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

OTHER MATTERS SUBJECT TO THE
ELECTRONIC PROVISION MEASURESFOR THE 53rd ANNUAL GENERALMEETING OF SHAREHOLDERS(MATTERS OMITTED FROMDOCUMENTS DELIVERED TO
SHAREHOLDERS)
Matters concerning the Status of the Group
Changes in assets and income (loss)
Principal business
Locations
Status of employees
Main lenders
Other important matters concerning the status of the Group

Matters concerning the Company’s shares
Matters concerning share acquisition rights
Matters concerning the Company’s officers
Overview of limited liability agreements
Matters concerning directors and officers liability insurance agreement
Matters concerning Outside Director

Status of the accounting auditor
System for ensuring appropriate business operation and overview of
its operating status
Consolidated statement of changes in equity
Notes on consolidated financial statements
Non-consolidated statement of changes in equity
Notes on non-consolidated financial statements(April 1, 2023 to March 31, 2024)

Mitsubishi HC Capital Inc.
-1-

Matters concerning the Status of the Group
Changes in assets and income (loss)
1) Changes in assets and income (loss) of the Group
Category

FY202050th term

FY202151st term

FY202252nd term(Millions of yen)
FY202353rd term(Current fiscal year)

Revenues

947,658

1,765,559

1,896,231

1,950,583

Recurring income

64,968117,239

146,076

151,633

Net income attributable toowners of the parent

55,314

99,401

116,241

123,842

Earnings per share¥62.07¥69.24¥80.95¥86.30Total assets

6,014,896

10,328,872

10,726,196

11,149,858

Total equity

817,906

1,333,467

1,551,029

1,705,345(Notes) 1. Effective from the 51st term, the Company changed its accounting policies for “Method for How to Post Releasing Revenues in Lease Transactions,” “Method for Posting Lease Transactions as Finance,” and “Method for
Posting Deferred Assets (Bond Issuance Cost),” and the new accounting policies have been retrospectively
applied to the figures of the 50th term.
2. A performance-based stock compensation plan has been introduced effective from this fiscal year under review.
Company shares held in a trust as part of a performance-based stock compensation plan are included in thenumber of treasury shares deducted in the calculation of the weighted average number of shares outstanding forthe purpose of calculating earnings per share.

2)

Changes in assets and income (loss) of the Company

Category

FY202050th term

FY202151st term

FY202252nd term(Millions of yen)
FY202353rd term(Fiscal year underreview)

Revenues

492,019

838,475

764,506

755,707

Recurring income

61,392

34,00879,91073,293

Net income

63,39951,58482,20482,798

Earnings per share¥71.14¥35.93¥57.24¥57.70Total assets

4,181,294

5,700,025

5,317,966

4,963,571

Total equity

557,554880,601

881,212851,108(Notes) 1. Effective from the 51st term, the Company changed its accounting policies for “Method for How to Post Releasing Revenues in Lease Transactions,” “Method for Posting Lease Transactions as Finance,” and “Method for
Posting Deferred Assets (Bond Issuance Cost),” and the new accounting policies have been retrospectively
applied to the figures of the 50th term.
2. A performance-based stock compensation plan has been introduced from this fiscal year under review. Company
shares held in a trust as part of a performance-based stock compensation plan are included in the number oftreasury shares deducted in the calculation of the weighted average number of shares outstanding for the purposeof calculating earnings per share.

-2-Principal business
The Group consists of the Company, its 437 subsidiaries and 89 affiliates. Other affiliated companies
include Mitsubishi Corporation and Mitsubishi UFJ Financial Group, Inc.
The Group is conducting its business in the seven segments of “Customer Solutions,” “Global Business,”“Environment & Energy,” “Aviation,” “Logistics,” “Real Estate,” and “Mobility.”
The main businesses of each reportable segment are as follows.
Reportable segments
Customer Solutions
Global Business

Main business
Finance solutions business for companies and government agencies, energy-saving
solutions business, sales finance business provided through collaboration withvendors, real estate leasing business, and financial service business
Finance solutions business and sales finance business in partnership with vendors in
Europe, the Americas, China and ASEAN region

Environment & Energy

Renewable energy business, environment-related finance solutions business

Aviation

Aircraft leasing business, aircraft engine leasing business

Logistics

Marine container leasing business, railway freight car leasing business

Real Estate

Real estate financing business, real estate investment business, real estate asset
management business

Mobility

Auto leasing business and supplementary services

In accordance with the organizational changes effective April 1, 2023, the name of the reportable segment “Environment,
Energy & Infrastructure” was changed to “Environment & Energy” from the current fiscal year.

Locations1) The Company
Head Office Chiyoda-ku, Tokyo
Branches, etc. Nishi-Shimbashi Office, Nagoya Office, Akasaka Office, Makuhari Office, Osaka Office, Hokkaido
Branch (Sapporo), Tohoku Branch (Sendai), Omiya Branch, Greater Tokyo Business Department No.4
(Shinjuku), Yokohama Branch, Kariya Business Department, Hamamatsu Branch, Kyoto Branch,
Chushikoku Branch (Hiroshima), Kyushu Branch (Fukuoka)

2)

Subsidiary

As listed in “Status of major subsidiaries” of the Business Report.

-3-

Status of employees
Status of Group employees
Segment name

Number of employees

Customer Solutions

2,505 (down 122 from the end of the previous fiscal year)

Global Business

4,131 (down 147 from the end of the previous fiscal year)

Environment & Energy

165 (down 9 from the end of the previous fiscal year)

Aviation

229 (up 17 from the end of the previous fiscal year)

Logistics

167 (down 16 from the end of the previous fiscal year)

Real Estate229 (up 41 from the end of the previous fiscal year)

Mobility

294 (up 63 from the end of the previous fiscal year)

Company-wide (common)

704 (down 51 from the end of the previous fiscal year)

Total

8,424 (down 224 from the end of the previous fiscal year)(Notes) 1. The number of employees excludes those dispatched from the Group to outside companies but includes thosedispatched from outside companies to the Group.
2. The employees indicated as Company-wide (common) belong to administrative divisions, which cannot beclassified in any specific segment.

Main lenders
LenderAmountMillions of yen

MUFG Bank, Ltd.

1,395,572

Mizuho Bank, Ltd.

471,228

Sumitomo Mitsui Banking Corporation

415,051

Sumitomo Mitsui Trust Bank, Limited

252,357

The Norinchukin Bank

224,795

Other important matters concerning the status of the Group
None.

-4-

Matters concerning the Company’s shares(1) Total number of authorizedshares(2) Total number of issued shares(Excluding 29,804,554 treasury shares.)Ownership of the Company’s shares (Reference)

4,800,000,000

Treasuryshares2.0%

1,437,107,690

Foreignnationals
18.4%(3) Number of shareholders

414,207(4) Major shareholders
Name

Individuals/
Others
17.4%

Financial
institutions
24.7%

Other
corporations
35.0%

Securities
companies
2.5%

Shares held

Ownership (Note)

Mitsubishi Corporation

264,044,396 shares

18.37%

Mitsubishi UFJ Financial Group, Inc.

208,345,981 shares

14.49%The Master Trust Bank of Japan, Ltd. (Trust Account)

125,617,500 shares

8.74%

Custody Bank of Japan, Ltd. (Trust Account)

65,927,600 shares

4.58%

MUFG Bank, Ltd.

50,348,620 shares

3.50%

Mitsubishi UFJ Trust and Banking Corporation

28,431,000 shares

1.97%

Meiji Yasuda Life Insurance Company

27,990,390 shares

1.94%

STATE STREET BANK WEST CLIENT - TREATY 505234

16,345,263 shares

1.13%

JP MORGAN CHASE BANK 385632

12,019,701 shares

0.83%

Tokio Marine & Nichido Fire Insurance Co., Ltd.

11,419,725 shares

0.79%(Note)

Treasury shares (29,804,554 shares) are excluded when calculating ownership.

(5) Other important matters concerning the Company’s shares

None.

-5-

Matters concerning share acquisition rights(1) Overview of share acquisition rights, etc. delivered as compensation for execution of duties andheld by officers of the Company on the last day of current fiscal year
Number ofholders
Directors of
the Company(excluding
Name
Directors who(Date of resolution
are Audit &on issuance)
Supervisory
Committee
Members andOutsideDirectors)
9th shareacquisition rights
1(September 27,
2017)
10th shareacquisition rights(June 28, 2018)1

11th shareacquisition rights(June 25, 2019)1

12th shareacquisition rights(June 24, 2020)

1

13th shareacquisition rights(June 25, 2021)

3

14th shareacquisition rights(June 28, 2022)

4

Number ofshareacquisitionrightsType andnumber ofAmount toshares to be
be paid fordelivered uponshare
exercisingacquisition
sharerightsacquisitionrightsCommonshares of the307
Company
30,700 shares
Commonshares of the
248
Company
24,800 shares
Commonshares of the321
Company
32,100 shares
Commonshares of the323
Company
32,300 shares
Commonshares of the880
Company
88,000 shares
Commonshares of the
1,150
Company
115,000 shares

Amount of
Major
assets to beconditions tocontributed
Share acquisition
exerciseuponrights exercise
share
exercising
periodacquisition
sharerightsacquisitionrights¥1 per share

October 14,
2017 to
October 13,
2047

(*)

¥590 pershare¥1 per share

July 14, 2018
to July 13,
2048

(*)

¥513 pershare¥1 per share

July 13, 2019
to July 12,
2049

(*)

¥424 pershare¥1 per share

July 16, 2020
to July 15,
2050

(*)

¥499 pershare¥1 per share

July 16, 2021
to July 15,
2051

(*)

¥511 pershare¥1 per share

July 16, 2022
to July 15,
2052

(*)

¥566 pershare

Notes: 1. In addition to exercising rights within the exercise period, share acquisition rights holders may
execute their share acquisition rights only for the period until five years elapse from the one-year
anniversary of the day following the day of losing their position as either Director or Executive
Officer.
2. Other conditions shall be stipulated in the “Agreement for Allotment of Share Acquisition Rights”
entered into between the Company and the share acquisition rights holders.

(2) Overview of share acquisition rights, etc. delivered as compensation for execution of duties of theCompany Executive Officers, etc. during current fiscal year
None.
(3) Other important matters related to share acquisition rights, etc.
None.

-6-

Matters concerning the Company’s officers
Overview of limited liability agreements
The Company has entered into limited liability agreements with non-Executive Directors, namely
Takahiro Yanai, Hiroyasu Nakata, Yuri Sasaki, Takuya Kuga, Akira Hamamoto, Koichiro Hiraiwa,
Hiroko Kaneko, and Masayuki Saito, as described below.
 In the event that a non-Executive Director is liable to the Company as a result of negligencein their duties, that liability shall be limited to the minimum liability set forth in Article 425,
Paragraph 1 of the Companies Act.
 The above limitation is recognized only when the non-Executive Director performed the
duty in question in good faith and without gross negligence.
Matters concerning directors and officers liability insurance agreement
The Company plans to enter into a directors and officers liability insurance agreement as provided for in
Article 430, Paragraph 3, Item 1 of the Companies Act with an insurance company. The agreement will
cover losses incurred from damages compensation, legal fees, etc. in cases where an insured receives aclaim for damages from a shareholder or third party. In addition, as a measure to ensure that thelawfulness of the execution of duties of the insured person is not compromised, the following losses, etc.
are excluded from coverage.
1) Damage arising from the fact that the insured illegally obtains private gain or benefit
2) Damage arising from criminal acts of the insured3) Damage arising from the insured’s acts committed with the knowledge that they violate laws or
regulations
The insureds under this agreement are the Directors, Directors who are Audit & Supervisory Committee
Members, Audit & Supervisory Board Members, and Executive Officers, etc. of the Company and its
subsidiaries in Japan. There is no insurance premium to be paid by the insureds.

-7-Matters concerning Outside Directors
1) Concurrent positions of executive Directors, etc. at other corporations, etc. and the Company’s
relationships to those corporations, etc.
Category

Director

Director(Audit &Supervisory
Committee
Member)Name

Other corporation

Concurrent position

Relationship to the other corporation, etc.

Takuya Kuga

Mitsubishi
Corporation

Executive Vice
President

There is a trade relationship such as leaseagreements between the Company and
Mitsubishi Corporation. Mitsubishi
Corporation is a major shareholder of theCompany.

Koichiro Hiraiwa

Dream Estate Tokyo
Inc.

Representative
Director

There is no significant trade or otherrelationship between the Company andDream Estate Tokyo Inc.

2) Concurrent positions of Outside Officers at other corporations, etc. and the Company’s relationships tothose other corporations, etc.
Category

Director

Director(Audit &Supervisory
Committee
Member)Name

Yuri Sasaki

Hiroko Kaneko

Other corporation

Concurrent position

Relationship to the other corporation, etc.

Meiji Yasuda Life
Insurance Company

Outside Director

There is a trade relationship such as leaseagreements between the Company andMeiji Yasuda Life Insurance Company.
Also, Meiji Yasuda Life Insurance
Company is a shareholder of the Company
holding 1.94% of its shares.

Kanagawa Chuo
Kotsu Co., Ltd.

Outside Director
There is no significant trade or other(Audit & Supervisory relationship between the Company andCommittee Member) Kanagawa Chuo Kotsu Co., Ltd.

Development Bankof Japan Inc.

Outside Audit &Supervisory Board
MemberThere is a trade relationship such as
borrowing funds between the Company
and Development Bank of Japan Inc.

Shin-Etsu ChemicalCo., Ltd.

Outside Audit &Supervisory Board
MemberThere is a trade relationship such as leaseagreements between the Company andShin-Etsu Chemical Co., Ltd.

-8-

3) Main activities
Category

Name

Director

Hiroyasu
NakataAttendance at meetings
Board of Directors
meetings: 15/15
Governance Committee :6/6
Nomination Committee :6/6

Main activities
Leveraging his deep knowledge as a legal expert, Hiroyasu Nakata
provides comments as necessary and appropriate when proposals
are discussed. In so doing, he contributes to proper decision-making
by the Board of Directors, etc. and supervision of management ingeneral.

Compensation Committee :7/7
Director

Yuri Sasaki

Board of Directors
meetings: 15/15
Governance Committee :6/6
Nomination Committee :6/6

Leveraging her academic knowledge as a university professor, Yuri
Sasaki provides comments as necessary and appropriate when
proposals are discussed based on her exceptional knowledge andabundant experience as a researcher on international finance. In sodoing, she contributes to proper decision-making by the Board of
Directors, etc. and supervision of management in general.

Compensation Committee :7/7
Director

Takuya Kuga

Board of Directors
meetings: 13/15
Governance Committee :6/6
Nomination Committee :6/6
Compensation Committee :7/7

Director(Audit &Supervisory
Committee
Member)Koichiro
Hiraiwa

Board of Directors
meetings: 15/15
Audit & Supervisory
Committee : 15/15
Governance Committee :6/6
Nomination Committee :6/6

Leveraging his extensive management experience and high level of
insight into domestic and foreign business from working at a leading
Japanese general trading company, Takuya Kuga provides
comments as necessary and appropriate from a practical standpoint
when proposals are discussed. In so doing, he contributes to proper
decision-making by the Board of Directors, etc. and supervision ofmanagement in general.

Leveraging his experience with Japan’s central bank and a leading
Japanese telecommunications company, as well as his extensive
expertise in managing major hotels, Koichiro Hiraiwa conducts
audits from a neutral and objective standpoint and provides
comments as necessary and appropriate when proposals are
discussed. In so doing, he contributes to ensuring the soundness of
the Company’s management.

Compensation Committee :7/7
Director(Audit &Supervisory
Committee
Member)Hiroko Kaneko Board of Directors
meetings: 15/15
Audit & Supervisory
Committee : 15/15
Governance Committee :6/6
Nomination Committee :6/6

Leveraging her vast experience at a leading auditing firm and as auniversity professor, as well as her in-depth knowledge as anaccounting expert, Hiroko Kaneko conducts audits from a neutral
and objective standpoint and provides comments as necessary andappropriate when proposals are discussed. In so doing, she
contributes to ensuring the soundness of the Company’s
management.

Compensation Committee :
7/7

-9-

CategoryDirector(Audit &Supervisory
Committee
Member)Name

Attendance at meetings

Masayuki Saito Board of Directors
meetings: 14/15
Audit & Supervisory
Committee : 15/15
Governance Committee :6/6
Nomination Committee :6/6

Main activities
Leveraging his extensive management experience and his expertiseon finance and accounting departments from a leading Japanesemanufacturer, Masayuki Saito conducts audits from a neutral andobjective standpoint and provides comments as necessary andappropriate when proposals are discussed. In so doing, hecontributes to ensuring the soundness of the Company’s
management.

Compensation Committee :6/7- 10 -

Status of the accounting auditor(1) Name of Accounting Auditor of the Company
Deloitte Touche Tohmatsu LLC(2) Remuneration, etc. for Accounting Auditor in current fiscal year(i) Remuneration, etc. for Accounting Auditor in current fiscal year of the Company¥264 million(ii) Total amount of cash and other property benefits to be paid to the Accounting
Auditor by the Company and its consolidated subsidiaries¥495 million

A total of 16 of the important subsidiaries of the Company receive auditing (limited to the provisions of
the Companies Act or the Financial Instruments and Exchange Act, including equivalent laws andregulations in foreign countries) from the certified public accountants or auditing firms (including
persons with equivalent certifications in foreign countries) besides the Accounting Auditor of theCompany.
(3) Reason that Audit & Supervisory Committee agreed to remuneration for Accounting Auditor
The Audit & Supervisory Committee agrees to this remuneration as it has confirmed that these amounts
are determined after sufficient discussion with the Accounting Auditor by using the number of auditingdays and of auditors required to perform appropriate and efficient accounting auditing as the basis forcalculation.
(4) Compensated non-auditing services by the Accounting Auditor to the Company
The Company entrusted the Accounting Auditor with the preparation of comfort letters and otherservices, which are services other than those stipulated in Article 2, paragraph (1) of the Certified Public
Accountants Act (non-auditing services), and paid compensation thereto.
(5) Policies on decisions of dismissal or non-reappointment of Accounting Auditor
If the Accounting Auditor falls under the conditions prescribed in each item of Article 340, paragraph (1)of the Companies Act, the Audit & Supervisory Committee shall deliberate the dismissal of the
Accounting Auditor. If the Audit & Supervisory Committee determines that the Accounting Auditor must
be promptly removed, the Audit & Supervisory Committee shall dismiss the Accounting Auditor basedon the agreement of all members of the Audit & Supervisory Committee.
In addition to the above, if it is determined that the Accounting Auditor should be changed, such as incases of obstacles hindering their ability to execute the duties of Accounting Auditor, the Audit &Supervisory Committee shall decide the details of the proposal relating to dismissal or nonreappointment of the Accounting Auditor that will be submitted to the General Meeting of Shareholders.

- 11 -

System for ensuring appropriate business operation and overview of its operating status
The Company has resolved to establish a system for ensuring appropriate business operation of thecompany (internal control system), as follows, in accordance with Article 399-13, paragraph (1), (b) and (c)of the Companies Act, as well as relevant laws and regulations.
Hereinafter, “the Group” refers to the Company, its subsidiaries, and its affiliates. “Group Company” refers
to subsidiaries and affiliates of the Company.
Specific uses of the Internal Control System in the Group companies are adjusted and implemented
appropriately based on the business, scale, and importance of each Group company.
[System for Group Management](1) The Company shall establish the Mitsubishi HC Capital Group Code of Ethics and Code of Conduct inorder to share fundamental values and ethics to be embraced by all members of the Group and reflect
them in business.
(2) The Company shall establish the management method between the Company and the Group companies,
in order to ensure the propriety of the business activities of the Group companies, and establish internal
rules, etc. to improve the management efficiency and corporate value of the Group as a whole, throughthe Group carrying out activities with a strong sense of solidarity.
(3) The Company shall receive reports, etc. from the Group companies and conduct management of theGroup in line with the various internal rules, etc. established for the Group management, in adherence tothe allocation of duties.
(4) The Company shall establish management and operational methods for internal controls pertaining to thefinancial reports of the Group, and shall effectively develop and operate the internal controls of theGroup as a whole, so that the Company’s financial reports will be prepared appropriately, in accordancewith the provisions of the Financial Instruments and Exchange Act, etc.
[System for Compliance with Laws and Regulations](1) The Company shall establish the Mitsubishi HC Capital Group Code of Ethics and Code of Conduct inorder to share fundamental values and ethics to be embraced by all members of the Group and reflect
them in business.
(2) The Company shall establish a system for ensuring that the officers and employees of the Group comply
with laws and regulations and the Articles of Incorporation, by establishing and disseminating various
internal rules, etc. and the Compliance Manual.
(3) The Company shall establish the Compliance Committee, which deals with establishment, maintenance,
management, etc., of the Group’s compliance system, in addition to the Chief Compliance Officer (Headof Risk Management Division), who is responsible for the compliance of the Group, and the Legal &Compliance Department, which is tasked with enforcing compliance. The Group Companies shall, if
there are any legal risks, etc. intrinsic to the business activities of such company, cooperate with theCompany as necessary, and develop an appropriate compliance system.
(4) The Company shall formulate compliance programs (specific plans to ensure that the officers andemployees of the Group comply with laws and regulations, etc., including education for the Group’s
officers and employees) and monitor how the Group’s officers and employees are working on those
programs.

- 12 -

(5) The Company shall establish the Compliance Hotline System as an internal whistleblowing framework
under which the Group’s officers, employees, etc., can report to or seek consultations with the Company
regarding unfair practices and other conduct.
(6) The Group shall take a resolute stance against anti-social forces, which threaten the peace and stabilityof civil society, and work to prevent transactions with such forces.
(7) The Company shall be aware of the possibility that funds transacted through the Group may be used forvarious criminal activities and/or terrorism, and shall work to prevent money laundering.
[Information Disclosure System](1) The Group shall establish internal rules, etc. for appropriately disclosing information regarding decisions
and occurrences concerning the Group in a timely manner, in accordance with accounting standards andother relevant laws and regulations. The Group Companies shall cooperate with the Company asnecessary.
(2) The Company shall establish a Disclosure Committee for deliberating on the appropriateness of
information disclosures regarding the Group and the effectiveness of internal controls and procedures
related to information disclosures, among other matters.
[Internal Audit System](1) The Company shall establish internal rules, etc. to smoothly and effectively promote audit activities byclarifying procedures for planning, implementing, and reporting internal audits and providing
instructions for improvement within the Group.
(2) The Company shall establish the Internal Audit Department as the department in charge of internal
audits. The Internal Audit Department shall systematically implement internal audits related to the Group
based on an annual audit plan and report the audit results to the Representative Director, the Board of
Directors and the Audit & Supervisory Committee. The Internal Audit Department shall also ensure theeffectiveness of audits by, in the case of matters requiring improvement that are identified and guidance
given to the parties subject to auditing by the Group (matters requiring improvement), having the resultsof improvements reported to the General Manager of the Internal Audit Department of the Company
after the audit, and in the case of significant matters requiring improvement, having the results reported
to the Representative Director.
(3) The General Manager of the Internal Audit Department shall build collaborative relationships with the
Audit & Supervisory Committee Members of the Company, Auditors and other relevant persons of theGroup Companies, and the Accounting Auditor, such as by exchanging relevant information with them
periodically and when appropriate, and shall work to ensure the efficient implementation of the audit.
[Risk Management System]<Company-level Risk Management>(1) The Company shall establish a company-level risk management system in line with the policy that takes
risks within the scope of control determined by the Executive Committee and the Board of Directors,
etc., after comprehensively grasping various risks in the Group and fully examining diverse risks
forecasted in new services. Company-level risk management shall aim to fulfill CSR for stakeholders
including customers, shareholders, employees and local communities by ensuring sound management
and contributing sustainable improvement of the corporate value.

- 13 -

(2) The Company shall plan to build a basis for the stable recording of returns that commensurate with risk,
for achievement of an appropriate capital structure, and appropriate allocation of resources, primarily byidentifying and recognizing, evaluating and measuring, controlling, monitoring, and reporting the risksof the Group and by implementing continuous comprehensive risk management.
(3) The Company shall establish individual risk management methods and their implementations, byclassifying significant risks into the following categories based on characteristic features of businesses
and services of the Group.
i)

Credit risksii) Asset risksiii) Investment risksiv) Market risksv)

Liquidity risksvi) Country risksvii) Operational risks(4) The Company shall implement and monitor risk capital management after comprehensively grasping therisks of the Group that can be evaluated, measured and forecasted in a reasonably quantitative mannerand by periodically and as necessary examining the risk capital management.
(5) The Company shall establish internal rules, etc. that state, among other matters, the Group’s basic
policies for risk management and risk management methods, operations, systems, etc. The Group
Companies shall also prepare necessary internal rules, etc. that state, among other matters, the risk
management and operations of the Group Companies.
(6) The Company shall install an officer responsible for company-level risk management and a departmentthat supervises risk management, and periodically and flexibly as necessary hold meetings of the Risk
Management Committee concerning integrated risk management of the Group. The Risk Management
Committee shall report, besides major risks of businesses of the Group, on risk management matters thatare engaged by different committees and through internal audits concerning financial markets, capital
fluidities, compliance, systems, IT, etc.
(7) The Company shall demand significant risk-related reports from the Group Companies and compile
them into information necessary for company-level risk management before reporting current risk,
issues, and if necessary countermeasures, etc. related to the overall management of the Group, to theBoard of Directors, which shall supervise their implementations.
<Crisis Management>(1) The Company shall clarify its basic ideas and judging standards in preparation against an event that may
lead to huge loss, undermine credibility, or cause substantial delay or long-term interruption in businessof the Group, and establish a system, etc. that ensures continuous management of operations in generaland recovery of normal functions to fulfill social responsibility and minimize losses of the Group.
(2) The Company shall, in peacetime, clarify the departments responsible for events in crisis based on thecharacteristics of their business, prepare systems that deal with different levels of events in crisis, andestablish internal rules, etc. that enable activities to collect information and collaborate in crisis, andallow business continuity and recovery. The Group Companies shall establish internal rules, etc. withineach company.

- 14 -

[Framework for ensuring the Efficient Execution of Duties](1) The Company shall set management targets for the Group and draw up management plans to manage
business based on appropriate methods. The Group Companies shall conduct business management
based on appropriate methods, based on the Group’s management targets and management plans.
(2) The Company shall establish the Executive Committee, to which decisions, etc., regarding certain
matters are delegated by the Board of Directors to the President subject to deliberation at the Executive
Committee. The Executive Committee will hold discussions and make decisions on important matters,
including the business management of the Group, in addition to conducting preliminary considerationsof matters that are to be submitted to the Board of Directors to facilitate decision-making by the Board of
Directors. In addition, various committees shall be established as advisory bodies for the Executive
Committee.
(3) In order to efficiently conduct the execution of duties based on the decisions of the Board of Directors,
the Company shall build an employee rank framework, organizational structure, etc., in accordance with
the internal rules, etc., and shall assign the execution of duties. The Group Companies shall provide
appropriate cooperation such as reports to and consultations with the Company on necessary matterspursuant to the internal rules, etc.
[Other Matters related to the Execution of Duties by Directors](Framework for ensuring that the execution of duties by Directors complies with laws, regulations, and the
Articles of Incorporation, framework for retention and management of information, and framework for reports
to the Company of matters related to the execution of duties by subsidiaries’ Directors)(1) The Company shall establish the Executive Committee to deliberate and decide on importantmanagement matters. The Audit & Supervisory Committee Member(s) selected by the Audit &Supervisory Committee shall attend the meeting, confirm the details of the deliberation, and receive
reports.
(2) The Company shall clearly define the authority and responsibilities of the Board of Directors andDirectors regarding material decision-making matters including compliance management, as well as
matters decided at the discretion of the Board of Directors.
(3) The Board of Directors shall receive and confirm reports of material information related to the executionof duties by Executive Directors, and utilize the internal whistleblowing system through reports from theCompliance Committee.
(4) The Company shall retain and manage material documents and other data related to the execution ofduties by Directors pursuant to the provisions of the internal rules, etc.
(5) The Company shall request reports of matters related to the execution of duties by Directors of theGroup Companies pursuant to the provisions of the internal rules, etc.
[Framework Concerning Employees who Assist with Duties of the Audit & Supervisory Committee](1) The Company shall establish an Audit & Supervisory Committee Office to assist with duties of the Audit& Supervisory Committee.
(2) The Company shall allocate employees to assist with duties of the Audit & Supervisory Committee tothe Audit & Supervisory Committee Office.
(3) The above employees shall not be subject to the directions and instructions of Directors excluding
Directors who are Audit & Supervisory Committee Members.

- 15 -

(4) When implementing personnel transfers or disciplinary action for the above employees, prior consent of
the Audit & Supervisory Committee shall be obtained. When determining performance evaluation,compensation, etc., related to those employees, the prior consent of the Full-time Audit & Supervisory
Committee Member(s) selected by the Audit & Supervisory Committee shall be obtained.
(5) Executive Directors shall cooperate in developing working environments and other relevant conditions
so that the above employees can assist with duties of the Audit & Supervisory Committee smoothly.
[Framework for reporting to the Audit & Supervisory Committee](1) Directors, Executive Officers and other relevant executives, and employees must repost the following
matters without delay to the Audit & Supervisory Committee or the Audit & Supervisory Committee
Member(s) selected by the Audit & Supervisory Committee:
1. when they discover any facts that are likely to cause significant damage (including loss of credit) to theCompany or when significant damage occurs, they shall immediately report that effect (including
matters concerning material lawsuits);
2. the status of whistleblowing through an internal whistleblowing system developed by Directors;
3. the status of management concerning elimination of transactions, and blocking of relationships, with
anti-social forces; and4. other matters that the Audit & Supervisory Committee requests to be reported.
(2) Directors, Auditors, and employees of subsidiaries or persons who receive reports from any of those
persons must report to the Audit & Supervisory Committee or the Audit & Supervisory Committee
Member(s) selected by the Audit & Supervisory Committee without delay, if any of the matters set forthin the preceding paragraph occurs.
(3) The Audit & Supervisory Committee Member(s) selected by the Audit & Supervisory Committee shallcooperate closely with the Auditors of Group Companies and other relevant persons, through means suchas exchanging information necessary for the execution of duties.
(4) If required by the Audit & Supervisory Committee, Directors, Executive Officers and other relevant
executives and employees must attend the Audit & Supervisory Committee meeting and explain matterswith necessary materials. In addition, they have a similar duty to explain if required by the Audit &Supervisory Committee Member(s) selected by the Audit & Supervisory Committee.
(5) The Company shall not treat the persons who have made the reports under (1) to the Audit &Supervisory Committee or any Audit & Supervisory Committee Members disadvantageously, justbecause they made those reports.
(6) The Company shall not treat the persons who have made reports just because they made those reports
using an internal whistleblowing system disadvantageously, and the Company shall specify this in theinternal rules and fully inform all employees through internal training and on other occasions.
[Matters Concerning Policies Regarding the Expenses or Liabilities Arising from the Execution of Duties by
the Audit & Supervisory Committee Members](1) The Audit & Supervisory Committee Office shall promptly process expenses or liabilities when each
Audit & Supervisory Committee Member makes requests with respect to the prepayment of expenses
and other payments, except in cases where such requested expenses or liabilities are deemed to beclearly unnecessary for the execution of the duties of an Audit & Supervisory Committee Member.

- 16 -

[Other Frameworks for ensuring Effective Audits by the Company’s Audit & Supervisory Committee
Members](1) The Audit & Supervisory Committee should create an opportunity to conduct interviews regularly with
Directors, Executive Officers and other relevant executives, and employees, concerning the business,and conduct a regular meeting to exchange opinions with the President and the Accounting Auditor.
(2) The Audit & Supervisory Committee may request opinions from lawyers, the Accounting Auditor, etc. asnecessary, for cases that require expertise.
(3) The Audit & Supervisory Committee should receive in advance an audit plan from the Accounting
Auditor, and regularly receive an audit implementation report; in addition, the Audit & Supervisory
Committee should conduct an interview as necessary, regarding the implementation of audit.
(4) The Audit & Supervisory Committee should make efforts to enhance the effectiveness of the audit, bycooperating with the Audit Department and conducting an audit, regularly or in a timely manner, of theoffices, etc. including the subsidiary, and by understanding the actual situation.
(5) The employee, who should assist the duties of an Audit & Supervisory Committee Member selected by
the Audit & Supervisory Committee and the duties of the Audit & Supervisory Committee, may attend
the Executive Committee, committees and other important meetings and make necessary statements
thereat, and view important documents.
(6) An Audit & Supervisory Committee Member selected by the Audit & Supervisory Committee should
request that the Company and its subsidiaries report on its business, or investigate the situation of theduties and properties, and the Company and its subsidiaries should cooperate therewith.
(7) The personnel of the General Manager of the Internal Audit Department should be decided upon priorconsultation with the Full-time Audit & Supervisory Committee Member selected by the Audit &Supervisory Committee.
(8) The Internal Audit Department should make a report to the Audit & Supervisory Committee regarding
the internal audit plan, internal audit result, and the amendment and abolition of the important rules
related to internal audit, and should respond to requests by the Audit & Supervisory Committee in
relation to information provision, investigation, and report.
(9) Directors, Executive Officers and other relevant executives, and employees should provide the necessary
cooperation for the execution of duties of the Audit & Supervisory Committee, based on the Audit &Supervisory Committee Regulations, standards for audit, etc. of the Audit & Supervisory Committee,
and standards for the Audit & Supervisory Committee to conduct an audit regarding an internal control
system.
(Overview of the operating status of the system for ensuring appropriate business operation)
An overview of the operating status for the 53rd fiscal year (fiscal year ended March 31, 2024) of thesystem for ensuring appropriate business operation (internal control system) is as follows.
[System for Group Management](1) The Company has established and disclosed the Our Mission that embraces the goals of the Group, andthe Our Vision that leads to realizing the Our Mission. The Company has established and disclosed the
Mitsubishi HC Capital Group Code of Ethics and Code of Conduct in order to share fundamental values
and ethics to be embraced by all members of the Group and reflect them in business.
(2) The Company has established six Sub-Committees (risk management, information disclosure,compliance, ALM, sustainability, and IT) as consultative bodies under the Executive Committee, and- 17 -

each of the Sub-Committees examine and report controlling matters (including matters of the Group
companies) to the Executive Committee and, significant matters to the Board of Directors. In addition,
the Company has established internal rules for the management of the Group Companies and assigned anorganization responsible for the internal rules. The Company receives timely reports from thisorganization and provides necessary advice and instruction.
(3) The Company has documented the content of internal controls related to financial reports of the Group
based on the internal rules and evaluated such reports for effectiveness through periodical verifications.
[System for Compliance with Laws and Regulations](1) The Company has established and disclosed the “Mitsubishi HC Capital Group Code of Ethics and Codeof Conduct.” In addition, the Company has established different types of internal rules and theCompliance Manuals and made them known well to the Group.
(2) The Company has assigned the Chief Compliance Officer (Head of Risk Management Division) as
Supervisor and installed the Legal & Compliance Department that will build compliance promotion
systems for the Group. The Legal & Compliance Department has formulated compliance programs towork for compliance promotion through monitoring and holding training programs and served as theadministrative office to the Compliance Committee (that opened four meetings in the current businessyear), which is a consultative body under the Executive Committee, and reported legal compliancematters to the Executive Committee and the Board of Directors.
(3) The Company has established the Compliance Hotline System as an internal whistleblowing frameworkthat allows employees to report to or seek consultations with the Company regarding unfair practices,
etc., and periodically made the system known well to officers, etc. and firmly protect reporting or
consulting persons from disadvantageous treatment.
(4) The Company has formulated treatment rules and accordingly established internal rules and manuals of
how to prevent deals with anti-social forces and money-laundering and make officers and employeesfamiliar to those rules and manuals though holding internal education, etc.
[Information Disclosure System](1) The Company has established and disclosed the “Information Disclosure Policy” as the basic policy of
the Group’s information disclosure. In addition, the Company has formulated internal rules to maketimely and appropriate disclosure and developed a system to receive timely report from the Group. The
information disclosure of the Group is reported to the Executive Committee after its appropriateness andprocedural effectiveness is examined at the Information Disclosure Sub-Committee (which held four
meetings in the current business year).
[Internal Audit System](1) The Company has enacted internal rules to clarify procedures related to planning, implementing, andreporting internal audits and providing instructions for improvement within the Group and familiarizedthese internal rules in the Group.
(2) The Company has established the Internal Audit Department as the department in charge of internal
audits. The Internal Audit Department has formulated annual audit plans, systematically implemented
internal audits related to the Group, and reported the audit results to the Representative Director, Boardof Directors and the Audit & Supervisory Committee. In addition, results of improvement for mattersrequiring improvement where findings have been made and guidance given in audits (matters requiring- 18 -

improvement) have been reported to the General Manager of the Internal Audit Department and audit
effectiveness has been ensured through PDCA.
(3) The General Manager of the Internal Audit Department of has exchanged relevant information in aperiodical and timely manner with the Audit & Supervisory Committee Members of the Company,
Auditors and other relevant persons of the Group Companies and the Accounting Auditor, and worked
for efficient implementation of audits.
[Risk Management System]<Company-level Risk Management>(1) The Company has established internal rules that stipulate matters concerning the Group’s basic policies
for risk management, risk management methods, operations, the system, etc. and familiarized suchmatters in the Group.
(2) The Company has established the Risk Management Department that integrates the Group’s risk
management. The Risk Management Department has comprehensively grasped the Group’s risks,monitored its risk management operation statuses, worked as the administrative office for the Risk
Management Committee (holding four meetings in the current business year), which is a consultative
body to the Executive Committee, and reported integrated risks and individual risk statuses to the
Executive Committee and the Board of Directors.
<Crisis Management>(1) The Company has installed the Chief Crisis Management Officer (CCMO) who is responsible forsupervising the entire Group in building and operating the crisis management system. In addition, theCompany has specified crisis events subject to crisis management, established internal rules that clarify
basic thoughts, judging standards, and handlings of different levels of crises, familiarized those mattersin the Group, and developed a system that receives reports from the Group, to perform crisis
management in a Group-wide manner. Moreover, the Company has shaped the position of thecountermeasure headquarters that deals with crisis events, periodically held disaster control trainings,
and worked for enhancing effectiveness of the trainings by resolving problems identified through suchtrainings.
[Framework for ensuring the Efficient Execution of Duties](1) The Company has established a smooth decision-making system, as a company with the Audit &Supervisory Committee, by delegating President to decide execution of significant operations subject todeliberation at the Board of Directors’ and the Executive Committee’s examinations.
(2) The Company holds, in principle, an Executive Committee meeting every two weeks, and examines
agendas scheduled to be examined at Board of Directors’ meetings that are useful to the Board of
Directors’ decision-makings, besides consulting and deciding on significant matters including theGroup’s business management. Furthermore, the Company has established different types of subcommittees as consultative bodies under the Executive Committee, and introduced a system that enables
to report significant agendas, among those examined at such sub-committees, to the Executive
Committee and the Board of Directors, in order to execute appropriate business management.
(3) The Company has established internal rules that stipulate an employee rank framework, organizational
structure, and allocation of business operations to perform efficient executions of duties, and performed
such execution of duties based on the allocation of business operations.

- 19 -

[Other Matters related to the Execution of Duties by Directors](Framework for ensuring that the execution of duties by Directors complies with laws, regulations, and the
Articles of Incorporation, framework for retention and management of information, and framework forreports to the Company of matters related to the execution of duties by subsidiaries’ Directors)(1) The Audit & Supervisory Committee Members that are elected by the Audit & Supervisory Committee
have attended important meetings of the Executive Committee, etc. to confirm what are deliberated atsuch meetings.
(2) The Company has clarified the powers and responsibilities of the Board of Directors and Directors in theinternal rules and disseminated them in the Group, and the Board of Directors has received reports on
significant information related to the execution of duties in the Group.
(3) The Company shall retain and manage material documents and other data related to the execution ofduties by Directors pursuant to the provisions of the internal rules.
[Framework Concerning Employees who Assist with Duties of the Audit & Supervisory Committee](1) The Company has installed the Audit & Supervisory Committee as the organization that effectively
performs the duties of the Committee and assigned dedicated employees. Personnel affairs, etc. of suchdedicated employees are subject to consent by the Audit & Supervisory Committee, reflecting theindependence of the Audit & Supervisory Committee.
[Framework for reporting to the Audit & Supervisory Committee](1) The Company has stipulated in its internal control system the significant matters that shall be reported to
the Audit & Supervisory Committee or to its members elected by the Audit & Supervisory Committee
and familiarized said matters within the Group. Situations of finance, risk management and internal
audits in the Group, and situations of compliance including the operation of the internal whistleblowing
system are reported to the Audit & Supervisory Committee.
(2) The scheme of the internal whistleblowing system is made periodically familiarized to officers, etc. andreporting persons are firmly protected from disadvantageous treatment. In addition, the Company has
stipulated that the full-time Audit & Supervisory Committee Members are one of the internal
whistleblowing system windows.
(3) For efficient auditing, the Audit & Supervisory Committee Members who are elected by the Audit &Supervisory Committee periodically exchange information necessary for the execution of their duties
with the departments concerning internal control of the Company (Risk Management Department, Legal& Compliance Department, Treasury Department, Accounting Department, etc.) and Audit &Supervisory Board Members, etc. of the Group companies.
[Matters Concerning Policies Regarding the Expenses or Liabilities Arising from the Execution of Duties by
the Audit & Supervisory Committee Members](1) The Company has stipulated in the audit standards of the Audit & Supervisory Committee that Audit &Supervisory Committee Members may demand from the Company the expenses and/or liabilities arisingduring execution of their duties and the Company has paid accordingly.

- 20 -

[Other Frameworks for ensuring Effective Audits by the Company’s Audit & Supervisory Committee
Members](1) The Audit & Supervisory Committee has made periodical exchanges of opinions with the President, theInternal Audit Department and the Accounting Auditor, respectively. The Committee has performed
periodical or timely collaborations with the Internal Audit Department and the Accounting Auditor, in
addition to receiving audit plans and results of audits from such bodies, and worked for improvement in
the effectiveness of audit by collecting information from, including investigation into, offices andsubsidiaries, etc.
(2) The Audit & Supervisory Committee Members that are elected by the Audit & Supervisory Committee
have attended significant meetings including the Executive Committee, etc. to make necessary remarks
and view important documents.
(3) Personnel affairs of the General Manager of the Internal Audit Department shall be decided upon priorconsultation with the Full-time Audit & Supervisory Committee Members selected by the Audit &Supervisory Committee.
(4) The audit standards of the Audit & Supervisory Committee have a stipulation that when the Audit &Supervisory Committee receives advice from outside experts including lawyers, it may demand theexpense from the Company.
(Reference) The Company revised a portion of its systems for ensuring appropriate business operation on April 1, 2024. The
main revisions are as follows.
i) For the system for group management, the Company has clarified that prior approval, prior consultation, or
reporting is required for each item.
ii) The reporting flow to the Representative Director regarding internal controls has been clarified.

- 21 -

Consolidated statement of changes in equity(April 1, 2023 to March 31, 2024)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of
period as of April 1, 2023

33,196

Capitalsurplus547,344

Cumulative amounteffected from changes in
the accounting policies
Balance at beginning of thecurrent period reflectingchanges in the accounting
policies

Retainedearnings
710,989

Treasuryshares(19,158)(7,957)33,196547,344703,032

Total
shareholders’equity1,272,372(7,957)(19,158)

1,264,414

Changes during fiscal year
Dividends from surplus(51,723)(51,723)

Net income attributableto owners of the parent

123,842

123,842

Change in ownershipinterest of parent due totransactions with noncontrolling interests

(966)

(966)

Purchase of treasury
shares
Disposal of treasury
shares(109)(2,134)(2,134)398

288

Net changes in items
other than shareholders’equityTotal changes during fiscal
year–(1,076)

72,119(1,735)69,307

Balance at end of period asof March 31, 2024

33,196546,268

775,152(20,894)

1,333,722- 22 -

Accumulated other comprehensive income
Total
Valuation
RemeasuNonShareaccumudifference Deferred Foreign
rements ofcontrolling
Total equity
acquisition
lated othergains or currencyondefinedinterests
rightscomprehenavailable- losses on translation
benefitsive
hedges adjustment
for-saleplansincomesecurities
Balance at beginning of
period as of April 1, 2023

14,81753,051

186,545

1,985

256,400

2,138

20,118Cumulative amounteffected from changes in
the accounting policies
Balance at beginning of thecurrent period reflectingchanges in the accounting
policies

1,551,029(7,957)

14,81753,051

186,545

1,985

256,400

2,138

20,1181,543,072

Changes during fiscal year
Dividends from surplus(51,723)

Net income attributableto owners of the parent

123,842

Change in ownershipinterest of parent due totransactions with noncontrolling interests(966)

Purchase of treasury
shares(2,134)

Disposal of treasury
shares288

Net changes in items
other than shareholders’equity169(16,234)

105,931

5,276

95,143(271)(1,906)

92,965

Total changes during fiscal
year

169

(16,234)

105,931

5,276

95,143(271)(1,906)

162,273

Balance at end of period asof March 31, 2024

14,98736,817

292,477

7,262

351,544

1,866

18,211

1,705,345- 23 -

Notes on consolidated financial statements<Notes to basis of preparing consolidated financial statements>
1.

Matters related to scope of consolidation(1) Number of consolidated subsidiaries: 245
The names of the major consolidated subsidiaries are listed in “Status of major
subsidiaries” of the Business Report. The following companies were included in the scopeof consolidation from the current fiscal year: MHC Energy Europe ApS and three othercompanies due to their establishment; and PFI MC One Y.K. and 19 other companies due
to acquisition of equity, etc.
The following companies were excluded from the scope of equity method application but
included in the scope of consolidation during the current fiscal year: CenterPoint
Development Inc. and one other company due to additional acquisition of shares, etc.
The following companies were removed from the scope of consolidation from the current
fiscal year: JSA Cayman 10130, Ltd. and 16 other companies due to the completion ofliquidation, etc.; Shutoken Leasing Co., Ltd. and six other companies due to the sale oftheir shares; Japan Infrastructure Initiative Company Limited and six other companies due
to mergers; and Shutoken Insurance Property Co., Ltd. and three other companies due to a
reduction in the Company’s ownership ratio due to a capital increase through third-party
allocation.
(2) Names of major non-consolidated subsidiaries
There are no major non-consolidated subsidiaries which should be disclosed.
Reason for exclusion from scope of consolidation
Of the non-consolidated subsidiaries, 141 companies are proprietors conducting leasing
businesses primarily through silent partnerships. Their assets, liabilities, and gains/losses are
not attributable to the pertinent subsidiaries and the Company has barely any transactions
with the subsidiaries. Therefore, they are excluded from the scope of consolidation.
Of the non-consolidated subsidiaries, 51 companies are small businesses. Their total assets,revenues, net income or loss (amount corresponding to equity share), retained earnings(amount corresponding to equity share), etc. do not significantly impact the consolidatedbalance sheet nor consolidated statement of income. Therefore, they are excluded from thescope of consolidation.

2.

Matters related to the application of the equity method(1) Number of non-consolidated subsidiaries applying equity method: 1
There are no major non-consolidated subsidiaries which should be disclosed.
(2) Number of affiliates applying equity method: 67
Names of major equity method affiliates
Mitsubishi Electric Financial Solutions Corporation
Mitsubishi Auto Leasing Corporation
Chubu Electric Power & MHC Germany Transmission GmbH- 24 -

The following companies are included in equity method affiliated companies for the current
fiscal year: Konan Urutra Datsutanso Suishin Kiko G.K. and six other companies due to theirestablishment.
The following companies are excluded from the scope of equity method application during
the current fiscal year: Mirai Soden Tsu Hakusan LLC and six other companies due to thesale of their equity; and Mitsubishi HC Capital Auto Lease Corporation due to an absorptiontype merger with Mitsubishi Auto Leasing Corporation as the surviving company.
The following companies were excluded from the scope of equity method application but
included in the scope of consolidation during the current fiscal year: CenterPoint
Development Inc. and one other company due to additional acquisition of shares, etc.
(3) Names of major companies, etc. among non-consolidated subsidiaries or affiliates not applying
equity method
There are no major non-consolidated subsidiaries or affiliates which should be disclosed.
Reasons not to apply equity method
Of the non-consolidated subsidiaries, 141 companies are proprietors conducting leasing
businesses primarily through silent partnerships. Their gains/losses are not attributable to thepertinent subsidiaries and the Company has barely any transactions with the subsidiaries.
Therefore, they are excluded from the scope of equity method application.
Of the non-consolidated subsidiaries and the affiliates, 50 non-consolidated subsidiaries and
22 affiliates have insignificant impact on the consolidated balance sheet and consolidated
statement of income from a perspective of net income or loss (amount corresponding toequity share), retained earnings (amount corresponding to equity share), etc., even whenexcluded from equity method. As they are also not important overall, they are excluded fromthe scope of equity method application.
3.

Matters related to fiscal year of consolidated subsidiaries(1) Consolidated subsidiaries with balance sheet dates that differ from consolidated balance sheet date
April 30:

2

May 31:

1August 31:

2

September 30:

4October 31:

14

November 30:

4

December 31:

116

January 31:29(2) Consolidated subsidiaries with balance sheet dates of the ends of April and October are consolidated
in financial statements based on provisional closings conducted as of the end of January.
Consolidated subsidiaries with balance sheet dates of the ends of May, August, and November are
consolidated in financial statements based on provisional closings conducted as of the end of
February.
Consolidated subsidiaries with balance sheet dates of the ends of September are consolidated infinancial statements based on provisional closings conducted as of the end of December.
- 25 -

Further, for 11 of the consolidated subsidiaries with balance sheet dates of the end of December,provisional closings are calculated based on the results at the consolidated balance sheet date.
Other consolidated subsidiaries use the financial statements as of their respective balance sheet
dates.
Also, important transactions that occur between the consolidated balance sheet date and the abovebalance sheet dates are adjusted as needed in consolidation.
4.

Matters related to accounting policies(1) Valuation standards and methods for important assets
1)

Securities
Of available-for-sale securities, bonds and other securities held for earning financial revenues for
operating purposes (operational investment securities)
・ Other than shares that have no market value
Fair value method(Valuation differences are included directly in net assets and costs of securities sold aredetermined by the moving average method.)・ Shares with no market value, etc.
Cost method based mainly on the moving average method
For investments in limited liability investment partnerships and similar entities (deemed to
be securities based on Article 2, paragraph (2) of the Financial Instruments and ExchangeAct), these are stated by the net amount corresponding to the Company’s equity sharebased on the most recent obtainable financial statements depending on the reporting dateestablished by the partnership agreement.
In addition, investments in partnerships, etc. invested by certain consolidated subsidiaries
outside Japan are recorded on the valuation of the market value that each of the invested
companies recognized and accordingly the net amounts equivalent to the equity interests
are included.
Available-for-sale securities not included above
・ Other than shares that have no market value
Fair value method(Valuation differences are included directly in net assets and costs of securities sold aredetermined by the moving average method.)・ Shares with no market value, etc.
Cost method based on the moving average method
For investments in limited liability investment partnerships (deemed to be securities basedon Article 2, paragraph (2) of the Financial Instruments and Exchange Act), these arestated by the net amount corresponding to the Company’s equity share based on the mostrecent obtainable financial statements depending on the reporting date established by thepartnership agreement.

2)

Derivatives
Fair value method- 26 -

3)

Inventories
Cost method based on the specific-cost method(Consolidated balance sheet values are calculated using the method of writing down the bookvalue based on declining profitability)(2) Methods of depreciation and amortization of significant depreciable and amortizable assets
1)

Leased assets
Depreciation is calculated with the lease period or estimated useful lives of assets considered as
the depreciation years, and using the straight-line method based on the standard that theestimated disposal value of a leased asset at the fulfillment of the period to be the residual value.

2)

Other operating assets
Depreciation is calculated with the estimated useful lives of assets considered as the depreciation
years, and using the straight-line method.

3)

Own-used assets
The Company and domestic consolidated subsidiaries primarily adopt the declining balancemethod.
However, for buildings (excluding equipment attached to buildings), as well as equipment
attached to buildings and structures acquired on or after April 1, 2016, depreciation is primarily
calculated using the straight-line method.
Consolidated subsidiaries outside Japan primarily adopt the straight-line method.

4)

Other intangible assets (excluding goodwill)
For software (used internally), amortization is mainly calculated using the straight-line method
based on expected usable period (five years) in the Company.
For other amortizable assets, amortization is calculated using straight-line method based on
expected effective period.

- 27 -

(3) Accounting policy for significant allowances and provisions
1)

Allowance for doubtful accounts
To reserve for loss on doubtful accounts, estimated uncollectible amounts are booked based on
historical default rates for general receivables, or based on individual consideration ofcollectability for doubtful receivables and distressed receivables (receivables from legally or
substantially bankrupt obligors).
Also, the Company applies the “Treatment on the calculation of default estimates” established in“Treatment for Accounting and Auditing of Application of Accounting Standard for Financial
Instruments in Lease Industry” (The Japanese Institute of Certified Public Accountants Industry
Committee Practical Guidance No. 19, November 14, 2000).
With respect to the amount of distressed receivables, the amount expected to be recoverable isdeducted from the receivable amount, and the remainder, which is treated as the estimatedamount of uncollectible receivables, is directly deducted from the receivable amount. This
amount is ¥6,836 million.
In addition, the consolidated subsidiaries adopting the International Financial ReportingStandards outside Japan post allowance for doubtful accounts after measuring their projectedcredit loss for 12 months or the entire expected remaining period using the loss ratio that is
adjusted after past bad debt records and current and future economic situations, etc. are counted.
In addition, the consolidated subsidiaries adopting U.S. accounting standards outside Japan post
allowance for doubtful accounts after measuring their projected credit loss for the entire
expected remaining period using the loss ratio that is adjusted after past bad debt records andcurrent and future economic situations, etc. are counted.

2)

Provision for bonuses
The Company and certain consolidated subsidiaries book the amount expected to be paid in thefollowing fiscal year that are attributable to the current fiscal year in order to issue payment forbonuses to employees.

3)

Provision for bonuses for directors (and other officers)
The Company and certain consolidated subsidiaries book the amount expected to be paid in thefollowing fiscal year that are attributable to the current fiscal year in order to issue payment forbonuses to officers and executive officers.

4)

Provision for retirement benefits for directors (and other officers)
Certain domestic consolidated subsidiaries book the full amount to be paid at the end of thecurrent fiscal year based on the internal payment rules in order to issue payment for retirement
benefits of officers and executive officers.

5)

Provision for share awards for directors (and other officers)
To provide for the delivery of the Company’s shares for directors and other officers inaccordance with the performance-based stock compensation plan, the Company books theamount expected to be paid at the end of this current fiscal year.

(4) Method of accounting for retirement benefits
1)

Method of attributing estimated retirement benefits for periods of service
In the calculation of retirement benefit liabilities, the method of attributing the estimated amountof retirement benefits to the period until the end of the current fiscal year is on the benefit
formula basis.
- 28 -

2)

Amortization of actuarial gains and losses and past service cost
Past service cost is amortized using the straight-line method for the average remaining service
years of employees (14 to 15 years) at the time of occurrence.
Actuarial gains and losses are amortized with the pro-rata amount calculated using the straightline method for a certain number of years (7 to 17 years) within the scope of the averageremaining service years of employees when incurred in each fiscal year from the respective
following fiscal years.

(5) Accounting standards for important income and expenses
1)

Accounting standards of revenues and cost of revenues related to finance lease transactions
The Company books the revenues and cost of revenues corresponding to the elapsed period
based on a standard of a monthly lease fee to be received under the lease agreement for theduration of the lease agreement period.

2)

Accounting standards of revenues related to operating lease transactions
The Company books lease fees corresponding to the elapsed period based on a standard of amonthly lease fee to be received under the lease agreement for the duration of the leaseagreement period.
The Company and consolidated subsidiaries inside Japan book disposal amount and cost related
to disposal of leasing assets as revenues and cost of revenues.

3)

Accounting policy for revenue from contracts with customers
The Company has recognized revenue at the time the control of promised goods or services istransferred to the customer at the amount expected to be received upon exchange of said goods
or services. The description of major performance obligations of major businesses and the times
recognizing revenues are stated as follows:(Sales from maintenance contracts)
Along with concluding lease contracts, maintenance and other services are offered to customers.
At the time when service is delivered, the performance obligation is judged as met and revenue
is recognized.
(Sales from selling merchandise, sales from disposal of lease properties)
Sales from selling merchandise and disposal of lease properties on maturities of lease contracts
by consolidated subsidiaries outside Japan adopting the International Financial ReportingStandards or the U.S. accounting standards are recognized as revenue when the delivery of said
properties to customers is completed and, therefore, the fulfillment obligation is considered asmet.
(Electricity sales)
Electricity sales to customers for the accounting year are calculated and recognized as revenue inaccordance with electricity supply volumes to the customers.

(6) Translation criteria of major assets or liabilities denominated in foreign currencies into Japanese yen
Monetary claims and liabilities denominated in foreign currencies are translated into Japanese yen
by using the spot exchange rates on the consolidated balance sheet date, and the difference arisingfrom such translation is stated as gain or loss. Monetary claims and liabilities denominated inforeign currencies subject to allocation treatment, such as forward exchange, etc., are translated into
a forward exchange in Japanese yen.
- 29 -

Assets and liabilities of foreign consolidated subsidiaries are translated into Japanese yen by using
the spot exchange rates on their respective balance sheet dates. Income and expenses are translated
into Japanese yen using the average exchange rates during the period. The difference arising fromsuch translation is included in foreign currency translation adjustment and non-controlling interestsin the equity section.
(7) Important hedge accounting methods
1)

Hedge accounting methods
The Company applies the deferred hedge method.
The Company applies allocation treatment for forward exchange that meets to requirements ofallocation treatment, and the Company applies special treatment for interest rate swaps that meetrequirements of special treatment.

2)

Hedge instruments and hedged items

Hedge instruments... Interest rate swap instruments, foreign currency interest rate swap instruments,
forward exchange contracts, investment in equity for overseas consolidated
subsidiaries and overseas affiliates, and other liabilities denominated in foreign
currencies related to available-for-sale securities denominated in foreign
currencies
Hedged items............ Borrowings, bonds payable, accounts payable - trade, commercial papers,
current maturities of loans from the securitizations of the minimum future
rentals on lease contracts, investment in equity for overseas consolidated
subsidiaries and overseas affiliates, and available-for-sale securities
denominated in foreign currencies
3)

Hedge policies and methods to evaluate hedge effectivenessIn order to hedge interest rate and foreign currency rate fluctuation risks, and maintain a stable
income, the Company performs derivative transactions based on internal rules.
Regarding interest rate fluctuation risks, lease fee receivables and installment receivables, etc.,
the primary operating assets of the Company, adopt a long-term fixed interest rate. On the other
hand, because there are variable interest rates within the financing through bank borrowings,
etc., the Company manages and performs comprehensive hedges of liabilities so that the
expected principal of derivative transactions that are hedging instruments is within the scope ofhedged liabilities based on the comprehensive management of assets and liabilities (ALM).
Furthermore, the Company uses interest rate-related derivative transactions for the purpose oflocking in profit on individual projects.
Regarding foreign currency exchange rate fluctuation risks, the Company uses currency-related
derivative transactions and hedges through liabilities denominated in foreign currencies forindividual assets and liabilities denominated in foreign currencies, investment in equity foroverseas consolidated subsidiaries and overseas affiliates, and available-for-sale securities
denominated in foreign currencies.
The Company evaluates the effectiveness of hedges by verifying whether the interest rate ofhedged items and the foreign currency exchange rate fluctuation risk are diminished. However,interest rate swaps performed by special treatment are not included in the evaluation ofeffectiveness.
Transaction status is reported quarterly to the President.
- 30 -

For derivative transactions of consolidated subsidiaries, the status of hedge with derivativetransactions and applicable claims and liabilities, contract participants, transaction amount,remaining period, and transaction market value are reported quarterly during the transaction
period to the Company, by applying internal rules of the Company mutatis mutandis.
(Hedge related items applying the “Practical Solution on the Treatment of Hedge Accounting for
Financial Instruments that Reference LIBOR”)
Of the above-mentioned hedge related items, as stipulated in the following practical solution,
special treatment is applied to all of the hedge related items that are covered in the scope of
application of “Practical Solution on the Treatment of Hedge Accounting for Financial
Instruments that Reference LIBOR” (ASBJ, Practical Solution No. 40, March 17, 2022).
Description of hedge related items to which said practical solution is applied is as follows:
Hedge accounting methods... Special treatment of deferred hedge processing or interest rate
swaps
Hedge instruments...

Interest rate swaps

Hedged items............

Borrowings

Type of hedge transactions... What makes cash flow fixed(8) Method and period of amortization of goodwill
Goodwill is amortized in equal amounts over 20 years.
(9) Other significant matters that are the basis for preparing the consolidated financial statements
Accounting method of bonds and other securities held for earning financial revenues for operating
purposes (operational investment securities)
Those bonds and other securities are booked including ¥160,977 million in investment securitiesand ¥763 million in securities.
Further, these financial revenues (interest income, redemption difference, and partnership gains/loss
corresponding to equity share) is booked under revenues.
(10) Accounting standards for consolidated subsidiaries outside Japan
In the event that the financial statements of a consolidated subsidiary of the Company locating
outside Japan is prepared pursuant to the International Financial Reporting Standards or the U.S.
accounting standards, those financial statements are used to prepare consolidated settlement ofaccounts.
In the event that the financial statements of a consolidated subsidiary of the Company locating
outside Japan is prepared pursuant to the generally accepted accounting standards in its residing
country other than the International Financial Reporting Standards or the U.S. accounting
standards, said financial statements are prepared primarily pursuant to the International Financial
Reporting Standards.

- 31 -

<Notes on changes in accounting policies>(Application of Accounting Standards Update (ASU) 2016-13 “Financial Instruments - Credit Losses”)
Certain overseas consolidated subsidiaries applied ASU 2016-13 “Financial Instruments - Credit Losses”
from the beginning of this current fiscal year. As a result, such subsidiaries post allowance for doubtful
accounts upon initial recognition after estimating the expected credit loss over the expected remaining
period.
Following the change, the beginning retained earnings balance decreased by ¥7,957 million in the
consolidated statement of changes in equity.
<Notes on accounting estimates>
Impairment of leased assets
If there are signs of impairment for leased assets, the Company determines whether to recognize impairment
loss. If impairment loss is recognized, the Company depreciates the book value of the leased asset to therecoverable value and books the depreciation amount as an impairment loss.
Future cash flow used in the recoverable value is calculated by an estimate based on future lease fees, lease
period, and value remaining upon fulfillment. The Company determines this estimate to be rational.
However, if there are changes to the conditions precedent or the business environment, there may besignificant impact on the consolidated financial statements from the next fiscal year on.
For the aircraft held by JSA International Holdings, L.P. group, which leases aircraft in the U.S. (¥1,289,006
million in leased assets at the end of the current fiscal year), the Company regularly confirms the future cash
flow and determines whether to recognize impairment losses according to the U.S. accounting standards. In
this determination, the Company compared book value and future cash flow before discount. For the assets
whose future cash flow before discount is less than the book value, the Company booked the amount bywhich the book value exceeds the fair value as an impairment loss. Future cash flow comprises current lease
fees, future lease fees, value remaining upon fulfillment, disposal costs, lease period, off-lease period, andrenewal period. Future lease fees and the value remaining upon fulfillment are determined by an appraisal
company. Disposal cost, lease period, off-lease period, and renewal period are calculated by estimating thembased on past results, etc.
The Company booked ¥1,998 million in impairment losses for aircraft in cost of revenues in the
consolidated statement of income for the current fiscal year.
Valuation of goodwill
If there are signs of impairment for goodwill, the Company determines whether to recognize impairment
loss. If impairment loss is recognized, the Company depreciates the book value of goodwill to therecoverable value and books the depreciation amount as an impairment loss.
Future cash flow across remaining amortization period of goodwill used in the recoverable value iscalculated by an estimate based on the business plan, etc. prepared by considering the past business results
and future business environment of the relevant company. The Company determines this estimate to berational. However, if there are changes to the conditions precedent or the business environment, there may
be significant impact on the consolidated financial statements from the next fiscal year on.
At the end of the current fiscal year, the Company booked ¥102,091 million as goodwill.

- 32 -

(Allowance for doubtful accounts)
Regarding the allowance for doubtful accounts, the subject receivables are classified into normal
receivables, highly doubtful receivables and distressed receivables based on credit information such as thebusiness conditions and payment status of the business partners and in accordance with the Company’s
internal management regulations, and estimated uncollectible amounts are booked as allowance for doubtful
accounts based on historical default rates for normal receivables, as well as considering the collectability ofhighly doubtful receivables and distressed receivables (receivables from legally or substantially bankrupt
obligors). The estimated unrecoverable amount is calculated based on the financial status of the business
partners, the estimated recoverable value of collateral, and future cash flow, etc. in the cash flow estimation
method.
In addition, the consolidated subsidiaries adopting the International Financial Reporting Standards locatedoutside Japan apply IFRS 9 “Financial Instruments,” and based on the expected credit loss (ECL) model,
post allowance for doubtful accounts after measuring their projected credit loss for 12 months or the entire
expected remaining period using the loss ratio that is adjusted after past bad debt records and current andfuture economic situations, etc. are counted.
The consolidated subsidiaries adopting U.S. accounting standards located outside Japan apply AccountingStandards Update (ASU) 2016-13 “Financial Instruments - Credit Losses,” and based on the current
expected credit loss (CECL) model, post allowance for doubtful accounts after measuring their projectedcredit loss for the expected remaining period using the loss ratio that is adjusted after past bad debt records
and current and future economic situations, etc. are counted.
The Company determines this estimate to be rational. However, if there are changes to the conditions
precedent or the business environment, there may be significant impact on the consolidated financial
statements from the next fiscal year on.
At the end of the current fiscal year, the Company booked ¥95,357 million as allowance for doubtful
accounts.
<Additional information>(Performance-based stock compensation plan)
During the current fiscal year, the Company introduced a performance-based stock compensation plan(“Plan”) as an incentive plan for the Company’s directors excluding those who are Audit & Supervisory
Committee members (excluding non-executive directors and non-residents in Japan; hereinafter the same
applies) and executive officers, etc. (excluding non-residents in Japan; hereinafter directors and executive
officers are collectively referred to as “Directors, etc.”)
1. Outline of the plan
The Plan is a stock compensation plan for the Company’s Directors, etc. where the Company sharesand cash equivalent to the conversion value of the Company shares (the “Company Shares, etc.”) aredelivered or paid (the “Delivery, etc.”) based on the achievement level of performance targets of theMedium-term Management Plan of the Company. The Company entrusts money to a trust bank inadvance to acquire the Company’s shares to be delivered, and the trust bank uses the cash to acquire theCompany’s shares. Furthermore, points are granted to Directors, etc. based on the share delivery rules
established separately, and the Company shares, etc. are delivered to Directors, etc. based on such
points.

- 33 -

2. The Company’s shares remaining in the trust
The Company’s shares remaining in the trust are recorded as shares in Equity at the carrying amount at
the trust. The carrying amount and the number of shares of these treasury shares for the current fiscal
year are ¥2,318 million and 2,685 thousand shares, respectively.

- 34 -

<Notes on consolidated balance sheet>
1. Displayed figures are rounded down to the nearest million yen.
2. Assets pledged as collateral and corresponding liabilities(1) Assets pledged as collateral(Millions of yen)
30,345
17,423532,205
162,842
15,8671,401,102
73,1052,344
43,14472
1,160
2,279,614

Cash and deposits
Installment receivables
Lease receivables and investments in leases
Operating loans receivables
Other current assets
Leased assets
Other operating assets
Other intangible assets
Investment securities
Other investments and other assets
Operating lease contract receivables
Total(2) Liabilities corresponding to assets pledged as collateral(Millions of yen)
Short-term borrowings
836
Bonds payable (including current portion of bonds payable)
8,465Long-term borrowings (including current portion of long896,126
term borrowings)
Current maturities of loans from the securitizations of theminimum future rentals on lease contracts (including long565,533
term)
Other non-current liabilities
1,274
Total
1,472,236
Note: Of the assets pledged as collateral, ¥8,562 million in operating loans receivables, and ¥18,577
million in investment securities have revolving pledge and mortgages as the collateral held by theinvestees for their borrowings from financial institutions.

3. Total depreciation of property, plant and equipment(Millions of yen)
1,274,316
61,251
16,138
1,351,706

Leased assets
Other operating assets
Own-used assets
Total(Note) The total depreciation amount above includes total accumulated impairment loss.

4. Guarantee obligations, etc.
(1) Guarantee obligations, etc. in operations (including commitment to guarantee)(Millions of yen)
20,246

Operating guarantees amount- 35 -

(2) Guarantee obligations, etc. for bank borrowings (including commitment to guarantee)(Millions of yen)
ALD MHC MOBILITY SERVICES MALAYSIA SDN.
BHD.
Employee (residential funds)
Subtotal
Total

556
17
574
20,821

5. The outstanding amounts of receivables generating from contracts with customers, contract assets, andcontract liabilities are as follows:
Receivables from contracts with customers (*1)
Contract assets
Contract liabilities (*2)(Millions of yen)
8,661
–
8,942

Notes: 1. Included mainly in lease and other receivables and other current assets in the consolidated balance sheet.
2. Included in other current liabilities in the consolidated balance sheet.

<Notes on consolidated statement of income>
1. Displayed figures are rounded down to the nearest million yen.
2. Gain on step acquisitions
This was due to acquiring all shares of CenterPoint Development Inc., and equity method affiliatedcompany, and making the company Nanko Logistics TMK Inc., and two other companies consolidated
subsidiaries.
3. Loss on sale of shares of subsidiaries and associates
This was primarily due to selling all of the shares of Shutoken Leasing Co., Ltd., which was aconsolidated subsidiary.
4. Impairment losses
The following assets or asset groups are booked as impairment loss.
(1) Property, plant and equipment
Use

Type

Leased assets

Transportation equipment (aircraft)
Transportation equipment (aircraft
engines)

Leased assets

Impairment loss (Millions of
yen)
1,998
715

For certain consolidated subsidiaries of the Company, the book value of leased assets that declined in
profitability due to lower future cash flow expected to occur was depreciated to the recoverable value
and the depreciation amount was booked as an impairment loss to cost of revenues.
The recoverable values of said assets are calculated mainly based on their utility value and the future
cash flow is discounted mainly by 5.1%.
(2) Asset group conducting solar power generation business
Use

Type

Assets for solar power
generation business

Other operating assets, etc.

Impairment loss (Millions of
yen)
5,816

The Group conducts asset grouping for each project of the solar power generation business. For certain
projects of the solar power generation business, the book value of other operating assets that declined in- 36 -

profitability due to lower future cash flow expected to occur was depreciated to the recoverable value
and the depreciation amount was booked as an impairment loss to cost of revenues.
The recoverable values of said assets are calculated based on their utility value and the future cash flow
is discounted by 3.9%.
<Notes on consolidated statement of changes in equity>
1. Displayed figures are rounded down to the nearest million yen.
2. Matters related to type and total number of issued shares(Thousands of shares)
Number of shares
Number of shares atdecreased during
end of current fiscal
current fiscal year
year

Number of shares at
beginning ofcurrent fiscal year

Number of shares
increased during
current fiscal year

Common shares

1,466,912––

1,466,912

Total

1,466,912––

1,466,912

Issued shares

3. Matters related to dividends(1) Dividend payment amount
1) The following was resolved at the Board of Directors meeting held on May 23, 2023.
- Matters related to common share dividends¥25,856 million(a) Total amount of dividends(b) Dividend amount per share(c) Record date(d) Effective date

¥18.00March 31, 2023
June 8, 2023

2) The following was resolved at the Board of Directors meeting held on November 10, 2023.
- Matters related to common share dividends¥25,866 million(a) Total amount of dividends(b) Dividend amount per share(c) Record date(d) Effective date

¥18.00
September 30, 2023
December 11, 2023

(Note)The total amount of dividends resolved at the Board of Directors meeting held on November 10, 2023
includes ¥48 million in dividends on the Company’s shares held by the Trust as part of theperformance-based stock compensation plan.
(2) Of the dividends whose record date is within the current period, those whose effective date is in thenext period
The following is scheduled to be resolved at the Board of Directors meeting held on May 22, 2024.
- Matters related to common share dividends¥27,305 million(a) Total amount of dividends(b) Source of dividends(c) Dividend amount per share(d) Record date(e) Effective date

Retained earnings¥19.00March 31, 2024
June 7, 2024

(Note)The total amount of dividends resolved at the Board of Directors meeting held on May 22, 2024
includes ¥51 million in dividends on the Company’s shares held by the Trust as part of theperformance-based stock compensation plan.

- 37 -

4. Matters related to share acquisition rights at end of current fiscal year
Date of resolution
by Board of
Directors
September 27, 2012
September 26, 2013
September 25, 2014
September 29, 2015
September 29, 2016
September 27, 2017
June 28, 2018
June 25, 2019
June 24, 2020
June 25, 2021
June 28, 2022

Type of shares to bedelivered

Number of shares to bedelivered

Number of outstanding
share acquisition rights

Common shares
Common shares
Common shares
Common shares
Common shares
Common shares
Common shares
Common shares
Common shares
Common shares
Common shares

37,50057,900113,300
156,800
231,600
336,700
287,500
384,200
400,300
841,100
855,400

375
579
1,133
1,568
2,316
3,367
2,875
3,842
4,003
8,411
8,554

- 38 -

<Notes on financial instruments>
1. Matters related to the status of financial instruments(1) Policies and initiatives for financial instruments
The Group mainly operates businesses of leasing, installments, and financial transactions.
In order to operate these businesses, the Group uses direct financing such as the issuance of bonds
and commercial papers and securitization of receivables, as well as indirect financing such as bankborrowings.
The Group conducts comprehensive management of assets and liabilities (ALM) in order to properly
manage and operate interest rate fluctuation risks that occur by the mismatch of interest rate formats
and contract periods for asset management and financing.
Also, derivative transactions are used to hedge interest rate and currency rate fluctuations risks. The
Group does not conduct such transactions for investment or short-term sales gains.
(2) Details and risks of financial instruments
The financial assets held by the Group are mainly receivables related to lease, installment, andfinancial transactions. There are credit risks stemming from non-payment of lease fees, etc. due tobankruptcy of the business partner.
Available-for-sale securities and investment securities are primarily shares, bonds, and investmentsin partnerships. The Company holds them for operating purposes for earning financial revenues orbusiness promotion. Each security bears a credit risk of the issuer, interest rate fluctuation risk, andmarket value fluctuation risk.
Borrowings, bonds payable, and commercial papers, etc., bear liquidity risks in which the Groupmay be unable to secure payment on the payment date in cases such as an inability to liquidate thesecurities in the market under certain conditions. Also, payment obligations with variable interest
rates bear interest rate fluctuation risks.
The main capital operation of the Group is lease, installment, and finance transactions. Certain
receivables related to lease fee receivables, installment receivables, and financing transactions isbased on fixed interest rate. On the other hand, some financing with variable interest rates bears
interest rate fluctuation risks. The Company uses interest rate related derivative transactions tocomprehensively hedge interest rate fluctuations risks and secure stable profit by guaranteeing profit
from individual sales projects. In order to hedge currency exchange rate fluctuation risks forindividual assets and liabilities denominated in foreign currencies, the Company hedges by currencyrelated derivative transactions and liabilities denominated in foreign currencies.
The Group applies hedge accounting related to derivative transactions, etc. Details are included in<Notes to basis of preparing consolidated financial statements> 4. Matters related to accounting
policies (7) Important hedge accounting methods.
The derivative transactions of the Group bear market risks and credit risks. The derivativetransactions of the Group play the role of reducing market risks of the entire Group because theymainly reduce interest rate and currency rate fluctuations risks of hedged assets and liabilities.
(3) Risk management System related to financial instruments
1) Credit risk management
The Group conducts credit management of each business partner group through individual credit
checks that are based on overall strategy, status of capital, and credit rating portfolio, incompliance with the Credit Risk Management Rules. Credit management is conducted through thesales department and credit department, which submit a proposal for deliberation and report to the- 39 -

Risk Management Committee, Executive Committee, and Board of Directors regularly. Also, theinternal audit department verifies and audits management status.
2) Market risk management
The Group manages market risks, primarily interest rate fluctuation risk, based on the rules formarket risk management.
In order to properly manage and operate interest rate fluctuation risks, the Group regularly
monitors the status of mismatching in interest rate formats and contract periods for asset
management and financing, as well as always pays close attention to interest rate situations.
Regarding the status of interest rate fluctuation risks, the Company holds quarterly meetings of the
ALM Committee, comprising officers and department heads of related departments. This
committee analyzes market conditions and portfolios of assets and liabilities, and deliberates thecurrent risk management policy. In addition, the status of interest rate fluctuation risks is reported
to the Risk Management Committee, which is held quarterly.
3) Exchange rate fluctuation risk management
The Company hedges exchange rate fluctuation risk by using derivative transactions related tocurrencies and procuring liabilities denominated in foreign currencies corresponding to assets
denominated in foreign currencies. The status of exchange rate fluctuation risk is reported to the
Risk Management Committee.
4) Price fluctuation risk management
Price fluctuation risks of securities and investment securities are reported to the Risk Management
Committee. Furthermore, because most shares are held for the purpose of transaction promotion,
the Company monitors the financial status of the business partner, confirms the status of thetransaction, and verifies from a capital cost perspective to determine whether or not to continue theholding.
5) Liquidity risk management related to financing
The Group monitors the capital management status of the entire Group and adjusts the long- toshort-term procurement balance. The Group also strives to secure capital liquidity by acquiring
commitment lines from multiple financial institutions and promoting diversification of financing
avenues. Furthermore, the Company monitors the probability of risks emerging in the financing
environment based on the Liquidity Risk Management Rules of the Company, and reports thestatus of liquidity risks monthly to the pertinent officers. Pertinent officers determine the stage ofthe liquidity risks and the results of this determination are reported to the ALM Committee andRisk Management Committee. Also, the Company establishes contingency plans for each stage
and has constructed a system to execute the appropriate plan when the unexpected event occurs.
6) Derivative transactions
Based on internal rules, use purpose and approval authority have been set for derivativetransactions. The use purpose of derivative transactions is to hedge against interest rate andcurrency exchange rate fluctuation risks. The Treasury Department implements them on individualtransactions of the Company. Regarding interest rate fluctuation risks, the Company
comprehensively manages assets and liabilities through ALM and manages currency exchange rate
fluctuation risks on an individual basis. The status of derivative transactions is reported quarterly
to the President. The Company also manages credit risk due to defaults by business partners by
establishing credit limits based on the credit and transaction status of each business partner.

- 40 -

(4) Supplementary explanation about matters related to market value, etc. of financial instruments
Because certain assumptions are adopted to calculate the market value of financial instruments, theprice may vary depending on different assumptions.
2. Matters related to details, etc. by market value level of financial instruments
Carrying amount, market value, and differences recorded in the consolidated balance sheet are as
follows: Besides, pursuant to paragraph (5) of the “Implementation Guidance on Disclosures about Fair
Value of Financial Instruments” (ASBJ Guidance No. 19, the “Fair Value Disclosure Implementation
Guidance”), shares with no market value, etc. are not included in the following table. Besides,
investment in partnerships, etc. where the net amount equivalent to the equity interests were recorded in
the consolidated balance sheet with the handling pursuant to paragraph (24-16) of the “Implementation
Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31) applied arealso not booked in the following table.
The market values of financial instruments are categorized into the following three levels based on their
input observability and importance.
Level 1 market value: Of the inputs related to observable market value calculation, those calculated
based on the market prices of assets or liabilities that are objects to calculatemarket values in a brisk exchange market
Level 2 market value: Market value, other than level 1 market values, where directly or indirectly
observable inputs are used to calculate market values
Level 3 market value: Market values calculated by using important but not observable inputs
In the cases where multiple inputs having important impact on market value calculation are used, of the
inputs having a respective level, the input having the lowest level of priority order is used to categorize
market values.
(1) Financial instruments with a market value in the consolidated balance sheet(Millions of yen)
Category(1) Securities and investment securities
Available-for-sale securities
SharesGovernment bonds, municipal
bonds, etc.
Bonds payable
Other(2) Derivative transactions(*1,*2)
Currencies relatedInterests related
Total assets(*1)

Market value
Level 2
Level 3

Level 1

19,072–

Total

22,34041,412

5,079

–

–

5,079

–
–

26,947
5,852

–
1,077

26,947
6,929––
24,152(62,283)
36,092
6,608––
23,417(62,283)
36,092
54,177

Net receivables and liabilities occurring by derivative transactions are presented by net amount.
Amounts in parentheses show that those are net liabilities.

(*2)

Of the derivative transactions, the amount of the transactions adopting hedge accounting in the
consolidated balance sheet records ¥(24,941) million. Said hedges are subject to the Practical Solution
on the Treatment of Hedge Accounting for Financial Instruments that Reference LIBOR (ASBJ
Practical Solution No. 40, March 17, 2022).

- 41 -

(2) Financial instruments except those with market values in the consolidated balance sheet
Cash and deposits, notes and accounts payable - trade, short-term borrowings and commercial paper
represent cash or are settled in a short-term, reflecting the value close to the booked value. Suchfinancial instruments are, therefore, not presented here.
(Millions of yen)
Market value

Category
Level 1

Level 2

Level 3Total

(1) Installment
receivables (*1)
Allowance for
doubtful accounts(*2)

Difference

165,351(729)––

169,137

169,137(2) Lease receivables
and investments inleases (*3)
Allowance for
doubtful accounts(*2)

164,6214,516

3,072,289(8,422)–

43,7753,125,434

3,169,209(3) Operating loans
receivables
Allowance for
doubtful accounts(*2)

3,063,866

105,3421,850,117(17,120)––

1,827,369

1,827,369(4) Other operatingloans receivables
Allowance for
doubtful accounts(*2)

1,832,997(5,627)211,228
(425)
–

244

211,114211,358(5) Distressed
receivables
Allowance for
doubtful accounts(*2)
Total assets(6) Bonds payable(7) Long-termborrowings(8) Current maturities ofloans from thesecuritizations of theminimum future
rentals on lease
contracts
Total liabilities

Carrying
amount210,802555

122,035(66,983)––––
44,0192,144,743

55,051
5,388,108–

55,051
5,432,127
2,144,743

55,051
5,327,340
2,170,273–
104,787(25,530)–

4,385,750–

4,385,750

4,448,320(62,569)–

552,714–552,714565,959(13,244)–

7,083,209–

7,083,209

7,184,554(101,345)(*1)

Carrying amount excludes deferred profit on installment sales.

(*2)

Installment receivables, lease receivables and investments in leases, operating loans receivables, otheroperating loans receivables, and distressed receivables exclude allowance for doubtful accounts for
each.

(*3)

Difference with the carrying amount on the consolidated balance sheet was ¥81,700 million inestimated remaining value related to finance leases that do not transfer ownership.

- 42 -

Note 1: Description of the valuation method for market value calculation and of inputs related to market
value calculation
Financial instruments with a market value in the consolidated balance sheet(1) Securities and investment securities
Securities listed on the exchange market book market values at the market, which are categorized
into the market values at level 1. In this relation, of the non-listed securities, those using importantbut not observable inputs to calculate market values are categorized into market values at level 3.
Receivables with a published market value are booked at said market value, while government
bonds and municipal bonds are categorized as having level 1 market values, and the receivables
other than mentioned above are categorized as having level 2 market values. Bonds having no
published market value but having variable interest rates reflect the market interest rate in a shortterm. Therefore, as long as the credit status of the issuer does not change significantly after theissuance, the book value is shown as the market value because they are deemed to be close to eachother. On the other hand, the market value of securities with fixed interest rates is the amount of
future cash flow discounted after the spread is added to the term-end risk free rate. Said securities
use observable inputs and are categorized as having level 2 market values.
(2) Derivative transactions
The market value of derivative transactions is calculated based on the price presented by financial
institutions or the discounted present value calculated using observable inputs, and is categorized
into level 2 market value. Items using special treatment for interest rate swaps or allocation
treatment for forward exchange contracts and currency swaps are treated together with long-termborrowings, etc. subject to hedge accounting. Therefore, their market value is included in themarket value of relevant liabilities (See “Financial instruments except those with market values in
the consolidated balance sheet” (7)).
Financial instruments except those with market values in the consolidated balance sheet(1) Installment receivables
The total recoverable amount in the categories based on internal rating, period, etc. is discounted
by the rate projected if a new installment is to be sold, or the total amount after estimated bad
debts are deducted from the amount of projected recoverable in the categories based on internalrating, period, etc. is discounted by the term-end risk free rate, to calculate market values, which
are categorized into level 3 market value.
(2) Lease receivables and investments in leases
The total amount after estimated maintenance costs are deducted from the projected recoverable
amount in the categories based on internal rating, period, etc. is discounted by the rate projected if
a new similar lease transaction is made, or the total amount after estimated maintenance costs andestimated bad debts are deducted from estimated amount recoverable in the categories based oninternal rating, period, etc. is discounted by the term-end risk free rate, to calculate market values.
In the case of using important but not observable inputs, level 3 market value is applied, and in thecase of not using such inputs, level 2 market value is applied to categorize.
(3) Operating loans receivables
Operating loans receivables with variable interest rates reflect the market interest rate in a shortterm. Therefore, as long as the credit status of the borrower does not change significantly after
disbursement of the loan, the book value is shown as the market value because they are deemed to- 43 -

be close to each other. For those with a fixed interest rate, the total principal and interest is
discounted by a rate projected if a similar new loan is made in the categories based on the type ofloan, internal rating, period, etc., or the estimated bad debts are deducted from the total of principal
and interest in the categories based on the type of loan, internal rating, period, etc. which is thendiscounted by the term-end risk free rate, to calculate market values. These are categorized ashaving level 3 market values.
(4) Other operating loans receivable
The total principal and interest is discounted by a rate projected if a similar new loan is made in
the categories based on the type of loan, internal rating, period, etc., or the estimated bad debts are
deducted from the total of principal and interest in the categories based on the type of loan,internal rating, period, etc. which is then discounted by the term-end risk free rate, to calculatemarket values. For items settled in a short term, the book value is shown as the market value
because they are close to each other. Securities using important but not observable inputs are
categorized as having level 3 market values, while the other securities are categorized as having
level 2 market values.
(5) Distressed receivables
Estimated unrecoverable amount of distressed receivables is calculated based on the expected
recoverable amount, etc. through collateral and guarantees. Therefore, the market value is deemed
to be close to the amount obtained by deducting the estimated unrecoverable amount from thecarrying amount on the consolidated balance sheet date, and thus said amount is shown as themarket value, which are subject to the category of level 3 market value.
(6) Bonds payable
Of the bonds issued by the Group, the book value is shown as the market value for those settled ina short term because they are close to each other. In addition, of the bonds settled in a long term,
those with variable interest rates reflect market interest rates in a short term, and the credit statusof the Group did not change significantly after actual issuance. Therefore, the book value is shownas the market value because they are deemed to be close to each other. The bonds with a market
value, except those mentioned above, is based on the market value, while the market value ofbonds with no market value is mainly calculated by discounting the total principal and interest of
said bonds categorized by certain periods by the rate expected in the case where the similar
funding. These are categorized as having level 2 market values.
(7) Long-term borrowings
Of long-term borrowings, those with variable interest rates reflect market interest rates in a shortterm, and the credit status of the Group did not change significantly after the borrowing.
Therefore, the book value is shown as the market value because they are deemed to be close toeach other. The market value of long-term borrowings with fixed interest rates is calculated bydiscounting the total principal and interest of long-term borrowings (*) categorized by set periodsby the rate expected in the case where the similar funding. These are categorized as having level 2
market values.
(*)

Long-term borrowings subject to special treatment for interest rate swaps use the total
amount of the principal and interest treated together with the interest rate swap. Long-termborrowings subject to allocation treatment for currency swaps use the total amount of theprincipal and interest treated together with the currency swap.

- 44 -

(8) Current maturities of loans from the securitizations of the minimum future rentals on lease contracts
Of current maturities of loans from the securitizations of the minimum future rentals on lease
contracts, those with variable interest rates reflect market interest rates in a short term, and thecredit status of the Group did not change significantly after issuance. Therefore, the book value isshown as the market value because they are deemed to be close to each other. The market value of
items with fixed interest rates is calculated by discounting, by the rate expected at similar funding,the total principal and interest of current maturities of loans from the securitizations of theminimum future rentals on lease contracts categorized by certain periods. These are categorized ashaving level 2 market values.
Note 2: Information on the financial instruments having level 3 market value in the consolidated balance
sheet(1) Quantitative information regarding important but not observable inputs
Category

Valuation method

Important but notobservable inputs

Scope of inputs

Weighted averageof inputs

1.37 times

1.37 times

Securities and investment securities
SharesMultiple method

EV/RAV multiplying
power (*1)(*1) EV/RAV multiplying power is a value where the enterprise value of a similar type of company is divided
by its regulated asset value.
In addition to the above, the market value of unlisted stocks held by overseas consolidated subsidiaries that apply theInternational Financial Reporting Standards were calculated using the present value method. In doing so, future cash flow
was estimated by considering factors such as future profitability, capital outlay, and repayment of debt and used as animportant but not observable input, and the stocks were categorized as having level 3 market value.
A significant increase (decrease) in future cash flow will cause a marked rise (fall) to the shares.
Other financial instruments are omitted from presentation due to their insignificance in terms of monetary value.

(2) Table of adjustments from the beginning balance to the term-end balance, valuation loss and profit
recognized in the current fiscal year
(Millions of yen)
Securities and investment securities
Category
Other
SharesBeginning balance
21,238
1,618
Income/loss or other comprehensive income for the current year
Recorded as income or loss (*1)125
(31)
Recorded as other comprehensive
2,203
4
incomePurchase, disposal and redemption
Purchase
61–
Disposal and redemption(1,288)(513)
Transfer to level 3 market value––
Transfer from level 3 market value––
Balance at end of fiscal year
22,3401,077
Valuation gain or loss (*1) on financial
assets and financial liabilities held in the85(31)
consolidated balance sheet as of thesettlement day, of their amounts of gain orloss recorded for the current fiscal year(*1) Included mainly in revenues in the consolidated statement of income.

- 45 -

Total
22,85793
2,207
61(1,801)––
23,41754

(3) Description of market value valuation process
Market values are measured by the management department independent from the sales department
pursuant to the prescribed rules. A valuation model that can most appropriately reflect individual
natures, characteristics, and risks of financial instruments is adopted.
In addition, the management department monitors changes in important indexes that may have
impact on market value fluctuations to check consistency with price fluctuations.
(4) Description of impact on market values in the case where important but not observable input ischanged
EV/RAV multiplying power
EV/RAV multiplying power is a value where the corporate value of a similar type of company isdivided by its restricted outstanding assets. A substantial rise (fall) of the EV/RAV multiplying
power will cause a marked rise (fall) to the shares.

- 46 -

<Notes on rental properties>
The Group owns rental office buildings, commercial facilities, housing units, and logistics warehouses inmajor cities across Japan. Gain on leases related to rental properties in the current fiscal year was ¥13,755
million (major rental income and expenses are booked to revenues and cost of revenues) and gain on sales
was ¥14,067 million (major sale income and expenses are booked to revenues and cost of revenues).
The carrying amount of rental properties, amount change during fiscal year, and market value are as
follows.
(Millions of yen)
Carrying amount
Balance at beginning ofcurrent fiscal year

Amount change during
current fiscal year

Balance at end of current
fiscal year

378,72189,990468,712Market value at end ofcurrent fiscal year
537,846

Notes: 1. Carrying amount is the amount subtracting accumulated depreciation amount from acquisition cost.
2. Of the increase (decrease) for the current fiscal year, the major increase (amounted to ¥126,862 million)
was due to the acquisition of real estate, and the major decrease (amounted to ¥44,053 million) was due tothe sale of real estate.
3. The market value of major properties at the end of the current fiscal year is the amount determined by thecapitalization method and the amount based on a real estate appraisal evaluation by an outside real estateappraiser. However, if there are no important changes to indicators that is considered to reflect the certain
valuation amount and appropriate market price from the most recent valuation, market value will be themost recent valuation amount adjusted appropriately. For other properties, market value is the amountbased on indicators that is considered to reflect market price and the amount reasonably calculated inhouse based on the capitalization method. The market value of properties newly acquired during thecurrent fiscal year such as some buildings in which the changes to market value and depreciation will not
be significant is based on the proper book value.

- 47 -

<Notes on revenue recognition>(Information on disaggregation of revenue)
Information disaggregating revenue from contracts with customers(Millions of yen)
Reportable segments

Sales frommaintenancecontracts
Sales fromsellingmerchandiseElectricity
sales
Sales from
disposal oflease
properties (*2)
Other
Revenue fromcontracts withcustomers
Other revenue
(*3)
Total

Customer
SolutionsGlobalBusiness

Environment& Energy

36,39625,397

3

–

–

–

–

12,312

3,526–

15,159

244

–

–

–

751

29,829

–

–

–

–

–

71,566

–

–

–

–

4

8,650

13,566

120

9,761

1,024

7,359

63

57,360114,81029,95324,921

1,268

7,359

67

986,329

313,351

19,853

183,359

123,391

83,1993,777

1,043,690

428,161

49,807208,281

124,659

90,558

3,845

Aviation

Logistics

Real estate

Mobility(Millions of yen)Amountrecorded in
Adjusted
consolidated
amount (*1)
statement ofincomeSales frommaintenancecontracts
Sales fromsellingmerchandiseElectricity
sales
Sales from
disposal oflease
properties (*2)
Other
Revenue fromcontracts withcustomers
Other revenue
(*3)
Total

9

61,808–31,243–30,581–

71,571

1,537

42,083

1,547

237,28731

1,713,295

1,578

1,950,583

Notes: 1. The adjustment includes ¥(1,541) million of adjusted amount of sales following the merger with Hitachi
Capital Corporation to which the purchase method was applied.
2. Sales from disposal of lease properties are sales from disposal of lease properties due to the lease contract
maturities of the subsidiaries outside Japan that adopt the International Financial Reporting Standards or
the U.S. accounting standards.
3. Other revenue primarily includes finance lease sales, operating lease sales, revenue from operating loans,and installment sales.

- 48 -

As shown in the disaggregated revenue information, revenue from contracts with customers has poor
significance to sales. The Company, therefore, omitted the description that is the base to understand revenue
and the information to understand amounts of revenue for the current and next fiscal years on.
<Notes on per share information>
Equity per share¥1,174.88

Earnings per share¥86.30(Note) The Company’s shares held by a trust under a performance-based stock compensation plan are
included in the number of treasury shares subtracted from the total number of issued shares at theend of the period when calculating equity per share (2,685 thousand shares as of March 31, 2024). In
addition, they are also included in the number of treasury shares deducted in the calculation of theweighted average number of shares outstanding for the purpose of calculating earnings per share(1,777 thousand shares as of March 31, 2024).
<Notes on significant subsequent events>(New associate accounted for by the equity method through share acquisition)
At a Board of Directors meeting held on January 19, 2024, the Company invested (approximately €700
million; “Investment”) in European Energy A/S (“European Energy”), a Danish company developing andoperating renewable and next generation energy mainly in Europe, and signed an investment agreement toacquire 20% of outstanding shares in European Energy. In accordance with this agreement, the investment
was completed on April 16, 2024. With this, European Energy became an equity method affiliatedcompany.
1. Strategic rationales of the Investment
European Energy, active in 28 countries, achieved a cumulative development of over 3GW of renewableenergy, and has more than 60GW in developed and constructed pipelines.
Furthermore, European Energy has a large growth potential as a leading player on the global stage in thePower-to-X* field, producing green energy such as e-methanol and green hydrogen generated fromrenewable energy sources.
“Promote a Decarbonized Society” is one of the Company’s materialities, and the Company has beenstrengthening and expanding its renewable energy business as well as increasing added value in thesegment to realize this materiality. In FY2023, the Company launched its Medium-term Management
Plan for FY2023 - FY2025 (“2025 MTMP”) and is proceeding with the evolution and layering ofbusiness models to achieve business portfolio transformation. As one of its long-term growth strategies,
the Company has been pursuing to enhance development functions of the renewable energy business in
Europe whereby this Investment will accelerate the initiative.
The Company, through the strategic partnership with European Energy and by leveraging the capability
and knowledge of both companies, will accelerate the development of renewable and green energy on a
global scale. By enhancing its initiatives in the environment and energy business, the Company willcontribute to realizing a decarbonized society.
*

The production of green fuel with low environmental impact using green electricity.

- 49 -

2. Overview of company to be invested in(1) Name of company

European Energy A/S(2) Line of business

Renewable energy and next generation energy business(3) Company size (year ended December Consolidated net assets €432 million
2023)

Consolidated total assets €2,027 million

3. Date of investment
April 16, 2024
4. Number of shares transferred, transfer price, and number of shares held before and after the Investment- shares(1) Number of shares held before the transfer (Number of voting rights: -)(Percentage of voting rights held: -%)(2) Number of shares transferredCommon shares: approximately 75 million shares(3) Transfer priceApproximately €700 million
Approximately 75 million shares(4) Number of shares held after the transfer(Number of voting rights: approximately 75 million)(Percentage of voting rights held: 20.0%)

5. Method of funding and payment
The Company acquired the shares of European Energy through its wholly-owned subsidiary inDenmark, MHC Energy Europe ApS, mainly by undertaking shares privately issued and allocated by
European Energy. The Investment was funded mainly with the Company’s own funds, borrowing, andcorporate bonds.

- 50 -

Non-consolidated statement of changes in equity(April 1, 2023 to March 31, 2024)(Millions of yen)
Shareholders’ equity
Capital surplus

Balance at beginning of
period as of April 1,
2023

Retained earnings

SharecapitalLegalcapitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

33,19633,802

509,108

542,911

638

Other retained
earnings

Total
Retained retained
General earnings earnings
reserve brought
forward72,035

317,091

389,764

Changes during fiscal
year
Dividends fromsurplus(51,723) (51,723)

Net income

82,79882,798Purchase of treasury
shares
Disposal of treasury
shares

(109)

(109)

Net changes in items
other thanshareholders’ equity
Total changes during
fiscal year
Balance at end of period
as of March 31, 2024

–

–

(109)

(109)

–

–

31,07531,07533,19633,802508,998

542,801

638

72,035348,166

420,840- 51 -

Shareholders’ equity

Balance at beginningof period as of April 1,
2023

Valuation and translation
adjustments

TreasurysharesTotalshareholders’equityValuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedges(19,158)

946,713

10,845(78,484)

Share
Total
valuation acquisition Total equity
rightsandtranslation
adjustments(67,639)2,138

881,212

Changes during fiscal
year
Dividends fromsurplus(51,723)(51,723)

Net income

82,79882,798(2,134)(2,134)(2,134)

398

288

288

Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity(1,288)(57,773)(59,062)(271)(59,333)

Total changes during
fiscal year

(1,735)29,229(1,288)(57,773)(59,062)(271)(30,104)

Balance at end of
period as of March 31,
2024(20,894)

975,943

9,557(136,258)(126,701)

1,866

851,108- 52 -

Notes on non-consolidated financial statements<Notes on matters related to important accounting policies>
1. Valuation standards and method for securities(1) Subsidiary shares and affiliate shares
Cost method based on the moving average method(2) Of available-for-sale securities, bonds and other securities held for earning financial revenues for
operating purposes (operational investment securities)- Other than shares that have no market value
Fair value method(Valuation differences are included directly in net assets and costs of securities sold aredetermined by the moving average method.)- Shares with no market value, etc.
Cost method based on the moving average method
For investments in limited liability investment partnerships and similar entities (deemed to be
securities based on Article 2, paragraph (2) of the Financial Instruments and Exchange Act), theseare stated by the net amount corresponding to the Company’s equity share based on the mostrecent obtainable financial statements depending on the reporting date established by thepartnership agreement.
(3) Available-for-sale securities not included above- Other than shares that have no market value
Fair value method(Valuation differences are included directly in net assets and costs of securities sold aredetermined by the moving average method.)- Shares with no market value, etc.
Cost method based on the moving average method
For investments in limited liability investment partnerships (deemed to be securities based on
Article 2, paragraph (2) of the Financial Instruments and Exchange Act), these are stated by the
net amount corresponding to the Company’s equity share based on the most recent obtainablefinancial statements depending on the reporting date established by the partnership agreement.
(4) Investments in other securities of subsidiaries and associates
Cost method based on the moving average method
For investments in partnerships (deemed to be securities based on Article 2, paragraph (2) of the
Financial Instruments and Exchange Act), these are stated by the net amount corresponding to theCompany’s equity share based on the most recent obtainable financial statements depending on thereporting date established by the partnership agreement.
2. Valuation standards and method for derivatives
Fair value method
3. Valuation standard and method for inventories
Cost method based on the specific-cost method(Balance sheet values are calculated using the method of writing down the book value based on
declining profitability)- 53 -

4. Method of depreciation for fixed assets(1) Leased assets
Depreciation is calculated with the lease period considered as the depreciation years, and using thestraight-line method based on the standard that the estimated disposal value of a leased asset at thefulfillment of the lease period to be the residual value.
(2) Own-used assets
Depreciation is calculated with declining balance method.
However, for buildings (excluding equipment attached to buildings), as well as equipment attached
to buildings and structures acquired on or after April 1, 2016, depreciation is calculated using thestraight-line method.
(3) Other intangible assets (excluding goodwill)Calculated using the straight-line method.
For software (used internally), amortization is calculated using the straight-line method based on
expected usable period (five years) in the Company.
(4) Long-term prepaid expenses
Calculated using the straight-line method.
5. Accounting method for deferred assets
Bond issuance costs are depreciated in interest rule for the period until their redemption.
6. Translation criteria of assets and liabilities denominated in foreign currencies into Japanese yen
Monetary claims and liabilities denominated in foreign currencies are translated into Japanese yen byusing the spot exchange rates on the balance sheet date, and the difference arising from such translationis stated as gain or loss. Monetary claims and liabilities denominated in foreign currencies subject toallocation treatment, such as forward exchange, etc., are translated into a forward exchange in Japaneseyen.
7. Accounting policy for allowances and provisions(1) Allowance for doubtful accounts
To reserve for loss on doubtful accounts, estimated uncollectible amounts are booked based on
historical default rates for general receivables, or based on individual consideration of collectability
for doubtful receivables and distressed receivables (receivables from legally or substantiallybankrupt obligors).
Also, the Company applies the “Treatment on the calculation of default estimates” established in“Treatment for Accounting and Auditing of Application of Accounting Standard for Financial
Instruments in Lease Industry” (The Japanese Institute of Certified Public Accountants Industry
Committee Practical Guidance No. 19, November 14, 2000).
With respect to the amount of distressed receivables, the amount expected to be recoverable isdeducted from the receivable amount, and the remainder, which is treated as the estimated amountof uncollectible receivables, is directly deducted from the receivable amount. This amount is ¥2,850
million.

- 54 -

(2) Provision for bonuses
The Company books the amount expected to be paid in the following year that are attributable to thecurrent fiscal year in order to issue payment for bonuses to employees.
(3) Provision for bonuses for directors (and other officers)
The Company books the amount expected to be paid in the following year that are attributable to thecurrent fiscal year in order to issue payment for bonuses to officers, executive officers, etc.
(4) Provision for share awards for directors (and other officers)
To provide for the delivery of the Company’s shares for directors and other officers in accordancewith the performance-based stock compensation plan, the Company books the amount expected tobe paid at the end of the current fiscal year.
(5) Provision for retirement benefits
The Company books provisions based on expected pension assets and retirement benefit liabilities atthe end of the current fiscal year in order to pay employee retirement benefits.
1) Method of attributing estimated retirement benefits for periods of service
In the calculation of retirement benefits liabilities, the method of attributing the estimatedamount of retirement benefits to the period until the end of the current fiscal year is on thebenefit formula basis.
2) Amortization of actuarial gains and losses and past service cost
Past service cost is amortized using the straight-line method for the average remaining service
years of employees (14 to 15 years) at the time of occurrence.
Pertaining to the actuarial gains and losses, the pro-rata amount calculated using the straightline method for the average remaining service years of employees (11 to 17 years) at the time ofoccurrence in each fiscal year is amortized from the respective following fiscal years.
8. Accounting standards for income and expenses(1) Accounting method for lease transactions
1) Accounting standards of revenues and cost of revenues related to finance lease transactions
The Company books the revenues and cost of revenues corresponding to the elapsed period
based on a standard of a monthly lease fee to be received under the lease agreement for theduration of the lease agreement period.
2) Accounting standards of revenues related to operating lease transactions
The Company books lease fees corresponding to the elapsed period based on a standard of amonthly lease fee to be received under the lease agreement for the duration of the leaseagreement period.
Disposal amount and cost related to disposal of leasing assets are booked as revenues and costof revenues.
(2) Accounting standards of revenues and cost of revenues related to installment sales transactions
Pursuant to the “Treatment of Installment Sale Transactions” stated in the “Treatment for
Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Lease
Industry” (The Japanese Institute of Certified Public Accountants Industry Committee Practical
Guidance No. 19, November 14, 2000), total of installment sale receivables is recorded as
installment receivables when an instalment sale contract is concluded, and installment sales and costof installment sales, which correspond to said policy duration based on the payment date in the
installment contract, are recorded.
- 55 -

Unrealized profit corresponding to installment receivables with a future payment date adopt deferred
accounting as deferred profit on installment sales.
(3) Accounting policy for financing expenses
Financing expenses are categorized and booked under financing expenses for operating income andother financing expenses.
Total assets are categorized as assets based on operating transactions and other assets. Based on thebalance of these assets, financing expenses corresponding to operating assets are booked in cost ofrevenues as capital costs while financing expenses corresponding to other assets are booked as nonoperating expenses.
Furthermore, capital costs are booked after deducting the interest income of corresponding deposits
from financing expenses related to operating assets.
9. Hedge accounting methods(1) Hedge accounting methods
The Company applies the deferred hedge method.
The Company applies allocation treatment for forward exchange that meets to requirements ofallocation treatment, and the Company applies special treatment for interest rate swaps that meetrequirements of special treatment.
(2) Hedge instruments and hedged items
Hedge instruments... Interest rate swap instruments, forward exchange contracts, investment inequity for overseas subsidiaries and overseas affiliates, and other liabilities
denominated in foreign currencies related to available-for-sale securities
denominated in foreign currencies
Hedged items............ Borrowings, accounts payable - trade, investment in equity for overseas
subsidiaries and overseas affiliates, and available-for-sale securities
denominated in foreign currencies(3) Hedge policies and methods to evaluate hedge effectivenessIn order to hedge interest rate and foreign currency rate fluctuation risks, and maintain a stable
income, the Company performs derivative transactions based on internal rules.
Regarding interest rate fluctuation risks, lease fee receivables and installment receivables, etc., theprimary operating assets of the Company, adopt a long-term fixed interest rate. On the other hand,because there are variable interest rates within the financing through bank borrowings, etc., theCompany manages and performs comprehensive hedges of liabilities so that the expected principalof derivative transactions that are hedging instruments is within the scope of hedged liabilities basedon the comprehensive management of assets and liabilities (ALM). Furthermore, the Company uses
interest rate-related derivative transactions for the purpose of locking in profit on individual projects.
Regarding foreign currency exchange rate fluctuation risks, the Company uses currency-related
derivative transactions and hedges through liabilities denominated in foreign currencies forindividual assets and liabilities denominated in foreign currencies, investment in equity for overseas
subsidiaries and overseas affiliates, and available-for-sale securities denominated in foreign
currencies.
The Company evaluates the effectiveness of hedges by verifying whether the interest rate of hedged
items and the foreign currency exchange rate fluctuation risk are diminished. However, interest rate
swaps performed by special treatment are not included in the evaluation of effectiveness.
- 56 -

Transaction status is reported quarterly to the President.
10. Other significant matters that are the basis for preparing the non-consolidated financial statements(1) Accounting method of bonds and other securities held for earning financial revenues for operating
purposes (operational investment securities)
The Company booked ¥100,513 million in investment securities, ¥763 million in securities, and¥70,681 million in investments in other securities of subsidiaries and associates.
Further, these financial revenues (interest income, redemption difference, and partnership gains/loss
corresponding to equity share) is booked under revenues.
(2) Accounting methods related to retirement benefits
The accounting method of unrecognized actuarial gains and losses related to retirement benefits andunaccounted amount of unrecognized past service costs differs from the accounting method in the
consolidated financial statements.
(3)

Method and period of amortization of goodwill
Goodwill is amortized in equal amounts over 20 years.

<Notes on accounting estimates>(Allowance for doubtful accounts)
Regarding the allowance for doubtful accounts, the subject receivables are classified into normal
receivables, highly doubtful receivables and distressed receivables based on credit information such as
the business conditions and payment status of the business partners and in accordance with theCompany’s internal management regulations, and estimated uncollectible amounts are booked asallowance for doubtful accounts based on historical default rates for normal receivables, as well as
considering the collectability of highly doubtful receivables and distressed receivables (receivables fromlegally or substantially bankrupt obligors).
The estimated unrecoverable amount is calculated based on the financial status of the business partners,
the estimated recoverable value of collateral, and future cash flow, etc. in the cash flow estimation
method. The Company determines this estimate to be rational. However, if there are changes to theconditions precedent or the business environment, there may be significant impact on the nonconsolidated financial statements from the next fiscal year on.
The Company booked ¥8,475 million in allowance for doubtful accounts at the end of the current fiscal
year.
<Additional information>(Performance-based stock compensation plan)
Notes are omitted because the same information is presented in the Notes to Consolidated Financial
Statements (Additional information).

- 57 -

<Notes on non-consolidated balance sheet>
1. Displayed figures are rounded down to the nearest million yen.
2. Assets pledged as collateral and corresponding liabilities(1)

Assets pledged as collateral(Millions of yen)
9,565

Cash and deposits
Installment receivables

8,999

Lease receivables

14,856

Investments in leases

55,777

Operating loans receivables

491

Loans receivable from subsidiaries and associates

8,070

Investment securities

10,960Shares of subsidiaries and associates

565

Investments in other securities of subsidiaries and associates

16,182

Operating lease contract receivables

52

Total

(2)

125,522

Liabilities corresponding to assets pledged as collateral(Millions of yen)

Current maturities of loans from the securitizations of the minimum future
rentals on lease contracts (including long-term)

59,802Long-term guarantee deposits received

926

Total

60,728

Note: Of the assets pledged as collateral, ¥9,565 million in cash and deposits, ¥186 million in
investments in leases, ¥491 million in operating loans receivables, ¥8,070 million in loans
receivable from subsidiaries and associates, ¥10,960 million in investment securities, ¥565
million in shares of subsidiaries and associates, and ¥16,182 million in investments in othersecurities of subsidiaries and associates have revolving pledge and mortgages as the collateral
held by the investees for their borrowings, etc. from financial institutions.

3. Total depreciation of property, plant and equipment
Leased assets(Millions of yen)
247,965

Own-used assets

5,464
Total

253,430

4. Guarantee obligations, etc.
(1)

Guarantee obligations, etc. in operations (including commitment to guarantee)(Millions of yen)
20,144

Operating guarantees amount- 58 -

(2)Guarantee obligations, etc. for operating transactions of subsidiaries and associates (including
commitment to guarantee)
Mitsubishi HC Capital (Hong Kong) Limited
Mitsubishi HC Capital Estate Plus Inc.

2,372

PFI MC One Y.K.

2,304

Other

1,361
Subtotal(3)(Millions of yen)
9,173

15,212

Guarantee obligations, etc. for liabilities including bank borrowings of subsidiaries and associates(including commitment to guarantee)(Millions of yen)
1,094,455

Mitsubishi HC Finance America LLC
Mitsubishi HC Capital UK PLC

755,758

JSA International U.S. Holdings, LLC

376,117

Mitsubishi HC Capital America, Inc.

204,127

CAI International, Inc.

124,937

Mitsubishi HC Capital Canada Leasing, Inc.

85,534

Jackson Square Aviation Ireland Ltd.

78,225MHC America Holdings Corporation

55,730MHC Mobility B.V.

44,789MHC Mobility Sp. z o.o.

43,284Bangkok Mitsubishi HC Capital Co., Ltd.

34,919Mitsubishi HC Capital (Hong Kong) Limited

34,847

Mitsubishi HC Capital Canada, Inc.

28,623

PT. Mitsubishi HC Capital and Finance Indonesia

25,239MHC Mobility GmbH

22,107

PT. Arthaasia Finance

22,078Mitsubishi HC Capital (Thailand) Co., Ltd.

20,009Engine Lease Finance Corporation

18,674

Mitsubishi HC Capital (Singapore) Pte. Ltd.

13,878Mitsubishi HC Capital Leasing (Beijing) Co., Ltd.

12,088Mitsubishi HC Capital Malaysia Sdn. Bhd.

11,680PT. Takari Kokoh Sejahtera

10,348Mitsubishi HC Capital (Shanghai) Co., Ltd.

7,128

ALD MHC Mobility Services (Thailand) Co., Ltd.

6,101

EuroFleet Zrt.

4,873

Mitsubishi HC Capital Asia Pacific Pte. Ltd.

4,577

MHC Management (Thailand) Co., Ltd.

2,194

Mitsubishi HC Capital Management (China) Limited

1,934

Other

626
Subtotal

3,144,892- 59 -

(4)Guarantee obligations, etc. for bank borrowings other than of subsidiaries and associates (including
commitment to guarantee)(Millions of yen)
17

Employee (residential funds)
Total

3,180,267

5. Monetary claims and liabilities related to subsidiaries and associates
Short-term monetary claims
Long-term monetary claims
Short-term monetary liabilities
Long-term monetary liabilities(Millions of yen)
112,505
2,859
43,80821,893

6. The outstanding amounts of receivables generating from contracts with customers, contract assets, andcontract liabilities are as follows:(Millions of yen)
2,302

Receivables from contracts with customers (*1)
Contract assets–

Contract liabilities (*2)
998
Notes: 1. Primarily included in lease and other receivables in the non-consolidated balance sheet.
2. Primarily included in advances received - lease in the non-consolidated balance sheet.

<Notes on non-consolidated statement of income>
1. Displayed figures are rounded down to the nearest million yen.
2. Transaction volume with subsidiaries and associates(Millions of yen)
53,338

Revenues
Cost of revenues

2,435

Selling, general and administrative expenses

3,463

Purchase of leased assets, etc.

8,480

Other transaction volume except operating transactions

75,628

3. Breakdown of capital costs
Interest expenses(Millions of yen)
23,258Interest income(2,081)
Total

21,177<Notes on non-consolidated statement of changes in equity>
1. Displayed figures are rounded down to the nearest million yen.
2. Matters related to the type and number of treasury shares
Number of shares at Number of sharesthe beginning of the increased during thecurrent fiscal year
current fiscal year
Treasury shares
Common shares(Note)
Total(Thousands of shares)
Number of shares
decreased during
the current fiscal
year

Number of shares atthe end of thecurrent fiscal year

30,7182,400

629

32,48930,7182,400

629

32,489- 60 -

Notes: 1. The number of treasury shares of common shares include the Company’s shares held by a trust as part ofthe performance-based stock compensation plan.
2. The increase of 2,400 thousand treasury shares of common shares was due to the acquisition of theCompany’s shares by the performance-based stock compensation plan.
3. The decline of 629 thousand treasury shares of common shares was due to the exercising of stock options,etc.

<Notes on tax effect accounting>
1. Breakdown of deferred tax assets and deferred tax liabilities by main causes(1)

Deferred tax assets
Retained earnings from designated foreign subsidiaries(2)(Millions of yen)
18,646

Advances received - lease

7,083

Shares of subsidiaries and associates, etc.

6,775

Asset retirement obligations

4,189

Investments in other securities of subsidiaries and associates

3,574

Allowance for doubtful accounts

2,821

Other

13,102

Subtotal of deferred tax assets

56,193

Valuation allowance amount(5,418)

Total of deferred tax assets

50,774

Deferred tax liabilities
Exceptions to deferred payment basis related to lease transfers(Millions of yen)
(4,908)Valuation difference on available-for-sale securities(4,158)Other(3,202)

Total deferred tax liabilities(12,269)

Net total of deferred tax assets

38,505

2. Reconciliation of difference between the statutory effective tax rate and the actual effective tax rate ofincome taxes after application of tax effect accounting
Statutory effective tax rate

(%)
30.6

(Adjustments)
Items never included in income, such as dividend income(25.8)

Retained earnings from designated foreign subsidiaries

2.4

Foreign tax credits

(1.3)

Other

(1.2)

Actual effective tax rate of income taxes after application of tax
effect accounting- 61 -

4.7

<Notes on related-party transactions>
(1)

Type

Subsidiary

Subsidiaries, affiliates, etc.

Name of company

Holding(owned) ratio Relationship withof voting the related party
rights, etc.

(Ownership)
Lending
Shutoken Leasing Co.,
Directbusiness funds
Ltd. (*5)
70.71%

Detail oftransactions

Lending business
funds

Balance atTransaction
end ofAccounting
amountfiscal year
title
(Millions of(Millionsyen)of yen)Loans
receivablefrom
90,000subsidiaries
andassociates

Receivinginterest income

Subsidiary

307

Lending businessfunds (*3)

Receivinginterest income

1,184

–

14,174

Investments
in leases

52,749716

Long-term
guarantee
deposits

344

Long-term
guarantee
deposits
received

21,416Loans
receivablefrom(3,162)subsidiaries
andassociates

79,888

Payment of landfees–

Subsidiary(Ownership) Lending
Direct 100% business funds

Lending businessfunds (*3)

Receivinginterest income

Subsidiary

Mitsubishi HC
Business Lease
Corporation(Ownership) Lending
Direct 100% business funds

Lending businessfunds (*3)

Receivinginterest income- 62 -–

Loans
receivablefrom34,361
subsidiaries
andassociates

Lending
Mitsubishi HC Capital (Ownership)business funds
Receiving lease
Estate Plus Inc.
Direct 100%
Property leasing fees

JAPAN MEDICALLEASECORPORATION

–

–

–

298

–

Loans
receivablefrom
31,615subsidiaries
andassociates
586–

193,949––

173,569–

Type

Subsidiary

Subsidiary

Name of company

Holding(owned) ratio Relationship withof voting the related party
rights, etc.

Lending
Mitsubishi HC Capital (Ownership)business funds
Energy Inc.
Direct 100%(*4)

Lending
Mitsubishi HC Capital (Ownership)business funds
Realty Inc.
Direct 100%(*4)

Balance atTransaction
end ofAccounting
amountfiscal year
title
(Millions of(Millionsyen)of yen)Detail oftransactions

Lending business
funds

Loans
receivable
from
1,700
subsidiaries
andassociates

94,979Lending businessfunds (*3)

105

–

–

Receivinginterest income

978

–

–

Loans
receivable
fromsubsidiaries
andassociates

Lending business
funds

–

Lending businessfunds (*3)

17,042––

Receivinginterest income

273

–

–

80,550Subsidiary

Mitsubishi HC Capital (Ownership) Guarantee of
UK PLC
Direct 100% obligation

Guarantee ofobligation

755,758––

Subsidiary

Mitsubishi HC Capital (Ownership) Guarantee ofAmerica, Inc.
Direct 100% obligation

Guarantee ofobligation

204,127––

Subsidiary(Ownership)
Guarantee ofMitsubishi HC CapitalIndirectobligation
Canada Leasing, Inc.
100%

Guarantee ofobligation

85,534––

Lending business
funds

Loans
receivablefrom98,319subsidiaries
andassociates

Receivinginterest income

7,060

–

–

Guarantee
obligation

78,225––Loans
receivable
fromsubsidiaries
andassociates

58,779Subsidiary

SubsidiaryJackson Square
Aviation Ireland
LimitedLending(Ownership)business funds
IndirectGuarantee of100%
obligation

Lending(Ownership)business funds
JSA International U.S.
IndirectGuarantee of
Holdings, LLC
100%
obligation

Lending business
funds

–

Receivinginterest income

2,361

–

–

376,117––

Guarantee
obligation- 63 -

of

207,177of

Type

Name of company

Holding(owned) ratio Relationship withof voting the related party
rights, etc.

Detail oftransactions

Balance atTransaction
end ofAccounting
amountfiscal year
title
(Millions of(Millionsyen)of yen)Subsidiary(Ownership)
Guarantee of
CAI International, Inc. Indirect
obligation
100%

Guarantee ofobligation

124,937––

Subsidiary

MHC America
Holdings Corporation(Ownership) Guarantee of
Direct 100% obligation

Guarantee ofobligation

55,730––Subsidiary(Ownership)
Guarantee ofMitsubishi HC
Indirectobligation
Finance America LLC
100%

Guarantee ofobligation

1,094,455

–

–

(2)

Type

Fellow subsidiaries, etc.

Name of company

Subsidiary ofothersubsidiaries MUFG Bank, Ltd.
andassociates

Subsidiary ofothersubsidiaries Lawson, Inc. (*6)
andassociates

Holding(owned) ratio Relationship withof voting the related party
rights, etc.

(Owned)Direct3.50%–

Borrowingbusiness capital

Leasetransaction

Detail oftransactions

Balance atTransaction
end ofAccounting
amountfiscal year
title
(Millions of(Millionsyen)of yen)Borrowing shortterm businesscapital575,841

Short-termborrowings

53,821

Borrowing longterm businesscapital–Long-term
borrowings

357,143

Payment ofinterest income

16,460––Receiving lease
fees

Investments
21,017 in leases

93,631

Notes: 1. The transactions under Article 112, paragraph (2) of the Regulations on Corporate Accounting are
omitted.
2. The interest rate of business capital loans, lease transactions (including property leases), and borrowings
are decided by considering market interest rates, etc.
3. Loans in the pooling system where funds of subsidiaries are collected to the Company, which offers suchfunds to subsidiaries who have demand for funds. The interest rate on such a loan is determined aftermarket interest rates, etc. are taken into consideration. In this connection, the transaction amount of capitalloans is presented in the amount of increase or decrease from the beginning balance in the current fiscal
year.
4. The Company has transitioned to lending funds based on a pooling system from the current fiscal year.
Regarding the details of transactions, the amount of lending business funds before the system transition isshown in the upper row, and the amount of increase or decrease from the loan balance at the time of thesystem transition based on the transaction amount shown in (Note 3) is shown in the lower row.
5. Because Shutoken Leasing Co., Ltd. was excluded from the scope of subsidiaries during the current fiscal
year, the holding (owned) ratio of voting rights, etc. and the transaction amount are for the period up to
the day before the date of exclusion.
6. Balance at end of fiscal year includes the amount of lease contracts, which aim to disperse credit risk,
including interest, presented in the non-consolidated balance sheet.

- 64 -

<Notes on per share information>
Equity per share¥592.04

Earnings per share¥57.70Note: The Company’s shares held by a trust under a performance-based stock compensation plan are includedin the number of treasury shares subtracted from the total number of issued shares at the end of theperiod when calculating equity per share (2,685 thousand shares as of March 31, 2024). In addition,
they are also included in the number of treasury shares deducted in the calculation of the weighted
average number of shares outstanding for the purpose of calculating earnings per share (1,777 thousand
shares as of March 31, 2024).
<Notes on significant subsequent events>
None.
<Notes on company subject to consolidated dividend regulations>
The Company is subject to consolidated dividend regulations.
<Other notes>
Notes on business combinations
Transactions etc. under common control(Mergers with consolidated subsidiaries)
Based on a resolution of the Board of Directors meeting held on February 10, 2023, the Company
merged by absorption with its wholly-owned subsidiary, Japan Infrastructure Initiative Company
Limited (JII), on April 1, 2023.
This merger was implemented by the Company based on the simplified merger procedure pursuant to
Article 796 (2) of the Companies Act, and by JII based on the short form merger procedure pursuant to
Article 784 (1) of the Companies Act.
1. Overview of transaction
(1)

(2)
(3)

(4)
(5)

Name of combined company or business and details of business
Name of combined company Japan Infrastructure Initiative Company Limited
Details of business Investment business in infrastructure businesses, money lending business,other financial business, etc.
Date of business combination
April 1, 2023
Legal form of business combination
Absorption-type merger where the Company is the surviving company, and JII is the absorbed
company
Name of company after the combination
Mitsubishi HC Capital Inc.
Other matters concerning overview of the transaction
JII has provided functions as an open financial platform that financially supports the export ofJapanese infrastructure industry, but the Company decided to absorb the company with the aim ofconcentrating management resources, know-how and expertise, and strengthening the system for
efficient business operation, by integrating JII’s business.

2. Overview of accounting treatment performed
It was treated as a transaction under common control based on the “Accounting Standard for Business
Combinations” (ASBJ Statement No. 21, January 16, 2019) and the “Implementation Guidance on
Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures”(ASBJ Guidance No. 10, January 16, 2019). As a result of this transaction, the Company posted a loss
- 65 -

on extinguishment of tie-in shares of approximately ¥4,763 million as an extraordinary loss in thestatement of income. However, there is no impact on profit and loss in the consolidated statement ofincome because it is set off as an internal transaction.

- 66 -