Member

Outside Auditor

Outside Auditor

Nobukatsu Funaki

Tatsuya Yamada

Shinichi Takahashi

Akira Noguchi

April 2005

April 2010

April 1984

April 1979

April 2012
June 2014
April 2018

April 2019
June 2020

29

Joined Marubeni Corporation
Executive Officer, Senior Operating Officer, Plant & Industrial
Machinery Division of Marubeni Corporation
Executive Officer, Chief Operating Officer, Plant & Industrial
Machinery Division of Marubeni Corporation
Executive Officer, Chief Operating Officer, Plant Division of
Marubeni Corporation
Managing Executive Officer, Chief Operating Officer, Plant Divisionof Marubeni Corporation
Managing Executive Officer, Regional CEO for the Americas,
Regional COO for North & Central America of Marubeni
Corporation, President and CEO of Marubeni America Corporation
Senior Managing Executive Officer, Chief Executive Officer ofTransportation & Industrial Machinery, Financial Business Group of
Marubeni Corporation (present position)
Director of the Company (part-time) (present position)

Corporate Executive Officers

Outside Audit & Supervisory Board Member

General Manager of Accounting Divisionof Mizuho Corporate Bank, Ltd.
March 2010 Corporate Auditor of Mizuho Bank, Ltd.
April 2013 Corporate Auditor of Mizuho Securities
Co., Ltd.
June 2013 Corporate Auditor of Mizuho Financial
Group, Inc.
June 2014 Member of the Board of Directors,
member of the Audit Committee of Mizuho
Financial Group Inc.
June 2019 Audit & Supervisory Board Member of theCompany (present position)

Executive Officer, General Manager of Executive Secretariat ofMizuho Corporate Bank, Ltd.
Managing Executive Officer, Head of Strategic Planning Group,
Head of IT, Systems & Operations Group, General Manager ofGroup Strategic Planning of Mizuho Financial Group, Inc.
Managing Director of Mizuho Financial Group, Inc.
Deputy President of Mizuho Financial Group, Inc.
Deputy President & Executive Officer of Mizuho Bank, Ltd.
Deputy President & Executive Officer of Mizuho Financial Group,
Inc.
Deputy Chairman & Executive Officer of Mizuho Financial
Group, Inc.
Director of the Company
Chairman of the Board of Directors of the Company (present
position)

Executive Officer, General Manager
of Accounting Department of Mizuho
Financial Group, Inc.
Managing Executive Officer, Head ofFinancial Control & Accounting Group of
Mizuho Securities Co., Ltd.
Managing Executive Officer, Head of IT &Systems Group of Mizuho Securities Co., Ltd.
Managing Executive Officer, Deputy Headof Financial Control & Accounting Group,
Deputy Head of IT & Systems Group of
Mizuho Financial Group, Inc.
Senior Executive Managing Director(Representative Director) and Senior
Managing Executive Officer, Head ofFinancial Control & Accounting Group,
Head of IT & Systems Group of Mizuho
Securities Co., Ltd.
President of Japan Investor Relations andInvestor Support, Inc.
Audit & Supervisory Board Member of theCompany (present position)

Joined the Dai-ichi Tokyo Bar Association
Nishimura & Asahi (present position)
September 1990 Joined Simpson Thacher & Bartlett LLP(New York office)June 1991 Joined New York State Bar Association
September 1996 Statutory Auditor, Lloyd’s Japan Inc.
April 2001 Liquidator, Daihyaku Mutual Life Insurance
Company
June 2017 Auditor of the Company (present position)

Joined The Dai-ichi Mutual Life Insurance
Company
April 2006 Executive Vice President of DLIBJ AssetManagement Co., Ltd.
April 2011 Senior Executive Vice President of DIAM
Co., Ltd.
October 2016 Director, Managing Executive Officer,
Head of Institutional Marketing Division ofAsset Management One Co., Ltd.
April 2018 Director of Trust & Custody Services Bank,
Ltd.
June 2018 Deputy President of Trust & Custody
Services Bank, Ltd.
Auditor of the Company (present position)
October 2020 Chairman, Public Interest Incorporated
Foundation The Cardiovascular Institute(present position)

Deputy President
Executive Officer

Akira Nakamura

Senior Managing
Executive Officer

Katsuhiko Yoshida

Managing
Executive Officers

Hironobu Yamaguchi
Tetsuya Norimatsu
Takanori Nishiyama
Masanobu Kobayashi
Katsuzumi Orihashi
Chihiro Tokiyasu
Katsunori Tomita
Noboru Otaka
Nobuhisa Zama

Executive Officers

Yoshiyasu Mizutomi
Hiromichi Koyata
Asao Tsumuji
Yasushi Hara
Kunihiro Mio
Mitsuyuki Kimura
Toru Mukojima
Koki Minami
Kazuo Seki

Kazuomi Funakawa
Takashi Yamada
Kensuke Sato
Kenji YoshidaToshiyuki Takezawa
Toshiyuki Takahashi
Yutaka Sato30

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

GovernanceCorporate Governance
Basic Approach

The Board of Directors and Executive Officers

Business activities of a listed company are primary
aimed at enhancing corporate value from theperspective of its shareholders, consistently and overa long term. To this end, the Company recognizes
that it is essential to ensure effective corporate
governance, meaning a framework governing businessactivities centered on a closely regulated relationshipbetween shareholders and management, and thatthe fundamental goal of corporate governance isto put in place an environment to ensure effective
corporate governance. The Company ’ s idea ofcorporate governance required of a listed company is:
primarily, that the rights and benefits of shareholders
are protected and shareholder equality according toequity holdings is guaranteed; secondly, that the rights
and benefits of stakeholders other than shareholders,
namely, clients, employees, suppliers and others,
are respected and a smooth relationship with thesestakeholders is in place; thirdly, that transparencyof business activities is secured through timely andappropriate disclosure of information so that the rights
and benefits of the stakeholders are actually protected;
and finally, that it is important for the Board of Directors
and the Auditors (Audit Committee) to appropriately
practice their supervisory and audit functions. Basedon this belief, the Company is working to execute
effective corporate governance through continuous
efforts to create and improve relevant environments.

The Company’s Board of Directors currently has 11
members, of whom five are independent outside
directors. This arrangement helps ensure theappropriateness of the supervisory function and decision
making by the board.
The Company has adopted an executive officer
system to ensure the rapid and efficient executionof business in accordance with the decisions of theBoard of Directors, and delegates authority for businessexecution to the president and executive officers. The
Executive Management Committee has been establishedas the highest decision-making body for executives toreinforce the operation of meeting bodies and Policy
Planning Committees & Council have been establishedfor each function under the Executive Management
Committee, with the objective of enabling prompt andappropriate decision-making in addition to taking onchallenges for new business models and responding toincreasingly diversified risks.

Outline of Corporate Governance Structure (As of June 24, 2020)
Form of organization

Company with auditors

Number of directors

11, of whom 7 are outside directors

Number of auditors

4, all of whom are outside auditors

Term of office of directors

2 years

Executive officer system

AdoptedBoard of Directors
meetings in FY2019

Audit Committee
meetings in FY2019

Number of meetings 20 times
held
Attendance rate of
directors

97%

Attendance rate ofcorporate auditors

98%

Number of meetings 14 times
held
Attendance rate ofcorporate auditors

Structure of compensation for directors

Independent auditor

31

100%
With regard to the compensation for
directors excluding outside directors, itis performance-based corresponding
to their positions and responsibilities,
and as for the compensation foroutside directors, it is fixed monthly
corresponding to their responsibilities.
In addition, a performance-linked,
share-based remuneration system
has been introduced.
Deloitte Touche Tohmatsu LLC

enhance the corporate governance structure. The
Committee deliberates the appointment and dismissalof directors and auditors, as well as the management
team, and matters related to compensation, the resultsof which are presented to the Board of Directors.

Establishment of an Optional Nomination
and Compensation Committee
The Company has an optional Nomination andCompensation Committee. The committee is formedby six directors, of whom five are independent outside
directors, to improve the transparency of the decisionmaking process by the Board of Directors and further

Evaluation and analysis of the effectiveness of
Directors

Implementation of Effectiveness Evaluationof the Board of Directors

1

The Board of Directors meetings are operated as a forum for discussions
on the promotion of strategies including the setting of topics for discussion.

In order to conduct an analysis and evaluation on theeffectiveness of the Board of Directors as a whole, aquestionnaire was introduced for directors and auditors on
the following items by an evaluation agency from fiscal 2019.

2

Open and lively discussions are held at the Board of Directors.

Questionnaire items

3

Further improvements are expected in the methods of providing
information related to the Board of Directors.

Roles and functions of the Board of Directors,
Composition and scale of the Board of Directors,
Operation of the Board of Directors meetings,
Coordination with auditing bodies, Communication withthe management team, Shareholder and investor relations

We will work to improve areas where issues werepointed out, and further improve the effectiveness andfunctions of the Board of Directors in light of theseanalyses and evaluations.

Corporate Governance Structure
General Meeting of Shareholders (Shareholders)

Auditors and Audit Committee
The Company has adopted a “company with auditors”
system consisting of four auditors, all of whom areoutside statutory auditors. The Audit Committee audits
directors’ decision-making activities at Board of Directors
meetings and other occasions, as well as the Company’s
entire business operations, to ensure that directors fulfill
their legal duties, such as duty of prudence, fiduciary
duties and ensuring that business operations are
conducted properly.
To ensure the effectiveness of audits, corporate
auditors attend important meetings, including Board of
Directors meetings, and also have regular meetings withrepresentative directors to exchange views on important
audit-related issues. Corporate auditors also cooperate
closely with the Audit Department, the internal audit
department, to ensure efficiency, and regularly receive
reports from this department regarding the plans andresults of audits. Furthermore, the Audit Committee holds
regular meetings with independent auditors to maintainclose cooperation with them, listen to their reports on
audit activities, and exchange information to raise theefficiency and quality of auditing.
Outside Standing Auditors Nobukatsu Funaki and
Tatsuya Yamada and Outside Auditor Akira Noguchi
have engaged in financial operations for many years andpossess sufficient financial and accounting knowledge.
Outside Auditor Shinichi Takahashi, being an attorney, isknowledgeable about legal matters.

The evaluation and analysis of the Board of Directors forthe previous fiscal year by the evaluation agency basedon the questionnaire results were as follows.

Board of Directors Audit Audit Committee(Directors/Outside(Outside Auditors
Directors)(all))

Nomination andCompensation
Committee

Supervision
Executive officer system

Audit

Chief Executive Officer (President)

CFO: Chief Financial Officer
CRO: Chief Risk Management Officer
CIO: Chief Information Officer
CCO: Chief Compliance Officer

Executive Management Committee(CEO, CFO, CRO, CIO, CCO, etc.)

Accounting
Audit
Independent Auditor(Audit Firm)
Cooperation

Audit Department
Compliance Division
Control (under direct control of
CCO)
Legal Division

Legal
Advisors

Cooperation
Policy Planning Committees & Council
Risk Management
PM/ALM Committee
Committee

Operating Units

Credit Committee

Business Council

Administrative UnitsGroup companies

Internal Audit Department
The Company’s Audit Department is responsible for
conducting internal audits. To ensure the independenceof this function, the department reports directly to thepresident. The Audit Department conducts internal
audits on the entire Company organization as wellas consolidated subsidiaries to ensure efficiency
and appropriate conduct in business operations and

IT System/
Investment Committee

compliance measures, and to give specific advice,recommendations and suggestions regarding theimprovement of business operations. The Audit
Department cooperates with corporate auditors andindependent auditors as necessary. Audit results
are periodically reported to the Board of Directors,
which determines, based on these results, whether
improvements to systems, organizations and regulations
are necessary for the avoidance of various risks.
32

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

GovernanceCompensation for Directors
The maximum total amount of compensation to be paid
to all directors has been set based on the resolutionof the General Meeting of Shareholders. With regard
to the compensation for directors excluding outside
directors, it is performance-based corresponding totheir positions and responsibilities (a combination of
fixed monthly compensation and performance-linked
compensation based on a performance evaluation inconsideration of contribution to medium- to long-termbusiness performance). As for the compensation foroutside directors, it is fixed monthly corresponding totheir responsibilities.
In addition, a performance-linked, share-based
remuneration system has been introduced by theCompany. The system aims to contribute to theimprovement of business performance in the mediumto long-term and increasing corporate value, andultimately sharing awareness of raising our stock value
with our shareholders by further clarifying the linkage ofthe remuneration for directors (excluding the chairmanof the Board of Directors and outside directors) and
executive officers who do not concurrently serve as
directors with the business performance and stock
value of the Company.

Reasons for Appointment of Outside Directors, Expected Expertise
Expertise we expect of the director
Title

Total amount of compensation, etc. for directors and corporate auditors in FY2019
Officer category
Directors excluding
outside directors
Corporate auditors
excluding outside auditors
Outside officers

Total amount ofcompensation, etc.
Number Total amount ofcompensation,
recipients
Performance-linked
Fixed
etc.
compensationcompensation
8¥298 million¥176 million

Name

Reasons for appointment

DaisakuAbe

In addition to his vast knowledge of financial
administration, he also has vast corporate management
experience having served at financial institutions.
We believe that he will be able to contribute to theCompany’s sustainable growth and improvement in themedium- to long-term corporate value, in light of his
aforementioned abundant business experience.

Takao
KomineWe expect that he would make use of his abundant
experience and broad insight in the field of economic
policy and specialized academic fields to contribute to
the Company’s sustainable growth and improvement in
the medium- to long-term corporate value.

Naofumi
Negishi

We expect that in light of his vast knowledge andsound judgement in manufacturing industry’s corporate
management, he will be able to contribute to theCompany’s sustainable growth and improvement in themedium- to long-term corporate value.

Hirofumi
Hagihira

We expect that in light of his vast experience andknowledge in the field of economic, industrial, and trade
policies, he will be able to contribute to the Company’ssustainable growth and improvement in the medium- tolong-term corporate value.

Mari
SagiyaWe expect that in light of her vast knowledge andcorporate management experience in systems andIT, she will be able to contribute to the Company ’ ssustainable growth and improvement in the medium- tolong-term corporate value.

Takehito
Miyaguchi

As the former corporate auditor of the Company, he has
experience in supervising the directors’ execution of duties.
Through working at overseas bases of a financial institution,
he has gained experience in management that takes
diversity into consideration. He also has profound knowledgeof the Company’ s business and operation of the Boardof Directors, as well as a high standard of awareness ofinternal control. We expect that he will be able to contributeto strengthening the Company’s supervisory function overthe management as well as its sustainable growth andimprovement in the medium- to long-term corporate value.

HajimeKawamura

He has vast experience and knowledge related tooverseas and finance operations at a general trading
company and also has vast corporate management
experience. In light of our business alliance with the
Marubeni Group, we believe that he will be able tocontribute to the sustainable growth and improvementin the medium- to long-term corporate value of theCompany in light of his aforementioned abundantbusiness experience and knowledge.

¥122 million–¥– million¥– million¥– million

13¥105 million¥105 million¥– million

1. Respondents include the three directors (excluding outside directors) and the four outside
directors who resigned on or prior to the end of period covered by this report (FY2019).
2. Performance-linked compensation states the amount that should be recorded as expenses
in FY2019.

The role of outside directors is primarily to monitor and supervise a company’s executive system, but in addition to
exercising such defensive governance, they should also backup the company when it takes up the challenge of a new
business.
Therefore, it is better to have diversity among outside
directors so that they would provide a variety of opinions. In
this respect, the Company’s outside directors are well-experienced experts, each with professional background in thefields of economic policy, trade and industry, systems, manufacturing, among others, making it a well-balanced team.
We as outside directors naturally need to have information
on which to premise discussions. When there is an important
issue to be discussed, we are briefed in advance at the socalled Communication Meeting. Thanks to this, the board isalways engaged in lively exchange of opinions, which means
the system is in full function.
In fiscal 2020, amid an extremely tough economic environment due to the impacts of COVID-19, the Group’s new midterm management plan to achieve further growth is alreadyunder way, led by Mr. Tsuhara, the new President. Under theplan, the Group aims to work together with its clients towards
contributing to the development of society and realization ofan enriched future, such as by expanding the Group’s rolein the Japanese economy as well as expanding its activities
abroad.
We as outside directors are committed to working as partof the Company to evolve itself into what it aims to become,while also keeping close watch on the Company’s management to ensure its transparency and soundness.

Naofumi Negishi

33

Executive Advisor,
Sekisui Chemical Co., Ltd.

Outside director

Message from Outside Director

Internal Control
The Group regards it as a key management
responsibility to maintain and ensure the appropriate
operation of a system that ensures proper conduct ofbusiness operations, and to work toward strengthening
internal control. Under the Companies Act, the Group

Corporate Economic
management
policy〇FinanceFinance andTechnology
accounting

〇

〇

〇

〇

〇

〇

〇

〇

〇

is required to strengthen its internal control system,and to this end, Mizuho Leasing and seven domestic
Group companies have formulated basic policies toensure proper and effective operation. Furthermore,regarding internal control on financial reporting
pursuant to the Financial Instruments and ExchangeAct, the Group maintains and implements a structure
to ensure reliability of its financial reports.
34

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Compliance and Risk Management

Compliance
The Group’s definition of “compliance” is “to comply
with the laws and regulations and to practice honest
and fair business activities in accordance with thenorms of society.” Duly recognizing that any issues
with compliance may undermine the very foundationsof management, and regarding that the “principles ofcompliance” are to be highly appreciated by shareholders
and the market and to earn the trust of society, theGroup is working to strengthen its compliance system.

To facilitate early detection of misconducts inthe workplace, the Group has established channels
through which employees can securely make reports
or have consultations, namely, the consultation
desk of the Compliance Division, corporate auditor’s
hotline, and an external contact point to attorneys. The
Group also stipulates in its Rules on the Protection ofWhistleblowers that a reporter shall not receive any
disadvantageous treatment whatsoever.

Compliance Structure

Enhancing Compliance AwarenessIn order to thoroughly enforce compliance, the Grouphas formulated rules, administrative guides, manuals
and other materials based on the Basic Policy forCompliance. We have in place a structure headedby the Board of Directors and directed by the chiefcompliance officer (CCO), who is fully responsible andauthorized to plan and manage the overall compliancerelated affairs, with the Compliance Division andpromoting overall compliance-related affairs, preventive
measures against money laundering, etc., andblocking-off of any relationship with anti-social forces,
among others, as well as grasping and controllingthe state of the Group’s compliance and providing
guidance and supervision.
More specifically, the general managers, as thecompliance officer of their respective department or
branch, grasp and control the state of compliancewithin the department or branch and provide guidanceand supervision, while the Audit Department, etc.
audit the state of compliance in the Company. General
Manager of the Compliance Division gives instructions
based on the content of reports and outcome of theabove-mentioned actions, pursuant to which thegeneral managers of the departments and branches
take necessary responses or correction measures andother actions.

The Group has formulated the Corporate Code of
Conduct of the Mizuho Leasing Group, which sets out
concrete action guidelines for directors and employees,
as well as published a Compliance Manual that serves
as the Group ’ s standards of compliance, outlining
key rules and regulations that must be followed andcompliance activities that need to be conducted in its
business operations. The Compliance Manual is alsoavailable on the corporate intranet so that directors
and employees can refer to it easily in the course of
their daily work.
As a practical scheme to ensure the thorough practiceof compliance, the Group works out a Compliance
Program. Once a year, the Compliance Program isdiscussed at the Risk Management Committee andresolved by the Executive Management Committee,
and the result of its implementation is reported to the
Executive Management Committee every six months.
Specifically, through job level-specific trainings oncompliance such as that for general managers, themespecific trainings such as that on preventing insider
trading, as well as e-learning sessions, the Group is
working to drive home the principles and standards ofcompliance to all of its members, thereby enhancing its
compliance and nurturing awareness.

management framework centered on the allocationof risk capital. Operational risk such as administrativerisk, system risk, legal risk, etc., is monitored for the
status of occurrence of risk events, countermeasures,
preventive measures, etc.
In addition, to realize the goal of becoming a
multiple financial services company and expand our
specialized financing services, we are aware thatfurther enhancement of our risk management system,

Keywords Explained
1 Credit risk is the risk of loss associated with the inability to collect lease payments, installment payments, or loan principal and interest as
contracted, due to factors such as bankruptcy or deterioration of financial position of the debtor.
2 Market risk is the risk of incurring loss as a result of a decline or disappearance in, or total loss of, the value of the Company ’s financial assets
and liabilities attendant on market price fluctuations (interest rates, stock prices, foreign exchange rates, etc.).
3 Price ﬂuctuation risk is the risk of ﬂuctuations in the value of items other than marketable products, for example, the risk of ﬂuctuationsin the estimated residual value in operating leases and risk inherent in real estate-related financing.

Risk Capital Allocation
The Group places an extremely high priority on the
integrated monitoring and control of total financial risk.
Thus we incorporate an integrated risk management
structure in baced on that of the mega-banks into
our management policies in order to improve thesoundness and stability of our business. Specifically,
we quantify various risk factors and employ integrated
and centralized control systems to ensure that our total
risk exposure remains below the required percentage
of our shareholders’ equity (i.e., our financial strength).
In other words, we define our risk tolerance as
the amount of risk capital, calculated by subtracting
equity capital and part of retained income as reserves
reported for the maintenance of the Company from

Directors/Outside Directors

Proposal ofcountermeasures

Comprehensive Risk Management Activities
As financial services become more diversified andsophisticated, the various risks that arise frombusiness operations grow increasingly complex. In
this environment, the Group recognizes that precise
monitoring and analysis, as well as the proper control
and management of these risks is exceedingly
important for maintaining or increasing the soundnessof business operations, and is strengthening andstreamlining its risk management system accordingly.
35

shareholders’ equity. By allocating this risk capital toeach financial risk, we control losses incurred from any
unforeseen situation within manageable limits, thereby
maintaining our financial stability.
Key aspects, such as the amount of risk capital tobe allocated for each risk, are determined as a partof the fiscal year’s management plan at the Board of
Directors meetings, and specific operating policies
are determined through resolutions by the Executive
Management Committee and Policy Planning
Committees (such as the PM/ALM Committee),and reflected in business operations. Within sucha framework, the Risk Management Department,
which is independent from the business and treasury
departments, monitors operations periodically tomeasure risks. The results of this monitoring arereported to the Board of Directors on a monthly basis.

Risk Management Framework Centered on Allocation of Risk Capital

Decides on importantmatters

Risk Management Structure

for example, monitoring and handling the various risks
inherent in transactions, etc., will be more important
than ever. For example, when we start handling new
products and developing new businesses, we evaluate
risks from the perspective of both financial risks andoperational risks, and work to strengthen management
through the establishment of a structure for thoroughreviews in advance.

Allocation of risk capital

Capitalsurplus

PM/ALM Committee

The Mizuho Leasing Group has categorized risks
that arise in association with the operating activities
into financial risk to be managed quantitatively andoperational risk to be managed qualitatively, andrisk management systems are established for eachrisk. Moreover, the Risk Management Committee
was instituted to establish a comprehensive risk
management system to centrally manage operationalrisk and financial risk.
As for financial risk, meaning credit risk1, market
risk 2, and price fluctuation risk 3, the locations andthe magnitude of risk are monitored based on the

Reserve fornew businessactivities

Operation and execution tomeet the basic policies

Risk measurement
Reporting, proposal ofcountermeasures

A reserve
needed tomaintain the
Company as
an ongoing
concernCorecapitalReporting, proposal ofcountermeasures

Market risk

Monitoring
Retainedearnings

Expected loss (EL)
Unexpected loss (UL)
Delta
Value at risk (VaR)

Monitoring line
ALM-related delta plan
Loss-cut level, etc.

Credit risk

Provisionallyallocated
capitalPricefluctuation risk

Note: The colored box on the right side of the chart above is not intended to denote the relative size of risk allocated to each risk category.
36

Value Creation by the Mizuho Leasing Group

The Mizuho Leasing Group aims to minimize credit
costs by optimizing its credit management structure
at all stages of each transaction, from entrance to exit,
regarding credit risk of our clients.
Firstly, at the initial stage of deal execution under our“client credit rating system,” we grant a credit rating foreach debtor, conduct a strict credit screening for eachdebtor when reviewing a deal, and, to avoid excessive
concentrations of credit, manage credit limit by using
our “credit monitoring systems by ratings.”
Next, during the contract period, we conduct
self-assessments of assets in accordance with the“Temporary treatment of accounting and auditing on
the application of accounting standard for financial
instruments in the leasing industry.” (Report No. 19of the Industry Auditing Committee of the JapaneseInstitute of Certified Public Accountants) and also
implement write-offs and provide reserves basedon the assessment results. Also, we periodicallyfollow up on non-performing assets and makedebt collection of assets for which we have alreadyprovided reserves to facilitate final disposal of
nonperforming assets.
Meanwhile, our approach to credit portfolio
management is based on the use of statisticalmethods to calculate the potential for losses related
to credit risk. To that end, each month we calculate
the expected loss (EL, i.e., credit cost), which is theaverage loss anticipated over the next year, and theunexpected losses (UL, i.e., credit risk amount), whichis the maximum amount of any additional loss inexcess of the EL.
As for expected losses, our stance is to cover an
expected loss from income gained through credit
transactions, and we use this amount as a reference
value when estimating the cost of credit for our income
plan as well as when arranging deals. Concerning
unexpected losses, if an unexpected loss is incurred,
our stance is to cover it from our equity capital, which
we monitor in relation to the pre-allocated risk capital,
and report to the Board of Directors on a monthly
basis.
In addition, we are focusing on initiatives to improve
our asset quality by controlling the risks inherent in thebusiness and assets through portfolio management.

Market Risk Management Structure

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Dialogue with Shareholders and Investors

Compliance and Risk Management

Attitude towards Credit Risk Management

Growth Strategy

include executives in charge of relevant departments.
Through these measures, the Mizuho Leasing Group
strives to maintain stable earnings by controlling risk.
Also, in terms of organizational structure, in orderto provide effective checks and balances, we haveestablished clearly defined dividing lines between
departments handling market operations (“front office”)
and departments providing back-office administration(“back office”), and an independent risk management
department dedicated to risk management has been
established.
Furthermore, risk-related analyses are reported
monthly at meetings of the PM/ALM Committee aswell as those of the Board of Directors.

Attitude towards Operational Risk Management
The Operational Risk Management Division of the
Risk Management Department centrally collects
and manages operational risk events resulting frominadequacies, administrative errors, compliance issues,
inappropriate business operations, system failures
and any other external factors and takes appropriate
actions according to the relevant risk categories suchas the formulation of countermeasures and measures
to prevent recurrence.
Furthermore, risk-related analyses are reported
quarterly at meetings of the Risk Management
Committee, as well as those of the Board of Directors,
together with financial risk.

Disclosure Policy
The Company discloses information to the public on
a consolidated basis of the Mizuho Leasing Group toprotect rights and interests of shareholders and otherstakeholders. Timely, proper and fair disclosure of

information will ensure transparency of the Company’s
corporate activities. A system to disclose information
accurately and promptly in a positive manner is also inplace and properly implemented.

IR Activities
The basic stance of the Company regarding IR
activities is to continuously disclose information in afair, timely and appropriate manner and to enhancecommunication with shareholders and investors, toenable their further understanding about the Mizuho
Leasing Group and fair evaluation of its corporate
value. The Company holds briefing sessions to explain
financial results to institutional investors and analysts
and individual meetings with domestic and overseas
investors on a regular basis, as well as annualcompany information sessions, questionnaire surveys,
etc. for individual investors. Through such means,

Record of IR Activity in FY2019
Financial results briefing session

Twice

Individual meeting with institutional investors, etc.

62 times

we engage in active dialogue with shareholders andinvestors.
The Mizuho Leasing Group aims to achievesustainable increases in corporate value by
appropriately incorporating opinions and feedback
obtained through dialogue into management.

Shareholder Returns
Dividend Policy

Shareholders Benefit Plan

The basic policy of the Company on dividends is torealize dividends based on the business performanceof the Company while improving its earning capacity indue consideration of balance between return of profits
to shareholders and securing shareholders’ equity.

The Company has ashareholders benefit plan
to show our appreciation
to shareholders. The
reference date of this plan
is March 31 each year.

Annual Dividend per Share
80

60

60

64

70

(yen)

78

82

* QUO cards have replaced pre-paid book cards as shareholders benefit
items from those dispatched after the general meeting of shareholders
in June 2020.

Shareholders Special Benefit Plan
If shares are held for two
consecutive years or longer*

40

The Mizuho Leasing Group establishes basic policies
based on market environments, financial strength,etc., at the Board of Directors meeting each year toproperly control risks in line with financial operations.
In addition, ALM operating policies based on the basic
policies, various credit lines for transactions, and loss
limits, etc., are determined on a monthly basis at themeetings of the PM/ALM Committee, whose members
37

A ¥3,000 QUO card is given A ¥4,000 QUO card is givenout to each shareholder who out to each shareholder who
holds 1 unit (100 shares) or holds 1 unit (100 shares) ormore shares.
more shares.

20

0

2015

2016

2017

2018

2019

* Shareholders who hold 1 unit (100 shares) or more shares for two
consecutive years or longer are those who are recorded in theshareholder registry on the record date (March 31) by the same
shareholder number as that on the record date of the previous
fiscal year.
38

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Human Resource Strategy

Commitment by the Personnel Unit

Personnel and Remuneration Systems
Revision of Personnel and Remuneration Systems
Recognizing that each individual employee is the
supporting pillar of the Group ’ s growth, we haverevised our personnel and remuneration systems infiscal 2019. We redefined the roles expected of each
employment type and position from general staff to the
management along with examples of job requirements

and accountability, and laid out a system that evaluates
each person’s job and organizational capabilities fromdifferent perspectives objectively and adequately, using
a common evaluation matrix. We will continue working
to improve the system in which capable and energetic
employees are adequately appraised, keeping in stepwith the diversifying work style and business.

Development of Human Resources

Hidehiko Kamata Managing Director in charge of Personnel Department
You may think that the service of a leasing company issimply about leasing “Mono (equipment & properties)”
to its clients, but the Group’s business is not limited
to it. We believe that the business of the Group is allabout accurately grasping the diverse and uniqueneeds of our clients and offering the right solutions
to match these needs. To do this, we need to makefull use of our skills in “ Mono, ” finance, taxation,accounting, laws and commercial distribution, among
others, and put ourselves in the shoes of the clients tosquarely face their concerns and challenges while we
conduct our business in a constructive manner. And
it is the “human,” or each and every employee of theGroup, that forms the core of our business. How much
we can bring out the potential of each employee is the
key to the Group’s growth.
Based on this view, with “ developing human resources and creating a corporate culture willing totake on challenges for innovation and promoting work
style reform” as the pillar of our personnel strategy,
we are working to create an environment in which
employees can work at their best. Our efforts towards
this goal is divided into the four major categoriesof “ personnel and remuneration systems,” “ humanresource development, ” “ human resource portfolio
and personnel allocation, ” and “ the promotion ofdiversity & inclusion and work style reform.” Measures39

we have implemented so far include: developing
personnel evaluation and remuneration systems topromote Challenge; strengthening and developing
human resources capable of playing an active roleon the global scene; introducing systems for careerconversions and retirement age extension; andfacilitating flexible working styles such as by utilizing
teleworking.
In a drastically changing business environment,
we believe that the capability to undertake tasks withautonomy will become more and more important.
The Group is supporting the autonomous growthof employees by presenting “ career plans ” as theirbenchmark for designing career paths, offering job
level-specific trainings catered to each career stage,strategically allocating personnel to make the bestuse of each employee’s strengths and characteristics,
and proactively passing on knowledge to the next
generation, and other means.
Development of an organization in which each
employee can demonstrate his/her individuality,
understand and accept diversity among themselves,
and together embody comfort and affluence, will leadto the company’s growth and employees’ good worklife balance. We will continue our efforts to provide anenvironment that allows our employees to exert theirfull potential.

Hiring New Graduates

Hiring Mid-career Workers

Based on its policy to conduct fair and impartial preemployment screening, the Company hires new
graduates who “ have flexible mindset and full ofchallenger spirits. ” We have in place systems andenvironments for women to continue working actively.
The proportion of women among new graduates
employed has remained above 40% in the past years.

In response to the globalization trends and expanding
business fields, the Group is increasingly recruiting
diverse talents with a challenger spirits and highprofessional expertise in various fields.

Number of new graduates employed

Number of mid-career workers employed(Persons) ■ Total ■ Women(Persons) ■ Total ■ Specialized personnel

30

27

20

26

15

15
20

10

18

17
9

12

11
9

12

5

1 1
0

2016

2017

2018

2019

9 9

10

0

2016

11

3
2017

2018

2019

40

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Human Resource Strategy

Diversity & Inclusion and Work Style Reform

Global Human Resources
The Group has established a target for the final fiscal
year of the Sixth Mid-term Management Plan to triple
the balance in the Global field from the end of March
2019. The Group is implementing the development andstrengthening of human resources who can play anactive role in a global scale.
The “open call for overseas-oriented employees” thatstarted in fiscal 2017 has gathered a total of 46 applicants in three years. Applicants are given a six-monthpractical language training, sent to our overseas bases
as trainees, or transferred to divisions related to global business, as a means to develop human resources
for overseas business. We are also increasingly hiring
mid-career talents in search for potential overseas-oriented employees, and strategically increasing personnel
size of global units involved in overseas projects.

Personnel in global business divisions (number ofJapanese employees involved in overseas projects)(Persons)

50

42
40

32
30

24

25

20
10
0

2016

2017

2018

2019

Career Plans
The Company sets up “career plans” for each employee
as a guide for them to understand the knowledge, skills,
etc., which they should acquire in each of the steps intheir career, and to devote themselves to their duties
and self-improvement by setting their own goals andundergo necessary training in a systematic manner.
The career plan divides a person’s career into phases,
namely, the “learning” phase covering from the first day
of work to the end of second year, the “ﬂourishing” phase
covering the third and fourth year, and “leap” phase fromthe fifth year onward, and stipulates the targeted level ofachievement, experience, knowledge, skills and training
for each phase. It is thus designed to allow each employee to grow as they move up from phase to phase.

Mizuho Leasing Group is promoting diversity andinclusion in our organization. We believe it is importantthat the employees understand and accept diversity
and the difference in their backgrounds, and based on
this notion, help each other bring out their best, foster
solidarity, and thereby promote their own growth while
adapting to changes.
By promoting the advancement of women, worklife balance, invigoration of communication, and flexible
working styles, we are working to achieve a rewarding
workplace environment where diverse ways of thinking
and values are accepted and respected and thatmaximizes the unique abilities of each of our employees.

● D&I at Mizuho Leasing

Initiatives for Creating Worker-friendly Environment

hours, we are putting in place a system for protecting
the health and safety of our employees. In addition, we
conducted a questionnaire survey of our employees
on teleworking to understand the current state andproblems, and shared the best practices in telework
utilization among the whole Group. Through these
efforts, we are striving to improve work efficiency andboost communication. Going forward, we will apply
working arrangement that suits each job on a trial basis and eventually revise the system so as to realize aneven more comfortable working environment.

● Promoting Flexible Working Styles

To promote work-life balance and improve work productivity, we are promoting flexible working styles
that are not bound by a fixed location. Since we hadalready begun using satellite offices and gradually
introducing telework system in fiscal 2019, we wereable to make a smooth shift to a full-scale teleworking
arrangement in the wake of COVID-19 (state of emergency). Combining this with ﬂexible staggered working

We foster growth of our employees by improving andexpanding training on themes meaningful to employees
who aspire to move on to the next step, such as on skills
related to sales or productivity improvement.

Succession Plans
The Company has set out succession plan with a view to “fostering the management tier ina planned manner” and “sustainable growth enabled by transparent process for appointing
directors.” Specifically, as a succession program aimed at making the successor candidates
visible and fostering their growth in on a long-term basis, we set up the “Mizuho Leasing
University,” a corporate university, which has begun operation in fiscal 2020.

Vigorous organization

Better job satisfaction

Understanding diversity, fostering solidarity

Advancement of
women

Work-life balance

Invigoration of

Flexible working

communicationstylesWork-life Balance Support Initiatives● Encouraging Male Employees to Take Childcare Leave

In order to create a corporate culture in which it is easy
for male employees to take childcare leave, we areencouraging male employees with a newborn to takechildcare leave through activities such as distribution of
leaﬂets that provide an overview of the work-life balance
support system and a summary on how to take leaves
as well as personally handing a “hand-written congratulation card” from the supervisor and colleagues. As aresult, we saw a great leap in the percentage of male
employees taking child care leave. The Group is supporting male employees’ participation in childcare.
Percentage of male employees who took childcare leave

Human Resource Portfolio and Personnel Allocation

50

(%)
50
40

Designing and Building Human Resource Portfolio
and Allocating Personnel Accordingly
In order to achieve the numerical targets of the Sixth
Mid-term Management Plan, it is essential that wesecure and nurture excellent talents and allocate personnel fittingly. To this end, we calculate the number
41of staff required for each segment or unit based on
the targeted business portfolio and allocate personnel accordingly. Furthermore, we will build a system
to centralize the collection and analysis of all internal
information related to human resources. Utilizing thissystem, we aim to allocate and train our personnel aswell as select successors in a more strategic manner.

30
20
10
0

10
2018

2019

42

Value Creation by the Mizuho Leasing GroupStrength to Support Growth

Initiatives for a Recycling-Oriented Society

Employee Feedback

At first, I was not really familiar with the system, but
prompted by my boss who urged me to take the childcare
leave, and backed by a cooperative workplace mindset
towards childcare and advice from my boss and colleagues
who also offered to cover for me while I am away, I decided
to go for it for the sake of my family.
During the leave, I did every childcare task other thanbreastfeeding. Now that I know firsthand the hardship ofchildcare, I think my wife and I are bonded through a sharedunderstanding of childcare, which is an advantage for the
future of my family. I also feel that this new experience of
caring for a child has broadened my insights and expanded
my possibilities both professionally and personally.

We offer Childcare Leave Returnee Training for
employees who have been reinstated to work afterchildcare leave. The training aims to help themstrengthen awareness of participation while achieving
a balance between work and childcare, learn about
the approach to work after reinstatement, and gain
knowledge related to housework and childcare.
Meanwhile, in response to the requests for “chances tomingle in a small group” and “connecting with people inthe same situation,” we also host round-table talks asa venue for working mothers to exchange information.
We are also making efforts to ease or relieve anxieties
and worries the employees may have by inviting wellexperienced lecturers to both the training and roundtable talks, from whom participants can receive advice.

Nursing Care Seminar
Work and Nursing Care Balance Support Seminars
are held by an external lecturer for Group employees
on basic knowledge concerning nursing care and thenursing care insurance system, as well as to bracethemselves for nursing care. The lecturer also holds
individual consultations after the seminar.

Implementation of Environmental Management System
The Company and seven Group companies have been awarded a certification for the international standard forenvironment, ISO 14001 Certification.

The Mizuho Leasing Group runs Torakoya, an inhouse educational institution established with the
purpose of transferring knowledge and know-how
accumulated by the Group in its history and providing
a venue for communication among employees beyond
generations. Torakoya was held with a variety ofthemes: in “ Value of equipment & properties, ”
participants learned from a lecturer with rich experiencein sales the expertise on equipment and commercial
distribution; in “Balancing Work and Childcare,” threefemale employees talked about working style andshared the know-how to balance between work andchildcare based on their own experience.

is responsible for the management of environmental
activities as a whole, and the Department responsible
for environmental management of the Company andthe Operating Officer of Environmental Management ofeach Group company promote activities to achieve theenvironmental goal.

The Mizuho Leasing Group ensures that theenvironmental management system (PDCA cycle) is
operated properly. To this end, the Chief CSR Officer
oversees the Environmental Management Officer who
Basic Environmental Policy

We strictly comply with environmental laws and regulations and continuously improve our environmental conservation activities with our corporatesocial responsibility in mind at all times.
We strive to balance environmental conservation and economic development by developing and providing goods and services that contribute toenvironmental conservation.
We properly manage equipment for which lease terms have expired, promote recycle and reuse, and thereby contribute to building a recycling-oriented society.
We make every effort to understand environmental impact each business activity will make, and to reduce environmental load and prevent pollution.

Eri Natsui General Manager, Diversity Promotion Division
In fiscal 2019, we held seminars targeting the managerial staff, in addition to those intended for all employees. The seminar offers managers an opportunity
to learn from outside lecturers to deepen their understanding of employees who are caregivers and how
to respond when consulted by a staff member about
nursing care, using case studies, so as to create aworkplace culture of mutual support.

Main Environmental Purposes and Targets
Environmental target -Annual target -Environmental Purposes - Medium-termtarget -FY2019 target

Results

Reduce the amount of paper used

Less than average monthly level (sheets used per person) of FY2016-FY2018

19% reduction from target

Reduce consumption of electric powerLess than average monthly level of FY2016-FY2018

17% reduction from target

Sustainable contribution to building a recycling-oriented society

Achieve reuse rate* of 68% or more

Reuse rate 72% achieved

Promote 3R by purchasing used equipment

Used equipment purchases of ¥730 million

96% achieved

Ensure disposal in compliance with laws and regulations
and select law-abiding recycling business operators

Regularly investigate industrial waste disposal business
operators used group-wide

Implemented group-wide* Reuse rate means the rate calculated by: Number of equipment soldInitiatives to Invigorate Communicationas materials, implements 3Rs (Reduce, Reuse andRecycle) by taking appropriate disposal measures
such as selling to used-item dealers and consigning torecycling companies, and thereby contributes to thecreation of a recycling-oriented society.

In lease transactions, equipment “owned” by leasing
companies is “used” by clients; therefore, after thelease term expires, the equipment will be returned to
the leasing companies for destruction, sale, disposal,
etc. The Mizuho Leasing Group screens expired
equipment that can be reused or that can be used

Organizational Structure of Environmental
Management System

Round-table Talks for Employees Returning
to Work from Childcare Leave

43

Consolidated Financial Data and Corporate Information

Environmental and Social Activities

Human Resource Strategy

Hiroki Nangumo Accounting Department

Growth Strategy

Number of Torakoya participantsSocial Contribution Activities(Persons) ■ Head Office ■ Branches ■ Group companies

500

440

400
300
200
100
0

173

228

31
41
156

2017

207

40
42
125

2018

Number of equipment for which the lease term or re-lease term has expired

94

173
2019

Investing in the Tokyo ESG Fund
The Company has decided to invest in SPARX
Public-Private Partnership ESG Investment Limited
Partnership (hereinafter Tokyo ESG Fund) set up by
the Tokyo Metropolitan Government and managed by
SPARX Asset Management Co., Ltd.
The Tokyo ESG Fund, one of the Tokyo Metropolitan
Government’s initiatives for realizing the “Global Financial
City: Tokyo” vision, aims to promote and accelerate ESG
investment as a way of helping to solve social issues

through finance. The Fund invests in renewable energy
development projects in Japan, while a portion of thecommission earned goes to supporting projects withhigh degree of social contribution, such as supportingchildren, promoting women’s participation and advancement in work, assisting single parents, and promoting
employment of persons with disabilities, among others.
The Group will strive to further increase its corporate
value through its efforts to contribute to solving social
issues.
44

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Analyses on Business Conditions and Results of Operations

1. Financial Results and Business Performance Overview

Consolidated Financial
Data andCorporate Information

46

Analyses on Business Conditions and Results of Operations

49

Business Risks and Other Risks

51

Consolidated Financial Statements

90

Corporate Information

92

Stock Information

The economic environment in fiscal 2019 saw moderate
economic growth in the world and in Japan, but withthe downward pressures caused by trade policy trends
and the global spread of COVID-19 pandemic since
early 2020, there is a growing concern of an economic
slowdown.
In the financial market, amid the continued monetary easing policy, both long-term interest rates andshort-term interest rates remained low. In the leasing
industry, despite the impact of COVID-19, the transaction volumes increased from the previous fiscal year,
thanks to the growth in the handling of information andcommunication equipment.
The Group has started the Sixth Mid-term Management Plan covering a five-year period from April
2019 to fiscal 2023. Under the plan, we will accelerate
our efforts in promoting business together with ourclients as partners and in focus areas that matches
the changes in social and industrial structures, while
expanding our business base through alliance and cooperation with Mizuho Financial Group and MarubeniGroup and taking up challenges in the new businessareas.
In fiscal 2019, we concentrated on structuring aframework for our alliance with Mizuho Financial Groupand Marubeni Group and implemented the businessstrategies set out in the Sixth Mid-term Management
Plan step by step. Making use of the Group’s extensive knowledge of “Mono (equipment & properties)”and advanced financial expertise, we have been offering solutions that contribute to our clients’ businesspromotion and expanding business in focus areas withgrowth prospects against the backdrop of changes insocial and industrial structures. We aim to further expand our business base by extending these services
to the clients of Mizuho Financial Group in addition to
our existing clients. Recognizing that the Group needs
to strengthen global sales and business bases in orderto grow further, we are also carrying forward our cooperation with Marubeni Group.
As for activities in our focus areas, in the environment and energy area, the Group boosted efforts inthe field of renewable energy, including the leasing ofwind power generation facilities, domestic consumption-type power supply service using photovoltaic
power generation in collaboration with our clients, andfinancing in biomass power generation project in cooperation with Mizuho Bank, Ltd.
In the medical and healthcare area, activities centered around the leasing of facilities and equipment for
medical and nursing care institutions, expanding business fields. In Japan, we launched a new rental service of manpower-saving equipment for nursing careinstitutions in collaboration with manufacturers, while inoverseas business we engaged in vendor finance services targeting local medical equipment dealers in thePhilippines.
In the real estate area, we saw growth in the execution of bridge scheme projects targeting logistics facilities, warehouses, etc. for REITs managed by leadingbusiness operators, and also participated in a large
scale finance project for property acquisition by REIT incooperation with Mizuho Bank Ltd. and Mizuho Securities Co., Ltd. Additionally, we are offering real estatesolutions covering factories, offices, and commercial
facilities in line with the clients’real estate strategies.

Contract Execution Volume(Millions of yen)
2015

2016

2017

2018

2019

Leasing and installment sales

465,505

475,661

430,482

549,418

692,350

Financing599,847

616,366

901,485996,700

590,088

Other

ー

ー

3,941

2,698

ー

Total

1,065,352

1,092,027

1,335,909

1,548,817

1,282,438

Operating Assets
2015

2016

2017

2018

2019

1,105,808

1,088,139

1,122,183

1,306,106

1,467,439

475,216

520,579

556,933

708,950

622,866

Other

ー

ー

3,888

6,311

ー

Total

1,581,025

1,608,718

1,683,005

2,021,368

2,090,305

Leasing and installment sales
Financing

45(Millions of yen)46

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Analyses on Business Conditions and Results of Operations

In the aircraft area, recognizing that a platform
equipped with advanced know-how and function is essential to expand business base in this field where themarket is expected to grow in medium- to long-term,
we acquired a 25% stake in Aircastle Limited (nowan equity-method affiliate of the Company), a leading
US aircraft leasing company, in March 2020. Aircastle
has become a joint venture with the Company andMarubeni Corporation.
In the global area, we continued working to grasp
the clients’ needs for plant and equipment investment
as well as financing, while also actively seeking theneeds for infrastructure development abroad and forging ahead into new business areas. In March 2020, theGroup acquired a 50% stake in PLM Fleet, LLC (nowan equity-method affiliate of the Company), the largest
leasing and rental company specializing in refrigerated trailers in the US and a wholly owned subsidiary of
Marubeni Group, making the company the Group’s
joint operating company with Marubeni Corporation.
The contract execution volume in leasing and installment sales increased 26.0% year on year to ¥692,350
million, while the volume in financing decreased 40.8%
to ¥590,088 million owing to the decline in short-termcommercial distribution finance. As a result, the total
contract execution volume decreased 17.2% from theprevious year to ¥1,282,438 million.
Regarding the results, reflecting the growing trend
in the projects in which we acquire and temporarily
hold a property based on request from a client (hereinafter bridge scheme), there was an increase in salesof properties upon completion of real estate-related bridge scheme projects. For this and other reasons, the revenues increased 40.1% year on year to¥539,241 million. Operating income increased 14.7%
to ¥26,275 million, while net income attributable toowners of the parent increased 5.5% from the previous year to ¥17,512 million.
Regarding the financial position, operating assets
increased ¥68,937 million year on year to ¥2,090,305
million due to the growth in contract execution volume
in leasing and installment sales, and total assets increased by ¥186,543 million to ¥2,348,416 million.
Meanwhile, total liabilities increased ¥172,922 million
year on year to ¥2,152,635 million, of which interestbearing debt increased ¥165,878 million to ¥2,000,636
million owing to the growth in operating assets and investment in overseas JV companies together with Marubeni
Corporation.
Total equity stood at ¥195,780 million, showing acontinued growth partly due to the income during theyear.
The financial results for each segment are as follows. (Revenues indicate revenues to external customers.)

47[Leasing and Installment Sales]
Revenues in leasing and installment sales increased
39.8% year on year to ¥511,721 million driven by therise in sales of properties upon completion of realestate-related bridge scheme projects. However, as
cost of revenue also rose, operating income totaled¥18,588 million, a 3.0% increase from the previous fiscal year.
Operating assets at the end of fiscal 2019 was¥1,467,439 million, a ¥161,332 million increase year
on year due to the growth in contract execution volume mainly in industrial and factory equipment andinformation and communication equipment.
[Financing]
Revenues in financing increased 12.2% year on year to¥18,772 million as the Group captured and served thediverse client needs, while operating income increased
33.9% year on year to ¥12,832 million partly owing to
the sale of operational investment securities.
Operating assets at the end of fiscal 2019 decreased ¥86,083 million year on year to ¥622,866
million, pushed up by the clients’active investment inplant and equipment and rise in business-related loans
but driven down by the decline in short-term commercial distribution finance.
[Other]In the other segment, revenues increased 321.9% year
on year to ¥8,747 million due to the sale, during period, of a photovoltaic power generation plant in a
bridge scheme project, but the cost of revenue also
increased, causing the operating income to decreaseby 11.5% to ¥584 million.
Operating assets as of the end of fiscal 2019 stoodat zero, decreasing ¥6,311 million from the previous
fiscal year as a result of the sale of a photovoltaic power generation plant.

2. Analyses on the Results of Operations and Other Matters
Results of Operations and Financial Position
Regarding the results of operations, revenues increased ¥154,348 million year on year to ¥539,241
million, partly driven by the rise in sales of properties
upon completion of real estate-related bridge scheme
projects.
Funding costs increased ¥1,276 million year on yearto ¥9,744 million due to higher foreign currency borrowings following an increase in foreign currency assets. Meanwhile, gross profit increased ¥6,390 million
year on year to ¥50,519 million, thanks to the initiatives
in focus areas, promotion of strategies under the Sixth
Mid-term Management Plan including the cooperation
with Mizuho Financial Group, and gain on sale from therenewal of investment properties.
Selling, general and administrative expenses increased ¥3,028 million year on year to ¥24,243 million,
driven by the rise in personnel and facilities costs dueto the increase in staff to match the expansion of business areas and continuing investment in systems. As aresult, operating income increased ¥3,362 million year
on year to ¥26,275 million.
As for extraordinary income and loss, extraordinary
income was ¥481 million and extraordinary loss was¥658 million, recording a net extraordinary loss of ¥176
million. The extraordinary income was due to the saleof investment securities. The extraordinary loss waspartly due to the recording of a loss on devaluation of
investment securities.
As a result of the above, net income attributableto owners of the parent increased ¥918 million year on
year to ¥17,512 million, setting new record high for seven consecutive periods.
Regarding the financial position, operating assets
increased ¥68,937 million compared with the previous
year to ¥2,090,305 million due to the growth in contract execution volume in leasing and installment sales,
and total assets rose by ¥186,543 million comparedwith the previous year to ¥2,348,416 million.
Meanwhile, total liabilities increased ¥172,922 million compared with the previous year to ¥2,152,635
million, of which interest-bearing debt rose ¥165,878
million to ¥2,000,636 million, owing to the growth inoperating assets and investment in overseas JV companies together with Marubeni Corporation.
Total equity increased ¥13,620 million compared tothe previous year to ¥195,780 million partly due to theincome during the year.
The impact of COVID-19 on the performance in fiscal
2019 was limited, but for fiscal 2020, the harsh economic situation is expected to continue for some time.
Although gradual recovery is expected subsequently,
the impact will remain through the year. The Group anticipates impacts from some industries’postponementof plant and equipment investment plans and rise incredit costs, among others, due to economic slowdown.
Source of capital and liquidity of funds
In order to offer wide-ranging financial services to meetcustomer needs, the Group strives for funding that
ensures stability and curtails costs. The Group also
raises funds flexibly based on its annual cash plans
and comprehensive asset liability management (ALM)
policies that respond to fluctuations in the financial environment.
s funds comprise long-term and shortThe Group’term procurements using a combination of indirect
funding via borrowing from financial institutions and direct funding from the market. At the end of fiscal 2019,indirect funding increased ¥61,416 million comparedwith the previous year to ¥1,064,981 million. Direct
funding increased ¥104,462 million compared with theprevious year to ¥935,654 million, partly due to the issuance of commercial paper and bonds.
In addition, the Group has concluded overdraft agreements and commitment line agreements in the total
amount of ¥717,778 million with 51 financial institutions
as of the end of fiscal 2019 with the aim of securing
the liquidity of working capital and flexibility in fundraising. The unused balance under these agreements is¥473,902 million, which ensures sufficient liquidity.
Status of cash ﬂows
Concerning the status of cash flows in fiscal 2019,
there was an increase in operating assets, investment
in overseas business corporations and other types ofcash outflow accompanied by buoyant business activities, for which we raised funds in the market andthrough borrowings from financial institutions while
securing liquidity of funds. As a result, the balance of
cash and cash equivalents as of the end of fiscal 2019
decreased ¥3,139 million compared with the previous
year to ¥22,299 million. The status of cash flow fromeach activity category and their factors are as follows.
Net cash used in operating activities was ¥69,130
million partly due to an increase in operating assets,
mainly in lease receivables and investment in lease.
Net cash used in investing activities was ¥98,336
million due to ongoing system investments and investment in overseas JV companies together with
Marubeni Corporation.
Net cash provided by financing activities as a wholewas ¥164,538 million, with ¥3,920 million of cash outflow for cash dividends paid against ¥63,927 million of
cash inflow from indirect funding and ¥104,481 millionof cash inflow from direct funding through the issuanceof commercial paper and bonds.

48

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Business Risks and Other Risks

The following factors constitute the principal business risks that have the potential to affectthe business results, stock price and financial position of the Mizuho Leasing Group. Forwardlooking statements contained herein represent the judgment of the Mizuho Leasing Group as ofthe end of fiscal 2019.
1. Credit Risk
Comprising the main business activity of the Mizuho
Leasing Group, lease transactions involve the provisionof credit to customers in the form of leases over relatively long terms (averaging five years). The initial expected revenue is secured by collecting the full amountof leasing fees from the customer.
If a customer suffers a decline in business due to aslump in the economy and the initially expected leasing
fees cannot be collected, it may affect the businessperformance of the Mizuho Leasing Group.
Therefore, the Mizuho Leasing Group determines
the appropriateness of entering into contracts by conducting strict credit checks at the start of each transaction and assessing the future second-hand value ofleased equipment. Once a transaction has begun, we
regularly monitor the customer’s credit status and takevarious measures to ensure collection if needed.
Moreover, in instances when a customer’s credit
status has deteriorated and issues such as non-payment of leasing fees occur, we work to recover as
much as possible of the outstanding amount throughthe sale or transfer of leased equipment to other customers.
Furthermore, we conduct self-assessments of assets in accordance with “Temporary treatment of accounting and auditing on the application of accounting
standard for financial instruments in the leasing industry” (Report No. 19 of the Industry Auditing Committeeof the Japanese Institute of Certified Public Accountants).
The Mizuho Leasing Group provides allowanceagainst 100% of the portion of credit in “doubtful operating receivables and receivables, etc., equivalent to
the foregoing” and directly reduces the entire amountas the amount deemed uncollectible.

2. Interest Rate Fluctuation Risk
Fund procurement for the Mizuho Leasing Group ’s
key businesses depends on borrowings from externalfinancial institutions and issuing of bonds.
Since the conditions for interest income (which isbased on the lease period and whether the rate is
fixed or floating) and interest paid differ, fluctuations ininterest rates give rise to fluctuations in the difference
between interest received and interest paid, which may
affect interest revenue.

49

To mitigate the risk of such interest rate fluctuations,
we carry out hedging using derivative transactions.
Specifically, we manage the matching ratio (setting
the ratio of the portion of assets not subjected to interest rate fluctuation risk by allocating liabilities andderivatives with fixed-rate interest and floating-rate interest to assets with fixed-rate and floating-rate yields)
through the use of asset liability management (ALM)
techniques.

3. Risk of Changes to Regulatory Systems
The Mizuho Leasing Group provides comprehensive
financial services, consisting mainly of lease transactions, in accordance with current laws and regulations,tax systems and accounting standards.
Significant changes to such regulatory systems andstandards may affect the business performance of theMizuho Leasing Group.
In order to address such changes, information onrevisions and repeals of regulatory systems and standards are gathered and shared with top management.
Furthermore, we have established an internal management structure that enables flexible response tominimize the impact of such changes on the Mizuho
Leasing Group.

4. Risks of Errors and Other Cases that
Occur in Business Activities
In addition to the above, inappropriate processing ofclerical work, failure or malfunction of IT systems, andlegal matters such as lawsuits can lead to loss of revenue opportunities or incur compensatory damages,
which may result in affecting the business performanceof the Mizuho Leasing Group.
Therefore, we have established a risk management
structure to ensure a flexible and group-wide response
to such cases, and take measures to keep the impact
on the Mizuho Leasing Group to a minimum.

5. Risk Related to the Impacts of COVID-19

performance caused by the economic downturn and arise in fund procurement costs may affect the businessperformance of the Mizuho Leasing Group.
While it is difficult to precisely estimate the likelihood,severity, and timing of risks and their impact on the
Mizuho Leasing Group’s business results and financial
position, we employ statistical techniques to calculate
the maximum loss that would be caused by deteriorated credit status resulting from economic downturn andby the impact fluctuations in interest rates would haveon the Mizuho Leasing Group, and conduct monitoring
through our risk management structure.

Risk Management Structure
In order to accurately identify, analyze and control therisks involved in the business activities of the Mizuho
Leasing Group and mitigate their impact, we haveestablished a CRO (Chief Risk Management Officer)
who oversees and facilitates risk management from agroup-wide perspective, defined the internal units responsible for managing specific risks, and built a structure to enable fast and flexible response to risks.
Furthermore, every quarter the Risk Management
Committee holds meetings to verify the state of implementation of risk-mitigation measures, and the level ofpenetration and effectiveness of said measures, andreports the results to the Board of Directors.
The units responsible for managing specific risks
identify business risks, implement measures to bringthem under control in a timely manner, and verify theireffectiveness.
Board of Directors
CEO (Executive Management Committee)
CRO
Risk Management Unit

Oversees risk cases

Department responsible for risk management in each unit

Considers andfacilitates policies in
response to eachcase

Admin, IT, legal, compliance, etc.

Risk managers in each unit

The grim economic state in fiscal 2 0 2 0 caused by
the spread of COVID-19 continues, and although we
anticipate a gradual recovery, the impact is expected
to continue throughout the year. Depending on how
the pandemic unfolds, factors such as an increase incredit costs due to a decline in customers’ business50

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements

Consolidated Balance Sheet

Consolidated Balance Sheet

Mizuho Leasing Company, Limited and Consolidated Subsidiaries
As of March 31, 2020

Mizuho Leasing Company, Limited and Consolidated Subsidiaries
As of March 31, 2020
Thousands of
U.S. dollars (Note 1)

Millions of yen

2020

2019

2020

2020

ASSETS

Lease Receivables and Investments in Lease (Notes 6, 9, 17 and 18)

2019

2020

LIABILITIES and EQUITYCurrent Assets:
Cash and Cash Equivalents (Note 18)

Thousands of
U.S. dollars (Note 1)

Millions of yen¥

22,299¥25,4381,082,088

930,318$

204,898
9,942,922

Receivables (Notes 6, 9 and 18):

Current Liabilities:
Short-term Borrowings (Notes 9, 10, 18 and 22)
Current Portion of Long-term Debt (Notes 9, 10, 18 and 22)¥ 1,031,075
185,358¥

994,386$ 9,474,183

197,959

1,703,196

886

1,015

8,143

Lease Payable (Notes 17 and 18)

8,772

8,010

80,606

6,560

3,336

60,287

Accounts Payable - trade (Note 18)

49,31856,040453,169

Installment Sales

141,812

147,979

1,303,068

Accrued Expenses (Note 22)

3,455

3,561

31,751

Loans

271,323

235,279

2,493,092

Factoring

129,676

233,106

1,191,554

Income Taxes Payable

4,098

4,654

37,663—

750—

Deferred Profit on Installment Sales (Note 6)

550,260

621,467

5,056,144

Operational Investment Securities (Notes 5, 6, 9, 18 and 22)

221,866

239,8142,038,653

Prepaid Expenses and Other (Note 22)

72,51051,121

666,273

Allowance for Doubtful Receivables (Note4(2))(1,752)(1,555)(16,101)

1,947,272

1,866,604

17,892,789

Notes and Accounts
Lease

Other
Total Receivables

Total Current Assets

Advances for Purchases of Leased Assets
Other Operating Assets
Own-used Assets (Note 9)
Total Property and Equipment

2,091

19,27356—

514

Accruals for Debt Guarantees

15

31

138

29,87527,442

274,516

1,314,123

1,294,178

12,075,009

Long-term Debt (Notes 9, 10, 18 and 22)784,202642,411

7,205,753

Deposits Received

31,29633,217

287,571

Liability for Employees’ Retirement Benefits (Note 11)

2,655

2,461

24,399

211

144

1,939

20,147

7,299

185,127

838,512685,534

7,704,789

26,08826,088

239,714

Other
Total Current Liabilities
Long-term Liabilities:

Property and Equipment:
Leased Assets (Notes 6, 7, 9 and 17)

2,097

Reserve for Management Board Benefit Trust - current

245,533

229,8172,256,121

656

6,042

6,035

—

6,311

—

3,455

3,360

31,753249,646

245,5312,293,909

Reserve for Management Board Benefit Trust (Note 2(aa))
OtherTotal Long-term Liabilities

Investments and Other Assets:
Investment Securities (Notes 5, 9 and 18)

20,776

18,215

190,910Investments in Unconsolidated Subsidiaries and Associated Companies

98,355

13,770903,749

Long-term Receivables (Note 18)

5,448

3,432

50,065

Goodwill (Note 8)

63

528

588

Intangible Leased Assets (Note 6)

101

82

936

2,609

2,338

23,979—11—

24,629

11,573

226,312

Capital Surplus

23,941

23,941

219,990

(487)

(215)

(4,480)Retained Earnings

131,579

118,219

1,209,035(1,745)(400)(16,040)

Unrealized Gain on Available-for-sale Securities

7,430

6,755

68,280

Deferred Loss on Derivatives under Hedge Accounting(1,060)(502)(9,744)Foreign Currency Translation Adjustments(1,005)(577)(9,237)

(41)

109

(384)

185,186

173,633

1,701,614

Deferred Tax Assets (Note 12)
Asset for Employees’ Retirement Benefits (Note 11)
Other (Note4(1))
Allowance for Doubtful Receivables (Note4(2))
Total Investments and Other Assets
Total Assets
See accompanying Notes to Consolidated Financial Statements.

151,497

49,736

1,392,059¥ 2,348,416¥ 2,161,872$ 21,578,757

Commitments and Contingent Liabilities (Note 13)
Equity: (Notes 2(aa), 14, 21 and 23)
Common Stock
Authorized, 140,000,000 Shares;
Issued, 49,004,000 Shares as of March 31, 2020 and 2019

Treasury Stock - at cost
640,003 shares as of March 31, 2020 and 147,127 shares as ofMarch 31, 2019
Accumulated Other Comprehensive Income:Defined Retirement Benefit Plans
Total
Non-controlling Interests
Total Equity
Total Liabilities and Equity

10,594

8,526

97,345

195,780

182,159

1,798,959¥ 2,348,416¥ 2,161,872$ 21,578,757

See accompanying Notes to Consolidated Financial Statements.

51

52

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

Mizuho Leasing Company, Limited and Consolidated Subsidiaries
For the year ended March 31, 2020

Mizuho Leasing Company, Limited and Consolidated Subsidiaries
For the year ended March 31, 2020
Thousands of
U.S. dollars (Note 1)

Millions of yen

2020

2019

2020

¥ 539,241¥ 384,893$ 4,954,901

Cost and Expenses

488,722

340,765

4,490,699

Gross Profit

50,51944,128464,202

Revenues

Selling, General and Administrative Expenses (Note 15)

24,243

21,214

222,766

Operating Income

26,27522,913

241,436

Other Income (Expenses):
Interest Income (Note 22)
Dividend Income
Equity in Earnings of Associated Companies
Profit from Investments (Note 22)
Interest Expenses
Bond Issuance Costs
Stock Issuance Costs
Gain on Sales of Investment Securities
Gain on Step Acquisition
Loss on Devaluation of Investment Securities
Loss on Impairment of Long-lived Assets (Notes 8 and 16)
Other — net (Note 3)

47
463
816
17
(700)
(268)
—
481
—
(336)
(322)
63

5
515
332
1,512
(526)
(345)
(143)
908
42
(53)
(8)
(38)

434
4,259
7,507
162
(6,441)(2,469)—4,426—(3,088)(2,959)586

Income before Income Taxes

26,53825,114

243,853

Income Taxes: (Note 12)
Current
Deferred

8,506
(55)

7,581
327

78,164
(514)

8,450

7,909

77,65018,087574¥ 17,512

17,205611¥ 16,594

166,203
5,283
160,920Total
Net Income
Net Income attributable to Non-controlling Interests
Net Income attributable to Owners of the Parent

Yen

Amounts per Share of Common Stock (Notes 2(x) and 23)
Net Income attributable to Owners of the Parent per Share
Cash Dividends applicable to the fiscal year$

Thousands of
U.S. dollars (Note 1)

Millions of yen

2020

2019

¥ 18,087¥ 17,205

Unrealized Gain (Loss) on Available-for-sale Securities

686(2,295)

6,310

Deferred Loss on Derivatives under Hedge Accounting

(559)

(647)

(5,142)Foreign Currency Translation Adjustments(599)(1,223)(5,508)

Defined Retirement Benefit Plans

(154)

64

(1,416)

Share of Other Comprehensive Income (Loss) in AssociatedCompanies

112

(40)

1,037

Net Income2020$ 166,203

Other Comprehensive Loss: (Note 20)

Total Other Comprehensive Loss
Comprehensive Income(513)(4,142)(4,719)¥ 17,574¥ 13,062$ 161,484¥ 17,051¥ 12,519$ 156,679

522

543

4,805

Total Comprehensive Income attributable to:
Owners of the Parent
Non-controlling Interests
See accompanying Notes to Consolidated Financial Statements.

U.S. dollars (Note 1)

2020

2019

¥ 360.49¥ 82.00¥ 388.64¥ 78.00

2020

$
$

3.31
0.75

See accompanying Notes to Consolidated Financial Statements.

53

54

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Mizuho Leasing Company, Limited and Consolidated Subsidiaries
For the year ended March 31, 2020
Thousands

Mizuho Leasing Company, Limited and Consolidated Subsidiaries
For the year ended March 31, 2020

Balance as of April 1, 2018
Net Income attributable to
Owners of the Parent
Cash Dividends Paid
Purchase of Treasury Stock
Disposal of Treasury Stock
Issuance of New Stock
Change in Scope of Consolidation

Number ofshares ofCommonStock
Outstanding

CommonStockCapitalSurplus42,648¥ 17,874¥ 16,070 ¥ 105,148

Balance as of March 31, 2019¥(1)

¥ 9,047

¥

141

¥

621

16,594(3,241)(399)(3,241)(399)

16,427

16,427

(282)

(282)

(59)

(59)

(59)

(283)

(283)

(283)

(3,241)
(399)
8,213

8,213
(282)

48,856¥ 26,088¥ 23,941 ¥ 118,219¥ (400)(2,292)¥ 6,755(644)¥ (502)(1,198)¥ (577)

61(4,074)
2,845(1,229)¥ 109 ¥ 173,633 ¥ 8,526 ¥ 182,159

17,512(3,920)(1,483)
137

(543)
50
(232)

48,363¥ 26,088

Noncontrolling Total Equity
Interests

16,594

16,594

6,208

Total

¥ 5,681 ¥ 154,632¥ 23,941 ¥ 131,579¥ (1,745)

CommonStockCapitalSurplusRetained
Earnings

TreasuryStock$ 239,714$ 219,990 $ 1,086,274$ (3,679)

Net Income attributable to
Owners of the Parent
Cash Dividends Paid
Purchase of Treasury Stock (Note 21)
Disposal of Treasury Stock
Issuance of New Stock
Change in Scope of Consolidation
Change in Scope of Applicationof Equity Method
Change in an Interest in Subsidiary
by Sales Transaction
Change in an Interest
in Subsidiary due toTransactions with Noncontrolling Interests
Net change during year
Balance as of March 31, 2020

TreasuryStock675¥ 7,430(557)¥ (1,060)(428)¥ (1,005)$ 62,070$ (4,620)$ (5,302)

17,512

17,512(3,920)(1,483)137(3,920)(1,483)
137

(232)

(232)

(151)
(461)
2,067
1,605
¥ (41) ¥ 185,186 ¥ 10,594 ¥ 195,780

Thousands of U.S. dollars (Note 1)
Accumulated Other Comprehensive Income
Unrealized Deferred
ForeignDefinedLoss onGain onCurrency Retirement
Available- Derivatives
Translation
Benefitfor-sale under Hedge
Adjustments
Plans
Securities Accounting

Total

Noncontrolling Total Equity
Interests$ 1,007 $ 1,595,454$ 78,348 $ 1,673,802

160,920

160,920(36,022)(13,628)1,267(36,022)(13,628)
1,267(2,137)(2,137)

160,920(36,022)(13,628)
1,267(2,137)

Thousands of
U.S. dollars (Note 1)

Millions of yen¥ 48 ¥ 148,951

Change in Scope of Applicationof Equity Method
Change in an Interest in Subsidiary
by Sales Transaction
Change in an Interest
in Subsidiary due toTransactions with Noncontrolling Interests
Net change during year
Balance as of March 31, 2019
Net Income attributable to
Owners of the Parent
Cash Dividends Paid
Purchase of Treasury Stock (Note 21)
Disposal of Treasury Stock
Issuance of New Stock
Change in Scope of Consolidation
Change in Scope of Applicationof Equity Method
Change in an Interest in Subsidiary
by Sales Transaction
Change in an Interest
in Subsidiary due toTransactions with Noncontrolling Interests
Net change during year
Balance as of March 31, 2020

Retained
Earnings

Millions of yen
Accumulated Other Comprehensive Income
Unrealized
Deferred Loss Foreign
DefinedGain onon Derivatives Currency Retirement
Availableunder Hedge Translation
Benefitfor-sale
Accounting Adjustments
Plans
Securities

2020

Cash Flows from Operating Activities:
Income before Income Taxes
Adjustments for:
Income Taxes Paid
Depreciation and Disposal of Fixed Assets
Equity in Earnings of Associated Companies
Profit from Investments
Loss on Impairment of Long-lived Assets
Increase (Decrease) in Allowance for Doubtful Receivables(Decrease) Increase in Accruals for Debt Guarantees
Gain on Sales of Marketable and Investment Securities
Loss on Devaluation of Investment Securities
Change in assets and liabilities:
Increase in Lease Receivables and Investments in Lease
Decrease (Increase) in Receivables
Decrease (Increase) in Operational Investment Securities(Increase) Decrease in Accounts Payable — trade
Gain on Step Acquisition
Purchases of Leased Assets
Proceeds from Sales of Leased Assets(Decrease) Increase in Interest Payable
Other — net
Total Adjustments
Net Cash Used in Operating Activities¥

Cash Flows from Investing Activities:
Purchases of Own-used Assets
Purchases of Marketable and Investment Securities
Proceeds from Sales and Redemption of Marketable andInvestment Securities
Purchase of Subsidiaries causing Changes in Scope ofConsolidation
Other — net
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Net Increase in Short-term Borrowings
Proceeds from Long-term Debt
Repayments of Long-term Debt
Proceeds from Common Stock IssuanceCash Dividends Paid
Other — net
Net Cash Provided by Financing Activities
Foreign Currency Translation Adjustments on Cash and Cash
Equivalents
Net Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Decrease in Cash and Cash Equivalents resulting from Exclusionfrom Scope of Consolidation
Cash and Cash Equivalents at End of Year

¥

2019

26,538¥

2020

25,114$

243,853(9,059)15,108
(816)
(17)
322
468
(16)
(481)
336

(4,938)13,227(332)(1,512)8(1,022)
4(908)
53(83,242)
138,824(7,507)
(162)
2,959
4,304
(152)
(4,426)
3,088(151,648)
70,804
15,524(6,693)—(181,931)
158,161(58)(5,670)(95,668)(69,130)(107,665)(105,120)(43,330)1,739(42)(120,504)
38,874
193
10,461(320,816)(295,701)(1,393,440)
650,601
142,650(61,508)—(1,671,704)
1,453,287(535)(52,105)(879,068)(635,215)(3,032)(84,559)(3,368)(9,812)(27,867)(776,983)

1,527

6,434

14,037

—

(711)

—

(12,272)(98,336)(487)(7,945)(112,763)(903,576)

29,999356,368(217,958)—(3,920)49
164,538

193,162
304,488(211,098)
16,427(3,241)(192)
299,546

275,658
3,274,541(2,002,744)—(36,022)455
1,511,888

65

(68)

601

(2,862)25,438(4,168)29,607(26,302)
233,745(276)—(2,545)22,299¥25,438$204,898

See accompanying Notes to Consolidated Financial Statements.

$ 239,714$ 219,990 $ 1,209,035$ (16,040)

6,210(5,124)(3,935)(1,391)$ 68,280$ (9,744)$ (9,237)$ (384) $ 1,701,614(4,240)18,997

14,757$ 97,345 $ 1,798,959

See accompanying Notes to Consolidated Financial Statements.

55

56

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of Mizuho Leasing Company, Limited (“the Company”) and its
consolidated subsidiaries (together with the Company, “the Group”) have been prepared in accordance with the provisions
set forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations and in accordancewith accounting principles generally accepted in Japan(“JGAAP”), which are different in certain respects as to application anddisclosure requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to thecompany’s financial statements issued domestically in order to present them in a form which is more familiar to readers outside
Japan. In addition, certain reclassifications have been made in the 2019 consolidated financial statements to conform to theclassifications used in 2020.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which the Company isincorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for theconvenience of readers outside Japan and have been made at the rate of ¥108.83 to US$1.00, the approximate rate ofexchange at March 31, 2020. The translations should not be construed as representations that the Japanese yen amounts
could be converted into U.S. dollars at that or any other rate. The amounts indicated in millions of yen are rounded down by
truncating the figures below one million. As a result, totals may not add up exactly.

2. Summary of Significant Accounting Policies(a) Consolidation
The consolidated financial statements include the accounts of the Group, which include Mizuho-TOSHIBA Leasing Company,
Limited, Dai-ichi Leasing Co., Ltd., Mizuho Auto Lease Company, Limited, ML Estate Company, Limited, Mizuho Leasing (China)Ltd., PT. VERENA MULTI FINANCE Tbk, IBJ Air Leasing Limited and IBJ Air Leasing (US) Corp.
The number of consolidated subsidiaries as of March 31, 2020 and 2019 was 31 and 32, respectively. The consolidated
financial statements for the year ended March 31, 2020 newly include the accounts of TDP 1 Limited and MM WHEEL LLC as
they were newly incorporated. PT. IBJ VERENA FINANCE was excluded from the scope of the consolidation as it was mergedwith other consolidated subsidiary. The account of KL INSURANCE&CO.,LTD. was excluded as it became immaterial. The
account of IBJ Air Funding Limited was also excluded as it was liquidated during the year.
The number of associated companies accounted for under the equity method as of March 31, 2020 and 2019 was 6 and3, respectively. Major investments in associated companies consist of MG Leasing Corporation, PLM Fleet, LLC, Krung Thai
IBJ Leasing Co., Ltd., PNB-Mizuho Leasing and Finance Corporation and Aircastle Limited. MM Air Limited was newly includedin the associated companies accounted for under the equity method as it was newly incorporated. Aircastle Limited and PLM
Fleet, LLC were also included in the associated companies as the Company purchased these shares.
Kaikias Leasing Co., Ltd. and 103 other subsidiaries are neither consolidated nor accounted for under the equity method asthey are acting as operators under Tokumei Kumiai agreements and the leased assets and liabilities do not substantially belong
to the subsidiaries. Aries Line Shipping S.A. and 32 other subsidiaries are also not consolidated or accounted for under theequity method as they are immaterial. IBJ ROYAL LINE S.A. and 1 associated company are not accounted for under the equity
method as they are immaterial.
Upon consolidation, significant intercompany accounts and transactions have been eliminated. In addition, all significant
unrealized profit included in assets resulting from transactions within the Group has also been eliminated.
The accounting standard for consolidated financial statements requires a company to consolidate all subsidiaries where
the company controls the operations, irrespective of whether or not the company owns a majority of their shares. Control isconsidered to exist where the company has (a) the power to appoint or remove the majority of the Board of Directors or anequivalent governing body, and/or (b) the power to cast the majority of the votes at a meeting of the Board of Directors or anequivalent governing body.
Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets of the acquired subsidiary at
the date of acquisition. The differences between the costs and underlying net equity of investments in consolidated subsidiaries
and associated companies at acquisition are recorded as Goodwill and are amortized on a straight-line basis over the estimatedbenefit period.
Implementation Guidance No. 15 “Implementation Guidance on Disclosures about Certain Special Purpose Entities” issued
by the Accounting Standards Board of Japan (the “ASBJ”) permits companies to avoid consolidation of certain Special Purpose
Entities (“SPEs”) that were established and are being operated for the purpose of securitization of receivables.
The Company securitizes its lease receivables to diversify its funding sources and ensure stable funding. In the securitization
structures, the Company uses SPEs that include Tokurei Yugen Kaisha and Kabushiki Kaisha. The Company transfers thelease receivables to the SPEs in the securitization structures. The SPEs procure funds, such as borrowings, backed by thetransferred assets and these funds flow back to the Company as sales proceeds of the transferred assets. The Company also

57

provides collection services to the SPEs. A portion of the receivables is not transferred and is held by the Company. These
receivables held by the Company are properly evaluated at the end of the fiscal year, and these are appropriately reflected in the
consolidated financial statements.
As a result of securitizations, the Company had 21 and 20 SPEs that were not consolidated under Guidance No. 15 as ofMarch 31, 2020 and 2019. Total assets (simply compiled amount) of such SPEs as of March 31, 2020 and 2019 were ¥189,934
million ($1,745,244 thousand) and ¥124,429 million, respectively. Total liabilities (simply compiled amount) of such SPEs as ofMarch 31, 2020 and 2019 were ¥190,322 million ($1,748,804 thousand) and ¥124,935 million, respectively. The Company
owns no voting rights in most of the SPEs while some employees of the Company serve as directors.
The total amount of Lease Receivables and Investments in Lease transferred from the Company to such SPEs in 2020
and 2019 was ¥27,188 million ($249,825 thousand) and ¥11,151 million, respectively, with no gain/loss on the transfer of suchreceivables. The Company holds subordinated interests of such transferred receivables of ¥5,234 million ($48,097 thousand)and ¥212 million in 2020 and 2019, respectively. The Company recognized profit dividends of ¥303 million ($2,793 thousand)and ¥173 million, respectively, for the years ended March 31, 2020 and 2019, and servicing fees received of ¥1 million ($14thousand) with respect to the transactions with such SPEs for both of the years ended March 31, 2020 and 2019. Theseamounts do not include transactions with SPEs that do not meet the criteria for off-balance-sheet transactions, because theCompany treats these asset transfer transactions to the SPEs as financial transactions.

(b) Business Combinations
Business combinations are accounted for using the purchase method. Acquisition-related costs, such as advisory fees orprofessional fees, are accounted for as expenses in the periods in which the costs are incurred. If the initial accounting for abusiness combination is incomplete by the end of the reporting period in which the business combination occurs, an acquirer
shall report in its financial statements provisional amounts for the items for which the accounting is incomplete. During themeasurement period, which shall not exceed one year from the acquisition, the acquirer shall retrospectively adjust theprovisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstancesthat existed as of the acquisition date and that would have affected the measurement of the amounts recognized as of that
date. Such adjustments shall be recognized as if the accounting for the business combination had been completed at theacquisition date. The acquirer recognizes any bargain purchase gain in profit or loss immediately on the acquisition date after
reassessing and confirming that all of the assets acquired and all of the liabilities assumed have been identified after a review ofthe procedures used in the purchase price allocation. A parent’s ownership interest in a subsidiary might change if the parent
purchases or sells ownership interests in its subsidiary. The carrying amount of noncontrolling interests is adjusted to reflect thechange in the parent’s ownership interest in its subsidiary while the parent retains its controlling interest in its subsidiary. Any
difference between the fair value of the consideration received or paid and the amount by which the noncontrolling interest is
adjusted is accounted for as capital surplus as long as the parent retains control over its subsidiary.

(c) Cash Equivalents
Cash Equivalents are short-term investments that are readily convertible into cash and exposed to insignificant risk of changes
in value. Cash Equivalents include time deposits, certificates of deposit, commercial paper and bond funds, all of which matureor become due within three months of the date of acquisition.

(d) Lease Accounting
In March 2007, the ASBJ issued ASBJ Statement No. 13, “Accounting Standard for Lease Transactions,” which revised theprevious accounting standard for lease transactions. As a lessor, all finance leases that are deemed to transfer ownership ofthe leased property to the lessee are recognized as Lease Receivables, and all finance leases that are deemed not to transfer
ownership of the leased property to the lessee are recognized as Investments in Lease. All other leases are accounted for as
operating leases.
As a lessee, all finance leases that are deemed to transfer ownership of the leased property to the lessee are capitalized.

(e) Installment Sales
For installment sales contracts, Installment Sales Receivables are recognized for the principal equivalent portion of the total
contract amounts when properties are delivered. Interest equivalent amounts are recognized as Installment Sales when therelated installment receivables become due.
For sales-type contracts, Installment Sales and the corresponding Installment Cost of Sales are fully recognized when theproperty is sold. Interest equivalent amounts applicable to the portion to be collected are deferred and recorded as Deferred
Profit on Installment Sales.

58Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements(f) Operational Investment Securities and Investment Securities(o) Retirement and Pension Plans

Operational Investment Securities and Investment Securities are classified as Available-for-sale Securities based upon
management’s intent. Available-for-sale Securities, which have a readily determinable fair value, are stated at fair value withchanges in net unrealized gain or loss, net of applicable income taxes, included directly in Equity (cost of securities sold is
calculated by the moving average method). Available-for-sale Securities, which do not have readily determinable fair value, arestated at cost.
Operational Investment Securities is held for the purpose of generating operational financial income. The income fromOperational Investment Securities is stated in Revenues in the Consolidated Statement of Income.

(g) Loans Receivables and Factoring Receivables

The Company and certain consolidated subsidiaries have a corporate pension plan and/or lump-sum severance payment plan
as a defined benefit type of a retirement benefits plan as well as a corporate pension plan as a defined contribution type of aretirement benefits plan. There are some cases in which extra retirement benefits are paid to employees when they retire.
The Company and certain consolidated subsidiaries account for the liability for retirement benefits based on the projected
benefit obligations and plan assets at the balance sheet date. The projected benefit obligations are attributed to periods ona benefit formula basis. Actuarial gains and losses that are yet to be recognized in profit or loss are recognized within equity(accumulated other comprehensive income), after adjusting for tax effects and are recognized in profit or loss over 10 to 15
years no longer than the expected average remaining service period of the employees. The discount rate is determined using asingle weighted-average discount rate reflecting the estimated timing and amount of benefit payment.

Loans to customers and receivables arising from factoring are included in Loans Receivables and Factoring Receivables,
respectively. Income from these receivables is recognized as Revenues.

(p) Reserve for Management Board Benefit Trust(h) Property and Equipment

Reserve for Management Board Benefit Trust is provided for the payment of the Company’s shares, etc. to executive officers
based on the estimated amount of stock benefit obligations at the end of the fiscal year.

1. Leased Assets
Leased Property and Equipment are stated at cost and depreciated over the lease term by the straight-line method to theresidual value, which is an amount to be realized at the time when the lease contract is terminated.
2. Own-used Assets
Own-used Assets of the Company and its domestic consolidated subsidiaries are stated at cost and depreciated over thefollowing estimated useful lives mainly by the declining-balance method:
Buildings
3-65 years
Fixtures and furniture
2-20 years(i) Long-lived Assets
The Group reviews its long-lived assets for impairment whenever events or changes in circumstance indicate the carrying
amount of an asset or asset group may not be recoverable. An impairment loss is recognized if the carrying amount of an asset
or asset group exceeds the sum of the undiscounted future cash flows expected to result from the continued use and eventual
disposition of the asset or asset group. The impairment loss would be measured as the amount by which the carrying amountof the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from the continued use andeventual disposition of the asset or the net selling price at disposition.

(q) Asset Retirement Obligations
An asset retirement obligation is recorded for a legal obligation imposed either by law or contract that results from theacquisition, construction, development and the normal operation of a tangible fixed asset and is associated with the retirementof such tangible fixed asset. The asset retirement obligation is recognized as the sum of the discounted cash flows required
for the future asset retirement and is recorded in the period in which the obligation is incurred if a reasonable estimate can be
made. If a reasonable estimate of the asset retirement obligation cannot be made in the period the asset retirement obligation
is incurred, the liability should be recognized when a reasonable estimate of the asset retirement obligation can be made. Upon
initial recognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized by increasing the carrying
amount of the related fixed asset by the amount of the liability. The asset retirement cost is subsequently allocated to expense
through depreciation over the remaining useful life of the asset. Over time, the liability is accreted to its present value eachperiod. Any subsequent revisions to the timing or the amount of the original estimate of undiscounted cash flows are reflected
as an adjustment to the carrying amount of the liability and the capitalized amount of the related asset retirement cost.

(r) Accruals for Debt Guarantees
The Company and certain domestic consolidated subsidiaries provide Accruals for Debt Guarantees for losses that might occur
in relation to guarantees of the indebtedness of others, taking the debtors’ financial condition into consideration.

(j) Intangible Assets
1. Leased Assets
Intangible Leased Assets are accounted for in the same way as Leased Property and Equipment.
2. Own-used Software
Own-used Software is amortized over the internally estimated useful lives (5 years) by the straight-line method.
3. Other Intangible Assets
Other Intangible Assets are stated at cost. Amortization of intangible assets by the Company and its domestic consolidated
subsidiaries is mainly computed by the straight-line method over the estimated useful lives.

(s) Income Taxes
The Company and its domestic consolidated subsidiaries are subject to corporate tax, inhabitants’ taxes and enterprise taxes.
Deferred income taxes are recorded by the asset and liability method based on the differences between the tax bases of assets
and liabilities and those as reported in the consolidated financial statements, using enacted tax rates that will be in effect when
the differences are expected to reverse.

(t) Recognition of Revenues and Cost of Sales
Revenues and cost of sales relating to finance lease transactions are recognized when lease payments are received.

(k) Bond Issue Costs
Costs for bond issuance are expensed upon payment.

(l) Allowance for Doubtful Receivables
Allowance for Doubtful Receivables is provided based on the estimated historical default rate for general trade receivables, andis based on individual reviews for receivables from doubtful and legally bankrupt creditors.
The amounts of Long-term Receivables considered uncollectible, which include receivables from legally bankrupt creditors,
were directly written off. The amounts directly written off were ¥7,199 million ($66,150 thousand) and ¥8,406 million at March
31, 2020 and 2019, respectively.

(m) Reserve for Bonus Payments
The Company and certain domestic consolidated subsidiaries provide a reserve for future bonus payments to employees. This
reserve is maintained at the estimated amount payable after the year-end, based on the services provided during the fiscal year.

(u) Translation of Foreign Currency Assets and Liabilities
1. Translation of foreign currency transactions
All monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the exchange
rates at the balance sheet date. The foreign exchange gains and losses from translation are recognized in the Consolidated
Statement of Income as income or expenses.
Revenue and expense items arising from transactions denominated in foreign currencies are generally translated into
Japanese yen at the rates effective at the respective transaction dates.
2. Translation of foreign currency financial statements
The assets, liabilities, revenues and expenses of overseas consolidated subsidiaries are translated into Japanese yen at theexchange rates at the balance sheet dates of each subsidiary. Differences arising from such translation are shown in either
Non-controlling Interests or Foreign Currency Translation Adjustments under Accumulated Other Comprehensive Income ina separate component of Equity.

(n) Reserve for Bonus Payments to Directors
The Company and certain domestic consolidated subsidiaries provide a reserve for future bonus payments to executive officers.
This reserve is maintained at the estimated amount payable for the fiscal year.
5960Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements(v) Derivatives and Hedging Activities
The Group uses derivative financial instruments to manage its exposures to fluctuations in foreign exchange and interest rates.
Interest rate swaps are utilized to manage interest rate risks associated with certain assets and liabilities, including Loans
Receivables and Long-term Debt. Short-term Borrowings, Long-term Debt and Foreign currency forward contracts are utilized
to reduce risks from fluctuations of foreign currency exchange rates associated with certain assets including Other Receivable,
Operational Investment Securities and Investment Securities as well as committed transactions denominated in foreign
currencies. Interest rate and currency swaps are utilized to manage interest rate risks as well as foreign currency risks. The
Group does not enter into derivatives for trading or speculative purposes.
Derivative financial instruments and foreign currency transactions are classified and accounted for as follows: a) all
derivatives are recognized as either assets or liabilities and measured at fair value, and gains or losses on derivative transactions
are recognized in the Consolidated Statement of Income and b) for derivatives used for hedging purposes, if such derivatives
qualify for hedge accounting because of high correlation and effectiveness between the hedging instruments and the hedged
items, gains or losses on derivatives are deferred until maturity of the hedged transactions.
Monetary receivables and payables covered by foreign currency forward contracts are translated at the contract rates. Any
differences between the foreign currency forward contract rates and historical rates resulting from the translation of receivables
and payables are recognized as income or expense over the lives of the related contracts.
Interest rate swaps that qualify for hedge accounting and meet specific matching criteria are not remeasured at market
value, but the differential paid or received under the swap agreements is recognized and included in interest expense.

(w) Consumption Taxes
The Company and its domestic consolidated subsidiaries are subject to Japanese consumption taxes. Japanese consumption
taxes are excluded from the transaction amounts.

(x) Per Share Information
Basic net income per share is computed by dividing net income attributable to common shareholders by the weighted-average
number of common shares outstanding for the period, retroactively adjusted for stock splits. Cash dividends per share shown in
the Consolidated Statement of Income are the amounts applicable to the respective fiscal years including dividends to be paid
after the end of the year.

(y) Accounting Changes and Error Corrections
Under ASBJ Statement No. 24, “Accounting Standard for Accounting Changes and Error Corrections,” and ASBJ Guidance
No. 24, “Guidance on Accounting Standard for Accounting Changes and Error Corrections,” accounting treatments are required
as follows: (1) Changes in Accounting Policies - When a new accounting policy is applied following revision of an accounting
standard, the new policy is applied retrospectively unless the revised accounting standard includes specific transitional
provisions in which case the entity shall comply with the specific transitional provisions. (2) Changes in Presentation - Whenthe presentation of financial statements is changed, prior-period financial statements are reclassified in accordance with thenew presentation. (3) Changes in Accounting Estimates - A change in an accounting estimate is accounted for in the periodof the change if the change affects that period only, and is accounted for prospectively if the change affects both the periodof the change and future periods. (4) Corrections of Prior-Period Errors - When an error in prior-period financial statements is
discovered, those statements are restated.

Fair Value Measurement— On July 4, 2019, the ASBJ issued ASBJ Statement No. 30 “Accounting Standard for Fair Value
Measurement”, ASBJ Statement No. 9 (revised 2019) “Accounting Standard for Measurement of Inventories”, ASBJ Statement
No. 10 (revised 2019) “Accounting Standard for Financial Instruments” and ASBJ Guidance No. 31 “Implementation Guidanceon Accounting Standard for Fair Value Measurement”.On March 31, 2020, ASBJ issued ASBJ Guidance No. 19 (revised 2019)“Implementation Guidance on Disclosures about Fair Value of Financial Instruments”.
Those accounting standards were issued from the perspective of efforts toward convergence between the international
accounting standards and JGAAP regarding the guidance on measurement and disclosure about fair value of financial
instruments.
The Group expects to apply those accounting standards for the fiscal year beginning on or after April 1, 2021 and is in theprocess of measuring the effects of applying those accounting standards in future applicable periods.
Disclosure of Accounting Estimates— On March 31, 2020, the ASBJ issued ASBJ Statement No. 31, “Accounting Standard
for Disclosure of Accounting Estimates.”
IASB issued the IAS 1,“Presentation of Financial Statements” in 2003, and the paragraph 125 of this accounting standard
requires a disclosure of key sources of estimation uncertainty. As these information is useful for the users of financial statements
and should be disclosed under JGAAP, ASBJ developed and issued “Accounting Standard for Disclosure of Accounting
Estimates.”
The Group expects to apply the accounting standard from the end of fiscal year ending on March 31, 2021.
Accounting Policy Disclosures, Accounting Changes and Error Corrections— On March 31, 2020, the ASBJ issued ASBJ
Statement No. 24, “Accounting Standard for the revised ASBJ Statement No.24 (revised 2020) Accounting Standard for
Accounting Policy Disclosures, Accounting Changes and Error Corrections.”
ASBJ revised certain accounting standards, and issued “Accounting Standard for Accounting Policy Disclosures,
Accounting Changes and Error Correction” upon recommendation on the enhancement of the information in notes regarding
accounting principles and procedures adopting when the related accounting standards being not definitive. The Group expects
to apply the accounting standard from the end of fiscal year ending on March 31, 2021.

(aa) Management Board Benefit Trust system (the “BBT”)
The Company has introduced a performance-linked stock compensation system (the “Stock Compensation System”) for
directors (excluding a chairperson and outside directors) and executive officers who are not concurrently serving as director(directors and executive officers are collectively referred to as “Directors, etc.”). The Stock Compensation System contributes
to the improvement of medium- and long-term performance and increase in corporate value, and as a result, aims to sharewith shareholders the sense of increasing stock value, by clarifying the link between compensation for Directors, etc., and theCompany’s performance and stock value.
(1) Outline of Stock Compensation System
The Stock Compensation System is a performance-linked stock-based system where the Company’s shares are acquired
through a trust by fund contributed by the Company, and the Company’s shares and/or the money equivalent to the market
value of the Company’s shares (the “the Company Stock, etc.”) are paid to Directors, etc., through trusts in accordance with
the Company’s executive share benefit rules. Directors, etc., receive the Company Stock, etc., at a certain time after the end ofeach medium-term management plan period or after their retirement.

(z) New Accounting Pronouncement
Revenue Recognition— On March 31, 2020, the ASBJ issued ASBJ Statement No.29, “Accounting Standard for Revenue
Recognition,” ASBJ Guidance No.30, “Implementation Guidance on Accounting Standard for Revenue Recognition” and ASBJ
Guidance No. 19 “Implementation Guidance on Disclosures about Fair Value of Financial Instruments”.
In May 2014, the International Accounting Standard Board (“IASB”) and the Financial Accounting Standards Board (“FASB”)
issued “Revenue from Contracts with Customers”, i.e., IFRS 15 from IASB and Topic 606 from FASB. They are comprehensive
accounting standards for revenue recognition as a consequence of the cooperative development project by the two boards.
ASBJ developed a comprehensive accounting standard for revenue recognition and published it in conjunction with the
Implementation Guidance in the light of the circumstances where IFRS 15 will be applied from the fiscal year starting on andafter January 1, 2018, and Topic 606 will be applied from the fiscal year starting on or after December 15, 2017.
The basic policy of the ASBJ in developing the accounting standard for revenue recognition is, first, to take in the basic
principles of IFRS 15 to be consistent with it and keep comparability. If there are practices that are prevailing in Japan andneed to be treated differently, then, the ASBJ develops an alternative accounting treatment to the extent it does not harm thecomparability of the other accounting standard.
The Group expects to apply the accounting standard and guidance for the fiscal year beginning on or after April 1, 2021,
and is in the process of measuring the effects of applying the accounting standard and guidance in future applicable periods.
61(2) Shares of the Company held in trust
Shares of the Company held in trust are recorded as Treasury Stock in Equity at book value in the trust (excluding
accompanying expenses). The carrying amount of such Treasury Stock for the year ended March 31, 2020 was ¥1,743 million($16,025 thousand), while the number of such treasury stock was 639,200 shares.

3. Change in Presentation
Foreign Exchange Loss, which was presented separately in Other Income (Expenses) section for the fiscal year ended March
31, 2019, has been included in “Other—net” for the fiscal year ended March 31, 2020, as the amount has become immaterial.
The amount of Foreign Exchange Loss for the fiscal year ended March 31, 2020 and 2019 was ¥87 million ($808 thousand) and¥109 million, respectively.

62

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements

4. Additional Information(1) File of litigation
On March 31, 2020, Mizuho-TOSHIBA Leasing Company, Limited (hereinafter “MTL”), the Company’s consolidated subsidiary,
filed suit against NS Solutions Corporation(hereinafter “NS Solutions”) in the Tokyo District Court, claiming that MTL has alegitimate right to charge the sales price amounting to ¥ 10,926 million ($ 100,395 thousand) in the sales contract for system
server and its peripheral devices concluded with NS Solutions (hereinafter “the Contract”), though NS Solutions intended
to cancel the Contract in November 2019. The Receivable amounts equivalent to the sales price are included in “Other” ofInvestments and Other Assets in the accompanying consolidated balance sheet.

(2) Proceeds from sales of Available-for-sale Securities for the years ended March 31, 2020 and 2019 were ¥21,140 million($194,255 thousand) and ¥6,499 million, respectively. Gross realized gains on these sales were ¥2,442 million ($22,442
thousand) and ¥1,071 million for the years ended March 31, 2020 and 2019, respectively.
(3) The Group recorded impairment losses on investment securities of ¥336 million ($3,088 thousand) and ¥53 million for theyears ended March 31, 2020 and 2019, respectively.

6. Operating Assets(1) Operating Assets as of March 31, 2020 and 2019 consisted of the following:(2) Incorporating the effects of COVID-19 pandemic when making accounting estimates
The Company made accounting estimates including allowance for doubtful receivable assuming that the severe economic
condition caused by the spread of the novel coronavirus (COVID-19) infection will continue for the time being and the impact willremain by the end of this year followed by the moderate recovery afterword.
The assumption used for the estimate is uncertain. The significant loss may occur if the end of contagion is delayed and theimpact on the economic environment is prolonged.

5. Operational Investment Securities and Investment Securities(1) Available-for-sale Securities whose fair values are readily determinable as of March 31, 2020 and 2019 were as follows:
Available-for-sale Securities
Securities with carrying amounts exceeding acquisition costs

Equity Securities Bonds
National and Local Government Bonds
Corporate Bonds
Other
Total

Carrying
amount¥ 19,866—
115,775
14,789¥ 150,431

Acquisitioncost¥ 10,507—
113,580
14,674¥ 138,761

Unrealized
gain¥ 9,358—
2,195
115¥ 11,669

Carrying
amount¥ 17,893
2,003
130,250
7,958¥ 158,105

Acquisitioncost¥ 11,805
2,000
126,281
7,739¥ 147,826

Unrealized
gain¥ 6,088
3
3,969
218¥ 10,279

2020

Equity Securities Bonds
National and Local Government Bonds
Corporate Bonds
Other
Total

Unrealized
gain$ 85,991—
20,174
1,062$ 107,227

Equity Securities Bonds
Corporate Bonds
Other
Total

(Millions of yen)

2020

Leasing and Installment Sales:
Finance Lease
Operating Lease
Installment Sales (*1)
Leasing and Installment Sales total
Finance
Other
Total

¥

447,660
187,316
57,373692,350
590,088—¥ 1,282,438

2020

63

(Thousands of U.S. dollars)

2019

2020

374,218
120,31454,885549,418
996,700
2,698¥ 1,548,817$ 4,113,388
1,721,188
527,181
6,361,757
5,422,116—$ 11,783,873

¥

2019

Unrealizedloss¥ (373)(168)(395)¥ (937)(Thousands of U.S. dollars)

Equity Securities Bonds
Corporate Bonds
Other
Total

$ 9,942,922
2,257,057
1,283,795
13,483,774
5,723,299—$ 19,207,073(*1) The amount of Installment Sales represents “Installment Sales Receivables” less “Deferred Profit on Installment Sales”.

Carrying
amount
¥ 630
—
9,239
¥ 9,870

Acquisition
cost
¥
996
—
9,422
¥ 10,419

Unrealizedloss¥ (366)—(182)¥ (549)The carrying amounts, changes in such balances and market prices of such properties are as follows:(Millions of yen)
Carrying Amount

April 1, 2019

¥ 168,670

Fair Value

Decrease¥ (8,096)

March 31, 2020

March 31, 2020

¥ 160,574¥ 173,206

March 31, 2019

March 31, 2019

¥ 168,670¥ 179,301(Millions of yen)
Carrying Amount

Carrying
Acquisition
amountcost$ 14,606$ 18,034
87,57989,13087,29890,930$ 189,483$ 198,094

930,318
229,900
145,888
1,306,106
708,950
6,311¥ 2,021,368¥

Certain domestic consolidated subsidiaries own certain rental properties such as commercial facilities with land in Tokyo andother areas. Net rental income for these rental properties for the years ended March 31, 2020 and 2019 was ¥4,447 million($40,871 thousand) and ¥4,676 million, respectively. Rental income and operating expenses are mainly recognized as “Revenues”
and “Cost and Expenses”, respectively.
Gain on sales of rental properties for the years ended March 31, 2020 and 2019 was ¥718 million ($6,599 thousand) and¥165 million, respectively. Proceeds from sales of rental properties and costs are recognized as “Revenues” and “Cost andExpenses”, respectively, otherwise net gain on sales is recognized as “Other Income (Expense)”.

(Millions of yen)2020

Acquisitioncost¥ 1,962
9,700
9,895¥ 21,558

2020

7. Investment Property

Securities with carrying amounts not exceeding acquisition costs

Carrying
amount¥ 1,589
9,531
9,500¥ 20,621¥ 1,082,088
245,635
139,715
1,467,439
622,866—¥ 2,090,305

2019(Thousands of U.S. dollars)

Carrying
Acquisition
amountcost$ 182,542 $
96,551——
1,063,820
1,043,646
135,896
134,834$ 1,382,258 $ 1,275,031

Leasing and Installment Sales:
Finance Lease
Operating Lease
Installment Sales (*1)
Leasing and Installment Sales total
Finance
Other
Total Operating Assets(Thousands of U.S. dollars)

2019(2) The total amounts of new contracts for the years ended March 31, 2020 and 2019 were as follows:(Millions of yen)

2020

(Millions of yen)

2020

Unrealizedloss$ (3,428)(1,551)(3,632)$ (8,611)

April 1, 2018

¥ 112,432

Increase¥ 56,237

Fair Value(Thousands of U.S. dollars)
Carrying Amount

April 1, 2019

$ 1,549,852

Decrease$ (74,393)

Fair Value

March 31, 2020

$ 1,475,459

March 31, 2020

$ 1,591,528(*1) Carrying amount recognized in the Consolidated Balance Sheets is net of accumulated depreciation.
(*2) “Decrease” for the year ended March 31, 2020 primarily represents the sales of certain properties for ¥158,189 million ($1,453,549thousand) and “Increase” forthe year ended March 31, 2019 primarily represents the acquisition of certain properties for ¥95,602 million.
(*3) Fair values of properties are mainly determined by appraisal reports issued by real estate appraisers.

64

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements

8. Long-lived Assets(2) “Long-term Debt” as of March 31, 2020 and 2019 was as follows:

The Group reviewed its long-lived assets for impairment as of March 31, 2020 and 2019. As a result, for the year ended March
31, 2020, the Group recognized an impairment loss aggregating ¥322 million ($2,959 thousand) as Other Expenses. Impairment
loss was recognized for goodwill of PT. VERENA MULTI FINANCE Tbk, the Company’s overseas consolidated subsidiary, due
to the unlikelihood of an estimated profitability in the business plan at the time of acquisition to be generated. The carrying
amounts of such assets were written down to the recoverable amount for the year ended March 31, 2020. The recoverable
amounts are estimated based on the future business plan.
For the year ended March 31, 2019, certain consolidated subsidiaries recognized an impairment loss aggregating ¥8 million
as Other Expenses.
Impairment loss was recognized for certain software due to the replacement of the core system. The carrying amounts ofsuch assets were written down to the recoverable amount for the year ended March 31, 2019. The recoverable amounts are
estimated based on the value in use, but they were evaluated as zero because no future cash flow is expected.

9. Pledged Assets
Assets pledged as collateral as of March 31, 2020 were as follows:(Millions of yen)(Thousands of U.S. dollars)

2020

2020

Lease Receivables and Investments in Lease
Installment Sales Receivable
Loans Receivables
Operational Investment Securities
Leased Assets
Own-used Assets
Investment Securities
Total¥ 12,916
990
5,789
22,02330,990106
8¥ 72,825$ 118,687
9,099
53,202
202,365284,764
974
77$ 669,168(Millions of yen)

Long-term Debt
Bonds payable, Japanese Yen
Bonds payable, U.S. Dollar
Long-term Debt from banks and otherfinancial institutions
Payables under securitized leasereceivables
Total(Thousands of U.S. dollars)

Weighted averageinterest rate

2020

2019

2020

2020

¥ 130,000
5,332¥ 85,000—$ 1,194,523
49,0000.030%~0.534%
2.745%

622,890524,173

5,723,517

0.70%

25,97933,238

238,7130.25%¥ 784,202¥ 642,411$ 7,205,753(*1) The Group has entered into overdraft contracts with 51 and 58 financial institutions that provide the Group with credit facilities amounting to ¥717,778 million($6,595,410 thousand) and ¥758,035 million as of March 31, 2020 and 2019, respectively. The unused facilities maintained by the Group as of March 31, 2020
and 2019 amounted to ¥473,902 million ($4,354,517 thousand) and ¥494,715 million, respectively.
(*2) “Payables under securitized lease receivables” is a type of financing based on the law for the regulation of specific claims. The lease receivables sold under thislaw as of March 31, 2020 and 2019 were ¥164,497 million ($1,511,508 thousand) and ¥142,889 million, respectively.
(*3) The aggregate annual maturities of “Long-term Debt” as of March 31, 2020 were as follows:(Millions of yen)(Thousands of U.S. dollars)

Years Ending March 31

2020

2020

2022
2023
2024
2025
2026 and thereafter
Total¥ 220,705
147,092
110,551
93,350212,502¥ 784,202$ 2,027,983
1,351,582
1,015,818
857,763
1,952,607$ 7,205,753

11. Retirement and Pension Plans
Outline of plans

Liabilities secured by the above assets as of March 31, 2020 were as follows:(Millions of yen)

2020

Short-term Borrowings
Current Portion of Long-term Debt
Long-term Debt
Total

(Thousands of U.S. dollars)

2020¥ 8,982
4,522
51,383¥ 64,888$ 82,538
41,557472,146$ 596,241

10. Short-term Borrowings and Long-term Debt
(1) “Short-term Borrowings” as of March 31, 2020 and 2019 was as follows:(Thousands of U.S. dollars)

Weighted averageinterest rate

2019

2020

2020

256,732¥ 302,209$ 2,359,023

0.82%

669,100

609,800

6,148,121

0.11%

105,242

82,376

967,0390.09%¥ 1,031,075¥ 994,386$ 9,474,183¥——¥ 20,000
777$

185,358

177,182

1,703,196

185,358¥ 197,959$ 1,703,196(Millions of yen)

2020

Short-term Borrowings
Short-term Borrowings from banks
and other financial institutions
Commercial Paper
Payables under securitized leasereceivables
Total
Current Portion of Long-term Debt
Bonds payable, Japanese Yen
Bonds payable, Indonesian Rupiah
Long-term Debt from banks andother financial institutions
Total

65

¥

¥

—
—
0.67%

The Company and certain consolidated subsidiaries have a corporate pension plan and/or lump-sum severance payment plan
as a defined benefit retirement benefits plan as well as a corporate retirement plan as a defined contribution retirement benefits
plan. There are some cases in which extra retirement benefits are paid to employees when they retire.

Defined benefit plan
(1) The changes in defined benefit obligation for the years ended March 31, 2020 and 2019, were as follows:(Millions of yen)

Balance at beginning of year
Current service cost
Interest cost
Actuarial gains
Benefits paid
Balance at end of year

(Thousands of U.S. dollars)

2020

2019

2020

¥ 6,555
391
25
18
(393)
¥ 6,598¥ 6,505
365
25
(86)
(255)
¥ 6,555$ 60,240
3,599
236
172
(3,618)$ 60,629(*1) Certain consolidated subsidiaries that have lump-sum severance payment plans use the simplified method in determining the projected benefit obligations.

(2) The changes in plan assets for the years ended March 31, 2020 and 2019, were as follows:(Millions of yen)

Balance at beginning of year
Expected return on plan assets
Actuarial gains
Contributions from the employer
Benefits paid
Balance at end of year

(Thousands of U.S. dollars)

2020

2019

2020

¥ 4,106
22
(179)
185
(191)
¥ 3,942¥ 4,095
22
4
181
(196)
¥ 4,106$ 37,731
208(1,652)
1,707(1,764)$ 36,230

66

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements(3) Reconciliation between the liability recorded in the Consolidated Balance Sheet and the balances of defined benefit
obligation and plan assets as of March 31, 2020 and 2019, were as follows:(Millions of yen)

Defined benefit obligation
Plan assets
Total
Unfunded defined benefit obligation
Net liability arising from defined benefit obligation(Thousands of U.S. dollars)

2020

2019

2020

¥ 4,168(3,942)225
2,429¥ 2,655¥ 4,094(4,106)(11)
2,461¥ 2,449$ 38,302(36,230)
2,072
22,327$ 24,399(Millions of yen)

Asset for employees’ retirement benefits
Liability for employees’ retirement benefits
Net liability arising from defined benefit obligation(Thousands of U.S. dollars)

2020

2019

2020

¥

¥

$

—
2,655
¥ 2,655(11)
2,461¥ 2,449—
24,399$ 24,399(8) Assumptions used for the years ended March 31, 2020 and 2019, are set forth as follows:
Discount rate
Expected rate of return on plan assets
Expected rate of future salary increases

2020

2019

0.30 - 0.47%
0.55%
4.38 - 9.27%

0.30 - 0.47%
0.56%
4.38 - 9.27%

Defined contribution plan
The Group’s contributions to the defined contribution retirement plan for the years ended March 31, 2020 and 2019, were ¥62
million ($576 thousand) and ¥61 million, respectively.

12. Income Taxes
The Company and certain consolidated subsidiaries are subject to a number of taxes based on income, which, in the aggregate,
resulted in a normal effective statutory tax rate in Japan of approximately 30.6% for the years ended March 31, 2020 and 2019.
Deferred Tax Assets and Liabilities consisted of the following:(4) The components of net periodic benefit costs for the years ended March 31, 2020 and 2019, were as follows:(Millions of yen)

2020

Service cost (*1)
Interest cost
Expected return on plan assets
Recognized actuarial losses
Net periodic benefit costs(Millions of yen)(Thousands of U.S. dollars)

2019

¥ 391
25
(22)
(4)
¥ 390

¥ 365
25
(22)
1
¥ 370

2020

$ 3,599
236
(208)
(41)
$ 3,586(*1) Service cost includes retirement benefits expenses of certain consolidated subsidiaries that use the simplified method.

(5) Amounts recognized in other comprehensive income (before income tax effect) in respect of defined retirement benefit plans
for the years ended March 31, 2020 and 2019, were as follows:(Millions of yen)

2020

Actuarial (losses) gains
Total(Thousands of U.S. dollars)2019¥ (220)¥ (220)

¥ 93
¥ 93

2020

$ (2,028)$ (2,028)(6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect of defined retirement
benefit plans as of March 31, 2020 and 2019, were as follows:(Millions of yen)

2020

Unrecognized actuarial (losses) gains
Total¥ (86)¥ (86)(Thousands of U.S. dollars)

2019

¥ 142
¥ 142

2020

$ (792)$ (792)(7) Plan assets as of March 31, 2020 and 2019, were as follows:a. Components of plan assets
Plan assets consisted of the following:
Domestic debt investments
Domestic equity investments
Foreign debt investments
Foreign equity investments
Insurance assets (general account)
Others
Total(Thousands of U.S. dollars)

2020

2019

2020

Deferred Tax Assets:
Allowance for Doubtful Receivables
Depreciation
Liability for Employees’ Retirement Benefits
Write-off of Securities
Accrued Enterprise Tax
OtherDeferred Tax Assets Subtotal
Valuation Allowance
Total Deferred Tax Assets

¥ 528
740
429
337
390
5,459
7,885
(1,173)
6,712

¥ 810
597
364
163
336
3,838
6,111
(328)
5,783

$ 4,856
6,802
3,943
3,105
3,588
50,16472,458(10,779)
61,679Deferred Tax Liabilities:
Net unrealized gain on Available-for-sale Securities
Investments in Lease
Other
Total Deferred Tax Liabilities(3,241)(110)(1,065)(4,417)(2,925)(156)(458)(3,540)(29,789)(1,016)(9,790)(40,595)¥ 2,294¥ 2,242$ 21,084

Net Deferred Tax Assets

A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in theaccompanying consolidated statement of income for the years ended March 31, 2020 and 2019 is not presented as thedifference is less than 5% of the effective statutory tax rate.

13. Commitments and Contingent Liabilities
2020

2019

20.9%
19.1
9.0
17.8
30.0
3.2
100.0%

19.6%
21.8
7.4
20.0
28.4
2.8
100.0%

b. Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the long-term rates of return that are expectedcurrently and in the future from the various components of the plan assets.

(1) Commitments
The Company had loan commitment agreements as of March 31, 2020 and 2019 of ¥4,299 million ($39,507 thousand) and¥7,620 million, respectively. The loans provided under these credit facilities as of March 31, 2020 and 2019 amounted to¥3,274 million ($30,086 thousand) and ¥6,674 million, respectively. Many of these facilities expire without being utilized andthe related borrowings are subject to periodic reviews of the borrowers’ credibility. Any unused amount will not necessarily
be utilized in full.
(2) Contingent Liabilities
Contingent Liabilities as of March 31, 2020 were as follows:(Millions of yen)(Thousands of U.S. dollars)

2020

Guarantee Obligations with respect to operating activities (*1)
Other Guarantee Obligations
Total¥ 12,519
11,394¥ 23,914

2020$ 115,039
104,701$ 219,740(*1) The amount includes bank loans and trade receivables provided by Unipres Corporation and others, which are guaranteed by the Company.

67

68

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements

14. Equity
Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The significant provisions in the
Companies Act that affect financial and accounting matters are summarized below:

15. Selling, General and Administrative Expenses
Major components of Selling, General and Administrative Expenses were as follows:(Millions of yen)

2020(a) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to the year-end dividends
upon resolution at the shareholders meeting. Additionally, for companies that meet certain criteria such as (1) having a Boardof Directors, (2) having independent auditors, (3) having a Board of Audit & Supervisory Board members, and (4) the term ofservice of the directors being prescribed as one year rather than the normal two-year term by its articles of incorporation, theBoard of Directors may declare dividends (except for dividends-in-kind) at any time during the fiscal year if the Company hasprescribed so in its articles of incorporation. However, the Company cannot do so because it does not meet (4) of the above
criteria.
The Companies Act permits companies to distribute dividends-in-kind (non-cash assets) to shareholders subject to certain
limitations and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles ofincorporation of the company so stipulate. The Companies Act provides certain limitations on the amounts available fordividends or the purchase of treasury stock. The limitation is defined as the amount available for distribution to the shareholders,
but the amount of net assets after dividends must be maintained at no less than ¥3 million.
(b) Increases / decreases and transfer of common stock, reserve and surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a componentof retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity account charged
upon the payment of such dividends until the total of the aggregate amount of legal reserves and additional paid-in capitalequals 25% of common stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserves may
be reversed without limitation. The Companies Act also provides that common stock, legal reserves, additional paid-in capital,
other capital surplus and retained earnings can be transferred among the accounts within equity under certain conditions upon
resolution of the shareholders.
(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolutionof the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to theshareholders which is determined by a specific formula.

Reversal for Doubtful Receivables
Accruals/(reversal) for Debt Guarantees
Salaries and Wages
Provision for Bonus Payments
Provision for Bonus Payments to Directors
Retirement Benefits Costs for Employees
Provision for Reserve for Management Board Benefit Trust
Commission Expenses¥ (435)
(16)
8,492
1,018
94
453
266
2,426

(Thousands of U.S. dollars)2019¥ (586)
4
7,692
907
130
431
144
1,853

2020

$ (4,003)(152)
78,037
9,361
864
4,163
2,452
22,295

16. Segment Information
Under ASBJ Statement No. 17, “Accounting Standard for Segment Information Disclosures,” and ASBJ Guidance No. 20,“Guidance on Accounting Standard for Segment Information Disclosures,” an entity is required to report financial and descriptive
information about its reportable segments. Reportable segments are operating segments or aggregations of operating
segments that meet specified criteria. Operating segments are components of an entity whose separate financial information isavailable and such information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources
and in assessing performance. Generally, segment information is required to be reported on the same basis as is used internallyfor evaluating operating segment performance and deciding how to allocate resources to operating segments.
(1) Description and revision of reportable segments
The reportable segments of the Group are those for which separate financial information is available and regular evaluationby the Company management is being performed in order to decide periodically how resources are allocated among theGroup.
The Group provides total financial services such as leasing business, installment sales and loan business to a wide
range of customers from large companies to small and medium-sized companies. The Group has three business segments
based on its services: “Leasing and Installment Sales”, “Finance” and “Other”.
“Leasing and Installment Sales” segment represents leasing business for industrial machinery, information-related
equipment and transportation equipment (including sales of subject properties upon expiration or cancellation of leaseagreements) and installment sales business. “Finance” segment represents loan business, factoring business and securities
business which invests in securities that are held for the purpose of generating operational revenues. “Other” segment
represents buying and selling of used properties business and sales of solar power business etc.
(2) Methods of measurement for the amounts of sales, profit, assets, liabilities and other items for each reportable segment

69

70Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements(3) The accounting policies of each reportable segment are consistent with those disclosed in Note 2, “Summary of Significant
Accounting Policies”.
Information about sales, profit, assets, liabilities and other items for the years ended March 31, 2020 and 2019 was asfollows:(Millions of yen)

2020(*1) The details of Reconciliations to Segment Profit for the years ended March 31, 2020 and 2019 were as follows:(Millions of yen)

Elimination of intersegment transactions
Administrative expenses not allocated to the reportable segments
Total(Thousands of U.S. dollars)

2020

2019

2020

¥

¥

$

332
(6,062)¥ (5,730)(426)(4,953)¥ (5,380)

3,052(55,707)$ (52,655)

Reportable segment
Leasing andInstallment Sales

Sales:
Sales to external customers ¥Intersegment sales andtransfers
Total
Operating Expenses
Segment Profit¥
Segment Assets
OthersDepreciation andAmortization
Capital Expenditure

Finance

Total

Other

Reconciliations (*1) (*2) (*3)

Consolidated (*4)(*2) The details of Reconciliations to Segment Assets as of March 31, 2020 and 2019 were as follows:(Millions of yen)

511,721¥ 18,772¥ 8,747¥

539,241¥—¥

539,241

348

867

18

1,234

(1,234)—

512,069
493,481
18,58819,6406,807¥ 12,832

8,766
8,181
¥ 584

¥

540,476
508,470
32,005(1,234)4,495¥ (5,730)¥

539,241
512,966
26,275¥ 1,558,974¥ 712,935¥ 2,288¥ 2,274,197¥ 74,218¥ 2,348,416

12,962——

12,962

2,141

15,104

181,931——

181,931

3,032

184,964

Elimination of intersegment transactions
Corporate assets not allocated to the reportable segments
Total

Sales:
Sales to external customers ¥Intersegment sales andtransfers
Total
Operating Expenses
Segment Profit¥
Segment Assets
OthersDepreciation andAmortization
Capital Expenditure¥ 201,178
Total

Reconciliations (*1) (*2) (*3)

EuropeNorth America / Latin America

Asia¥ 8,982¥ 39,234

¥ 250

Total

¥ 249,646(Millions of yen)

Consolidated (*4)

2019

366,095¥ 16,724¥ 2,073¥

384,893¥—¥384,893

333

700

119

1,153

(1,153)—

366,429
348,382
18,046

17,424
7,837¥ 9,587

2,193
1,532
¥
660

¥

386,047
357,753
28,294(1,153)4,227¥ (5,380)¥

384,893361,980
22,913¥ 1,320,729¥ 842,165¥ 11,940¥ 2,174,835¥ (12,962)¥ 2,161,872

Japan¥ 216,669

EuropeNorth America / Latin America

Asia¥ 9,515¥ 18,933

¥ 413

Total

¥ 245,531(Thousands of U.S. dollars)

2020
Japan

$ 1,848,560

Europe$ 82,534

North America / Latin America

Asia$ 360,514$ 2,301

Total$ 2,293,909(*1) Assets are classified by country or region based on the location of the Company and consolidated subsidiaries.
(*2) Information by geographic segment of Sales is not presented as domestic sales exceeded 90% of all segments.

(5) Impairment loss of long-lived assets per reportable segment:
11,460——11,4601,767

13,227

120,504——

120,504

3,368

123,872(Millions of yen)

2020
Reportable segment
Leasing andInstallment Sales

2020

Impairment loss

¥ 322

Finance¥—

Reportable segment
Leasing andInstallment Sales

Sales:
Sales to external customers $ 4,702,024
Intersegment sales and3,204transfers
Total
4,705,228
Operating Expenses
4,534,428
Segment Profit$
170,80071$ (441,192)
1,123,161$ 681,969(Millions of yen)(Thousands of U.S. dollars)

Segment Assets
OthersDepreciation andAmortization
Capital Expenditure2020¥ (49,664)
36,702¥ (12,962)

2020

2019
Other

¥ (48,014)
122,233¥ 74,218(4) Information about Geographical Areas
Property and Equipment

Japan

Reportable segment
Finance2019(*3) Reconciliations of “Depreciation and Amortization” and “Capital Expenditure” are related to corporate assets notallocated to the reportable segments.
(*4) Segment Profits are reconciled to Operating Income in the Consolidated Statement of Income.

(Millions of yen)

Leasing andInstallment Sales(Thousands of U.S. dollars)

2020

Finance

Total

Other

¥—

¥ 322

Reconciliations

Consolidated

¥—

¥ 322

Reconciliations

Consolidated¥8¥8Reconciliations

Consolidated$—$ 2,959(Millions of yen)
Total

Other

Reconciliations (*1) (*2) (*3)

Consolidated (*4)

2019
Reportable segment$

172,497$ 80,380$ 4,954,901

7,970

172

11,346$—$ 4,954,901(11,346)—

180,467
62,550117,91780,55275,178$ 5,374

4,966,247
4,672,156$
294,091(11,346)
41,309$ (52,655)

4,954,901
4,713,465$
241,436$ 14,324,856$ 6,550,907$ 21,025$ 20,896,788$ 681,969$ 21,578,757

119,112——

119,112

19,679138,791

1,671,704——

1,671,704

27,867

1,699,571$

Leasing andInstallment Sales

Impairment loss¥—

Finance

¥—

Total

Other

¥—

¥—

(Thousands of U.S. dollars)

2020
Reportable segment
Leasing andInstallment Sales

Impairment loss

$ 2,959

Finance

$—

Other

$—

Total

$ 2,959(6) Goodwill per reportable segment:
Goodwill per reportable segment for the years ended March 31, 2020 and 2019 is not presented as they were immaterial.

72

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements

17. Lease Transactions

18. Financial Instruments and Related Disclosures

Operating Leases as lessee
The minimum rental commitments under non-cancellable operating leases as of March 31, 2020 and 2019 were as follows:(Millions of yen)(Thousands of U.S. dollars)

2020

Due within one year
Due after one year
Total

2019

¥ 7
14
¥ 22

2020

¥ 7
14
¥ 21

$ 67
136
$ 203

Finance Leases as lessor(1) The net investments in lease were as follows:(Millions of yen)

Lease contract receivables
Estimated residual value
Interest income equivalents
Total(Thousands of U.S. dollars)

2020

2019

2020

¥ 991,739
732(56,594)¥ 935,877¥ 948,306
1,187(94,500)¥ 854,993$ 9,112,744
6,730(520,028)$ 8,599,446(2) Maturities of Lease Receivables for finance leases that were deemed to transfer ownership of the leased property to thelessee were as follows:(Millions of yen)(Thousands of U.S. dollars)

2020

2021
2022
2023
2024
2025
2026 and thereafter
Total¥ 44,474
36,235
31,10818,528
11,2649,921¥ 151,533

2020$

408,658
332,954285,849
170,255
103,510
91,162$ 1,392,388(3) Maturities of Investments in Lease for finance leases that were deemed not to transfer ownership of the leased property to
the lessee were as follows:(Millions of yen)

2021
2022
2023
2024
2025
2026 and thereafter
Total(Thousands of U.S. dollars)

2020

2020

¥ 273,755
199,480
143,244
115,819
87,580171,858¥ 991,739$ 2,515,440
1,832,955
1,316,227
1,064,225
804,749
1,579,148$ 9,112,744

Operating Leases as lessor
Future lease receivables under non-cancellable operating leases were summarized as follows:(Millions of yen)

Due within one year
Due after one year
Total

(Thousands of U.S. dollars)

2020

2019

¥ 79,605
152,306¥ 231,912¥ 96,880
119,341¥ 216,222

2020$

731,471
1,399,494$ 2,130,965

Sub-lease transactions
Among the receivables and obligations relating to the sub-lease transactions, the amounts before deducting interest equivalents
and included in the Consolidated Balance Sheet as of March 31, 2020 and 2019 were summarized as follows:(Millions of yen)

Lease Receivable
Investments in Lease
Lease Payable
73(Thousands of U.S. dollars)

2020

2019

2020

¥

¥

$ 6,31272,80780,579

686
7,923
8,769

632
7,199
8,007

(1) Policy for financial instruments
The Group provides comprehensive financial services, including leasing, installment sales and loans. From the perspectiveof financial stability, the Group diversifies its funding sources. In addition to the indirect funding from financial institutions, theGroup utilizes direct funding such as issuing bonds, commercial paper and securitization of lease receivables. Further, theGroup has an integrated Asset-Liability Management (ALM) program. Derivatives are used to avoid fluctuation risks such as
interest rates and to secure stable profits.
(2) Nature and extent of risks arising from financial instruments
Financial assets held by the Group mainly consist of lease receivables and investments in lease, installment salesreceivables, loans receivables, and factoring receivables mainly due from domestic business companies. These assets
are exposed to the credit risks triggered by a contractual default of a counterparty to the transactions. In the case ofdeterioration in the credit conditions of counterparties caused by a change in economic conditions or the environment, it ispossible that the repayment of obligations under the contract may not be performed. Investment securities, which are mainlycomprised of stocks, bonds, preferred equities and investments in partnerships, are exposed to market price fluctuation
risks if they are exchange-traded in addition to the credit risk of issuers. Transactions related to real estate finance areexposed to the risk of price fluctuations in the targeted real estate.
Borrowings, bonds and commercial paper are exposed to the interest rate fluctuation risk for floating interest ratefunding, and the liquidity risk that ready access to funds may not be available due to a change in the financial market
environment. An ALM analysis is employed in order to make stable profit as well as to manage these funding risks.
Derivative transactions are mainly composed of interest rate swaps arranged as a part of ALM. The Group enters into
interest rate swap transactions as a hedging instrument and applies hedge accounting to the interest rate fluctuation risk
associated with interest bearing debt such as bank loans. It is the Group’s basic policy to utilize hedge transactions within
the limit of the debt amount to reduce interest rate risks and to improve cash flow from financial activities. The effectivenessof the hedge transactions are assessed by comparing the changes in the market price and cumulative cash flows between
the hedging instrument and the hedged item from the beginning of the hedge to the time of assessment.
The Group also utilizes derivative transactions such as foreign currency forward contracts and interest and currency
swaps etc. to control the level of the risk associated with the assets and liabilities denominated in foreign currencies.
(3) Risk management for financial instruments(a) Integrated risk management
The Group places an extremely high priority on integrated monitoring and control of total financial risks, including credit
risks and market risks which consist of interest rate risk and share price fluctuation risk. Thus, The Group incorporates anintegrated risk management system into its management policy in order to improve the stability of the business. Specifically,
the Group manages various quantified risks in an integrated fashion to control the total risk under a certain level of net equity(business capacity) of the company. In addition, a risk analysis is performed monthly, the results of which are reported to theBoard of Directors.
(b) Credit risk management
The Group aims to minimize credit costs by optimizing its credit management structure at all stages of each transaction,from entrance to exit to manage the credit risks of business partners.
Firstly, at the initial stage of deal execution, the Group assigns a credit rating to each debtor under its client credit rating
system, conducts a strict credit screening and makes judgments on contract arrangements based on the prospects offuture value of leasing assets, and from the perspective of the avoidance of excessive concentrations of credit, the Group
monitors its credit administration ceiling by using its credit rating monitoring systems. Any large contract or matter requiring
complex risk judgment requires the deliberation and decision by the Credit Committee, which enhances the risk control
process. When offering new services or new products, the Group thoroughly reviews the identification and evaluation of
inherent risks through the Risk Control Committee.
And next, as an ongoing management measures, the Group provides necessary write-offs or allowances in accordancewith the self-assessment rules for assets conforming to “Temporary treatment of accounting and auditing on the applicationof accounting standard for financial instruments in the leasing industry”. Furthermore, regarding credit risk management
for the portfolio as a whole, through the quantification of the volume of the risk based on the credit rating of businesscustomers, the Group endeavors to minimize credit costs. Also, the Group periodically follows up on non-performing assets
and performs debt collection of assets for which the Group has already provided reserves to facilitate final disposal of nonperforming assets.

74

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements(c) Market risk management
The Group establishes basic policies (e.g., funding policy, setting commercial paper program, hedging policy and securities
trading policy) at the Board of Directors that are designed based on market environments and financial strength meeting
to control risks in line with financial operations. In addition, monthly ALM operating policies based on these basic policies,
position limits, and loss limits, etc., are determined on a monthly basis at the PM · ALM Committee, and the Group strives
to maintain stable earnings by controlling risk factors. Also, with regard to market transactions, in order to maintain a mutual
check system, The Group separately established the risk control department that is independent from departments that are
responsible for executions or for approval of delivery settlement.
(i) Interest rate risk management
In order to manage interest rate risk, the Group monitors the matching ratio (i.e., proportion of assets that is not
exposed to interest rate risk without allocation of the matching fixed/floating interest bearing debt to entire assets) under
ALM. Also, the Group quantifies the interest rate and maturity of financial assets and liabilities based on *BPV (Basis
Point Value). The Group analyzes and monitors them using statistical techniques such as *VaR (Value at Risk).
In addition, compliance with the internal rules etc. is managed by the risk control department.
Sensitivity to interest rate (10BPV) interest rate risk volume (VaR) figures in the Group as of March 31, 2020 and
2019, are as shown below. The Internal Models Approach applied to measure VaR is based on the assumption thatpast price fluctuations follow a normal distribution and the model calculates variance and covariance, based on which
the Group estimates maximum losses statistically (variance/covariance method).
(Millions of yen)Sensitivity to interest rate (10BPV)Interest rate risk volume (VaR)(Thousands of U.S. dollars)

2020

2019

2020

¥ (2,410)¥ 3,560¥ (2,410)¥ 1,520$ (22,145)$ 32,712

The VaR measurement method is as follows:
Variance-covariance model for linear risk
Quantitative criteria:(1) Confidence interval: 99%;(2) Holding period of one month; and(3) Historical observation period of one year(ii) Price fluctuation risk management of securities such as stock
Relating to the price fluctuation risk of securities, the risk control department captures the volume of the risk using the
VaR. In addition, it monitors the status of compliance with our internal rules.
The VaR measurements in the Group as of March 31, 2020 and 2019, are shown below. To measure the VaR, theGroup created a model that shows the price fluctuation of each stock based on the stock price index fluctuation. The
Group adopted the stock price fluctuation model that sets the stock price index fluctuation ratio represented by the risk
factor of general market risk. Also, the inherent fluctuation portion of each stock that is unable to be shown by the stock
price index is set as a risk factor of individual risk in our model.
(Millions of yen)

2020

Price variation risk of stock (VaR)(d) Other price fluctuation risk management
The risk mainly consists of real estate price fluctuation risks for specified bonds, preferred shares, investments inpartnerships, and non-recourse loans relating to a real estate finance vehicle. The risk is managed by estimating the fairvalue of real estate at exit and monitoring the quantified risk for loss of principal.
(e) Liquidity risk management
The Group manages liquidity risk by diversifying the method of funding and balancing its long-term and short-term fundingneeds, depending upon the market environment.
(4) Supplemental explanation for quantitative information concerning market risk
Because quantitative information concerning market risk is based on statistical assumptions, the quantitative information
may differ depending upon the quantitative basis and measurement method assumed. Also, the quantitative information isa statistical result based on certain assumptions. It is not intended to show the expected maximum losses. Because future
market conditions may differ considerably from past conditions, there are many limitations on the quantitative data that is
estimated using observation values of past data.
(Glossary)*BPV: BPV is one of the interest rate risk indices indicating the change in present value of subject assets or liabilities
given a basis point (0.01%) change in interest rates. The Group adopts 10 basis points (0.1%) as the basis forchange of value.
*VaR: VaR is a technique for estimating the probable maximum portfolio losses as a volume of risk when the market
is affected adversely based on the statistical analysis of historical data under a given time and probability (99%
one-sided confidence interval).
(5) Supplemental explanation for fair values of financial instruments
Fair values of financial instruments are based on the quoted prices in active markets. If a quoted price is not available,another rational valuation technique is used instead. Such prices have been calculated using certain assumptions, and may
differ if calculated based on different assumptions.

(Thousands of U.S. dollars)

2019

¥0

(iii) Derivative transactions
The derivative transactions carried out by the Group mainly consist of interest rate swaps, entered as a part of ALM,
to hedge the interest rate risks. The operating policy of hedging is determined at the monthly PM · ALM Committee tocontrol the interest rate risk. Also, from an operational control perspective, in order to ensure a proper review function,
the Group has an organizational structure whereby the transaction execution department is clearly separated from themarket risk control department, which is responsible for evaluation of the effectiveness of hedging transactions, and theoperations department, which is responsible for delivery settlement. For the use of derivative transactions, the Group
enters into such transactions only with major financial institutions in order to mitigate counterparty risk.

2020

¥0

$0

(Note) The VaR value shown above reflects annual realized profit or loss (including impairment loss) and unrealized profit or loss, net of corporate income taxes.

The VaR measurement method is as follows:
Quantitative criteria:(1) Confidence interval: 99%;(2) Holding period of one month; and(3) Historical observation period of one year.
The market price at the measurement date is used for securities with market price. The moving-average acquisition
costs or the amortized costs are used for securities without market price. General market risk (risk of suffering losses
due to stock market movement) and individual risk (price variance risk due to factors associated with the issuer of stock)are calculated and combined. Individual risk for securities without market price is calculated assuming a fluctuation ratio
of 8%.

75

76

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements(a) Fair values of financial instruments

Methods for determining the fair values of financial instruments were as follows:(Millions of yen)

2020

March 31,
Carrying
amountCash and Cash Equivalents¥
22,299Securities (*1)
Available-for-sale Securities
171,052
Lease Receivables and1,064,970
Investments in Lease (*2) (*3) (*4)(*2) (*5)
Installment Sales Receivables
139,138
Loans Receivables (*2)
270,640
Factoring Receivables (*2)
129,621Long-term Receivables (*6)
4,973
Assets total¥ 1,802,696¥

Short-term Borrowings
Lease Payable
Accounts Payable — tradeLong-term Debt (*7) (*8)
Liabilities total

22,299Unrealized
gain (loss)¥—

Carrying
amount¥25,438Fair value¥

25,438

Unrealized
gain (loss)¥—

171,052—

167,975

167,975—

1,116,018

51,048914,870

950,81135,941

139,914285,431
131,146
4,973¥ 1,870,835

775
14,791
1,524—¥ 68,139

145,571
234,615233,053
3,228¥ 1,724,753

147,962
246,816
234,6173,228¥ 1,776,850

2,391
12,2001,563—¥ 52,097¥ 1,030,982
8,763
49,300971,019¥ 2,060,065

¥

92
8
17
(1,458)¥ (1,338)¥

994,386
8,010
56,040840,371¥ 1,898,809¥

995,470
8,042
56,015844,996¥ 1,904,524¥ (1,083)(31)
25(4,625)¥ (5,715)

68

¥

68

¥

—

¥

(30)

¥

(30)

¥

—

(2,172)(2,103)¥(2,172)(2,103)

¥

—
—

¥

(956)
(987)

¥

(956)
(987)

¥

—
—

¥ 1,031,075
8,772
49,318969,560¥ 2,058,726

Hedge accounting is not¥applied (*9)
Hedge accounting is applied (*9)
Derivative transactions total¥

2019

Fair value(Thousands of U.S. dollars)

2020

March 31,
Carrying
amountCash and Cash Equivalents$
204,898
Securities (*1)
Available-for-sale Securities
1,571,741
Lease Receivables and9,785,635
Investments in Lease (*2) (*3) (*4)(*2) (*5)
Installment Sales Receivables
1,278,494
Loans Receivables (*2)
2,486,820
Factoring Receivables (*2)
1,191,049
Long-term Receivables (*6)
45,696
Assets total$ 16,564,333
Short-term Borrowings
Lease Payable
Accounts Payable — tradeLong-term Debt (*7) (*8)
Liabilities total$

204,898

Unrealized
gain (loss)$—

1,571,741—

10,254,700

469,065

1,285,620
2,622,730
1,205,059
45,696$ 17,190,444

7,126
135,91014,010—$ 626,111$ 9,473,329
80,527453,0078,922,348$ 18,929,211

$

854
79
162
(13,399)$ (12,304)

633

$

633

$

—

(19,965)(19,332)$(19,965)(19,332)$——$ 9,474,183
80,606453,169
8,908,949$ 18,916,907

Hedge accounting is not$applied (*9)
Hedge accounting is applied (*9)
Derivative transactions total$

Fair value(*1) Securities include Operational Investment Securities and Investment Securities.
(*2) Lease Receivables and Investments in Lease, Installment Sales Receivables, Loans Receivables and Factoring Receivables are stated net of Allowance for
Doubtful Receivables.
(*3) Investments in Lease are stated net of estimated residual value of lease assets for finance leases that are deemed not to transfer ownership of the leased property
to the lessee.
(*4) Unearned lease payments received are not included in Lease Receivables and Investments in Lease.
(*5) Installment Sales Receivables are stated net of Deferred Profit on Installment Sales.
(*6) Long-term Receivables are stated net of Allowance for Doubtful Receivables.
(*7) Current Portion of Long-term Debt is included.
(*8) Long-term Debt includes Payables under Securitized Lease Receivables.
(*9) Assets and liabilities incurred resulting from derivative transactions are netted. The net liability is presented in parenthesis.

77(a) Cash and Cash Equivalents
The carrying values of bank deposits approximate fair values because of their short maturities.
(b) Operational Investment Securities and Investment Securities
The fair values of securities are measured at the quoted market price of the stock exchange for the equity instruments.
The fair values of bonds are measured at the quoted price obtained from the financial institution for the debt
instruments, or are determined by discounting the future cash flows, by credit risk categories for risk management, at an
appropriate benchmark rate such as an interbank market rate plus a credit spread. Fair value information for securities
by classifications is included in Note 5. Operational Investment Securities and Investment Securities.
(c) Lease Receivables and Investments in Lease
The fair values of Lease Receivables and Investments in Lease are principally determined by discounting the future cash
flows (lease payments received less maintenance fees), by credit risk categories for risk management, at an appropriate
benchmark rate such as an interbank market rate plus a credit spread.
(d) Installment Sales Receivables
The fair values of Installment Sales Receivables are determined by discounting the future cash flows, by credit risk
categories for risk management, at an appropriate benchmark rate such as an interbank market rate plus a credit
spread.
(e) Loans Receivables and Factoring Receivables
The fair values of Loans Receivables and Factoring Receivables are determined by discounting the future cash flows, bycredit risk categories for risk management, at an appropriate benchmark rate such as an interbank market rate plus a
credit spread.
(f) Long-term Receivables
The carrying values of Long-term Receivables at the balance sheet date (net of Allowance for Doubtful Receivables)
approximate fair values, because the Allowance for Doubtful Receivables is determined based on the amount that is
expected to be recovered from collateral and guarantees.
(g) Short-term Borrowings
Short-term Borrowings from banks and other financial institutions
The fair values of Short-term Borrowings from banks and other financial institutions are measured at the amount ofprincipal plus interest to be paid at maturity discounted at an appropriate benchmark rate such as an interbank market
rate plus a credit spread.
Commercial Paper
The fair values of Commercial Paper are measured at the amount of principal plus interest to be paid at maturity
discounted at an appropriate benchmark rate such as an interbank market rate plus a credit spread.
Payables under Securitized Lease Receivables
The fair values of Payables under Securitized Lease Receivables are determined by discounting the future cash flows at
an appropriate benchmark rate such as an interbank market rate plus spread for securitization.
(h) Lease Payable
The fair values of Lease Payable are principally determined by discounting the future cash flows at an appropriate
benchmark rate such as an interbank market rate plus a credit spread.
(i) Accounts Payable - trade
The carrying values of Accounts Payable - trade approximate fair value because they are settled within a short period.
The fair values of long-term Accounts Payable are determined by discounting the future cash flows at an appropriate
benchmark rate such as an interbank market rate plus a credit spread.

78

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements(j) Long-term Debt
Bonds Payable
The fair values of Bonds Payable are measured at the amount of interest and principal to be paid at maturity discounted
at an appropriate benchmark rate such as an interbank market rate plus a credit spread.
Long-term Debt from banks and other financial institutions
The fair values of Long-term Debt from banks and other financial institutions are measured at the amount of interest andprincipal to be paid at maturity discounted at an appropriate benchmark rate such as an interbank market rate plus a
credit spread.
Payables under Securitized Lease Receivables
The fair values of Payables under Securitized Lease Receivables are determined by discounting the future cash flows at
an appropriate benchmark rate such as an interbank market rate plus spread for securitization.
(k) Derivatives
Fair value information for derivatives is included in Note 19.
(b) Carrying amount of financial instruments whose fair values cannot be readily determined(Millions of yen)

Unlisted Stocks (*1) (*2)
Funds, Investments in Partnerships (*3)
Preferred Equities (*4)
Other (*4)
Total

(6) Maturity analysis for financial assets and securities with contractual maturities(Millions of yen)March 31, 2020

Cash and Cash Equivalents
Securities
Available-for-sale Securities
Bonds
National and Local
government Bonds
Corporate Bonds
Other
Lease Receivables andInvestments in Lease
Installment Sales Receivables
Loans Receivables
Factoring Receivables
Total

Due after
one yearthrough
two years

Due in one
year or less

¥ 22,299¥—

Due after
two years
throughthree years

Due after
three years
throughfour years

Due after
four years
throughfive years

¥

¥

¥

2019

¥ 99,875
39,873
4,427
25,769¥ 169,945¥ 17,575
53,124
3,533
29,590¥ 103,824$(*1) As unlisted stocks do not have quoted market prices in an active market and their fair values cannot be readily determined, they are excluded from the disclosureof market value information.
(*2) The impairment loss on certain unlisted stocks for the year ended March 31, 2020 and 2019 was ¥336 million ($3,088 thousand) and ¥53 million, respectively.
(*3) Investments in funds and partnerships are excluded from the disclosure of market value information, as they are composed of financial instruments whose fairvalues cannot be readily determined, such as unlisted stocks.
(*4) These financial instruments are excluded from the disclosure of market value information, as they do not have quoted market prices in an active market and fairvalues cannot be readily determined.

—

¥

—

—

—

—

—

—

25,3003,453

22,0008,099

23,16020,10025,620
9,910

3,500
4,864

23,70018,245

301,755

225,341

166,226

127,920

93,890166,953

50,15685,711106,017¥ 594,693

37,64846,2038,848¥ 348,142

24,44047,5354,439¥ 285,901

18,05032,6523,536¥ 217,691

7,108
24,5742,372¥ 136,311

4,407
34,6444,463¥ 252,414

Due in one
year or lessDue after
one yearthrough
two years

Due after
two years
throughthree years

Due after
three years
throughfour years

Due after
four years
throughfive years

Due after
five years

¥

¥

¥

(Millions of yen)2020

917,722366,386
40,680236,783$ 1,561,571——(Thousands of U.S. dollars)

2020

—

Due after
five years

March 31, 2019

Cash and Cash Equivalents
Securities
Available-for-sale Securities
Bonds
National and Local
government Bonds
Corporate Bonds
Other
Lease Receivables andInvestments in Lease
Installment Sales Receivables
Loans Receivables
Factoring Receivables
Total¥ 25,438

¥

—

—

—

—

¥

—

2,000

—

—

—

—

—

5,500
33,52625,3005,453

22,00010,04828,16010,697

21,6204,584

24,6008,287

270,736

201,256

148,710

95,11873,835

140,661

58,02454,883
210,157¥ 660,267

38,312
54,215
10,843¥ 335,380

24,91736,2844,557¥ 246,517

14,862
29,521
2,084¥ 180,444

7,205
25,4151,343¥ 134,004

4,657
34,9594,119¥ 217,285

Due in one
year or lessDue after
one yearthrough
two years

Due after
two years
throughthree years

Due after
four years
throughfive years

Due after
five years(Thousands of U.S. dollars)

March 31, 2020

Cash and Cash Equivalents$ 204,898
Securities
Available-for-sale Securities
Bonds
National and Local—
government Bonds
Corporate Bonds
232,473
Other
31,734
Lease Receivables and2,772,723
Investments in Lease
Installment Sales Receivables
460,872
Loans Receivables
787,571
Factoring Receivables
974,153
Total$ 5,464,424

$

—

$

—

Due after
three years
throughfour years

$

—

$

—

$

—

—

—

—

—

—

202,150
74,424

212,809
184,693

235,41391,06032,16044,701

217,771
167,6542,070,580

1,527,392

1,175,420

862,730

1,534,077

345,943424,552
81,307$ 3,198,956

224,576
436,788
40,789$ 2,627,047

165,863
300,036
32,493$ 2,000,285

65,316
225,811
21,797$ 1,252,515

40,498318,334
41,015$ 2,319,349(*1) Please see Note 10 for annual maturities of Long-term Debt.

79

80

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements

19. Derivatives(2) Interest rate and currency swaps

Fair values of derivative transactions were as follows. The fair value is measured at quoted prices obtained from the financial
institutions. The contract amounts shown in the tables are the notional amounts of derivatives and do not indicate theCompany’s exposure to credit or market risks:

Derivative transactions to which hedge accounting is not applied:(1) Interest rate and currency swaps(Millions of yen)Contract
AmountPayment - floating
rate in JapaneseYen, receipt floating rate in
U.S. dollars

2019

2020

At March 31,¥ 3,333

Contract
Amount due
after One Year

Fair Value¥ 2,243

Unrealized
Gain (Loss)¥ 68

Contract
Amount due
after One Year

Contract
Amount¥ 68¥ 3,333

Fair Value¥ 3,333

Unrealized
Gain (Loss)¥ (30)¥ (30)

2020
Contract
AmountPayment - floating
rate in JapaneseYen, receipt $ 30,629
floating rate in
U.S. dollars

Contract
Amount due
after One Year

Fair Value$ 20,616

Unrealized
Gain (Loss)$ 633

Payment - fixed
rate in Japanese Operational
Yen, receipt –Investment
fixed rate in U.S. Securities
dollars
Payment fixed rate inIndonesianLong-term
Rupiah, receipt
Debt- floating rate in
U.S. dollars$ 633(1) Interest rate swaps(Millions of yen)

2020

2019

Contract
AmountContract
Amount due
after One Year

Fair
Value

Contract
AmountContract
Amount due
after One Year

Fair
Value

¥ 137,899¥ 116,028¥ (1,445)¥ 106,697¥ 88,224¥ (791)

¥

¥

—

¥

—

¥

8,000

¥ 8,000¥ 40¥ 19,500

¥

28

¥

—

¥

¥

At March 31,
Hedged item

Short-term
Borrowings,
Long-term
Debt
Bonds
PayableLong-term
Debt
Bonds
Payable—¥Contract
Amount due
after One Year

¥ 14,278¥ (777)¥ 9,017¥ 9,017¥ (207)

¥

¥

¥

¥

¥

—

—

¥ 18,000¥ 18,000

¥

21

14

—

Fair
Value

1

Contract
AmountContract
Amount due
after One Year

Fair
Value

$ 1,267,015$ 1,066,148$ (13,287)

Hedged item

Long-term
Debt
Bonds
PayableContract
Amount due
after One Year$ 137,615$ 131,201$ (7,146)

$

$

$

—

—

Fair
Value

—

Foreign currency forward contracts to which specific accounting is applied:
The following foreign currency forward contracts, which qualify for hedge accounting and meet specific matching criteria, are
not re-measured at market value. However, any differences between the foreign exchange contract rates and historical rates
resulting from the translation of receivables and payables are recognized as income or expense over the lives of the related
contracts. In addition, the fair value of such foreign currency forward contracts in Note 18 is included in those of the hedged
items (i.e. Loans Receivable), in principle.

——(Millions of yen)

$

—

$

¥

—

¥

—

¥

—

2020
Hedged item

Foreign currency
forwardcontracts
Selling, U.S.
dollars

2020

Short-term
Borrowings,
Long-term
Debt
Bonds
PayableContract
Amount

At March 31,(Thousands of U.S. dollars)

81

Contract
Amount(1) Foreign currency forward contracts¥ 19,500

At March 31,

Payment - floating
rate, receipt fixed rate

¥ 14,976

—

Fair
Value

2020
Hedged item

Derivative transactions to which hedge accounting is applied:

Payment - fixed
rate, receipt floating rate

Payment - fixed
rate in Japanese Operational
Yen, receipt
Investment- fixed rate inSecurities
U.S. dollars
Payment fixed rate inIndonesianLong-term
Rupiah, receipt
Debt- floating rate in
U.S. dollars

Contract
Amount due
after One Year

(Thousands of U.S. dollars)

At March 31,

Payment - floating
rate, receipt fixed rate

Hedged item

2019

Contract
Amount

At March 31,(Thousands of U.S. dollars)

Payment - fixed
rate, receipt floating rate

(Millions of yen)

2020

At March 31,

—

$

—

$ 179,179$ 179,179$

263$ 165,396$ 165,396$

200

Committed
transactions
in foreign
currencies

Contract
Amount¥ 91

Contract
Amount due
after One Year

¥ —

2019
Fair
Value

¥0

Contract
Amount¥ —Contract
Amount due
after One Year

¥ —

Fair
Value

¥ —

(Thousands of U.S. dollars)

2020

At March 31,
Hedged item

Foreign currency
forwardcontracts
Selling, U.S.
dollars

Committed
transactions
in foreign
currencies

Contract
Amount$ 844

Contract
Amount due
after One Year

$ —

Fair
Value

$4

82

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements

20. Other Comprehensive Loss

Interest rate swaps and interest rate and currency swaps to which specific accounting is applied:
The following interest rate swaps and interest rate and currency swaps, which qualify for hedge accounting and meet specificmatching criteria, are not re-measured at market value. However, the differential paid or received under the swap agreements
is recognized and included in interest expense or income. In addition, the fair value of such interest rate swaps in Note 18 isincluded in those of the hedged items (i.e. Loans Receivables, Factoring Receivables and Long-term Debt).
(1) Interest rate swaps(Millions of yen)

2020

At March 31,
Hedged item

Payment - fixed rate, receipt floating rate
Payment - floating rate, receipt fixed rate

Loans
Receivables
Long-term
Debt
Long-term
Debt

2019
Contract
Amount due
after One Year

Contract
Amount

¥

2,672

¥

2,672

¥ 137,232¥ 125,032¥ 16,067¥ 16,067

Hedged item

Loans
Receivables
Long-term
Debt
Long-term
Debt

Contract
AmountContract
Amount due
after One Year¥ 3,063¥ 3,063¥ 75,263¥ 65,214¥ 12,000¥ 12,000(Thousands of U.S. dollars)

2020

At March 31,
Hedged item

Payment - fixed rate, receipt floating rate
Payment - floating rate, receipt fixed rate

Contract
Amount due
after One Year

Contract
AmountLoans$
24,558
Receivables
Long-term$ 1,260,983
Debt
Long-term$ 147,641
Debt$

24,558$ 1,148,882$ 147,641(2) Interest rate and currency swaps(Millions of yen)

2020

At March 31,
Hedged item

Payment - fixed rate in Indonesian
Rupiah, receipt - floating rate in
U.S. dollars

Factoring
Receivables

Contract
Amount2019
Contract
Amount due
after One Year

Hedged item

¥ 153

Factoring
Receivables¥ 153(Thousands of U.S. dollars)

2020

At March 31,

Payment - fixed rate in Indonesian
Rupiah, receipt - floating rate in
U.S. dollars

83

Hedged item

Contract
AmountContract
Amount due
after One Year

Factoring
Receivables$ 1,408$ 1,408

Contract
Amount¥—Contract
Amount due
after One Year¥—The components of other comprehensive loss for the years ended March 31, 2020 and 2019 were as follows:(Millions of yen)

Unrealized Gain (Loss) on Available-for-sale Securities
Gains arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Deferred Loss on Derivatives under Hedge Accounting
Losses arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal
Foreign Currency Translation Adjustments
Adjustments arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Defined Retirement Benefit Plans
Adjustments arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Share of Other Comprehensive Income (Loss) in associates
Income (Loss) arising during the year
Reclassification adjustments to profit or loss
Total
Total Other Comprehensive Loss(Thousands of U.S. dollars)

2020

2019

2020

¥ 2,358(1,355)
1,002
315
¥ 686

¥ (2,081)(1,227)(3,308)(1,012)¥ (2,295)$ 21,671(12,458)
9,213
2,903
$ 6,310¥ (1,224)
418
(805)
(245)
¥ (559)¥ (1,234)
302
(932)
(285)
¥ (647)$ (11,249)
3,850(7,399)(2,257)$ (5,142)

¥

(599)
—
(599)
—
(599)

¥ (1,223)—(1,223)—¥ (1,223)$ (5,508)—(5,508)—$ (5,508)

(216)
(4)
(220)
(66)
(154)

¥

91
1
93
28
64

$ (1,989)(41)(2,030)(614)$ (1,416)

¥

(40)
—
(40)

$

¥

112
—
112

¥

(513)

¥ (4,142)

¥
¥

¥
¥

¥

¥

$

1,037
—
1,037

$ (4,719)

21. Supplemental Information on Changes in Equity
The increase of 543 thousand shares of treasury stock is due to the acquisition of the Company’s share under the Company’s
BBT of 543,300 shares and the purchase of shares less than one unit of 176 shares. The decrease of 50 thousand shares oftreasury stock is due to the sales from BBT mentioned above. Issued shares in common stock at the end of fiscal year includes
treasury stock of 639,200 shares held by the Company’s BBT. (See Note 2 (aa) for details on BBT.)

84

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Consolidated Financial Statements

22. Related-Party Disclosures

24. Subsequent Events

Transactions of the Group with related parties, i.e., a major shareholder, parent company of a major shareholder, unconsolidated
subsidiaries, and fellow company for the years ended March 31, 2020 were as follows:

Borrowing funds
Securitization of receivables
Issuance of commercial paper
Payment of interest
Receipt of interest
Issuance of bonds payable(Millions of yen)(Thousands of U.S. dollars)

2020¥ 1,396,550
43,934
1,740,000
2,728
1,054
45,0002020$ 12,832,404
403,697
15,988,239
25,075
9,685
413,489(Millions of yen)(Thousands of U.S. dollars)

2020

2020
$ 603,852
2,852
15
705,299
701,093508,682
535,371
1,194,524
535,184
230,103
1,552

The balances due to or from these companies at March 31, 2020 were as follows:

Operational investment securities
Accrued income
Prepaid expenses
Short-term borrowings
Commercial paper
Payables under securitized lease receivables
Current Portion of Long-term debt
Bonds payable
Long-term debt
Long-term payables under securitized lease receivables
Accrued expenses¥ 65,717
310
1
76,75776,30055,35958,264130,000
58,24425,042
168

23. Per Share Information
Details of basic net income attributable to owners of the parent per share (“EPS”) for the years ended March 31, 2020 and 2019were as follows:(Millions of yen)(Thousands ofshares)For the year ended
March 31,

(Yen)

(U.S. dollars)(Millions of yen)(Thousands ofshares)2020
Net income
attributable toowners of theparentWeightedaverage shares(Yen)(U.S. dollars)

2019

EPS

Net income
attributable toowners of theparentWeightedaverage shares¥ 16,594

42,697(1) Appropriation of Retained Earnings
The following appropriation of Retained Earning at March 31, 2020, was approved at the Company’s shareholders’ meeting on
June 24, 2020:(Millions of yen)

Year-end cash dividends, ¥42.00 ($0.39) per share¥ 2,058(Thousands of U.S. dollars)$ 18,911(2) Acquisition of the shares
On March 9, 2020, the Company, Ricoh Company, Ltd. (“Ricoh”), and Ricoh Leasing Company, Ltd. (“Ricoh Leasing”) reached
an agreement to enter into a business alliance among the three companies, subject to the conclusion of the acquisition of
Ricoh Leasing’s 6,160,000 shares of common stock (20.00% of the voting rights ratio (rounded at the third decimal point. In thecalculation of the voting rights ratio, hereinafter the same applies.)) by the Company from Ricoh. The Company completed theacquisition of 6,160,000 shares of common stock of Ricoh Leasing on April 23, 2020.
(1) Purpose of the business alliance agreement
The Company, Ricoh and Ricoh Leasing agreed to proceed discussions to decide the specific details of the businessalliance among the parties in order to achieve their own business growth and increase corporate value for the purpose ofeffectively utilizing their own business foundations to strengthen their existing businesses, and using their know-how andinfrastructure to create new business opportunities.
(2) Corporate name, business and capital of the company whose shares were acquired(a) Corporate name
Ricoh Leasing Company, Ltd.
(b) Description of the business
Lease, Installment Sales Business and Financial Services Business(c) Capital¥7,896 million ($72,561 thousand)(3) Date of the acquisition of the shares
April 23, 2020
(4) Number of shares acquired, acquisition price and voting rights ratio held after the transaction(a) Number of shares acquired
6,160,000 shares(b) Acquisition price¥36,799 million ($338,141 thousand)(c) Voting rights ratio held after the transaction
20.00%EPS

Basic EPS
Net income available
to common¥ 17,512
shareholders

85

48,581¥ 360.49$ 3.31¥ 388.64$ 3.5786

Value Creation by the Mizuho Leasing Group

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Independent Auditor’s Report87

88Value Creation by the Mizuho Leasing Group

Independent Auditor’s Report

Growth Strategy

Strength to Support Growth

Consolidated Financial Data and Corporate Information

Corporate Information

Corporate Profile (As of August 31, 2020)
CompanyName

Mizuho Leasing Company, Limited

Paid-in
Capital¥26,088 million

Head
Office2-6 Toranomon 1-chome, Minato-ku, Tokyo 105-0001, Japan
Tel: +81-3-5253-6511 (main exchange)

Number of
Employees

Consolidated: 1,745; Non-consolidated:
687

Date of
Establishment

December 1, 1969

Business
Description

Integrated financial services

Business Sites (As of August 31, 2020)
Head Office

2-6, Toranomon 1-chome, Minato-ku, Tokyo 105-0001

Sapporo Branch

2, Kita 1-jo Nishi 5, Chuo-ku, Sapporo, Hokkaido 060-0001

Sendai Branch

4-1, Ichiban-cho 2-chome, Aoba-ku, Sendai, Miyagi 980-0811

Corporate Business Dept. (Metropolitan Area No. 2) 65-2, Naka-cho 2-chome, Omiya-ku, Saitama, Saitama 330-0845
Niigata Branch

866, Rokuban-cho, Nishihori-dori, Chuo-ku, Niigata, Niigata 951-8061

Toyama Branch

5-13, Sakurabashi-dori, Toyama, Toyama 930-0004

Shizuoka Branch

5-9, Miyuki-cho, Aoi-ku, Shizuoka, Shizuoka 420-0857

Nagoya Branch

Osaka Business Dept.

11-11, Nishiki 1-chome, Naka-ku, Nagoya, Aichi 460-0003
659, Tearaimizu-cho, Nishikikozi-agaru, Karasuma-dori, Nakagyo-ku,
Kyoto, Kyoto 604-8152
1-1, Koraibashi 4-chome, Chuo-ku, Osaka, Osaka 541-0043

Kobe Branch

69, Kyomachi, Chuo-ku, Kobe, Hyogo 650-0034

Hiroshima Branch

1-22, Kamiyacho 2-chome, Naka-ku, Hiroshima, Hiroshima 730-0031

Takamatsu Branch

6-8, Bancho 1-chome, Takamatsu, Kagawa 760-0017

Fukuoka Branch

13-2, Tenzin 1-chome, Chuo-ku, Fukuoka, Fukuoka 810-0001

Kyoto Branch

Sapporo Branch

Niigata Branch
Kyoto Branch
Kobe Branch

Toyama Branch

Sendai Branch

Corporate Business Dept.
(Metropolitan Area No. 2)

Takamatsu Branch
Hiroshima Branch

Head Office

Fukuoka Branch
Shizuoka Branch
Nagoya Branch
Osaka Business Dept.
89

90

Value Creation by the Mizuho Leasing Group

Challenging for Further Leap
Forward & Value Creation

Corporate Information

Major Group Companies (As of August 31, 2020)
Company Name

Mizuho-Toshiba Leasing Company, LimitedJapan

Dai-ichi Leasing Co., Ltd.

Japan

Mindset of each employee

Universal Leasing Co., Ltd.

Action Guidelines
Mizuho Marubeni Leasing Corporation*

The ThreeCs

RICOH LEASING COMPANY, LTD.*

Challenge

Mizuho Auto Lease Company, Limited
ML Estate Company, Limited

ChangeML Shoji Company, Limited

Paid-in Capital or
Investment

Locations

Business Activity

Ownership

How
Group
shouldbe and90%¥1,520themillionGeneralleasing
stakeholders the Group should consider¥2,000 million General leasing

CreateMizuho Leasing (China) Ltd.

Japan

¥50 million General leasing
Clients

Employees

Shareholders

90%
SocietyJapan¥4,390 million General leasing

50%

Japan

¥7,896 million General leasing
Management Policy

20%

to customers’
needs
and provide
preciseJapan 1. Respond¥386
millionAutoleasing100%

and prompt services by combining the Group’s total
strength.

Japan

2.
Japan

¥10 million

Real estateleasing

100%

Endeavor to further enhance the Group’s reputationand credibility among shareholders
and in the market.
Used equipment¥310 million

Japan

sales

100%

energy and vitality in which proactive, ambitious human¥10 million

Office services

resources are fostered and promoted.

100%

US$30,000
its spirit,and aimto be aChina 4. Comply with the law andGeneralleasing
100%
thousandGroup which always recognizes its social responsibility

and secures understanding and sympathy from society.

IDR568,735,399
General leasing
thousand67%

UnitedKingdom

GBP6,000
General leasing
thousand100%

Thailand

THB100,000
General leasing
thousand49%

Indonesia

Mizuho Leasing (UK) Limited

StrengthPHP1,000,000
to Support Growth
LeasingandLeasing
FinanceGroup
Corporation* Philippines
GeneralLeasingleasing Group:
25%of the Mizuho
Trajectory of theMizuho03 PNB-Mizuho
27 CSR Activities
thousand
TowardSustainable
Growth07 Financial/Non-ﬁnancial Highlights
29 Management Structure
09 11-year Financial Summary
US$72,933
MizuhoLeasing
11 PLM
Fleet,
LLC* Group’s Value Creation Process
USA 31 Corporate GovernanceTrailer leasing
50%
thousandOutside Director
33 Message from
Growth Strategy
35 Compliance and Risk Management
38 Dialogue with Shareholders and Investors
13 President’s Commitment
LIMITED*USA 39 Human Resource
US$140Aircraft leasing
25%
Strategy
Sixth Mid-termManagement Plan (FY2019 to FY2023)
17 AIRCASTLE
44 Environmental and Social Activities
19 Topics in FY2019
21 Business Strategy under the Sixth Mid-term
Consolidated Financial
Data andManagement
IBJ
Air LeasingPlan
LimitedBermudaUS$1 Aircraft
leasing75%
Corporate Information
23 Examples of Co-creation of Value with Clients
25 Reinforcement of Management Base46 Analyses on Business Conditions and Results ofOperations
26 Funding Policies
IBJ Air Leasing (US) Corp.
USA 49 Business Risks
US$100Aircraftleasing75%
and OtherRisks
51 Consolidated Financial Statements
90 Corporate Information*An equity-method affiliate
92 Stock Information

Value Creation by the Mizuho Leasing Group

01 91

Consolidated Financial Data and Corporate Information

Stock Information (As of March 31, 2020)

Stock Information
140,000,000
49,004,000
44,056
Tokyo Stock Exchange, 1st section

Number of Shares Authorized
Number of Shares Issued
Number of Shareholders
Stock Exchange Listing

Securities CodeShareholder Registry
Administrator(Office Location)

8425
Mizuho Trust & Banking Co., Ltd.
Stock Transfer Agency Department,
Mizuho Trust & Banking Co., Ltd. 2–1,
Yaesu 1-chome, Chuo–ku, Tokyo

Major Shareholders (Top 20)

PT. Verena Multi Finance Tbk

Krung Thai IBJ Leasing Co., Ltd.*CONTENTS

Strength to Support Growth90%

3. Strive to create a dynamic corporate culture full of
ML Office Service Company, Limited

Growth Strategy

Shareholders

Mizuho Bank, Ltd.
The Dai-ichi Life Insurance Company, Limited
The Master Trust Bank of Japan, Ltd. (Trust Account)
NISSAN MOTOR CO., LTD. Retirement Benefit Trust Account,with the trustee being Mizuho Trust & Banking Co., Ltd., andre-trustee Trust & Custody Services Bank, Ltd.
UNIZO Holdings Company, Limited.
Meiji Yasuda Life Insurance Company
DOWA HOLDINGS CO., LTD.
Japan Trustee Services Bank, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (TOSHIBA CORPORATION Retirement Benefit
Trust Account re-entrusted by the Mitsui Sumitomo Trust & Banking Co., Ltd.)
Japan Trustee Services Bank, Ltd. (Trust Account 9)
SSBTC CLIENT OMNIBUS ACCOUNT
Credit Saison Co., Ltd.
JP MORGAN CHASE BANK 385151
IINO KAIUN KAISHA, LTD.
Trust & Custody Services Bank, Ltd. (Trust Account E)
Japan Trustee Services Bank, Ltd. (Trust Account 5)
Sompo Japan Nipponkoa Insurance Inc.
Nippon Life Insurance Company
The Master Trust Bank of Japan, Ltd.
(Retirement Benefit Trust, The Senshu Ikeda Bank, Ltd. Account)
KISSEI PHARMACEUTICAL CO., LTD.

Number of Shares Held
(1,000 shares)

Shareholding Ratio*(%)

11,283
2,930
2,059

23.03
5.98
4.20

1,750

3.57

1,546
1,251
1,120
1,098

3.15
2.55
2.29
2.24

900

1.84

843
733
670
669
666
639
626
540
504

1.72
1.50
1.37
1.37
1.36
1.30
1.28
1.10
1.03

405

0.83

400

0.82

*Shareholding ratio is calculated by deducting treasury stock.

Stock Performance

Distribution of Shareholders

Stock price(yen)

Individuals
and Others

11.8%
ForeignInvestors

3,500
3,000
2,500

Financial
Institutions

56.3%

11.7%

2,000
1,500
1,000
500
0

1Q

2Q

3Q

FY2017

4Q

1Q

2Q

3Q

FY2018

4Q

1Q

2Q

3Q

FY20194Q

1Q

2Q

FY2020

Domestic
Corporations

18.8%

Financial
Instruments
Business
Operators

1.4%
92This report is printed on paper certified by the Forest
Stewardship CouncilTM (FSC) as being made fromsustainably managed forests, as well as vegetableoil ink in consideration of the environment.

Mizuho Leasing Co., Ltd.
2-6 Toranomon 1-chome, Minato-ku, Tokyo 105-0001, Japan

www.mizuho-ls.co.jp