Mizuho Leasing Co., Ltd.

Integrated report2019Value Creation Process

140,000,000

Number of Shares Issued

49,004,000

Changes in the external
environment

Aging population withlow birthrate

Sixth Mid-term Management Plan P15

Providing solutions that contribute to financial andbusiness strategies for all our clients

Evolving New Business Strategies

Strong ties between Group companies
including banks, trust banks, and securities
firms

Creating value with clients, serving as a businessplatform for them

44,427

Service business

Strengthening andexpanding the leasefinancing business

Managing joint ventures with clients

Supporting clients’ commercial distribution

Jointly implementing
New Business
Strategies

Maturity ofdomestic market

Marubeni
Conducting initiatives in focus areas

How the Group should be and stakeholders
the Group should consider
Shareholders

Employees

Society

Major Shareholders (Top 20)
Labor shortage due to thedecreasing labor force

Reinforcement ofTransformation of businessmodels driven by Industry 4.0

Strengthening group
governanceManagement Policy
to customers’ needs and provide precise
1. Respondand prompt services by combining the Group’s total
strength.

全ページ

2019/11/20

6:59:19

Mizuho Bank, Ltd.

11

President’s Commitment–Toward Dramatic Growth–

The Dai-ichi Life Insurance Company, Limited

NISSAN MOTOR CO., LTD. Retirement Benefit Trust Account,with the trustee being Mizuho Trust & Banking Co., Ltd., andre-trustee& Custody
Services
Bank, Ltd.
The
MizuhoTrust
Leasing
Group will
merge thewith the law and its spirit, and aim to
4. Comply
be a Group which always recognizes its social

responsibility and secures understanding andsympathy from society.

The businesses of the Mizuho Leasing Group, including financing, the management of equipment, insurance,and overseas businesses, are closely connected with the economy, society and the environment in various
aspects. The Mizuho Leasing Group aims to develop a sustainable society and increase corporate value by

The Group has rolled out the Sixth Mid-term Management Plan covering a five-year period from April 2019.
Under the plan, we will continue to promote business together with clients and initiatives in focus areas in response tochanges in social and industrial structures that have been implemented to date. At the same time, we will offer new
solutions as a business development partner for clients in widely expanded business fields in Japan and overseas throughalliances with strategic business partners and take on the challenge of co-creating value with clients and expanding
business overseas with new business bases.

Value-creating company tackling challenges together with clients

Credit Saison Co., Ltd.

resolving social issues through its business and creating values shared with various stakeholders including“clients,” “shareholders,” “society” and “employees.”

Clients

Provision of optimal solutions
tailored to changes in the timeand environment

IINO KAIUN KAISHA, LTD.
E

S

Contribution to the developmentof clients’ business activities

Corporate Philosophy

We aim to be a Group

Enhancement of corporate
governance

Shareholders

G

Sustainable economic
development

Sompo Japan Nipponkoa Insurance Inc.
Compliancewhich contributes to

Dialogue with shareholders andinvestorssociety by offeringvalued financial

SocietyE

SSocial contribution activities
through businessNippon Life Insurance Company
services which lead tofuture prosperity.

Initiatives for reducing
environmental load

Respecting the human rights of each
employee

Employees

Securing and cultivating humanresources with diverse perspectives
and values

Realization of a sustainable society

Efforts of the Group to achieve sustainable growth

Creation of productive and highquality employment opportunities

Prosperous living

E Environment

S Social

JP MORGAN CHASE BANK 385151
全ページ

Maintenance of a healthy
global environment

2019/11/20

7:00:09

666

1.36

540

1.10

504

1.03

472

0.96

444

0.91

436

0.89

405

0.83

Reporting Period

This report contains
the Mizuho
Leasing treasury
Group’sstock.
financial information as well as non-fi*Shareholding
ratio is calculated
by deducting

From April 2018 to March 2019 (including some

activities that occurred outside this period)
nancial information including management strategies, environment, social and corporate
governance(ESG) to help stakeholders have a better understanding of the Group’s busiStock
Performance
Distribution of Shareholders
Entities Covered
ness activities. When we edited this Report, we referred to certain guidelines including
Financial
Individuals“InternationalThis
report covers the entire Mizuho Leasing
Stock price <IR> Framework” issued by the International Integrated Reporting Council
Institutions
and Others
mediumtolong-term(IIRC),
andexplained
theGroup’svalue-creating
activities
over
the
(yen)
Group.
54.5%
12.0%
in3,500
an easy-to-understand and simple manner.

Compositionof communication tools
3,000
2,500

Overview

1,500
1,000

Fulfill corporate social
responsibility

1.37

G GovernanceJapan Trustee Services Bank, Ltd. (Trust Account 2)
092_0191387911910.indd

1.48

Contribution to industrial andtechnological advancement

Japan Trustee Services Bank, Ltd. (Trust Account 1)
Organizational management tocreate a vibrant environment in which
employees feel satisfied with their jobs

2,000

Flow for realization of the vision

2.07

50 Consolidated Financial Statements
725
86 Corporate Information
670
88 Stock Information

The Master Trust Bank of Japan, Ltd.
(Retirement
Benefit Trust, The Senshu Ikeda Bank, Ltd. Account)
Editorial
PolicySixth Mid-term Management Plan

Tackle new businessdomains transcending theframework of financing

11,28323.03
27 Toward Sustainable Growth2,930Leasing Group
5.98
CSR Activities of the Mizuho
29 Management Structure
31 Corporate Governance andInternal Control
1,750
3.57
33 Message from Outside Director
34 Compliance and Risk Management
1,546
3.15
36 Dialogue with Shareholders and Investors
1,283
2.62
37 Commitment by the Personnel Unit
1,251 of Human Resources
2.55
38 Recruitment and Development
41 Promotion of Work-Life Balance
1,141 and Diversity 2.33
43 Environmental and Social Activities
1,120
2.29

27

Toward Sustainable Growth CSR Activities of the Mizuho Leasing Group

Strive to create a dynamic corporate culture full ofenergy and vitality in which proactive, ambitious
human resources are fostered and promoted.

Shareholding Ratio*(%)

Toward Sustainable Growth
45 Financial
Highlights
Japan Trustee
Bank, Ltd.
CORPORATION Retirement
Benefit Trust
CSRServices
Activities
of(TOSHIBA
the Mizuho
900
1.84
Account re-entrusted by the Mitsui Sumitomo Trust & Banking Co., Ltd.)47 Analyses on Business Conditions and Results of Operations
LeasingGroup
49 Business Risks and Other 861
Risks
Japan Trustee Services Bank, Ltd. (Trust Account 9)
1.76
Japan Trustee Services Bank, Ltd. (Trust Account 5)

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

(1,000 shares)
27 Strength to Support
GrowthSSBTC CLIENT OMNIBUS ACCOUNT
44 Consolidated Financial
Data and
1,012(Standing proxy: The Hongkong and Shanghai Banking Corporation Limited)
Corporate Information

S

01

Number of Shares Held

CSR Activities of the Mizuho Leasing Group P27

through the business2.

Promote business together
with clients as their partner

Development of asustainable society

Increasing sophistication ofrisk-return management

HR strategy

President
CEO
DOWA andHOLDINGS
CO., LTD.

3.

Thorough client-oriented
approach

19 Business Strategy for the Sixth Mid-term Management Plan

management base

Improving operational
productivity

Shareholders
091_0191387911910.indd

Employees

Creation of environmentand systems where all
employees are provided
with a meaningful andengaging workplace

Japan Trustee
Services Bank, Ltd. (Trust Account)
Hiroshi
Motoyama

The Three Cs

VisionInvesting in new
overseas businesses

strengthsthat it hasCompany,
developed withthe business
UNIZO Holdings
Limited.
base and know-how of the Mizuho Financial
The Master Trust Bank of Japan, Ltd. (Trust Account)Group and the Marubeni Group in an aim to
Meiji Yasuda
Life
Insurance Company
achieve
dramatic
growth.

Action Guidelines

Challenge
ChangeCreateCollaboration inoverseas leasefinancing businesses

Creation of shared value with stakeholders

Mindset of each employee

Clients

Aircraft
Technology

Solving social issues andpracticing corporate social
responsibility through ourbusinesses

Administrator
11 President’s Commitment –Toward Dramatic Growth–(Office
Stock Plan
Transfer
AgencyDepartment,
15 SixthLocation)
Mid-term Management(FY2019
to FY2023)
Mizuho Trust
17 Reinforcement of Management
Base& Banking Co., Ltd.
2–1, Yaesu 1-chome, Chuo–ku, Tokyo
18 Funding Policies

500

Details01Q

ForeignInvestors

Strength to Support Growthsociety by offering valued financial services
which lead to future prosperity.

DesiredFuture Imageof the Mizuho
Leasing Group

Wide range of lease financing products fromgeneral trading company

Medical and Healthcare

GlobalSocietyNotes concerning Future Forecast

This report contains management policies andWebsite: www.mizuho-ls.co.jp
12.1% future business performance based on theinformation on hand at the time of the prepaIntegrated Report (Japanese and English)
ration of this report. These statements may
contain certain risks and uncertainties, and as
Report for Shareholders
Report on Corporatesuch do not guarantee that such policies and(Japanese and English)
Governanceperformance will be achieved. Please be advised that any predictions for the future madeFinancial Results
Financial
Securities Report
CSR Activities (Website)
in this report may differ significantly from the(Japanese and English)
Instruments
actual results due to various factors.
Business
Domestic
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
Operators
Corporations
FY2016FY2017FY2018FY2019Financial information
Non-financial information
19.1%
2.3%
Integrated
Integrated
ReportReport20192019 02 88

Consolidated Financial Data and Corporate Information

We aim to be a Group which contributes toOverseas network

Expanding the business in fields that respond tosocial issues

Real Estate

Shareholders

Sustainable increasesof corporate value andshareholder returns

Tokyo Stock Exchange, 1st section

Stock Exchange Listing
Environment andEnergy11 Shareholder
Growth Strategy
Registry
Mizuho Trust & Banking Co., Ltd.

Providing flexible and awide range of services tomeet clients’ needs

One of the largest client bases in Japan andoverseas

Global warming

Advancement of
globalization

Clients

MizuhoEnhancing lease financing business by
expanding client base

Resource andenergy shortage

Stakeholders

Cooperation with strategic business partners

Number of Shareholders

Corporate Philosophy

05 Trajectory of the Mizuho Leasing Group07 Business of the Mizuho Leasing Group
09 Value Creation Process
Securities Code8425

Stock Information
Number of Shares Authorized

03 Message from the President
05 Value Creation by the Mizuho Leasing Group

Growth Strategy

09(As of March 31, 2019)
StockValue
Information
Creation Process

Value Creation by the Mizuho Leasing GroupCO NTE NTS

Value creation for stakeholders

The Mizuho Leasing Group aims to make a further
leap forward by taking on challenges for enhancing
corporate value and achieving value creation forstakeholders.

Message from the President

From IBJ Leasing to Mizuho Leasing– Toward the Creation of Further Value –Amid rising demand for funds for capital investment,

Mizuho Bank, Ltd. and Marubeni Corporation to achieve

Mizuho Leasing Company, Limited was established in 1969even more dramatic growth for the Group. On October 1,

as a general leasing company under the initiative of The

2019, our company name was changed from IBJ Leasing

Industrial Bank of Japan, Ltd. (now Mizuho Bank, Ltd.) andCompany, Limited to Mizuho Leasing Company, Limited towith investment from leading companies across Japanesemaximize the effects of the alliance as the only equity-meth-industry. We have continued to grow and expand the prod-

od affiliate leasing company in the Mizuho Financial Group.

ucts we offer on the same trajectory as the expanding role

During this milestone year that marks our 50th anniver-played by the leasing industry in the Japanese economy

sary, we will take advantage of the tailwinds from the ex-

while actively expanding our business not only in Japan,

pansion of business fields through both business alliances

but also overseas. Recently, in addition to expanding into

to set off on a new start for the next 50 years as Mizuho

growth fields in response to structural changes in society

Leasing Company, Limited as we aim for further growth.

and industries, we have engaged in a business strategy

Going forward, we will transform ourselves along with thethat focuses on the commercial distributions rather than thechanges in the times as officers and employees work ascapital investment of companies to offer services capable

one to contribute to the advancement of society and theof comprehensively resolving the issues of clients.

achievement of a prosperous future with our clients throughWhile the Group has continued to grow steadily to date,in March 2019 we entered into business alliances withour business. We hope for your continued understanding
and support in the future.

President and CEO

03

Integrated Report 201904

Value Creation by the Mizuho Leasing Group

Trajectory of the Mizuho Leasing Group

30,000The Mizuho Leasing Group has developed its operations primarily in leasing and installment sales—the financing of physical items. In addition to financing related to capital expenditure, including industrial and factoryequipment, information and communication equipment and medical equipment, we are expanding the scope ofour business activities through initiatives in businesses to involve in commercial distributions and a broad rangeof financial sectors and through M&A activities, as we proactively engage in business in Japan and overseas.

March 2019

Supporting
improvements inmobilityEnters into capital and business alliance with
Mizuho Bank, Ltd. and an alliance in the leasefinancing business with Marubeni Corporation

Meeting needs for reducing the environmental load

Catering to needs for- Becomes an equity-method affiliate of the Mizuho
Financial Group, Inc.
- Acquires shares of MG Leasing Corporation (now anequity-method affiliate, a joint venture with Marubeni
Corporation)

extending the healthy life expectancy

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

Supporting the establishment of social infrastructure

December 1969

1972

2000

2012

2016

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

Begins vendor leases of construction
equipment as a pioneer in that field.

Business department specializing
in medical and welfare services isestablished.

Environmental Business Promotion
Division is established.

IBJ Air Leasing Limited (now a consolidated subsidiary) is jointly establishedwith a U.S. aircraft leasing company
to enter the aircraft operating leasebusiness.

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

16,594Growth Strategy

History of Our Business

Value Creation by the Mizuho Leasing Group

Toward new growth as
Mizuho Leasing

Operating Assets (Billions of yen)

2004
Shares listed on theSecond Section of theTokyo Stock Exchange.

2005
Designated an issue
on the First Sectionof the Tokyo Stock
Exchange.

2006
Acquires shares of
Dai-ichi Leasing Co.,
Ltd. (now a consolidated subsidiary).

8,984

7,981

5,591

2012
Acquires shares ofToshiba Group’s financial
services company
for corporations (nowIBJL-TOSHIBA Leasing
Company, Limited, aconsolidated subsidiary).

9,025
7,799

1,031.2

953.7

1,092.2

1,211.3

7,019
985.0

935.2

8,920
1,263.1

13,643

10,531

11,144

11,60912,414

1,581.0

1,608.7

2015

2016

2,021.4

1,683.0

1,432.3
1,343.0

Strength to Support Growth*The graph shows results from FY2004 onwards after the Company’s listing.

928.6

4,296

813.5

3,348

2005

GlobalBusiness
Expansion

Accumulated
Strengths

05

2006

2007

2008

2009

2010

2011

2012

2013

2014

2017

2018

1992

1998

2008

2010

January 2019

Krung Thai IBJ Leasing Co., Ltd., an overseas subsidiary, is established in Thailand(now an equity-method affiliate).

PNB-IBJL Leasing and FinanceCorporation, an overseas subsidiary, isestablished in the Philippines (now anequity-method affiliate).

IBJ Leasing (China) Ltd., an overseas
subsidiary, is established in China (now aconsolidated subsidiary).

PT. IBJ VERENA FINANCE, an overseas
subsidiary, is established in Indonesia.

Acquires shares of the Indonesian auto financing company PT. VERENA MULTI FINANCE
Tbk (now a consolidated subsidiary, merges PT. IBJ VERENA FINANCE in July 2019)

High expertise and extensive

Strong relationship with largeknow-how to solve clients’ issues

and mid-sized corporate clients

Well-balanced portfolio

2023(Target)

Consolidated Financial Data and Corporate Information

2004

Strong fundraising baseIntegrated Report 201906

Value Creation by the Mizuho Leasing Group

The Mizuho Leasing Group comprises Mizuho Leasing, 32 consolidated subsidiaries and three equity-method
affiliates (as of March 31, 2019). Centered on this structure, we provide wide-ranging financial services, including
leasing, installment sales and loans in Japan and overseas by utilizing our understanding of equipment and extensive financial expertise.

Value Creation by the Mizuho Leasing Group

Business of the Mizuho Leasing Group
Each Mizuho Leasing Group company aims to achieve “the expansion of cooperation with partner corporations,”“the pursuit of expertise” and “the expansion of global business” and collaborate with each other, with Mizuho
Leasing at the core and displaying their respective characteristics, to provide solutions that best suit the diverse
needs of clients in not only Japan, but also countries around the world.

Major Group Companies (As of October 1, 2019)
Financing and Other

Consulting service for controlling optimal BS/PL control

Specialized financing to deliver cash flow through realin addition to fundraising at the time of introducing

estate, aircraft, vessels and other items
Commercial distribution finance/business financeLeases in the subscription or value-added service models
Support for clients’ product sales and service provision

Pursuit of expertiseGroup companies/partner corporations

Group companies/business description

IBJL-TOSHIBA Leasing Company,
Limited1/Toshiba Group
Dai-ichi Leasing Co., Ltd./The Dai-ichi Life
Group
Universal Leasing Co., Ltd./Sankyu GroupMG Leasing Corporation*/Marubeni Group

Mizuho Auto Lease Company, Limited/
Auto leasing
ML Estate Company, Limited/Real estateleasing
ML Shoji Company, Limited/Used property
sales and support of clients’ commercial
distribution
ML Office Service Company,
Limited/Office services

Used equipment sales, photovoltaic power sales
operations, etc.

Leverage our extensive know-how of equipment and highly sophisticated financial
solutions to solve clients’ accounting, financial and business issues

Client base centered on large and mid-sized corporations

Industrial and factoryequipment

Transportationequipment

Construction
equipment

Information andcommunication equipment

Medicalequipment

Leasing and Installment Sales

66%

Real estate

Environment-related
equipment

Financing

FY2018Gross profit

Strength to Support Growth

Note 1: Company name will be changed to Mizuho-Toshiba
Leasing Company, Limited

Growth Strategy

equipment

Cooperation withpartner corporations

32%

Expansion of global business
Consolidated Financial Data and Corporate Information

Leasing and Installment Sales

Group companies/locations
IBJ Leasing (China) Ltd.2/China¥44.1Billion

PT. Verena Multi Finance Tbk/Indonesia
IBJ Leasing (UK) Limited3/the U.K.
Krung Thai IBJ Leasing Co., Ltd.*/Thailand
PNB-IBJL Leasing and Finance Corporation*4/the Philippines
Other

2%

07

IBJ Air Leasing Limited/the U.S. and Bermuda
Note 2: Company name will be changed to Mizuho Leasing (China) Ltd.
Note 3: Company name will be changed to Mizuho Leasing (UK) Limited
Note 4: Company name will be changed to PNB-Mizuho Leasing and Finance Corporation*An equity-method affiliate
Integrated Report 201908

Value Creation by the Mizuho Leasing Group

Stakeholders

Cooperation with strategic business partners

MizuhoProviding flexible and awide range of services tomeet clients’ needs

One of the largest client bases in Japan andoverseas
Evolving New Business Strategies
Creating value with clients, serving as a businessplatform for them

Strong ties between Group companies
including banks, trust banks, and securities
firms

Service businessResource andenergy shortage

Strengthening andexpanding the leasefinancing business

Managing joint ventures with clients

Jointly implementing
New Business
Strategies

Supporting clients’ commercial distribution
Maturity ofdomestic market
Marubeni
Conducting initiatives in focus areas
Advancement of
globalization

Expanding the business in fields that respond tosocial issues
Environment andEnergyMedical and Healthcare

GlobalAircraftReal EstateTechnology

Overseas network
Wide range of lease financing products fromgeneral trading company
Collaboration inoverseas leasefinancing businesses

Investing in new
overseas businesses

Labor shortage due to thedecreasing labor force

Shareholders
Growth Strategy

Enhancing lease financing business by
expanding client baseGlobal warming

Clients

Sustainable increasesof corporate value andshareholder returns

Society

Strength to Support Growth

Providing solutions that contribute to financial andbusiness strategies for all our clients

Solving social issues andpracticing corporate social
responsibility through ourbusinesses
Employees

Creation of environmentand systems where all
employees are provided
with a meaningful andengaging workplace

Reinforcement of management baseTransformation of businessmodels driven by Industry 4.0

Strengthening group
governanceImproving operational
productivity

HR strategy

Increasing sophistication ofrisk-return management

Development of asustainable society

CSR Activities of the Mizuho Leasing Group P27
09

Integrated Report 201910

Consolidated Financial Data and Corporate Information

Aging population withlow birthrate

Sixth Mid-term Management Plan P15

Value creation for stakeholders

Changes in the external
environment

Value Creation by the Mizuho Leasing Group

Value Creation Process

Growth Strategy

Value Creation by the Mizuho Leasing Group

President’s Commitment –Toward Dramatic Growth–

Growth Strategy

The Mizuho Leasing Group will merge thestrengths that it has developed with the businessbase and know-how of the Mizuho Financial
Group and the Marubeni Group in an aim toachieve dramatic growth.
President and CEO

Net Income Attributable to
Owners of the Parent (Billions of yen)
18

Contract Execution Volume

1,700

1,548.8
1,500

1,300

12

1,100

10

900

11

2016

1,800

1,683.012.4

02,021.4

2,000

1,335.9

13.6

14(Billions of yen)
2,200

16.6
16

Operating Assets(Billions of yen)

2017

2018

0

1,092.0

1,600

1,608.7

1,400

2016

2017

2018

0

2016

2017

2018

ness strategy, grasping the entire commercial distribution
process of clients, we engaged in the provision of solutions
in line with the issues that occur in the flow from purchaseto product sales as well as the product sales of clients, andpromoted the formation of sales formats based on service
contracts jointly with the client. In the environment and energy field, we started new initiatives in the renewable energy
field, such as the participation in an offshore wind power
generation project, in addition to efforts in energy saving
investment projects by companies utilizing subsidies. In the
medical and healthcare field, we expanded our initiatives
in the nursing care and healthcare field, mainly consistingof financing of medical equipment, as well as initiatives forserviced housing for the elderly and equity investments ina healthcare real estate fund. In the real estate field, bridge
scheme projects for REIT managed by leading business
operators expanded, while we produced results throughjoint real estate investments with clients and building leases
for hotels in response to rising social needs. In the aircraftbusiness, we accumulated our balance by engaging in bothloans backed by aircraft and aircraft engines and aircraft
operating leases. Meanwhile, we have been expandingtransactions with non-Japanese companies through ouroverseas subsidiaries by strengthening transactions withblue-chip companies including local conglomerates, cooperating with local partner companies, and providing local
support for the sales expansion of the products and services of Japanese companies.

As a result of these efforts, net income attributable toowners of the parent for fiscal 2018 amounted to ¥16.6
billion, achieving record-breaking profit for six consecutive
years, ROE was 10.3%, and the dividend payout ratio was
20.1%, meaning that we achieved all of the numeral targetsof the final fiscal year of the Fifth Mid-term Management
Plan one year ahead of schedule.

Strength to Support Growth

Under the Fifth Mid-term Management Plan covering athree-year period starting from fiscal 2017, we have established the vision of a “value-creating company tackling challenges together with clients” and a basic policy of promoting
businesses that are more profitable by leveraging our accumulated business know-how and financial strengths. We
focused our efforts on new business strategies, including
the “support clients’ commercial distribution” strategy that
focuses on the flows of purchase and product sales at clients, as well as on focus areas that have good potential for
growth (environment and energy, medical and healthcare,aircraft, overseas subsidiaries, real estate, and technology)
in line with changes in the business models of corporations
and structural changes in society and industries while reinforcing the management base that supports our businesses in an aim to achieve the consolidated targets of “¥15.0
billion in net income attributable to owners of the parent,”“10% ROE,” and “maintaining 20% or more dividend payout ratio” by the final fiscal year of the Plan.
In fiscal 2018, the second year of the Fifth Mid-termManagement Plan, the Group pushed forward with initiatives for business strategies and the focus areas set out in
the Fifth Mid-term Management Plan, and took on challenges of entering new domains as well as proactively carryingout the formation and provision of services that were notlimited to conventional financial solutions. In our new busi-

Sixth Mid-term Management Plan
While the Group has continued to grow steadily to date, inMarch 2019 we entered into a capital and business alliancewith Mizuho Bank, Ltd. and an alliance in the lease financing business with Marubeni Corporation in order to achieve
dramatic growth.
In fiscal 2018, we launched the Sixth Mid-term Management Plan covering a five-year period from fiscal 2019 to
fiscal 2023 as all of the targets of the three-year Fifth Midterm Management Plan were achieved one year ahead ofschedule and to strongly promote the alliances with Mizuho
Bank and Marubeni. As the targets for the final fiscal yearof the Plan, we aim for net income attributable to ownersof the parent of ¥30.0 billion, triple the balance of operating
assets in the global area of that of the end of March 2019,
and aim for consolidated dividend payout ratio of 25% ormore. The achievement of these targets requires us to draw
on the strengths that the Group has developed to date andIntegrated Report 2019

Consolidated Financial Data and Corporate Information

Fifth Mid-term Management Planand Achievements in Fiscal 201812

Net income attributableto owners of the parent¥30

billionBalance in the global area
compared with that at the endof March 2019

Triple*Balance of ¥142.5 billion at the end of March 2019

Consolidated dividend
Aim forpayout ratio

25% or more

Strength to Support Growth
The business environment surrounding companies is unceasingly changing, and in order for the Group to achievesustainable growth, it is necessary to respond agilely to thesechanges and continue to create value that can be sharedwith stakeholders. To do so, we must enhance our organizational capability through means such as the further enhancement of the corporate governance structure and the further
sophistication of risk-return management and building of anenvironment where employees can demonstrate their capabilities at their full potential through efforts including improving
operational productivity and promoting diversity.
In 2019, we have established an optional Nomination
and Compensation Committee formed of a majority of independent outside directors to improve the transparency
13

Desired Future Image of the Mizuho
Leasing Group

Shareholder Returns

improve corporate value by creating value that can be

The Company’s basic policy on shareholder returns is topay dividends in accordance with business performance inan attempt to improve profitability. At the same time, as afinancial services business operator, the amount of shareholders’ equity is one of the important factors to increasing corporate value. Therefore, we intend to pay dividends
while maintaining a balance between shareholder returns
and shareholders’ equity. We plan to continue paying
steady dividends. Retained earnings are effectively utilized
as funds for future growth in an attempt to further expand
our business base and increase ROE over the medium tolong term.
In line with this policy, in fiscal 2018 we continued toincrease shareholder returns by raising the annual dividend ¥8 to ¥78 per share, with the dividend payout ratioof 20.1%.
We expect to raise the annual dividend per share an additional ¥2 in fiscal 2019, to ¥80 per share, amounting to
the 18th consecutive year of dividend increases.

shared with stakeholders through our business through

During this milestone year that marks our 50th anniversary,the company name was changed from IBJ Leasing Company, Limited to Mizuho Leasing Company, Limited and theGroup entered a new stage.
While the Group will keep providing services with client needs as the starting point by taking advantage of ourbusiness strengths we have developed over a period of 50
years, the alliances with Mizuho Bank, Ltd. and Marubeni

Corporation will greatly expand our business fields in Japanand overseas and enable our business scale to grow further. As the social and industrial structures of Japan continue to change, as a Group that has cooperated with a bankand a trading company as new partners, we believe that it
is important to respond agilely to these changes and create
opportunities from these changes while boldly taking on thechallenge of new businesses.
Going forward, the Group aims to achieve a sustainable
society and improve corporate value by creating value thatcan be shared with stakeholders through our businessthrough relentless improvement and transformation.

Growth Strategy

The Group aims to develop a sustainable society andrelentless self-improvement and transformation.
Strength to Support Growth

Consolidated targets for final fiscal year (FY2023)

and objectivity of the decision-making process of the Boardof Directors. We are also working to further enhance ourcorporate governance structure through the start of evaluations of the effectiveness of the Board of Directors by an assessment organization to further improve its effectivenessand functions. In addition, we have started to consider new
portfolio management frameworks in an effort to optimally leverage management capital and enhance risk-return
management.
Moreover, based on the recognition that the active participation of human resources with diverse perspectives andvalues based on various experience and skills underpins
the Group’s growth, we will continue to focus on promoting
diversity and improving operational productivity through IT
system investments and reforms in operational processes.

Consolidated Financial Data and Corporate Information

take on new challenges that break free from our conventional modus operandi. As our business strategy to achievethese targets, we will continue our success model from theFifth Mid-term Management Plan, namely, jointly promoting
businesses with clients and driving forward initiatives in focus areas in response to structural changes in society andindustries. At the same time, we will combine our accumulated know-how with the business base and expertise of
the Mizuho Financial Group and the Marubeni Group. Our
alliance with Mizuho Bank, Ltd. allows for a wider range ofsolutions we can offer to Mizuho clients, and our alliancewith Marubeni Corporation enables us to take on risks evenmore dynamically and expand operation in the international
arena. Furthermore, we will continue reinforcing the management base that will support this business strategy bystrengthening group governance, improving operational
productivity, HR strategy, and enhancing risk-return management, for a stronger organizational management capable of responding to business fields that are expected to
expand.

Value Creation by the Mizuho Leasing Group

Growth Strategy

Annual Dividend per Share
(yen)
90

78
64

70

60

30

0

2016

2017

2018

Integrated Report 201914

Growth Strategy

know-how of the Mizuho Financial Group and the Marubeni Group. We will offer new solutions as a businessdevelopment partner for clients in widely expanded business fields in Japan and overseas through these alliances and take on the challenge of co-creating value with clients and expanding business overseas with new
business bases.

Mizuho Leasing

MizuhoValue-creating company tacklingchallenges together with clients

Strategic partner for businessdevelopment under a changing
industrial structure*1

Providing solutions that contribute to financial
and business strategies for all our clients

Banking

Flow for realization of the vision

Consulting capabilities

Enhancing lease financing business by
expanding client baseThorough client-oriented
approachPromote business together
with clients as their partner

Tackle new businessdomains transcending theframework of financing

Fulfill corporate social
responsibility

Trust

Evolving New Business Strategies
Securities

Creating value with clients, serving as abusiness platform for themGroup
companies

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

Consolidated targets
Net Income Attributable to Owners of the Parent(Billions of yen)

30.0

30

Consolidated targets for the final fiscal year (FY2023)

Net Income Attributable to
Owners of the Parent¥30

Management of JVs, mezzanine/equity
investment, PFIs, and project financing

compared with that at the end of March 2019

20

16.6

Consolidated dividend payout ratio

17.0

25

15

Aim foror more

13.6
12.4
11.1

15

%

Environment andenergyMedical andhealthcare

GlobalAircraftReal estateTechnology

Conducts business as a unitedgroup
Credibility and gives sense of
security

Operates financing/leasing businessthat transcends industrial verticals*2
Overseas asset
financing

Overseas
network

Aircraft, aircraft engines, etc.
*2 Excerpt from Marubeni’s “Medium-Term Management
Strategy (FY 2019–2021) GC2021”

11.6
Reference: FY2018 performance

10

0Continuing initiatives in focus areas

Business match-making
function

Marubeni

General trading
companybusinesses andmerchandise

Balance in the global area

TripleComplementing
each other’sfunctions, andexpand eachother’s businessIndustry and businessknowledge*1 Excerpt from Mizuho Financial Group’s “5-Year Business
Plan: Transitioning to the Next Generation of Financial
Services”

Supporting clients’ commercial distribution
Expanding commercial distribution
support function to reduce costs andboost sales

billion25

Managing joint ventures with clients

Client base and network within
and outside Japan

Growth Strategy

Value-creating company tackling challenges together with clients

Strength to Support Growth

Vision of the Sixth Mid-term Management Plan

Consolidated Financial Data and Corporate Information

The Group has started the Sixth Mid-term Management Plan covering a five-year period from fiscal 2019.
Under the plan, we will continue to promote business together with clients and initiatives in focus areas inresponse to changes in social and industrial structures that have been implemented to date. At the same time,
we will leverage the alliances with Mizuho Bank, Ltd. and Marubeni Corporation formed in March 2019 as strategic partners to integrate the know-how that the Group has accumulated with the business foundation andValue Creation by the Mizuho Leasing Group

Sixth Mid-term Management Plan (FY2019 to FY2023)

FY2014FY2015FY2016FY2017FY2018FY2019(Planned)

FY2023(Planned)

Net income attributable toowners of the parent¥16.6billion

Balance in the global area

¥142.5billion

Consolidated dividend payout ratio

Expand and grow fields of business within and outside Japan

20.1%
Integrated Report 201916

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

Funding Policies

Partnership with Mizuho

Expansion of business fields in Japan and globallyPartnership with Marubeni

Strengthening group
governance

Measures

Key points

Strengthening ties within the Group

Building a network that maximizes synergy
among the Group companies in response todiversification of business fields
Facilitating integrated management byconsolidating overlapping functions within theGroup

Consolidating functions within the
GroupInterest-bearing Debt
Accelerating decision-making

Improving operational
productivity

Re-examining structure of clericalorganization

Enhancing organizational capability inresponse to expansion of business
Improving productivity by enhancing efficiency
through re-examining work processes andintroducing RPA and the like
Establishing “Work Productivity Improvement
Committee” to promote improvement of
productivity throughout organization

Recruiting and developing highly
specialized personnel

Efficiently utilizing human resources
Increasing specialized personnel in response
to business diversification and globalization
Accommodating diverse working styles by
incorporating teleworking, etc.

Promoting diversity and work stylereformPortfolio
management

Financial ALM

17

Indirect funding
55%

2,000

1,834.8
609.8

1,000

500

1,492.4
433.8

Mizuho Group
10%

453.8

135.1

162.8

312.7

270.7

610.8

Commercial
paper, corporate
bonds, etc.

1,536.2

648.9

221.4

Interest-bearing debt
as of the end of FY2018

302.2¥1,834.8 billion

701.4

Regionalbanks
24%City banks
6%
Life insurancecompanies, etc.
15%0

Risk management

Increasing
sophistication ofrisk-return
management

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

Direct funding
45%(Billions of yen)

1,500

Optimizing assignment of personnel
based on productivity indicators, etc.

HR strategy

Long-term borrowings Short-term debt
Securitized bonds and receivables Commercial paper

The Company obtains funding from financial markets
through the issuance of commercial paper and corporate
bonds and the securitization of lease receivables. The
Company and subsidiary IBJL-TOSHIBA Leasing haveissue limits for commercial paper of ¥550.0 billion and¥150.0 billion, respectively. The Company also actively
uses corporate bonds. It procured ¥67.0 billion throughbonds with maturities of 3 to 10 years in fiscal 2018.
With regard to ALM operations, the Company’s PM/
ALM Committee, consisting of members who are officers incharge of relevant departments, holds monthly meetings to
discuss the financing means that are most suitable for the
portfolio composition and interest-rate outlook, and decideon the management policy. We also perform detailed
analyses of the impact of interest rate volatilities on thepresent value of assets and liabilities, using indicators suchas delta1 and value at risk (VaR)2, and engage in flexible
operations to ensure smooth funding and cost control.

Consolidated Financial Data and Corporate Information

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

The Mizuho Leasing Group offers wide-ranging financial
services to meet clients’ needs through funding that ensures
stability and curtails costs. The Group also raises funds
based on its annual cash plans and in a flexible mannerthat responds to fluctuations in the financial environment
based on its comprehensive asset liability management(ALM) policies.
When procuring funds, we use a combination of borrowings
from financial institutions and raising funds in the market,
thereby achieving a balance between short- and long-term
funding.
We borrow funds from more than 100 financial institutions,
including city banks and regional banks, as well as insurancecompanies, and we maintain stable transactions with these
institutions.
In addition, the Group had concluded overdraft agreements
and commitment line agreements in the total amount of¥758.0 billion with 58 financial institutions as of the end of fiscal
2018. The aim is to secure flexible fundraising and liquidity
at times of deterioration in the fundraising environment. The
unused balance under these agreements is ¥494.7 billion,
which ensures sufficient liquidity.

Growth Strategy

Funding Policies

Strength to Support Growth

Reinforcement of Management Base

Value Creation by the Mizuho Leasing Group

Growth Strategy

Promoting strategic capital management tosupport the expansion of business fields
Implementing Group-wide risk capitalmanagement to establish the optimal portfolio
by clarifying and identifying risks and returns
Implementing flexible financial ALM attuned todiverse portfolios

2016

2017

2018

Credit Rating

Rating and Investment
Information, Inc. (R&I)

Japan Credit Rating
Agency, Ltd. (JCR)

Mizuho Leasing has obtained credit ratings from Rating

Long-term rating

Short-term rating

Long-term rating

and Investment Information, Inc. (R&I) and Japan Credit

A

a−1

A

Rating Agency, Ltd. (JCR) to evaluate its creditworthiness.

Integrated Report 201918

Business Strategy for the Sixth Mid-term Management Plan

Business Strategy for the Sixth Mid-term Management Plan

The Group has started the Sixth Mid-term Management
Plan covering a five-year period from fiscal 2019 to fiscal
2023. Under the previous Fifth Mid-term Management Plan,
we focused on New Business Strategies in response to theincreasing sophistication of the business models of clientsand initiatives for focus areas with growth potential in lightof structural changes in society and industries and provided
solutions with client needs as the starting point. As a resultof these efforts, we achieved record-breaking net income
attributable to owners of the parent for six consecutive years
in fiscal 2018 and achieved all of the targets of the final fiscal
year of the Fifth Mid-term Management Plan one year aheadof schedule. Confident that positive developments arebrought about by these efforts in New Business Strategies
and focus areas so far, in the Sixth Mid-term Management
Plan, we will roll out these strategies in an expanded business field through the business alliances with Mizuho Bank,
Ltd. and Marubeni Corporation and integrate the know-how
developed by the Group with that of our newly partneringbank and trading company to take our business scale tothe next level.
To express this commitment, we have set a goal of “tripling
the balance of operating assets in the global area of that of
the end of March 2019” as one of the targets for the final yearof the Sixth Mid-term Management Plan. While the Grouphas worked to identify the needs of Japanese companies forcapital investment and business development overseas andexpand business with non-Japanese companies to date, inorder to achieve these targets we will take on new challenges that break free from our conventional modus operandi,
including the further expansion of the client base through col-“ N e w Busi ne ss St r a t e g i e s”
In order to co-create value with clients by serving as their business platform, we will respond to the diverse needsof clients under the New Business Strategies, i.e. the service business, managing joint ventures with clients, andsupporting clients’ commercial distribution, to expand business in fields where high growth is expected as a resultof changes in social and industrial structures.

Sales Strategies

Supporting clients build
new business models

Service business

Deputy President

19(medical equipment
manufacturers)

Provision of equipment,
maintenance andtraining

The Group

Equipment financing

Service business,
subscription model,
sharing economy, payper-use, etc.
Owns
equipment

Hospitals

Service contract, etc.

ClientCreating investment
opportunities by sharing
risks with clients as
business partner

JV/SPCThe Group

Supporting clients’commercial
distribution

Expanding commercial
distribution support
function to reduce
costs and manage
production and sales
Expanding business
opportunities by
being involved incommercial distribution
from upstream todownstream

Conventional

SupplierRawmaterials
inventory

Strength to Support Growth

JV company

End customer

Finished
goods
inventory

ClientEnd customer

Reduce inventory
burden and improve
cash flow

New

Supplier

Off-balance
sheet

ClientConsolidated Financial Data and Corporate Information

Shusaku Tsuhara

ClientOperation andmaintenance

Asset management service contract

Service scheme partnershipManaging joint
ventures with clients

By creating value from clients’perspective, we aim to be theirchoice as a business partnerthat will promote business
together.

Growth Strategy

Business model example

Acquires stakelaboration with Mizuho, the establishment of new businesslocations, and collaboration in asset financing handled byMarubeni Corporation overseas. In addition, in order to promote collaboration with Mizuho on an organizational level, in
April 2019 we reorganized the sales structure and newly established the MIZUHO Cooperation Promotion Division, andwe are beginning to achieve concrete results. As an example,
in the environment and energy area that is our focus, we financed a biomass power generation project by mutually taking advantage of the knowledge Mizuho Bank, Ltd. has on
business and our knowledge on equipment. We would liketo grow together by providing Mizuho’s clients in and outside
Japan with solutions that contribute to the promotion of theclient’s business in its entirety.
With the spread of business models that provide value
and function instead of physical ownership, such as service
businesses, the sharing economy, and subscription-based
business, we will enjoy unprecedented opportunities as acompany that has evolved around leasing. By agilely responding to changes in the business models of clients and creating
value from clients’ perspective, we aim to be their choice as abusiness partner that will promote business together.

Value Creation by the Mizuho Leasing Group

Growth Strategy

End customer
Off-balance
sheet

The Group’s trading
company function

The Group’s trading
company function

Reduce procurement
costs and securematerials

Hedge end-customer risks
and securely sell/collectaccounts receivable

Integrated Report 201920

“Environment and Energy”“Medical and Healthcare”

Amid the growing importance of environmental activities on a global scale, the Mizuho
Leasing Group supports clients in their installation of environment- and energyrelated equipment, energy infrastructure investments, and participation in renewableenergy projects, in an effort to contribute to the prevention of global warming and theachievement of a sustainable co-existence with the natural environment.

With the advancement of the aging society, the role of the medical and healthcare field
in society is becoming increasingly important. Under such circumstances, the Mizuho
Leasing Group is promoting the provision of service businesses in partnership withmedical equipment manufacturers and the initiatives targeting medical institutions
overseas, as well as financing services for equipment so as to meet a wide variety ofclient needs in the medical and healthcare field.

Sales Strategies

Sales Strategies

Develop businesses in response to reforms in power systems
and the trend toward local production and use of power

Engage in initiatives with medical equipment manufacturers
such as pay-per-use services

Engage in initiatives to invest in energy infrastructure

Meet investment needs of medical and nursing care services
leveraging IoTEnter renewable energy business

Engage in initiatives targeting overseas hospitals

Provide energy-saving solutions

Participate in community development with clients torevitalize local economies

Leasing of Air Conditioning Equipment for Municipality-run Educational Institutions

In response to the introduction of air conditioning equipment through alease for all classes (468 classrooms) at kindergartens, elementary schools,
and junior high schools managed by Narashino City, Chiba Prefecture,
the Company made a joint proposal with a leading engineering firm in
the prefecture for design and construction that achieves energy and costsaving and the introduction of environmentally friendly equipment. The
proposal was adopted.
We contribute to the realization of a comfortable learning
environment and the maintenance of good health forchildren while reducing the environmental burden throughthe installation of equipment that takes into consideration
temperature differences in classrooms as a result of theflow of air and sunlight, as well as efficient facility operations
using a centralized management system.

21

Case Study

Execution of Lease for Robot-assisted Endoscopic Surgery System

Abiko Toho Hospital, operated by Medical Corporation Association
Taikokai, aims to contribute to community health by, for example,
providing minimally invasive treatment in accordance with its mission
to “build a community where citizens can live with peace of mind.”
The client adopted a lease from the Company to introduce thelatest model of the da Vinci X Surgical System, a robot-assisted
endoscopic surgery system developed by Intuitive Surgical Inc., an
American company leading the world in the field of surgery support
robots. This equipment enables doctors to perform precise and quick
surgeries by manipulating a computer-controlled robot arm, which
supports the movement of the hand, based on a clear 3D-endoscopic
image of the surgical field, contributing to the provision of bettermedical services.

Consolidated Financial Data and Corporate Information

Case Study

Growth Strategy

Business Strategy for the Sixth Mid-term Management Plan

Strength to Support GrowthBusiness Strategy for the Sixth Mid-term Management Plan

Value Creation by the Mizuho Leasing Group

Growth Strategy

Integrated Report 201922

Business Strategy for the Sixth Mid-term Management Plan

Business Strategy for the Sixth Mid-term Management Plan

“Global”“Aircraft”

Global business expansion beyond national borders is becoming increasingly important,amid globalization and the growing number of Japanese companies entering overseas
markets. The Group has four local sales subsidiaries in the Asian region to respond toclient needs related to overseas business and financing through transactions among
overseas local subsidiaries, cross-border transactions, etc.

The expansion of mobility worldwide and the market entry of LCCs due to theliberalization of the airline industry are fueling the global increase in travelers, leading
to a growing demand for air travel. The Mizuho Leasing Group is helping to address
the growing demand for aircraft by providing airline companies around the world
with services including aircraft leasing and aircraft-backed loans or loans secured byengines.

Sales Strategies

Sales Strategies

Roll out joint overseas lease financing business with Marubeni Corporation:- M&As, establishing new companies, leveraging existing locations, etc.

Case Study

Launch of a Truck Operating Lease Business with Maintenance Services in Thailand

Underpinned by the growth of the electronic commerce (EC)market, logistics is becoming increasingly important in Thailand.
The Company’s local subsidiary in Thailand, Krung Thai IBJ Leasing
Co., Ltd. (KTIBJ), has started a truck operating lease business withmaintenance services in cooperation with leading local Japaneseaffiliated truck dealers. The provision of unique maintenance services,
going so far as engine overhauls, allows clients to benefit from
improvements in vehicle availability, thanks to appropriate maintenanceand inspection by authorized dealers, a reduction in complex
management operations, and the leveling of maintenance costs.
KTIBJ’s proposal of this service was adopted by SANKYU LAEMCHABANG (THAILAND) CO., LTD., the Thai local subsidiary ofSankyu Inc. which is engaged in a unique business that combines
logistics, plant engineering, and operational support.

23

Growth Strategy

Drive forward aircraft operating lease businessEnter businesses related to engines, parts,and other aircraft peripherals
Set up and sell JOLCO (Japanese Operating Leases with Call Option)

Strength to Support Growth

Leverage expanded client base to improve capabilityof identifying needs of Japanese companies for capital
investment and rolling out businesses overseas

Aircraft-backed collateralized loans

Initiatives at Mizuho Leasing

The Company has been involved in the aircraft business for over 30
years. We are currently engaged in both financing backed by aircraft
and engines and aircraft operating leases, mainly for leading airlines
overseas. The aircraft operating lease business is conducted forairlines around the world without regional limitations, for narrow bodyaircraft that have a high level of versatility, based on an appropriate
assessment of risks and returns.
Going forward, we will respond to a broad range of client needs
by expanding services in areas peripheral to aircraft, in addition to
our services to date and strengthening our alliances with the Mizuho
Financial Group and the Marubeni Group.

Consolidated Financial Data and Corporate Information

Enhance marketing that targets non-Japanese companies
by tapping leading local companies and end-customers ofJapanese vendors overseas

Value Creation by the Mizuho Leasing Group

Growth Strategy

Integrated Report 201924

Business Strategy for the Sixth Mid-term Management Plan

“Real Estate”“Technology”

The real estate business is facing increasingly diversified needs such as increased hotel
construction on the back of demand from inbound tourism, as well as the promotionof the healthcare and childcare fields as a result of an increasingly aging society with a
low birthrate and women’s more active participation in society.
The Mizuho Leasing Group will respond to diversified client needs for property suchas commercial facilities and logistics facilities by taking advantage of its initiatives infields with growing social needs and accumulated know-how.

The industry structure is beginning to undergo big changes as a result of the advance of
IoT, big data, AI, and other technologies. The changes include a shift from the provisionof uniform products and services to that of individually customized production andservices and the expansion of the sharing economy that uses the Internet to match theneeds of service users and providers. The Group will fully leverage the knowledge it hasdeveloped to date related to the business of equipment to provide solutions that flexibly
respond to the changes in clients’ business models.

Sales Strategies

Sales Strategies

Lease real estate in areas with high societal needs

Provide bridge functions for REITs in Japan

Growth Strategy

Business Strategy for the Sixth Mid-term Management Plan

Value Creation by the Mizuho Leasing Group

Growth Strategy

Roll out businesses that merge the Company’s knowledge withtechnology, such as lease financing with IoT, data business,robotics, and MaaS-related businesses

Invest in overseas real estate funds
Create and jointly invest in new businesses by matching existingclients with startups

Hotel Leasing Project in the Tokyo Waterfront City Area

The Mizuho Leasing Group conducted a building lease for Daiwa
Roynet Hotel Tokyo-Ariake, which is managed by Daiwa Royal
Co., Ltd. of the Daiwa House Group. This is a case of businessdevelopment in an area with high societal needs, including new hotels
on the back of growing demand from inbound tourism.
The hotel was built in Tokyo Waterfront City, an area slated
for further development plans with a concentration of tourism
resources such as attractive commercial and leisure facilities
including the Tokyo Big Sight (Tokyo International Exhibition
Center), Japan’s largest convention facility*. The hotel has 368
guest rooms, the highest number for any Daiwa Roynet Hotel,
and is used for both tourism and business.
*Complex for the purpose of holding exhibitions and conferences.

25

Initiatives at Mizuho Leasing

In response to the change in the industrial structure from a focus on
selling equipment to selling solutions and experiences, the Company
will focus on building networks with companies that have innovativetechnologies and services, in order to create new business andservice opportunities. During FY2018, we pursued partnerships withpromising venture companies through investments in funds managed
by SBI Investment Co., Ltd. that has an abundant investment trackrecord mainly in fields such as IT, bio, and life science and Energy &Environment Investment, Inc. that is the only venture capital firm inJapan that specializes in the field of environment and energy.
Going forward, we will take on the challenge of developing newservice-oriented businesses using pioneering technologies throughthe utilization of the knowledge of the Mizuho Financial Group while
cooperating with existing clients and venture companies.

Consolidated Financial Data and Corporate Information

Case Study

Strength to Support Growth

Jointly invest in good properties with major developers

Integrated Report 201926

Strength to Support Growth

Value Creation by the Mizuho Leasing Group

Toward Sustainable Growth CSR Activities of the Mizuho Leasing GroupThe businesses of the Mizuho Leasing Group, including financing, the management of equipment, insurance,and overseas businesses, are closely connected with the economy, society and the environment in various
aspects. The Mizuho Leasing Group aims to develop a sustainable society and increase corporate value by
resolving social issues through its business and creating values shared with various stakeholders including

Corporate Philosophy

We aim to be a Group

Enhancement of corporate
governance

Shareholders

G

Compliancewhich contributes to

Dialogue with shareholders andinvestorssociety by offeringvalued financial

SocietyE

S

services which lead tofuture prosperity.

Social contribution activities
through businessInitiatives for reducing
environmental load

Respecting the human rights of each
employee

Employees

S

Securing and cultivating humanresources with diverse perspectives
and values
Organizational management tocreate a vibrant environment in which
employees feel satisfied with their jobs

Growth Strategy

Contribution to the developmentof clients’ business activities

Contribution to industrial andtechnological advancement

Strength to Support Growth

S

Creation of productive and highquality employment opportunities

Consolidated Financial Data and Corporate Information

E

Provision of optimal solutions
tailored to changes in the timeand environment

Realization of a sustainable society

Clients

Sustainable economic
development

through the business

Efforts of the Group to achieve sustainable growth

Creation of shared value with stakeholders“clients,” “shareholders,” “society” and “employees.”

Prosperous living
E Environment

S Social

G Governance

Maintenance of a healthy
global environment
27

Integrated Report 201928

Strength to Support Growth

Value Creation by the Mizuho Leasing GroupManagement Structure
Board of Directors

President and CEO

Deputy PresidentManaging Director

Managing Director

Managing Director

Outside Director

Hiroshi Motoyama

Shusaku Tsuhara

Shinichiro Maruyama

Hidehiko Kamata

Yasuhisa Fujiki

Takao Komine

December 2002 General Manager, Corporate Banking Division No. 9 of Mizuho
Corporate Bank, Ltd.
Executive Officer, General Manager of IT & Systems Planning
Division of Mizuho Corporate Bank, Ltd.
April 2007 Managing Executive Officer, Head of Strategic Planning Group,
Head of IT, Systems & Operations Group of Mizuho Financial
Group, Inc.
June 2007 Executive Managing Director, Head of Strategic Planning Group,
Head of IT, Systems & Operations Group of Mizuho Financial
Group, Inc.
April 2009 Director of Mizuho Financial Group, Inc. (up to June 2009)
Deputy President & Representative Director, Chief Auditor ofMizuho Corporate Bank, Ltd.
June 2011 President & Representative Director of Mizuho Securities Co., Ltd.
June 2016 President and CEO of the Company (present position)

April 2009

April 2010

General Manager of Corporate Banking Division No. 14 of Mizuho
Corporate Bank, Ltd.
Executive Officer, General Manager of the Corporate Business
Unit (Large Corporations)
June 2012 Executive Officer, General Manager of Planning Department of
the Company
June 2013 Director, Executive Officer, General Manager of Planning
Department of the Company
April 2015 Managing Director, Managing Executive Officer, General
Manager of Corporate Planning Department of the Company
June 2015 Managing Director, Managing Executive Officer, General
Manager of Business Co-ordination Department of the Company
April 2017 Managing Director, Managing Executive Officer of the Company
February 2018 Managing Director, Managing Executive Officer, CFO of theCompany (present position)

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

April 2011

July 1969
June 1998
July 1999

Outside Director

Outside Director

Outside Director

Outside Director

Outside Director

Naofumi Negishi

Hirofumi Hagihira

Mari Sagiya

Daisaku Abe

Nobuhiro Yabe

April 1971
June 2003

April 1977

April 1985
July 2002
July 2005
July 2014

April 2007

April 1982 Joined Marubeni Corporation
September 2006 General Manager, Agri-Marine Products Administration of
Department of Marubeni Corporation
April 2009 Chief Financial Officer (CFO) and Chief Administrative Officer(CAO) of Marubeni America Corporation
April 2012 Executive Officer, General Manager of Finance Department ofMarubeni Corporation
April 2014 Executive Officer, General Manager of Corporate Planning &Strategy Department of Marubeni Corporation
April 2016 Managing Executive Officer, CFO of Marubeni Corporation
June 2016 Managing Executive Officer, Member of the Board, CFO of
Marubeni Corporation
April 2019 Senior Managing Executive Officer, Member of the Board, CFO
of Marubeni Corporation (present position)
June 2019 Director of the Company (part-time) (present position)

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

April 2012
April 2015
June 2015
April 2017
April 2019
June 2019

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

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

April 2012

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

29

April 2009
June 2012
April 2013
July 2013
June 2014

June 2019

April 2014
April 2018
April 2019

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

General Manager of Corporate Banking Division No.15 of Mizuho
Corporate Bank, Ltd.
Executive Officer, General Manager of International Coordination
Division of Mizuho Corporate Bank, Ltd.
Executive Officer, General Manager of International Coordination
Division of Mizuho Bank, Ltd.
Managing Executive Officer (in charge of Consumer, Health,Care, Telecom, Media, Technology, Specific Global Corporations)of Mizuho Bank, Ltd.
Managing Executive Officer of the Company
Managing Executive Officer, Chief Compliance Officer (CCO)
and Chief Risk Officer (CRO) of the Company
Managing Director, Managing Executive Officer, Chief
Compliance Officer (CCO) and Chief Risk Officer (CRO) of theCompany (present position)

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

Outside Audit & Supervisory Board Member

Outside Auditor

Outside Auditor

Takehito Miyaguchi

Nobukatsu Funaki

Shinichi Takahashi

Akira Noguchi

April 2005

April 2005

April 1984

April 1979

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

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

Joined The Dai-ichi Mutual Life Insurance
Company
April 2006 Executive Vice President of DLIBJ AssetManagement Co., Ltd.
April 2011 Senior Executive Vice President of DIAM
Co., Ltd.
October 2016 Director, Managing Executive Officer, Headof Institutional Marketing Division of AssetManagement One Co., Ltd.
April 2018 Director of Trust & Custody Services Bank,
Ltd.
June 2018 Deputy President of Trust & Custody
Services Bank, Ltd. (present position)
Auditor of the Company (present position)

Senior Managing
Executive Officer

Katsuhiko Yoshida

Managing Executive
Officers

Noriyuki Yukawa
Hironobu Yamaguchi
Kunimoto Wakasugi
Tetsuya Norimatsu
Takanori Nishiyama
Masanobu Kobayashi
Katsuzumi Orihashi
Toshikazu Ishizaka

Executive Officers

Kozo Shino
Yoshiyasu Mizutomi
Chihiro Tokiyasu
Yutaka Sasaki
Hiromichi Koyata
Noboru Otaka
Asao Tsumuji
Yasushi Hara

Consolidated Financial Data and Corporate Information

Corporate Executive Officers

Outside Audit & Supervisory Board Member

General Manager of Beijing Branch ofMizuho Corporate Bank, Ltd.
April 2007 Executive Officer, Head of the Committee
for Establishment of China Subsidiary ofMizuho Corporate Bank, Ltd.
June 2007 Executive Officer of Mizuho Corporate
Bank, Ltd.
Deputy Chairman & President of Mizuho
Corporate Bank (China), Ltd.
April 2012 Senior General Manager of Mizuho
Corporate Bank, Ltd.
Councillor of Mizuho Corporate Bank
(China), Ltd.
June 2012 Senior General Manager of Mizuho
Corporate Bank, Ltd.
Chairman of Mizuho Corporate Bank
(China), Ltd.
October 2015 Adviser of Mizuho Research Institute Ltd.
Adviser of Mizuho Bank (China), Ltd.
June 2017 Audit & Supervisory Board Member of theCompany (present position)

July 2013

June 2019

April 2019

Corporate Auditors

April 2012

Growth Strategy

April 2010

Strength to Support Growth

April 2004

Kunihiro Mio
Mitsuyuki Kimura
Toru Mukojima
Koki Minami
Kazuo Seki
Kazuomi Funakawa
Takashi Yamada
Kensuke Sato

Integrated Report 201930

Strength to Support Growth

Outline of Corporate Governance Structure (As of June 25, 2019)
Form of organization

Company with auditors

Number of directors

11, of whom 6 are outside directors

Number of auditors

4, all of whom are outside auditors

Term of office of directors

2 years

Executive officer system

AdoptedBoard of Directors
meetings in FY2018

Audit Committee
meetings in FY2018

Number of meetings 19 times
held
Attendance rate of
directors

98%

Attendance rate ofcorporate auditors

97%

Number of meetings 15 times
held
Attendance rate ofcorporate auditors

Structure of compensation for directors

Independent auditor

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

The Board of Directors and Executive Officers
The Company’s Board of Directors currently has 11 members, ofwhom four are independent outside directors. This arrangement
helps ensure the appropriateness of the supervisory function
and decision making by the board.
The Company has adopted an executive officer system
to ensure the rapid and efficient execution of business inaccordance with the decisions of the Board of Directors, anddelegates authority for business execution to the president
and executive officers. The Executive Management Committee
has been established as the highest decision-making body forexecutives to reinforce the operation of meeting bodies andPolicy Planning Committees & Council have been establishedfor each function under the Executive Management Committee,
with the objective of enabling prompt and appropriate decisionmaking in addition to taking on challenges for new businessmodels and responding to increasingly diversified risks.

Auditors and Audit Committee
The Company has adopted a “company with auditors” system
consisting of four auditors, all of whom are outside statutory
auditors. The Audit Committee audits directors’ decision-making
activities at Board of Directors meetings and other occasions,as well as the Company’s entire business operations, to ensurethat directors fulfill their legal duties, such as duty of prudence,fiduciary duties and ensuring that business operations are
31

Establishment of an Optional Nomination andCompensation Committee
An optional Nomination and Compensation Committee wasestablished in April 2019. The committee is formed by five
directors, of whom four are independent outside directors, toimprove the transparency of the decision-making process by the
Board of Directors and further enhance the corporate governancestructure. The Committee deliberates the appointment anddismissal of directors and auditors, as well as the management
team, and matters related to compensation, the results of which
are presented to the Board of Directors.

Implementation of Effectiveness Evaluation of theBoard of Directors
In order to conduct an analysis and evaluation on the effectivenessof the Board of Directors as a whole, a questionnaire wasintroduced for directors and auditors on the following items byan evaluation agency from fiscal 2019.
Questionnaire items

Officer category

Compensation for Directors
The maximum total amount of compensation to be paid to all
directors has been set based on the resolution of the General
Meeting of Shareholders. With regard to the compensation
for directors excluding outside directors, it is performancebased corresponding to their positions and responsibilities (acombination of fixed monthly compensation and performancelinked compensation based on a performance evaluation inconsideration of contribution to medium- to long-term businessperformance). As for the compensation for outside directors, it is

The Group regards it as a key management responsibility tomaintain and ensure the appropriate operation of a system that
ensures proper conduct of business operations, and to work
toward strengthening internal control. Under the Companies Act,
the Group is required to strengthen its internal control system,and to this end, Mizuho Leasing and seven domestic Group

Nomination andCompensation
Committee

Communication with the management teamShareholder and investor relations

We will work to improve areas where issues were pointed out,
and further improve the effectiveness and functions of the Boardof Directors in light of these analyses and evaluations.

Performance-linked
compensation

6¥346 million¥214 million¥131 million–¥– million¥– million¥– million

8¥91 million¥91 million¥– million* This includes one outside officer who resigned on or prior to March 31, 2019.
Performance-linked compensation states the amount that should berecorded as expenses in FY2018.

companies have formulated basic policies to ensure properand effective operation. Furthermore, regarding internal control
on financial reporting pursuant to the Financial Instruments andExchange Act, the Group maintains and implements a structure
to ensure reliability of its financial reports.

Board of Directors(Directors/Outside
Directors)

Audit

Audit Committee(Outside Auditors (all))Supervision
Executive officer system

Audit

Chief Executive Officer (President)

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

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

Accounting
Audit

Independent Auditor(Audit Firm)

Cooperation

Audit Department

Control

Compliance Division(under direct control of CCO)
Legal Division

Legal Advisors
Cooperation

Policy Planning Committees & Council

Open and lively discussions are held at the Board of Directors.
Further improvements are expected in the methods of providing
information related to the Board of Directors.

Outside officers

Fixed
compensation

General Meeting of Shareholders (Shareholders)

Coordination with auditing bodies

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

Directors excluding
outside directors
Corporate auditors
excluding outside
auditors

Total amount ofcompensation, etc.

Corporate Governance Structure

Operation of the Board of Directors meetings

Evaluation and analysis of the effectiveness of Directors

Total amount of
Number compensation,
recipients
etc.

Internal Control

Roles and functions of the Board of Directors
Composition and scale of the Board of Directors

The evaluation and analysis of the Board of Directors for fiscal
2018 by the evaluation agency based on the questionnaire
results were as follows.

Total amount of compensation, etc. for directors and corporate auditors in FY2018

Strength to Support Growth

To enhance corporate value consistently over the long term,
the Group recognizes that it is essential to ensure effective
corporate governance, meaning a framework governingbusiness activities centered on a closely regulated relationshipbetween shareholders and management, and to put in place anenvironment to ensure this.

conducted properly.
To ensure the effectiveness of audits, corporate auditors
attend important meetings, including Board of Directors
meetings, and also have regular meetings with representative
directors to exchange views on important audit-related
issues. Corporate auditors also cooperate closely with the
Audit Department, the internal audit department, to ensure
efficiency, and regularly receive reports from this department
regarding the plans and results of audits. Furthermore, theAudit Committee holds regular meetings with independent
auditors to maintain close cooperation with them, listen to theirreports on audit activities, and exchange information to raise
the efficiency and quality of auditing.
Outside Standing Auditors Takehito Miyaguchi andNobukatsu Funaki have both engaged in financial operations
for many years and possess sufficient financial and accounting
knowledge.

fixed monthly corresponding to their responsibilities.
In addition, a performance-linked, share-based remuneration
system has been introduced by the Company. The system aims
to contribute to the improvement of business performance inthe medium- to long-term and increasing corporate value, andultimately sharing awareness of raising our stock value with ourshareholders by further clarifying the linkage of the remuneration
for directors (excluding the chairman of the Board of Directors
and outside directors) and executive officers who do notconcurrently serve as directors with the business performanceand stock value of the Company.

Consolidated Financial Data and Corporate Information

Basic Approach

The Company’s Audit Department is responsible for conducting
internal audits. To ensure the independence of this function,
the department reports directly to the president. The Audit
Department conducts internal audits on the entire Company
organization as well as consolidated subsidiaries to ensure
efficiency and appropriate conduct in business operations
and compliance measures, and to give specific advice,recommendations and suggestions regarding the improvementof business operations. The Audit Department cooperates withcorporate auditors and independent auditors as necessary. Audit
results are periodically reported to the Board of Directors, which
determines, based on these results, whether improvements tosystems, organizations and regulations are necessary for the
avoidance of various risks.

Growth Strategy

Internal Audit Department

Corporate GovernanceValue Creation by the Mizuho Leasing Group

Corporate Governance and Internal Control

PM/ALM Committee

Risk Management
Committee

Operating Units

Credit Committee

Administrative Units

Business Council

IT System/
Investment Committee

Group companies

Integrated Report 201932

Strength to Support GrowthCompliance and Risk Management

Over the course of my career as a government official and university faculty
member spanning about half a century up until now, I have observed the Japanese economy and discussed economic policy issues. Rather than from themicro-economic level such as corporate management, I have analyzed theeconomy in general from the macro-economic level, such as the economic
climate, economic growth, fiscal and monetary policy, and population issues.
I have never worked in the private sector, nor do I have any expertise on theleasing business. However, I believe that it is my role as an outside director tocheck management from this different perspective and point out issues thatcan be hard to notice from the inside.
I think that fiscal 2019 will be a big milestone for the Company. A close
partnership with Mizuho Bank, Ltd. and Marubeni Corporation commenced
from March 2019, and a dramatic increase in business opportunities can be
expected as a result. The company name was also changed to Mizuho Leasing Company, Limited in October, and 2019 also marks the 50th anniversaryof the Company’s establishment. On this occasion, the Company has literally
started off with a clean slate and achieved a new start. I intend to live up to
the expectations of many stakeholders including shareholders, and do all that
I can to take the utmost advantage of the opportunity for new development.

Value Creation by the Mizuho Leasing Group

Message from Outside Director

Compliance

Compliance Structure
The Company has formulated Compliance Regulations toensure compliance, appointed a chief compliance officer (CCO),
and established the Compliance Division. Furthermore, eachdepartment general manager functions as the departmentlevel head of compliance, and is tasked with supervising andenforcing its practice. In addition, the Audit Department, which
undertakes internal audits, examines and assesses the current
state of compliance in each department. The Company has
created a system in which necessary measures are taken basedon reports from the Audit Department.
As internal reporting systems, the Company has established a

Takao Komine

compliance hotline structure and maintains internal and externalreporting lines via attorneys to enable all of its employees to report orconsult about potential violations directly to the Compliance Division
and/or the corporate auditors. The Company has also formulated
Rules on the Protection of Whistleblowers to protect reporters.

Compliance Awareness Activities
The Group has formulated the Corporate Code of Conductof the Mizuho Leasing Group, which sets out concrete action
guidelines for directors and employees, as well as publisheda Compliance Manual, a guidebook describing key rules andregulations that must be followed to ensure full compliance withinall business operations. The Compliance Manual is also available
on the corporate intranet so that directors and employees canrefer to it easily in the course of their daily work.
Furthermore, every year the Group arranges a Compliance
Program, a set of concrete hands-on activities that raises
awareness of compliance issues through education and training
for general managers, as well as stratified training and/or
e-learning.

Growth Strategy

The Group duly recognizes that any issues with compliance
may undermine the very foundations of management. On thisunderstanding, the Group complies with laws and regulations
and practices honest and fair business activities in accordancewith the norms of society. To ensure the trust and confidenceof society, the Group is firmly committed to maintaining strict
compliance.

Professor, Faculty of Regional Development, Taisho University

Outsidedirector

Name

Significant concurrent positions
outside the Company(As of June 27, 2019)

Takao
KomineTrustee, Senior Research Fellow,
Japan Center for Economic Research We expect that he would make use of his abundant experience and broad insight in financial
Professor, Faculty of Regional
policy and specialized academic fields.
Development, Taisho University

Attendance at meetingsof Board of Directors /Audit Committee

Board of Directors
meetings:
17 out of 19 meetings

Naofumi
Negishi—

We expect that reflecting his vast knowledge in manufacturing industry’s corporate managementin the Company’s corporate management will contribute a new perspective to achieving (Assumed office in June 2019)sustainable growth and increasing our medium- and long-term corporate value of the Company.

Hirofumi
Hagihira—

We expect that that reflecting his vast experience and knowledge in the fields of economics,
industry, and trade policy in our own corporate management will contribute to achieve sustainable (Assumed office in June 2019)
growth and increasing our medium- and long-term corporate value of the Company.
We expect that that reflecting her vast knowledge and corporate management experience in systems
and IT in the Company’s corporate management will contribute to a new perspective towards achieving (Assumed office in June 2019)sustainable growth and increasing our medium- and long-term corporate value of the Company.

Mari
SagiyaIndependent Outside Director,
Kokusai Pulp & Paper Co., Ltd.

DaisakuAbe

In addition to his vast knowledge of financial administration, he also has vast corporate
Deputy Chairman & Executive
management experience having served at financial institutions. We believe that he will be able
(Assumed office in June 2019)
Officer, Mizuho Financial Group, Inc. to contribute to the sustainable growth and improvement in the medium- to long term corporate
value of the Company in light of his aforementioned abundant business experience.

Nobuhiro
Yabe

Senior Managing Executive Officer,
Member of the Board, CFO,
Marubeni Corporation

He has vast experience and knowledge related to overseas and finance at a general trading
company and also has vast corporate management experience. In light of our business alliancewith the Marubeni Group, we believe that he will be able to contribute to the sustainable growth (Assumed office in June 2019)and improvement in the medium- to long term corporate value of the Company in light of his
aforementioned abundant business experience and knowledge.

Takehito
Miyaguchi—

Having worked for a financial institution, he has abundant experience and broad insight in corporate
administration and administrative operations, including the management of an overseas branch.
We believe that he will use these qualities in carrying out the Company’s audit operations.

—

In addition to his broad knowledge related to financial institutions, he also has vast audit
experience as a full-time corporate auditor, member of the Board of Directors and member ofthe Audit Committee for financial institutions. We believe that he will apply his knowledge and (Assumed office in June 2019)
experience in carrying out the Company’s audit operations and also that he would contribute tomaintaining and raising the level of corporate governance of the Company.

Nobukatsu
Funaki
Outsideauditor33

Reasons for appointment

Shinichi Attorney, Nishimura & Asahi
Takahashi

We expect that he would make use of his abundant experience and high expertise as an attorneyin carrying out the Company’s audit operations, and also that he would contribute to maintaining
and raising the level of corporate governance of the Company.

Akira
Noguchi

We expect that he would make use of his abundant experience and broad insight in financial
institutions in carrying out the Company’s audit operations, and also that he would contribute tomaintaining and raising the level of corporate governance of the Company.

Deputy President, Trust & Custody
Services Bank, Ltd.

Board of Directors meetings:
19 out of 19 meetings
Audit Committee meetings:
15 out 15 meetings

Board of Directors meetings:
18 out of 19 meetings
Audit Committee meetings:
15 out 15 meetings
Board of Directors meetings:
14 out of 15 meetings
Audit Committee meetings:
11 out of 11 meetings(Since assuming office in June 2018)

Comprehensive Risk Management Activities
As financial services become more diversified and sophisticated,the various risks that arise from business operations growincreasingly complex. In this environment, the Group recognizes
that precise monitoring and analysis, as well as the proper control
and management of these risks is exceedingly important for
maintaining or increasing the soundness of business operations,and is strengthening and streamlining its risk management
system accordingly.
The Mizuho Leasing Group has categorized risks that arise
in association with the operating activities into financial risk to
be managed quantitatively and operational risk to be managed
qualitatively, and risk management systems are established foreach risk. Moreover, the Risk Management Committee wasinstituted to establish a comprehensive risk management system
to centrally manage operational risk and financial risk.
As for financial risk, meaning credit risk1, market risk2, andprice fluctuation risk3, the locations and the magnitude of risk
are monitored based on the management framework centeredon the allocation of risk capital. Operational risk such asadministrative risk, system risk, legal risk, etc., is monitored
for the status of occurrence of risk events, countermeasures,
Keywords Explained
1 Credit risk is the risk of loss associated with the inability to collectlease payments, installment payments, or loan principal and interest
as contracted, due to factors such as bankruptcy or deterioration offinancial position of the debtor.
2 Market risk is the risk of incurring loss as a result of a decline or disappearance in, or total loss of, the value of the Company’s financial
assets and liabilities attendant on market price fluctuations (interest
rates, stock prices, foreign exchange rates, etc.).
3 Price fluctuation risk is the risk of fluctuations in the value of items
other than marketable products, for example, the risk of fluctuationsin the estimated residual value in operating leases and risk inherent inreal estate-related financing (risk of fluctuations in the real estate value
at the expiry of a contract).

preventive measures, etc.
In addition, to realize the goal of becoming a multiple financial
services company and expand our specialized financing
services, we are aware that further enhancement of our risk
management system, for example, monitoring and handling thevarious risks inherent in transactions, etc., will be more important
than ever. For example, when we start handling new products
and developing new businesses, we evaluate risks from theperspective of both financial risks and operational risks, andwork to strengthen management through the establishment of astructure for thorough reviews in advance.

Strength to Support Growth

Title

Risk Management Structure

Risk Capital Allocation
The Group places an extremely high priority on the integrated
monitoring and control of total financial risk. Thus we incorporate
an integrated risk management structure in accordance with thatof the mega-banks into our management policies in order toimprove the soundness and stability of our business. Specifically,
we quantify various risk factors and employ integrated andcentralized control systems to ensure that our total risk exposure
remains below the required percentage of our shareholders’equity (i.e., our financial strength).
In other words, we define our risk tolerance as the amountof risk capital, calculated by subtracting equity capital and partof retained income as reserves reported for the maintenance of
the Company from shareholders’ equity. By allocating this risk
capital to each financial risk, we control losses incurred fromany unforeseen situation within manageable limits, thereby
maintaining our financial stability.
Key aspects, such as the amount of risk capital to beallocated for each risk, are determined as a part of the fiscal
year’s management plan at the Board of Directors meetings, andIntegrated Report 2019

Consolidated Financial Data and Corporate Information

Concurrent Positions Outside the Company, Reasons for Appointment and Other Relevant Matters Concerning Outside
Directors and Outside Auditors

34

Strength to Support Growth

The Mizuho Leasing Group establishes basic policies based onmarket environments, financial strength, etc., at the Board of
Directors meeting each year to properly control risks in line withfinancial operations. In addition, ALM operating policies based on
the basic policies, various credit lines for transactions, and loss
limits, etc., are determined on a monthly basis at the meetingsof the PM/ALM Committee, whose members include executives
in charge of relevant departments. Through these measures,the Mizuho Leasing Group strives to maintain stable earnings bycontrolling risk.
Also, in terms of organizational structure, in order to provide
effective checks and balances, we have established clearly
defined dividing lines between departments handling market
operations (“front office”) and departments providing backoffice administration (“back office”), and an independent risk
management department dedicated to risk management has
been established.
Furthermore, risk-related analyses are reported monthly at
meetings of the PM/ALM Committee as well as those of theBoard of Directors.

Operational Risk Management Structure
The Group’s Operational Risk Management Division of
the Risk Management Department centrally collects andmanages operational risk events resulting from inadequacies,
administrative errors, compliance issues, inappropriate business
operations, system failures and any other external factors
and takes appropriate actions according to the relevant risk
categories such as the formulation of countermeasures andmeasures to prevent recurrence.
Furthermore, risk-related analyses are reported quarterly at
meetings of the Risk Management Committee, as well as thoseof the Board of Directors, together with financial risk.

Risk Management Framework Centered on Allocation of Risk Capital
Directors/Outside Directors

Allocation of risk capital

Decides on important matters
Proposal ofcountermeasures

Capitalsurplus

PM/ALM Committee
Operation and execution to meet the basic policies
Reporting, proposal ofcountermeasures

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

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

Reserve for new
business activities

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

Retainedearnings

Market risk
Credit risk
Price fluctuation risk

Note: The colored box on the right side of the chart above is not intended to denote the relative size of risk allocated to each risk category.
35

The Company discloses information to the public on aconsolidated basis of the Mizuho Leasing Group to protect
rights and interests of shareholders and other stakeholders.
Timely, proper and fair disclosure of information will ensure

Flow of company information

Legal department
Verification

Board of Directors and otherdecision-making bodies

Department responsible for handling information(Information Handling Manager)∙ Collection of information concerning theMizuho Leasing Group∙ Grasping and managing information in an
integrated fashion∙ Judgment on whether or not informationneeds to be disclosed∙ Execution of disclosure operations

Decisions madeFinancial results

Each department

Company information of
the Mizuho Leasing Group

Subsidiaries

Information
disclosure

Securities
exchange, etc.

Reporting to the Board of Directors

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

dialogue with shareholders and investors.
The Mizuho Leasing Group aims to achieve sustainable
increases in corporate value by appropriately incorporating
opinions and feedback obtained through dialogue into
management.
Record of IR Activity in FY2018
Twice

Financial results briefing session
Individual meeting with institutional investors, etc.

44 times

Shareholder Returns
Dividend Policy

Shareholders Benefit Plan

The basic policy of the Company on dividends is to realize
dividends based on the business performance of the Company
while improving its earning capacity in due consideration ofbalance between return of profits to shareholders and securing
shareholders’ equity.

The Company has a shareholders benefit plan to show ourappreciation to shareholders. The reference date of this plan is
March 31 each year.

Annual Dividend per Share* QUO cards will replace pre-paid book cards as shareholders benefit
items from those dispatched after the general meeting of shareholders inJune 2020.

(yen)
78

80

Shareholders Special Benefit Plan

70
60

Provisionallyallocated
capitaltransparency of the Company’s corporate activities. A system
to disclose information accurately and promptly in a positive
manner is also in place and properly implemented.

Growth Strategy

The Mizuho Leasing Group aims to minimize credit costs by
optimizing its credit management structure at all stages of eachtransaction, from entrance to exit, regarding credit risk of ourclients.
Firstly, at the initial stage of deal execution under our “client
credit rating system,” we grant a credit rating for each debtor,
conduct a strict credit screening for each debtor when reviewing
a deal, and, to avoid excessive concentrations of credit, manage
credit limit by using our “credit monitoring systems by ratings.”
Next, during the contract period, we apply asset selfassessment rules, which are as stringent as those employed bymegabanks, in accordance with the Financial Services Agency’s“Financial Inspection Manual,” and also implement write-offs andprovide reserves based on the assessment results. Also, we
periodically follow up on non-performing assets and make debt
collection of assets for which we have already provided reserves
to facilitate final disposal of nonperforming assets.
Meanwhile, our approach to credit portfolio management isbased on the use of statistical methods to calculate the potential
for losses related to credit risk. To that end, each month wecalculate the expected loss (EL, i.e., credit cost), which is theaverage loss anticipated over the next year, and the unexpected
losses (UL, i.e., credit risk amount), which is the maximum
amount of any additional loss in excess of the EL.
As for expected losses, our stance is to cover an expected
loss from income gained through credit transactions, and we
use this amount as a reference value when estimating thecost of credit for our income plan as well as when arranging
deals. Concerning unexpected losses, if an unexpected loss is
incurred, our stance is to cover it from our equity capital, which
we monitor in relation to the pre-allocated risk capital, and reportMarket Risk Management Structure

Disclosure Policy

Strength to Support GrowthCredit Risk Management Structure

to the Board of Directors on a monthly basis.
In addition, we are focusing on initiatives to improve ourasset quality by controlling the risks inherent in the business andassets through portfolio management.

56

60

Consolidated Financial Data and Corporate Information

specific operating policies are determined through resolutions
by the Executive Management Committee and Policy Planning
Committees (such as the PM/ALM Committee), and reflectedin business operations. Within such a framework, the Risk
Management Department, which is independent from thebusiness and treasury departments, monitors operations
periodically to measure risks. The results of this monitoring arereported to the Board of Directors on a monthly basis.

Value Creation by the Mizuho Leasing Group

Dialogue with Shareholders and Investors

If shares are held for two
consecutive years or longer*64

A ¥3,000 QUO card is given out toeach shareholder who holds 1 unit
(100 shares) or more shares.

40

A ¥4,000 QUO card is given out toeach shareholder who holds 1 unit
(100 shares) or more shares.

20

0

2014

2015

2016

2017

2018

* Shareholders who hold 1 unit (100 shares) or more shares for two consecutive years or longer are those who are recorded in the shareholder registryon the record date (March 31) by the same shareholder number as that on
the record date of the previous fiscal year.
Integrated Report 201936

Strength to Support Growth

Value Creation by the Mizuho Leasing Group

Commitment by the Personnel Unit
Overview of the Personnel Strategies and Progress of Concrete Measures
Personnel strategy in anticipation of the next 50 years
Concrete measures in theFifth Mid-term Management Plan

•Utilization of external
educational institutions

37

An organization capable ofcontributing to the development oflocal industries not only in Japan, butalso in overseas countries•Strategic personnel allocation•Human resource portfolio•Establishment of humanresources portfolio in light ofthe partnership with Mizuho
and Marubeni

Diversity
An organization capable ofallowing diverse human resources
to demonstrate their skills andincreasing value provided to society•Aggressive hiring ofspecialized human resources

Promotion ofdiversity
Work style reform•Implementation of measures
to promote diversity•Implementation of measuresrelated to work style reform•Implementation of measures
to invigorate communication•Introduction of teleworking•Encouraging male employees
to take childcare leave

Expansion of businessfields in Japan and globally•Branch deployment ofTorakoya

Recruitment and Development of Human Resources
Human Resources Development Programs
The Mizuho Leasing Group has established detailed training programs such as operational skill training programs including stratified training based on each employee’s development level and optional training and correspondence courses to support employees to improve
themselves and to encourage them to acquire qualifications.
In addition, the Mizuho Leasing Group strives to develop human resources by setting up career plans for each employee as a guide for
employees to understand the knowledge, skills, etc., they should acquire in each of the steps in their career, devote themselves to theirduties and self-improvement by setting their own goals and undergo necessary training in a systematic manner.

Stratified training
Career-track positions

Administrative

Correspondence
courses

Operational skill training

Consolidated Financial Data and Corporate Information

Training Program Diagram
Other

Human assessment training

Evaluator training

Administrative job training

Mid-level manager training

Secondment

Administrative training
Follow-up training

Follow-up training

New employee training (Introduction, OJT, operational)

New employee training (Introduction, OJT, operational)

Compulsory
courseCareer design
training

Language training

Manager training

Management training

e-Learning

Selective management training

Course for self-development

Management training

Optional training

External management seminar
External lecture to acquire
specialized knowledge

and increase remuneration in accordance with the expected
role. In addition, for general positions that are mainly responsible
for administrative work, in light of their increasingly sophisticatedjob requirements, administrative positions will be newly established as an employment system to replace general positions.
The scope of work responsibilities will be expanded for these
positions along with an increase in remuneration in accordancewith the expected role.
Based on the recognition that establishing opportunities
for talented elderly employees who have abundant experience
will be important for the further growth of the Company as the
population continues to age in Japan, we will introduce a retirement age extension system that extends the retirement age
to 65 and enables the active participation of elderly employees
in April 2020. We will establish dedicated positions as a new
employment system for employees age 60 and above which will
broaden the individual lifestyle choices for people in the system,and establish four work categories in light of the considerable
individual differences in terms of household circumstances andphysical strength for this age group to provide a comfortableworking environment that supports individual circumstances.
Because making it possible for each and every employee tocontinue to vigorously take on new challenges for the next 50
years will help to drive dramatic growth for the Company as awhole, we will make improvements to the work environment toenable active participation of all employees through the implementation of new personnel and remuneration systems alongwith future measures to further enhance career planning, education and training systems as well as diversity promotion measures, including work style reform such as teleworking.

Global•Continual dispatching ofoverseas trainees

Sales skill improvement training

Fiscal 2019 is a milestone year that marks the 50th anniversaryof the Company’s establishment and a change in the company
name to Mizuho Leasing, along with the start of alliances withstrategic business partners.
Against this backdrop, with the aim of “developing human resources and creating a corporate culture willing to take on challenges and promoting work style reform,” since fiscal 2017 wehave strategically provided support through systems for the development of employees and strived to develop a fulfilling working environment for employees, through efforts divided into thefour major categories of “personnel and remuneration systems,”“human resource development,” “human resource portfolio andstrategic personnel allocation,” and “the promotion of diversity
and work style reform.”
Over this period of two years, we have promoted diversity
including work style reform through measures such as the development of personnel evaluation and remuneration systems topromote Challenge, the creation of career plans to help provide
an image of one’s future career, the strengthening of human resources capable of playing an active role on the global scene,
and the introduction of a system for career conversions.
In an aim for the further growth of the Group in anticipation of
the next 50 years, during this milestone year of fiscal 2019 wewill revise the personnel and remuneration systems and introduce systems that support the participation of the senior generation as the most significant measures of our personnel strategy.
The revisions to the personnel and remuneration systems aim
to better clarify the roles expected of each employment type andposition from general employees to management positions, review the job requirements that have currently been established,•Overseas human resources
recruitment and language
training

Instructor training

Executive Officer, General Manager of
Personnel Department

Challenge
A highly-flexible organization capableof adapting itself to changes in thesocial environment and taking onchallenges•Creation of succession plans

Mentor training

Managing Executive
Officer•Introduction of a retirement
age extension system
From April 2020

•Strengthening of humanresources working overseas

Human resource
portfolio
Personnel allocation

ChihiroTokiyasu•Setting up of appropriate
evaluation processes andremuneration systems•Creation of career plans

Human resource
development

Hidehiko
Kamata•Major revisions to thepersonnel system andremuneration system

Growth Strategy

Personnel andremuneration
systems

Desired Future Imageof the Organization•Evaluation and remuneration
systems to promote
Challenges

Strength to Support Growth

Four Categories

Initiatives during FY2019

Life planningtraining

Financial analysis lecture
Integrated Report 201938

Hiring New Graduates, Mid-career Workers and Persons with Disabilities
Based on its policy to conduct fair and impartial pre-employment
screening, the Mizuho Leasing Group promotes recruitment ofdiverse talent including new graduates, as well as mid-career
workers with various backgrounds and persons with disabilities.

Development of Global Human Resources

We believe that the future of the Mizuho Leasing Groupdepends on people with different personalities who perform
at their full potential, think together, act together and develop
together.
Past record(Persons)
30

Value Creation by the Mizuho Leasing GroupStrength to Support Growth

New graduates employed27

The Group has established a target for the final fiscal year of
the Sixth Mid-term Management Plan to triple the balance in
the Global field of that of the end of March 2019. The Group is
strategically implementing the development and strengtheningof human resources who can play an active role in overseas
countries based on the three pillars, namely education andtraining of existing employees, the hiring of students who desire
to work overseas, and the mid-career recruitment of employeeswith overseas experience.

An open call for overseas-oriented employees was started
within the Company in September 2017, and as a result trainees
have been dispatched to overseas subsidiaries after undergoing
language training.
In addition, we focus on the hiring of students studying abroad
and those who desire to work overseas, while also proactively
undertaking the mid-career recruitment of employees who
have overseas experience as those who can make immediate
contributions to the Group.

22
18

17

10

0

2016

2017

2018

2019

Acceptance of Trainee from Overseas

After I graduated from the University of California, San Diego, I worked for several years in China
and South Korea, and during that time I also visited Japan. However, this is the first time that I have
lived in Japan. While I have only been in Japan for a short amount of time, I am extremely gratefulfor all of the kind support that I have received. Mizuho Leasing is involved in a wide range of operations from finance leasing to M&As and environmental energy, and through my work at Mizuho
Leasing I hope to improve my own skills by learning about business in Japan, while accumulatingknowledge from a broad perspective that includes the Japanese labor market and Japan’s positionin the global economy of the 21st century that are currently undergoing changes.

Internship Program

Benjamin Irvine

Internship Programs are provided twice per year
(summer and winter) for students so that they can havea better understanding of the leasing industry and ourbusiness operations.
In the summer internship program, interns receive
basic knowledge of the leasing business, learn analyticalmethods to understand corporate business models andengage in sales role-plays, and visit clients’ locations
together with Mizuho Leasing employees. In the winterinternship program, interns mostly experience sales
role-plays based on actual projects. The program hasreceived favorable responses from participating students
with comments such as “I was able to learn about thedepth and appeal of the leasing business through work
keeping in mind to make proposals that went so far as toaddress the management issues of customers.”

Growth Strategy

20International Administration Department

System for Career Conversions

The OJT and mentor systems have been instituted tosupport new employees from both operational andmental aspects so that they can learn the operations andgrow effectively.
The OJT system is designed to allow trainees todeepen their understanding of their jobs and master theoperations by working on practical operations together
with their instructors. The mentor system allows employees
who have just started their careers to designate senior
employees close to their own career stage as mentors andprovides an environment where they can ask for various
consultations on not only questions and concerns overwork, but also private matters, so that they can mitigate
their anxiety.

Administrative
positionsArea-limited careertrack positions

Career-track
positions

Career conversions tolifework positions

Employee Feedback
Consolidated Financial Data and Corporate Information

On-the-Job Training (OJT) and Mentor Systems

Career enhancement
conversions

Strength to Support Growth

We have been striving to develop systems that allow for flexible
work styles according to the life cycle of employees in orderto create a meaningful and engaging corporate culture. A
career conversion system has been established and proactively
operated, which enables (i) career enhancement conversions(career conversions from administrative positions to career-track
positions); (ii) career conversions from area-limited career-track
positions to unlimited career-track positions; and (iii) careerconversions to lifework positions (those who are temporarily
unable to perform their duties due to reasons such as childcare,nursing care, etc. may convert from career-track positions toarea-limited career-track positions or administrative positions).

Although I conducted sales in the Tokyo metropolitan area for a period of four years after joining theCompany in an area-limited position, I decided that I would like to work overseas because I wanted
to explore new possibilities and did not want to remain complacent with the status quo. However,
because people in area-limited career-track positions are not able to work overseas, I used thesystem for career conversions to switch to a career-track position and applied for the open call foroverseas-oriented employees at the same time. After that, I received language training and left fora long-desired post at a Chinese subsidiary as a trainee in April 2019.
Currently, I mainly engage in sales for Japanese-affiliated clients together with the locally-hired
staff. Not only do I work in Shanghai where the local subsidiary is located, but also travel around
China by airplane and high-speed trains to places like Beijing and Guangzhou. Every day is reallyexciting because the languages, culture, and business practices are completely different from thosein Japan.
I hope to take on various challenges with a hungry spirit in the future as well.

Rina Morita

Trainee at Chinese subsidiary

Employees who become mentors are required to undergo mentor training beforehand.
39

Integrated Report 201940

Strength to Support GrowthNursing Care Seminar

Work Style Reform Initiatives

Invigoration ofcommunication

Flexible working styles• Mobile work

• Torakoya• Satellite offices• Holding various seminars• Telework

Work stylereformWork-life balance support• Holding nursing care seminars• Improving acquisition of childcare
leave by male employees• Holding round-table talks for
employees returning to workfrom childcare leave

Distribution of a Work and Nursing Care Balance
Handbook
A handbook has been prepared anddistributed to employees to provide
easy-to-understand explanations on
the basic knowledge of nursing care,
how to achieve a balance between workand nursing care, and the first responsewhen faced with nursing care.

Initiatives to Invigorate Communication
Advancement of women• Career training• Career conversions• Skill training

Torakoya
The Mizuho Leasing Group set up Torakoya as an in-house
educational institution in October 2017 with the purpose oftransferring knowledge and know-how accumulated by theGroup in its history and providing a venue for communication
among employees beyond generations.
At Torakoya, interactive sessions are provided by seasoned

employees with abundant experience as lecturers instead ofclassroom lectures, enabling communication that goes beyond
workplaces, employment types and ages. It has been held 13
times in total so far attended by around 400 employees to dateincluding Group companies.

Torakoya at the Head OfficeKansai Torakoya FY2018

Growth Strategy

The Group believes that it is important
to conduct vibrant organizational
management to ensure the diversityof em pl o y ees an d c r e a te a n dmaintain an engaging workplacefor each of them. By promoting
the advancement of women, worklife balance, and the invigoration ofcommunication, we are working
to achieve a rewarding workplaceenvironment where diverse ways ofthinking and values are accepted
and respected and that maximizes
the unique abilities of each of ouremployees.
In fiscal 2018, we accelerated
initiatives toward the improvementof co m pany -wi d e o p e r a ti o n a l
productivity by adding work stylereform to the personnel evaluation
items for employees.

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

Value Creation by the Mizuho Leasing Group

Promotion of Work-Life Balance and Diversity

Initiatives for Flexible Working Styles

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

Childcare Leave Returnee Training

In order to create a corporate culture in which it is easy formale employees to take childcare leave, we are encouraging
male employees to take childcare leave through the distributionof leaflets that provide an overview of the work-life balance
support system and a summary on how to take leave as well
as awareness raising activities aimed at management positions.
In April 2019, we were registered in the Ikumen Supporter
Declaration as a supporting company under the Ikumen Projectof the Ministry of Health, Labour and Welfare.

Childcare Leave Returnee Training is held for employees after
reinstatement from childcare leave. The purpose is to strengthenawareness of participation while achieving a balance between
work and childcare, learn about the approach to work after
reinstatement, and knowledge related to housework andchildcare. Time is also set aside for sharing uncertainties andconcerns through interactions with other participants while
receiving advice from an external lecturer.

Ca s e S tudy

L e c tu r e r ’ s Voic e
When I talk with customers every day, it seems that many people are worried about internal communications becoming diluted. People are just moving forward to achieve a goal that has been
decided on. However, if the fun and joy of work is left behind and communication is diluted, it canlead to a decline in learning opportunities and a sense of entrapment that makes it difficult to foster
a positive working environment. In Torakoya lectures, I try to convey as many people as possible
about the fun and joy of work based on my past experiences, in the hopes that the positive corporate culture we have fostered at the Company up until now will be carried on by the next generation.

Childcare Leave Seminar
Childcare Leave Seminars are held to provide an opportunity
to learn about the mindset for balancing work and childcare,working style support for employees returning to work after
taking childcare leave, points to note regarding harassment,
and support for spousal partnerships and childcare by men.
Participation is encouraged for not only employees returningfrom childcare leave, employees using reduced work hours forchildcare, and employees planning to acquire childcare leave inthe future, but also for supervisors as well.
41

Strength to Support Growth

also started from July 2019. In addition, telework tests are being
conducted in stages for the administrative units and sales units
to study the full-scale introduction of the telework system inorder to achieve even greater flexibility in working styles.

Consolidated Financial Data and Corporate Information

Telework has been gradually introduced in order to achieve
flexible working styles not bound by a fixed location to improve
work-life balance and operational productivity.
Mobile work started in December 2018 along with theintroduction of mobile PCs, and work using satellite offices was

D e ta ils of th e L e c tu r e

Lecturer: Suguru Yanagida
Mizuho Leasing Company, Limited

Suguru Yanagida has been involved with sales throughout his career since joining the Company.
He provides management support through measures including sales activities with young sales
employees, and serving as a counselor for sales in general. Since the establishment of Torakoya in
2017, he has held lectures on the basics of sales and the importance of knowing customers, titledthe “Soul of Sales!” In fiscal 2019, he has held lectures at several branches under this tagline as wellas the new topic “Value of Tangibles” to pass down knowledge relating to equipment.

Integrated Report 201942

Strength to Support Growth

Initiatives for a Recycling-Oriented Society
In lease transactions, equipment “owned” by leasing companies
is “used” by clients; therefore, after the lease term expires,the equipment will be returned to the leasing companies for
destruction, sale, disposal, etc. The Mizuho Leasing Group
screens expired equipment that can be reused or that canbe used as materials, implements 3Rs (Reduce, Reuse andRecycle) by taking appropriate disposal measures such as sellingto used-item dealers and consigning to recycling companies,
and thereby contributes to the creation of a recycling-oriented
society.

Consolidated Financial Data andCorporate Information

Value Creation by the Mizuho Leasing Group

Environmental and Social Activities

45 Financial Highlights
47 Analyses on Business Conditions and Results of Operations

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

49 Business Risks and Other Risks
50 Consolidated Financial Statementsof environmental activities as a whole, and the Department
responsible for environmental management of the Company andthe Operating Officer of Environmental Management of each Group
company promote activities to achieve the environmental goal.

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

86 Corporate Information
Growth Strategy

Organizational Structure of Environmental Management System

88 Stock Information

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

Main Environmental Purposes and Targets
FY2018 target

Results

Reduce the amount of paper used

Maintain average monthly level(sheets used per person) of FY2013-FY2015

14% reduction from target

Reduce consumption of electric power

Maintain average monthly level of FY2013-FY2015

17% reduction from target

Sustainable contribution to building a recycling-oriented society

Achieve reuse rate* of 68% or more

Reuse rate 75% achieved

Promote 3R by purchasing used equipment

Used equipment purchases of ¥720 million

126% achieved

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

Regularly investigate industrial waste disposal business
operators used group-wide

Implemented group-wide

Strength to Support Growth

Environmental target -Annual target -Environmental Purposes - Medium-term target -* Reuse rate means the rate calculated by: Number of equipment sold ÷ Number of equipment for which the lease term or re-lease term has expired

Social Contribution Activities

Consolidated Financial Data and Corporate Information© TAKAO OCHI / KANPARA PRESS

Signed Official Partnership Agreement with Japan Para Athletics
The Company signed an official partnership agreement with theJapan Para Athletics (JPA) on October 1, 2019.
The JPA supervises track and field events for people withdisabilities in Japan and promotes the mental and physicaldevelopment and social participation of people with disabilities
through the popularization and promotion of track and field events.
The Group is always aware of its corporate social responsibility
and aims to be a corporate group that is widely understood andempathized with in society. We will work to support para sports
through the signing of this official partnership agreement as part ofour support activities for people with disabilities as we contribute to
the advance of society and the achievement of a prosperous future
through our business activities.
43

JPA elite category player Masayuki Higuchi
Integrated Report 201944

Consolidated Financial Data and Corporate Information

Value Creation by the Mizuho Leasing Group

Financial Highlights
Consolidated Financial Results
FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018

Revenues

298,707

263,598

256,059

270,066

352,492

354,779

353,733

364,174

429,405

399,738

384,893

Gross profit before funding costs

38,18136,72036,54936,57944,27043,00541,60944,80344,90445,15752,596

Funding costs

10,105

7,213

5,459

5,286

6,596

6,426

6,338

6,361

5,697

6,959

8,467

Gross profit

28,076

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

38,441

39,20638,197

44,128Selling, general and administrative expenses

21,32018,24815,646

20,601

23,007

19,877

17,325

20,86821,244

19,034

21,214

Operating income

6,755

11,257

15,444

10,691

14,665

16,701

17,946

17,573

17,962

19,162

22,913

Net income attributable to owners of the parent

3,348

7,019

9,025

4,296

8,920

10,531

11,144

11,60912,414

13,643

16,594

1,076,150

1,017,099

1,028,020

1,332,963

1,372,246

1,462,183

1,551,704

1,718,720

1,752,284

1,821,501

2,161,872

Operating assets

984,981935,223

928,633

1,211,268

1,263,116

1,343,046

1,432,299

1,581,025

1,608,718

1,683,005

2,021,368

Lease

596,869

553,541

546,185

755,139780,234

809,499878,693

958,353

950,318

983,590

1,160,218

Installment sales receivable*

120,373

107,487

94,514112,243

113,939

133,267

153,910

147,455

137,820

138,592

145,888

Loans

233,687

237,414

241,925

295,008

320,143

359,530

361,067

377,933

348,085

360,073

469,135

Operational investment securities

34,05036,77946,00848,876

48,79840,74938,627

97,283

172,493

196,860

239,814Long-term receivables

9,470

14,082

10,397

19,15318,502

11,404

8,947

10,393

3,331

2,440

3,432

Interest-bearing debt

927,454868,631877,629

1,133,481

1,176,464

1,226,274

1,309,951

1,465,584

1,492,438

1,536,240

1,834,757

Equity55,994

63,342

69,392

74,71784,905

109,840

123,297

132,786

141,755

154,632

182,15991.90

193.91

249.33118.71

246.43264.75261.32272.20291.08319.91388.64

1,509.00

1,709.86

1,889.18

1,954.63

2,218.77

2,458.28

2,764.23

2,978.61

3,202.27

3,492.55

3,553.92

40.00

44.00

46.00

48.00

50.00

54.00

56.00

60.00

64.00

70.00

78.00

Return on equity (ROE)

6.0

12.0

13.9

6.2

11.8

11.4

10.0

9.5

9.4

9.6

10.3

Return on assets (ROA)

0.6

1.2

1.6

0.9

1.1

1.2

1.3

1.1

1.1

1.1

1.2

Equity ratio

5.1

6.1

6.7

5.3

5.9

7.2

7.6

7.4

7.8

8.2

8.0

743

766

765

1,073

1,050

1,036

1,050

1,072

1,053

1,081

1,627

For the year: (Millions of yen)

Strength to Support Growth

Total assets

Growth Strategy

At year-end: (Millions of yen)

Per share data: (Yen)
Net income
EquityDividends

Consolidated Financial Data and Corporate Information

Key indicators: (%)

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

45

Integrated Report 201946

Consolidated Financial Data and Corporate Information

The financial results for each segment are as follows.
(Revenues indicate revenues to external customers.)[Leasing and Installment Sales]
Revenues in leasing and installment sales decreased 5.2% year
on year to ¥366,095 million partly due to the recording in theContract Execution Volume(Millions of yen)
2014

2015

2016

2017

2018

Leasing and installment sales

456,381465,505

475,661

430,482

549,418

Financing486,752

599,847

616,366

901,485996,700

Other

—

—

—

3,941

2,698

Total

943,134

1,065,352

1,092,027

1,335,909

1,548,817

Operating Assets
Leasing and installment sales

2014

2015

2016

2017

2018

1,032,603

1,105,808

1,088,139

1,122,183

1,306,106
708,950

399,695

475,216

520,579

556,933

Other

—

—

—

3,888

6,311

Total

1,432,299

1,581,025

1,608,718

1,683,005

2,021,368

Financing

47(Millions of yen)previous fiscal year of a series of sales of real estate for which
the lease term had expired. Nevertheless, operating income
increased 16.2% year on year to ¥18,046 million, mainly due tothe growth of the global field.
Operating assets at the end of fiscal 2018 increased ¥183,923
million compared with the previous year to ¥1,306,106 million.
[Financing]
Revenues in financing increased 33.7% year on year to ¥16,724
million while operating income increased 20.4% year on year to¥9,587 million, as the Group responded to diverse client needs
including financing for clients’ commercial distribution.
Operating assets at the end of fiscal 2018 increased ¥152,016
million compared with the previous year to ¥708,950 million.
[Other]In the other segment, revenues increased 69.8% year on year to¥2,073 million, while operating income increased 67.9% year on
year to ¥660 million, mainly due to the increase in photovoltaic
power sales.
Operating assets at the end of fiscal 2018 increased ¥2,422
million compared with the previous year to ¥6,311 million.

2. Results of Operations and Financial Position

Revenues
Revenues decreased ¥14,844 million year on year to ¥384,893
million, partly due to the recording in the previous fiscal yearof a series of sales of real estate for which the lease term had
expired.
Gross profit and operating income
Cost of revenues decreased ¥20,775 million year on year to¥340,765 million following a decrease in revenues. Of this amount,funding costs increased ¥1,507 million year on year to ¥8,467
million due to reasons such as an increase in foreign currency borrowing following the expansion of initiatives in the global business.
As a result of the above, gross profit increased ¥5,931 million
year on year to ¥44,128 million.
Selling, general and administrative expenses increased¥2,180 million year on year to ¥21,214 million. Of this amount,personnel and facilities costs increased ¥1,5 9 1 million year on
year to ¥21,373 million. In addition, the provision of the allowance for doubtful accounts, etc. amounted to ¥(193) million, due
to the reversal once again this year of a portion of the provisionof allowance for doubtful receivables incurred in the previous
fiscal year, despite the increase of ¥588 million of the provisionof the allowance for doubtful accounts, etc. from the previous
year.
As a result of the above, operating income increased ¥3,750
million year on year to ¥22,913 million.
Net income attributable to owners of the parent
As for extraordinary income and loss, extraordinary income was¥950 million and extraordinary loss was ¥61 million, recording a
net extraordinary income of ¥888 million.
The extraordinary income was partly due to the sales ofinvestment securities and shares of equity-method affiliates. The
extraordinary loss was partly due to the recording of a loss ondevaluation of investment securities.
Income before income taxes increased ¥4,579 million year
on year to ¥25,114 million.
Corporate taxes, current income taxes and deferred income
taxes amounted to ¥7,909 million, while net income attributable
to non-controlling interests was ¥611 million.
As a result of the above, net income attributable to ownersof the parent increased ¥2,950 million year on year to ¥16,594
million.

Operating assets
The Group continued to focus its efforts on the initiatives forbusiness strategies set out in the Fifth Mid-term Management
Plan, carried out initiatives for new business strategies andfocus areas that focused on the flows of purchase and productsales at clients, in line with the changes in the business modelsof corporations and the structural changes in society and industries, and further promoted the provision of services with theneeds of its clients as the starting point. As a result, operating
assets at the end of fiscal 2018 increased ¥338,362 million
compared with the previous year to ¥2,021,368 million.
Total assets
Total assets at the end of fiscal 2018 also increased ¥340,590
million compared with the previous year to ¥2,161,872 million.
Interest-bearing debt
Interest-bearing debt at the end of fiscal 2018 increased¥298,517 million compared with the previous year to ¥1,834,757
million following an increase in operating assets.

Growth Strategy

sales as well as the product sales of the clients, and promoting
the formation of sales formats based on service contracts jointlywith the client. At the same time, the Group also places its focus on the fields where business expansion can be expected inassociation with the structural changes in society and industries
in Japan.
In the environment and energy area, the Group started new
initiatives in the renewable energy field, such as the participationin an offshore wind power generation project, in addition to attracting corporate investment in energy saving projects utilizing
subsidies. Additionally, the Group promoted initiatives to contribute to the local community, including support for the installation of air-conditioning equipment at education establishments
run by local public agencies through leases. In the medical andhealthcare area, the Group expanded its initiatives in the nursing
care and healthcare field, which mainly included the financing of
medical equipment such as the leasing of the latest surgery assistance robots, as well as initiatives for serviced housing for theelderly and equity investments in a healthcare real estate fund.
In the real estate area, bridge scheme projects for REIT managed by leading business operators increased, while the Group
continued to carry out joint real estate investments with clientsand building leases for hotels in response to rising social needs.
In the global area, the Group has been expanding transactions
with non-Japanese companies through its overseas subsidiaries
by strengthening transactions with good-standing companies
including local conglomerates, cooperating with local partnercompanies, and providing local support for the sales expansionof the products and services of Japanese companies. Additionally, in January 2019, the Group made PT. VERENA MULTIFINANCE Tbk, an Indonesian company engaged in auto financefor retail clients, a consolidated subsidiary, and expanded its
business domain in the focus area of Asia. In the aircraft business, the Group has been engaged in both loans collateralizedby aircraft and aircraft engines and aircraft operating leasing. In
aircraft operating leasing, in addition to initiatives by the subsidiary established jointly with Aircastle Limited, a leading US
aircraft leasing company, the Group has started in-house operation of aircraft utilizing know-how acquired at the subsidiary.
As a result of these developments, the contract execution
volume increased 15.9% year on year to ¥1,548,817 million,
while operating assets increased 20.1% compared with the previous year to ¥2,021,368 million.

EquityTotal equity at the end of fiscal 2018 increased ¥27,527 million
compared with the previous year to ¥182,159 million, as a resultof a capital increase through third-party allotment to Mizuho Bank,
Ltd. in March 2019, in addition to the income during the year.
Source of capital and liquidity of funds
In order to offer wide-ranging financial services to meet customer needs, the Group strives for funding that ensures stability andcurtails costs. The Group also raises funds flexibly based on its
annual cash plans and comprehensive asset liability management (ALM) policies that respond to fluctuations in the financial
environment.
The Group’s funds comprise long-term and short-term procurements using a combination of indirect funding via borrowing
from financial institutions and direct funding from the market.
At the end of fiscal 2018, indirect funding increased ¥83,943
million compared with the previous year to ¥1,003,565 million.
Direct funding increased ¥214,573 million compared with theprevious year to ¥831,192 million, partly due to the issuance ofcommercial paper and bonds.
In addition, the Group has concluded overdraft agreements and commitment line agreements in the total amountof ¥758,035 million with 58 financial institutions as of the endof fiscal 2 0 1 8 with the aim of securing the liquidity of working
capital and efficient fundraising. The unused balance underthese agreements is ¥494,715 million, which ensures sufficientliquidity.

Strength to Support Growth

The global economic environment in fiscal 2018 has exhibited
moderate expansion, mainly due to the growth of the US economy, despite certain modulations in the global economy and theincreasing uncertainty of the political situation.
The Japanese economy continued on a moderate recovery trend due to strong personal consumption, as a result of
improvements in capital investments and the employment andincome environments mainly backed by improved corporate
earnings.
In the leasing industry, leasing transaction volumes increased
from the previous fiscal year.
In the financial market, amid the continued monetary easing
policy, both long-term interest rates and short-term interest
rates remained low.
Amid such a business environment, the Mizuho Leasing
Group has continued to focus on the initiatives of the Fifth Midterm Management Plan covering the three-year period fromfiscal 2017 to fiscal 2019. Under this plan, the Group sets thevision of a “value-creating company tackling challenges together
with clients,” and aims to achieve consolidated performance targets of “¥15.0 billion in net income attributable to owners of theparent,” “10% ROE,” and “maintaining 20% or more dividend
payout ratio” by the final fiscal year of the Plan, under the basic
policy of promoting businesses with higher profitability by utilizing its accumulated business know-how and financial strengths.
In fiscal 2018, the second year of the plan, the Group focused
its efforts on new business strategies, including the “support clients’ commercial distribution” strategy that focuses on the flows
of purchase and product sales at clients, as well as on focus areas, in line with changes in the business models of corporations
and structural changes in society and industries, and further promoted the provision of services with the needs of its clients as thestarting point. As a result of these efforts, the contract execution
volume reached ¥1,548,817 million, operating assets amounted
to ¥2,021,368 million, net income attributable to owners of theparent reached ¥16,594 million, and ROE was 10.3%, resulting in
the achievement of the targets of net income attributable to owners of the parent and ROE for the final fiscal year, one year aheadof schedule.
As for the business condition in fiscal 2018, the Group pushedforward with initiatives for business strategies and the focus
areas set out in the Fifth Mid-term Management Plan, and took
on challenges of entering new domains as well as proactively
carrying out the formation and provision of services that were
not limited to conventional financial solutions. The Group established a track record of achievements through new businessstrategies mainly by surveying the entire business process ofclients, proactively engaging in the provision of solutions in linewith the issues that occur in the flow from purchase to productStatus of cash flows
Net cash used in operating activities was ¥295,701 million partly
due to an increase in operating assets.
Net cash used in investing activities was ¥7,945 million due
to ongoing system investments and the acquisition of sharesof MG Leasing Corporation in March 2019 in conjunction withthe alliance with Marubeni Corporation in the lease financing
business.
Net cash provided by financing activities as a whole was¥299,546 million, with ¥72,756 million of cash inflow fromindirect funding and ¥230,224 million of cash inflow from direct
funding through a capital increase through third-party allotment
to Mizuho Bank, Ltd., in addition to funding through the issuance of commercial paper and bonds.
As a result of the above activities, the balance of cash andcash equivalents as of the end of fiscal 2018 decreased ¥4,168
million compared with the previous year to ¥25,438 million.

Integrated Report 2019

Consolidated Financial Data and Corporate Information

1. Financial Results and Business Performance Overview

Value Creation by the Mizuho Leasing Group

Analyses on Business Conditions and Results of Operations

48

Business Risks and Other Risks

Consolidated Financial Statements

The following factors constitute the principal business risks that have the potential to affect the business results,
stock price and financial position of the Mizuho Leasing Group. Forward-looking statements contained herein
represent the judgment of the Mizuho Leasing Group as of June 25, 2019.

Consolidated Balance Sheet

2. Interest Rate Fluctuation Risk and Effect of Changes
in the Funding Environment
Although many leasing fees and installment payments are basedon the interest rate levels prevalent at the time of agreements,
and the majority is fixed revenue, interest-bearing debt includes
debt with floating interest rates. Therefore, funding costs, which
are part of the cost and expenses, fluctuate. As a result, interest rate fluctuations may affect the business performance ofthe Mizuho Leasing Group. Also, while it is possible to reduce
the effects of interest rate fluctuations by raising the weight ofinterest-bearing debt with fixed interest rates, gross margins
may contract since fixed-rate interest is generally higher than
floating-rate interest. Accordingly, the weighting and component
ratios of interest-bearing debt with fixed-rate interest and interest-bearing debt with floating-rate interest may affect the business performance of the Mizuho Leasing Group.
The Group uses derivative transactions to hedge the riskof such interest rate fluctuations. Specifically, we manage thematching ratio (setting the ratio of the portion of assets not subjected to interest rate fluctuation risk by allocating liabilities andderivatives with fixed-rate interest and floating-rate interest to
assets with fixed-rate and floating-rate yields) through the useof asset liability management (ALM) techniques. Accordingly,
with respect to transactions subject to interest rate fluctuations,fluctuations in market interest rates may affect the business performance of the Mizuho Leasing Group.
The Mizuho Leasing Group’s fund procurement methods
include commercial paper and other direct funding in addition toindirect funding. Therefore, changes in the funding environment
may affect the procurement of funds.

49

2019

2018

2019

ASSETS
Current Assets:
Cash and Cash Equivalents (Note 18)
Marketable Securities (Notes 5 and 18)
Lease Receivables and Investments in Lease (Notes 6, 9, 17 and 18)¥

25,438¥29,607$229,155—520—

930,318

823,384

8,380,489

Receivables (Notes 6, 9, 18 and 25):
Notes and Accounts

1,015

363

9,144

Lease

3,336

4,289

30,057Installment Sales

147,979

138,851

1,333,031

Loans

235,279

230,405

2,119,442

Factoring

233,106

125,538

2,099,870

750

4,130

6,756

Other

621,467

503,577

5,598,300

Operational Investment Securities (Notes 5, 6, 9, 18 and 23)

239,814

196,860

2,160,295

Prepaid Expenses and Other (Note 23)

51,121

50,760460,515

Allowance for Doubtful Receivables(1,555)(2,265)(14,010)

1,866,604

1,602,444

16,814,744

Leased Assets (Notes 3(1), 6, 7, 9 and 17)229,817160,100

2,070,240

Advances for Purchases of Leased Assets

6,042

5,858

54,429Other Operating Assets (Notes 3(1) and 6)

6,311

3,888

56,853

—

1,873

—

3,360

2,992

30,276245,531

174,7142,211,798

Investment Securities (Notes 5, 9 and 18)

18,215

21,680

164,086

Investments in Unconsolidated Subsidiaries and Associated Companies

13,7708,359

124,050

4. Risk of Changes to Regulatory Systems

Long-term Receivables (Note 18)

3,432

2,440

30,918The Mizuho Leasing Group provides comprehensive financial
services, mainly leases, rentals, installment sales and loans, inaccordance with current laws and regulations, tax systems andaccounting standards. Significant changes to such regulatory
systems and standards may affect the business performance ofthe Mizuho Leasing Group.

Goodwill (Note 4(1))

528

133

4,759

Intangible Leased Assets (Note 6)

82

105

747

2,338

2,006

21,063

5. Other Risks
Other risks that may affect the business performance of theMizuho Leasing Group include operational risk (including administrative risk (the risk of inappropriate processing of clericalwork), systems risk (the risk of IT systems failure or incorrect
operation), and compliance risk (the risk of illegal or antisocial
activities)) and price fluctuation risk (the risk of the estimatedresidual value of operating leases falling below the originally anticipated level).

Total Receivables

Total Current Assets

Growth Strategy

Lease transactions involve the provision of credit to customers
in the form of leases over relatively long terms (averaging five
years). The initial expected profit is secured by collecting thefull amount of leasing fees from the customer. Therefore, theMizuho Leasing Group assesses the appropriateness of entering into contracts by conducting strict credit checks of eachcustomer, and by assessing the future second-hand value ofleased equipment. We also strive to control and minimize credit
risk within the operating assets portfolio through quantitative
monitoring of credit risks. Moreover, in instances when a customer’s credit status has deteriorated and non-payment of leasing fees, etc., occurs, we work to recover as much as possibleof the outstanding amount through the sale or transfer of leased
equipment to other customers.
Furthermore, from the perspective of credit risk management, we conduct self-assessments of assets in compliancewith the Financial Inspection Manual of the Financial Services
Agency, which is recommended by “Temporary treatment of accounting and auditing on the application of accounting standard
for financial instruments in the leasing industry.” (Report No. 19of the Industry Auditing Committee of the Japanese Institute ofCertified Public Accountants)
As a result, the portion of credit in “doubtful operating receivables and receivables, etc., equivalent to the foregoing” in fiscal
2018 was ¥8,406 million. The Group provides allowance against
100% of this amount and directly reduces the entire amount as
the amount deemed uncollectible.
Nonetheless, depending upon future economic trends, newbad debts caused by the deterioration of the credit status ofcompanies may affect the business performance of the Mizuho
Leasing Group.

Thousands of
U.S. dollars (Note 1)

Millions of yen

3. Credit Risk

Property and Equipment:

Advances for Purchases of Other Operating Assets
Own-used Assets (Notes 3(1), 8 and 9)
Total Property and Equipment

Strength to Support Growth

In Japan, lease transactions are widely used as a fund procurement technique when companies undertake capital investments.
Trends in the amount of corporate capital investment and in
the amount of investment in leased plant and equipment tend tofollow the same underlying pattern, and the amount of investment in leased plant and equipment may be affected by trends
in corporate capital investment.
Trends in the amount of contracts executed by the Mizuho
Leasing Group, the amount of corporate capital investment
and the amount of investment in leased plant and equipment
do not always coincide. However, any significant decrease in
the amount of corporate capital investment and the amount ofinvestment in leased plant and equipment may affect the futurebusiness performance of the Mizuho Leasing Group.

Mizuho Leasing Co., Ltd. and Consolidated Subsidiaries
As of March 31, 2019

Investments and Other Assets:

Deferred Tax Assets (Notes 2(s) and 12)
Asset for Employees’ Retirement Benefits (Note 11)
Other
Allowance for Doubtful Receivables
Total Investments and Other Assets
Total Assets

11

—

106

11,573

9,567

104,252

(215)

(171)

(1,945)49,73644,123448,036¥ 2,161,872¥ 1,821,282$ 19,474,578

Consolidated Financial Data and Corporate Information

1. Trends in Corporate Capital Investment andInvestments in Leased Plant and Equipment

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information

See accompanying Notes to Consolidated Financial Statements.

Integrated Report 201950

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information

Consolidated Statement of Income
Mizuho Leasing Co., Ltd. and Consolidated Subsidiaries
For the year ended March 31, 2019

2019

2018

2019

¥ 384,893¥ 399,738$ 3,467,197

Cost and Expenses

340,765

361,541

3,069,681

Gross Profit

44,12838,197397,516

Revenues

LIABILITIES and EQUITYCurrent Liabilities:
Short-term Borrowings (Notes 9, 10, 18 and 23)

2019788,165$ 8,957,630

197,959

202,054

1,783,258

Lease Payable (Notes 17 and 18)

8,010

7,251

72,160

Selling, General and Administrative Expenses (Note 15)

21,214

19,034

191,108

Accounts Payable - trade (Notes 18 and 25)

56,04054,383504,828

Operating Income

22,913

19,162

206,408

Accrued Expenses (Note 23)

3,561

2,669

32,086

Income Taxes Payable

4,654

2,015

41,928Deferred Profit on Installment Sales (Note 6)

2,091

258

18,840

31

27

284

27,442

25,318247,205

1,294,178

1,082,143

11,658,219

Long-term Debt (Notes 9, 10, 18 and 23)

642,411546,020

5,786,973

Deposits Received

33,217

29,126299,227

Liability for Employees’ Retirement Benefits (Note 11)

2,461

2,410

22,172

144

—

1,297

7,299

6,947

65,758Other Income (Expenses):
Interest Income (Note 23)
Dividend Income
Equity in Earnings of Associated Companies
Profit from Investments (Note 23)
Interest Expenses (Note 23)
Foreign Exchange Loss (Note 3(2))
Bond Issuance Costs
Stock Issuance Costs
Gain on Sales of Investment Securities
Gain on Step Acquisition (Note 4(1))
Loss on Devaluation of Investment Securities
Loss on Impairment of Long-lived Assets (Note 8)
Other — net

5
515
332
1,512
(526)
(109)
(345)
(143)
908
42
(53)
(8)
71

2
516
124
445
(308)
(31)
(3)
—
586
—
(16)
—
56

46
4,644
2,994
13,626(4,744)(982)(3,108)(1,297)
8,180
384
(481)
(76)
645

685,534

584,505

6,175,427

Income before Income Taxes

25,114

20,535226,239

Income Taxes: (Note 12)
Current
Deferred

7,581
327

5,380
984

68,300
2,950

7,909

6,365

71,25017,205611¥ 16,594

14,169526¥ 13,643

154,989
5,505
149,484

Current Portion of Long-term Debt (Notes 9, 10, 18 and 23)

Accruals for Debt Guarantees
Other
Total Current Liabilities¥

994,386¥

Long-term Liabilities:

Reserve for Management Board Benefit Trust (Note 2(aa))
OtherTotal Long-term Liabilities
Commitments and Contingent Liabilities (Note 13)

Total

Equity: (Notes 2(aa), 14,21,23 and 24)
Common Stock
Authorized, 140,000,000 Shares;
Issued, 49,004,000 Shares as of March 31, 2019 and 42,649,000 Shares
as of March 31, 201826,08817,874

235,006

Capital Surplus

23,941

16,070215,670

Retained Earnings

118,219

105,148

1,064,942

Treasury Stock - at cost
147,127 shares as of March 31, 2019 and 583 shares as of March 31, 2018

(400)

(1)

(3,607)

Accumulated Other Comprehensive Income:Unrealized Gain on Available-for-sale Securities

6,755

9,047

60,851

Deferred (Loss) Gain on Derivatives under Hedge Accounting

(502)

141

(4,528)Foreign Currency Translation Adjustments

(577)

621

(5,198)

Defined Retirement Benefit Plans

109

48

987

173,633

148,951

1,564,123

Total
Non-controlling Interests
Total Equity
Total Liabilities and Equity

8,526

5,681

76,809182,159

154,632

1,640,932¥ 2,161,872¥ 1,821,282$ 19,474,578

Net Income
Net Income attributable to Non-controlling Interests
Net Income attributable to Owners of the Parent

Yen

Amounts per Share of Common Stock (Notes 2(x) and 24)
Net Income attributable to Owners of the Parent per Share
Cash Dividends applicable to the fiscal year$

Growth Strategy

2018

Strength to Support Growth

2019

Thousands of
U.S. dollars (Note 1)

Millions of yen

U.S. dollars (Note 1)

2019

2018

¥ 388.64¥ 78.00¥ 319.91¥ 70.00

2019$$

Consolidated Financial Data and Corporate Information

Thousands of
U.S. dollars (Note 1)

Millions of yen

3.50
0.70

See accompanying Notes to Consolidated Financial Statements.

See accompanying Notes to Consolidated Financial Statements.

51

Integrated Report 201952

Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Equity

Mizuho Leasing Co., Ltd. and Consolidated Subsidiaries
For the year ended March 31, 2019

Mizuho Leasing Co., Ltd. and Consolidated Subsidiaries
For the year ended March 31, 2019
Thousands

Net Income

2018¥ 17,2052019¥ 14,169$ 154,989
Balance as of April 1, 2017

Other Comprehensive (Loss) Income: (Note 20)
Unrealized (Loss) Gain on Available-for-sale Securities
Deferred (Loss) Gain on Derivatives under Hedge Accounting
Foreign Currency Translation Adjustments(2,295)

1,020(20,675)

Net Income attributable to
Owners of the Parent

(647)

112

(5,833)

Cash Dividends Paid
Purchase of Treasury Stock(1,223)

126(11,024)

Defined Retirement Benefit Plans

64

169

583

Share of Other Comprehensive (Loss) Income in Associated Companies

(40)

97

(368)

(4,142)

1,525(37,317)¥ 13,062¥ 15,695$ 117,672

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

Number ofshares ofCommonStock
Outstanding

CommonStockCapitalSurplus42,648¥ 17,874¥ 16,086 ¥ 94,319

Retained
Earnings

Treasury
Stock

¥

(1)

¥ 15,210$ 112,778

543

485

4,894

¥ 8,036

¥ 24

¥

348

Noncontrolling Total Equity
Interests

Total¥ (116) ¥ 136,571¥ 5,183 ¥ 141,755

13,643

13,643

13,643(2,814)(2,814)(2,814)

(15)

(15)

Issuance of New Stock
Change in Scope of Applicationof Equity Method
Change in an Interest in
Subsidiary by Sales Transaction
Change in an Interest in
Subsidiary due to Transactions
with Non-controlling Interests(15)

Net change during year

¥ 12,519

Unrealized Deferred
ForeignDefinedGain on(Loss) Gain
Currency Retirement
Available- on Derivatives
Translation
Benefitfor-sale under Hedge
Adjustments
Plans
Securities Accounting

Balance as of March 31, 2018

42,648¥ 17,874¥ 16,070 ¥ 105,148

Net Income attributable to
Owners of the Parent

16,594

Cash Dividends Paid

(3,241)¥

Purchase of Treasury Stock(Note 21)Issuance of New Stock (Note 21)

(1)

1,011

117

¥ 9,047

¥ 141

273
¥

621

164

6,208

8,213

497

2,064

¥ 48 ¥ 148,951¥ 5,681 ¥ 154,632

16,594

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

(399)

(399)

16,427

16,427

(282)

(282)

(399)
8,213

Change in Scope of Applicationof Equity Method

1,566

(282)

Change in an Interest in
Subsidiary by Sales Transaction

(59)

(59)

(59)

Change in an Interest in
Subsidiary due to Transactions
with Non-controlling Interests

(283)

(283)

(283)

Net change during year
Balance as of March 31, 2019

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

61(4,074)¥ 109 ¥ 173,633

2,845

Growth Strategy

2019Millions of yen
Accumulated Other Comprehensive Income

Strength to Support Growth

Thousands of
U.S. dollars (Note 1)

Millions of yen

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information(1,229)¥ 8,526 ¥ 182,159

Thousands of U.S. dollars (Note 1)
Accumulated Other Comprehensive Income

Net Income attributable to
Owners of the Parent
Cash Dividends Paid

CapitalSurplusRetained
Earnings$ 161,014$ 144,764 $ 947,199$(9)Unrealized Deferred
ForeignDefinedGain on(Loss) Gain
Currency Retirement
Available- on Derivatives
Translation
Benefitfor-sale under Hedge
Adjustments
Plans
Securities Accounting$ 81,502$ 1,278$ 5,602$ 51,176 $ 1,392,961

149,484

149,484

149,484(29,198)(29,198)(29,198)(3,598)(3,598)147,984

147,984(2,543)(2,543)(3,598)73,99273,992

Change in Scope of Applicationof Equity Method

Noncontrolling Total Equity
Interests

Total$ 435 $ 1,341,785

Purchase of Treasury Stock(Note 21)Issuance of New Stock (Note 21)

TreasuryStock(2,543)

Change in an Interest in
Subsidiary by Sales Transaction

(535)

(535)

(535)

Change in an Interest in
Subsidiary due to Transactions
with Non-controlling Interests(2,551)(2,551)(2,551)

Net change during year
Balance as of March 31, 2019

$ 235,006$ 215,670 $ 1,064,942$ (3,607)(20,651)(5,806)(10,800)

552$ 60,851$ (4,528)$ (5,198)$ 987 $ 1,564,123(36,705)

25,633

Consolidated Financial Data and Corporate Information

Balance as of March 31, 2018

CommonStock(11,072)$ 76,809 $ 1,640,932

See accompanying Notes to Consolidated Financial Statements.

53

Integrated Report 201954

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presenting Consolidated Financial Statements
2019

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

Cash Flows from Investing Activities:
Purchases of Own-used Assets
Purchases of Marketable and Investment Securities
Proceeds from Sales and Redemption of Marketable and Investment
Securities
Purchase of Subsidiaries causing Changes in Scope of Consolidation(Note 22)
Other — net
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Net Increase in Short-term Borrowings
Proceeds from Long-term Debt
Repayments of Long-term Debt
Proceeds from Common Stock IssuanceCash Dividends Paid
Other — net
Net Cash Provided by Financing Activities
Foreign Currency Translation Adjustments on Cash and Cash
Equivalents
Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
See accompanying Notes to Consolidated Financial Statements.

55

¥

2018

25,114¥2019

20,535$226,239(4,938)13,227(332)(1,512)8(1,022)
4(908)
53(4,565)
11,679
(124)
(445)
—
(1,037)
(40)
(586)
16

(44,487)
119,158(2,994)(13,626)76(9,208)39(8,180)481(107,665)(105,120)(43,330)1,739(42)(120,504)
38,874
193
10,461(320,816)(295,701)(14,175)(14,931)(24,366)
955—(92,767)
57,83450
7,773(74,731)(54,196)(969,876)(946,947)(390,331)
15,667(384)(1,085,525)
350,186
1,739
94,235(2,889,977)(2,663,738)(3,368)(9,812)(1,637)(825)(30,340)(88,396)

6,434

650

57,963(711)—(6,408)(487)(7,945)(284)(2,096)(4,394)(71,575)

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

5,643
210,921(169,286)—(2,814)(146)
44,317

1,740,045
2,742,894(1,901,614)
147,984(29,198)(1,734)
2,698,377

(68)

19

(619)

(4,168)29,60725,438(11,955)
41,563¥ 29,607(37,555)
266,710229,155$

The accompanying consolidated financial statements of Mizuho Leasing Co., Ltd. (“MHLS”) and its consolidated subsidiaries (together
with MHLS, “MHLS Group”) have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments andExchange Act and its related accounting regulations and in accordance with accounting principles generally accepted in Japan, which
are different in certain respects as to application and disclosure requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to thecompany’s financial statements issued domestically in order to present them in a form which is more familiar to readers outside Japan.
In addition, certain reclassifications have been made in the 2018 consolidated financial statements to conform to the classifications
used in 2019.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which MHLS is incorporated andoperates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside
Japan and have been made at the rate of ¥111.01 to US$1.00, the approximate rate of exchange at March 31, 2019. The translations
should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any otherrate. The amounts indicated in millions of yen are rounded down by truncating the figures below one million. As a result, totals may not
add up exactly.

Growth Strategy

Thousands of
U.S. dollars (Note 1)

Millions of yen

2. Summary of Significant Accounting Policies(a) Consolidation
The consolidated financial statements include the accounts of MHLS Group, which include IBJL-TOSHIBA Leasing Company, Limited,
Dai-ichi Leasing Co., Ltd., Mizuho Auto Lease Company, Limited, ML Estate Company, Limited, IBJ Leasing (China) Ltd., PT. VERENA
MULTI FINANCE Tbk, PT. IBJ VERENA FINANCE, IBJ Air Leasing Limited and IBJ Air Leasing (US) Corp.
The number of consolidated subsidiaries as of March 31, 2019 and 2018 was 32 and 26, respectively. The consolidated financial
statements for the year ended March 31, 2019 newly include the accounts of PT. VERENA MULTI FINANCE Tbk, Aircraft MSN 7316
LLC and Aircraft MSN 7791 LLC, of which MHLS acquired shares, as well as the accounts of IBJL Aircraft Lotus Co., Limited, IBJL
Aircraft Rafflesia Co., Limited, Aircraft MSN 33212 LLC and IBJ Air Leasing (Ireland) 2 Limited as they were newly incorporated. The
accounts of IBJ Air Funding (US) LLC were excluded from the consolidated financial statements, as it was liquidated during the year.
The number of associated companies accounted for under the equity method as of March 31, 2019 and 2018 was 3. Investments
in associated companies consist of MG Leasing Corporation, Krung Thai IBJ Leasing Co., Ltd. and PNB-IBJL Leasing and FinanceCorporation.
Kaikias Leasing Co., Ltd. and 106 other subsidiaries are neither consolidated nor accounted for under the equity method, as they
are acting as operators under Tokumei Kumiai agreements and the leased assets and liabilities do not substantially belong to thesubsidiaries. Aries Line Shipping S.A. and 28 other subsidiaries are also not consolidated or accounted for under the equity method,as they are immaterial. IBJ ROYAL LINE S.A. and 1 associated company are not accounted for under the equity method, as they are
immaterial.
Upon consolidation, significant intercompany accounts and transactions have been eliminated. In addition, all significant unrealized
profit included in assets resulting from transactions within MHLS Group has also been eliminated.
The accounting standard for consolidated financial statements requires a company to consolidate all subsidiaries where thecompany controls the operations, irrespective of whether or not the company owns a majority of their shares. Control is considered toexist where the company has (a) the power to appoint or remove the majority of the Board of Directors or an equivalent governing body,and/or (b) the power to cast the majority of the votes at a meeting of the Board of Directors or an equivalent governing body.
The excess of the cost of an acquisition over the fair value of the net assets of the acquired subsidiary at the date of acquisition isrecorded as Goodwill and is amortized on a straight-line basis over the estimated benefit period.
Implementation Guidance No. 15, “Implementation Guidance on Disclosures about Certain Special Purpose Entities,” issued by the
Accounting Standards Board of Japan (“ASBJ”) permits companies to avoid consolidation of certain Special Purpose Entities (“SPEs”)
that were established and are being operated for the purpose of securitization of receivables.
MHLS securitizes its lease receivables to diversify its funding sources and ensure stable funding. In the securitization structures,
MHLS uses SPEs that include Tokurei Yugen Kaisha and Kabushiki Kaisha. MHLS transfers the lease receivables to the SPEs in the
securitization structures. The SPEs procure funds, such as borrowings, backed by the transferred assets and these funds flow back to
MHLS as sales proceeds of the transferred assets. MHLS also provides collection services to the SPEs. A portion of the receivables is
not transferred and is held by MHLS. These receivables held by MHLS are properly evaluated at the end of the fiscal year, and these areappropriately reflected in the consolidated financial statements.

Integrated Report 2019

Strength to Support Growth

Mizuho Leasing Co., Ltd. and Consolidated Subsidiaries
For the year ended March 31, 2019

Consolidated Financial Data and Corporate Information

Consolidated Statement of Cash Flows

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information

56

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

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

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

(h) Property and Equipment
1. Leased Assets
Leased Property and Equipment are stated at cost and depreciated over the lease term by the straight-line method to the residual
value, which is an amount to be realized at the time when the lease contract is terminated.
2. Other Operating Assets
Other Operating Assets are stated at cost and depreciated over the estimated useful lives by the straight-line method.
3. Own-used Assets
Own-used Assets of MHLS and its domestic consolidated subsidiaries are stated at cost and depreciated over the following
estimated useful lives mainly by the declining-balance method:
Buildings
3-65 years
Fixtures and furniture
2-20 years

Growth Strategy(b) Business Combinations(g) Loans Receivables and Factoring Receivables(i) Long-lived Assets
MHLS Group reviews its long-lived assets for impairment whenever events or changes in circumstance indicate the carrying amountof an asset or asset group may not be recoverable. An impairment loss is recognized if the carrying amount of an asset or asset groupexceeds the sum of the undiscounted future cash flows expected to result from the continued use and eventual disposition of theasset or asset group. The impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its
recoverable amount, which is the higher of the discounted cash flows from the continued use and eventual disposition of the asset or
the net selling price at disposition.

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

Strength to Support Growth

As a result of securitizations, MHLS had 20 SPEs that were not consolidated under Guidance No. 15 as of March 31, 2019and 2018. Total assets (simply compiled amount) of such SPEs as of March 31, 2019 and 2018 were ¥124,429 million ($1,120,889
thousand) and ¥120,601 million, respectively. Total liabilities (simply compiled amount) of such SPEs as of March 31, 2019 and 2018
were ¥124,935 million ($1,125,444 thousand) and ¥121,161 million, respectively. MHLS owns no voting rights in most of the SPEs
while some employees of MHLS serve as directors.
The total amount of Lease Receivables and Investments in Lease transferred from MHLS to such SPEs in 2019 and 2018 was¥11,151 million ($104,940 thousand) and ¥2,109 million, respectively, with no gain/loss on the transfer of such receivables. MHLS holds
subordinated interests of such transferred receivables of ¥212 million ($2,002 thousand) and ¥81 million in 2019 and 2018, respectively.
MHLS recognized profit dividends of ¥173 million ($1,633 thousand) and ¥153 million, respectively, for the years ended March 31, 2019and 2018, and servicing fees received of ¥1 million ($12 thousand) with respect to the transactions with such SPEs for both of the years
ended March 31, 2019 and 2018. These amounts do not include transactions with SPEs that do not meet the criteria for off-balancesheet transactions, because MHLS treats these asset transfer transactions to the SPEs as financial transactions.

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information(k) Stock Issue Costs and Bond Issue Costs
In March 2007, the ASBJ issued ASBJ Statement No. 13, “Accounting Standard for Lease Transactions,” which revised the previous
accounting standard for lease transactions. As a lessor, all finance leases that are deemed to transfer ownership of the leased property
to the lessee are recognized as Lease Receivables, and all finance leases that are deemed not to transfer ownership of the leased
property to the lessee are recognized as Investments in Lease. All other leases are accounted for as operating leases.
As a lessee, all finance leases that are deemed to transfer ownership of the leased property to the lessee are capitalized.

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

(f) Marketable Securities, Operational Investment Securities and Investment Securities
Marketable Securities, Operational Investment Securities and Investment Securities are classified as Available-for-sale Securities based
upon management’s intent. Available-for-sale Securities, which have a readily determinable fair value, are stated at fair value withchanges in net unrealized gain or loss, net of applicable income taxes, included directly in Equity (cost of securities sold is calculated by
the moving average method). Available-for-sale Securities, which do not have readily determinable fair value, are stated at cost.
Operational Investment Securities is held for the purpose of generating operational financial income. The income from Operational
Investment Securities is stated in Revenues in the Consolidated Statement of Income.
57

Costs for stock issuance and bond issuance are expensed upon payment.

(l) Allowance for Doubtful Receivables
Allowance for Doubtful Receivables is provided based on the estimated historical default rate for general trade receivables, and is basedon individual reviews for receivables from doubtful and legally bankrupt creditors.
The amounts of Long-term Receivables considered uncollectible, which include receivables from legally bankrupt creditors, weredirectly written-off. The amounts directly written-off were ¥8,406 million ($75,728 thousand) and ¥8,400 million at March 31, 2019 and2018, respectively.

Consolidated Financial Data and Corporate Information(d) Lease Accounting(m) Reserve for Bonus Payments
MHLS and certain domestic consolidated subsidiaries provide a reserve for future bonus payments to employees. This reserve ismaintained at the estimated amount payable after the year-end, based on the services provided during the fiscal year.

(n) Reserve for Bonus Payments to Directors
MHLS and certain domestic consolidated subsidiaries provide a reserve for future bonus payments to executive officers. This reserve ismaintained at the estimated amount payable for the fiscal year.

(o) Retirement and Pension Plans
MHLS and certain consolidated subsidiaries have a corporate pension plan and/or lump-sum severance payment plan as a defined
benefit retirement benefits plan as well as a corporate retirement plan as a defined contribution retirement benefits plan. There are somecases in which extra retirement benefits are paid to employees when they retire.

Integrated Report 201958

MHLS and certain consolidated subsidiaries account for the liability for retirement benefits based on the projected benefit obligations
and plan assets at the balance sheet date. The projected benefit obligations are attributed to periods on a benefit formula basis.
Actuarial gains and losses that are yet to be recognized in profit or loss are recognized within equity (accumulated other comprehensive
income), after adjusting for tax effects and are recognized in profit or loss over 10 to 15 years no longer than the expected averageremaining service period of the employees. The discount rate is determined using a single weighted-average discount rate reflecting theestimated timing and amount of benefit payment.

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information

2. Translation of foreign currency financial statements
The assets, liabilities, revenues and expenses of overseas consolidated subsidiaries are translated into Japanese yen at theexchange rates at the balance sheet dates of each subsidiary. Differences arising from such translation are shown in either Noncontrolling Interests or Foreign Currency Translation Adjustments under Accumulated Other Comprehensive Income in a separate
component of Equity.

(v) Derivatives and Hedging Activities

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

MHLS and its domestic consolidated subsidiaries are subject to Japanese consumption taxes. Japanese consumption taxes are
excluded from the transaction amounts.

(x) Per Share Information

MHLS and certain domestic consolidated subsidiaries provide Accruals for Debt Guarantees for losses that might occur in relation toguarantees of the indebtedness of others, taking the debtors’ financial condition into consideration.

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

MHLS and its domestic consolidated subsidiaries are subject to corporate tax, inhabitants’ taxes and enterprise taxes. Deferred income
taxes are recorded by the asset and liability method based on the differences between the tax bases of assets and liabilities and those
as reported in the consolidated financial statements, using enacted tax rates that will be in effect when the differences are expected toreverse.
On February 16, 2018, the ASBJ issued ASBJ Statement No. 28, “Partial Amendments to Accounting Standard for Tax EffectAccounting,” which requires deferred tax assets and deferred tax liabilities to be classified as investments and other assets and longterm liabilities, respectively. Deferred tax assets were previously classified as current assets and investments and other assets, anddeferred tax liabilities were previously classified as current liabilities and long-term liabilities under the previous accounting standard. The
revised accounting standard is effective for annual periods beginning on or after April 1, 2018.
The Company retrospectively applied the revised accounting standard effective April 1, 2018, and deferred tax assets of ¥1,595
million ($14,369 thousand), which were previously classified as Current Assets as of March 31, 2018, have been reclassified as
Investments and Other Assets in the accompanying consolidated balance sheet. As a result of this change, the amount of Deferred Tax
Assets in Investments and Other Assets as of March 31, 2018 was restated as ¥2,006 million ($18,076 thousand) from ¥631 million($5,687 thousand). The restated amount of Deferred Tax Assets includes ¥1,595 million ($14,369 thousand) of Current Assets, andoffset by ¥219 million ($1,980 thousand) of Long-term Liabilities. As a result, Total Assets decreased by ¥219 million ($1,980 thousand)compared with the numbers before restatement.

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

(u) Translation of Foreign Currency Assets and Liabilities
1. Translation of foreign currency transactions
All monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the exchange rates
at the balance sheet date. The foreign exchange gains and losses from translation are recognized in the Consolidated Statement of
Income as income or expenses.
Revenue and expense items arising from transactions denominated in foreign currencies are generally translated into Japanese
yen at the rates effective at the respective transaction dates.
59(w) Consumption Taxes(r) Accruals for Debt Guarantees(s) Income Taxes

Growth Strategy(q) Asset Retirement Obligations

MHLS Group uses derivative financial instruments to manage its exposures to fluctuations in foreign currency exchange and interest
rates. Interest rate swaps are utilized to manage interest rate risks associated with certain assets and liabilities, including Loans
Receivables and Long-term Debt. Short-term Borrowings is utilized to reduce risks from fluctuations of foreign currency exchange rates
associated with certain assets including Operational Marketable Securities. Interest rate and currency swaps are utilized to manageinterest rate risks as well as foreign currency risks. MHLS Group does not enter into derivatives for trading or speculative purposes.
Derivative financial instruments and foreign currency transactions are classified and accounted for as follows: a) all derivatives arerecognized as either assets or liabilities and measured at fair value, and gains or losses on derivative transactions are recognized in theConsolidated Statement of Income and b) for derivatives used for hedging purposes, if such derivatives qualify for hedge accounting
because of high correlation and effectiveness between the hedging instruments and the hedged items, gains or losses on derivatives
are deferred until maturity of the hedged transactions.
Interest rate swaps that qualify for hedge accounting and meet specific matching criteria are not remeasured at market value, but
the differential paid or received under the swap agreements is recognized and included in interest expense.

Strength to Support Growth

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

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

(z) New Accounting Pronouncement
Consolidated Financial Data and Corporate Information(p) Reserve for Management Board Benefit Trust

Revenue Recognition—On March 30, 2018, the ASBJ issued ASBJ Statement No. 29, “Accounting Standard for Revenue
Recognition,” and ASBJ Guidance No. 30, “Implementation Guidance on Accounting Standard for Revenue Recognition.
In May 2014, the International Accounting Standard Board (“IASB”) and the Financial Accounting Standards Board (“FASB”) issued“Revenue from Contracts with Customers”, i.e., IFRS 15 from IASB and Topic 606 from FASB. They are comprehensive accounting
standards for revenue recognition as a consequence of the cooperative development project by the two boards.
ASBJ developed a comprehensive accounting standard for revenue recognition and published it in conjunction with the
Implementation Guidance in the light of the circumstances where IFRS 15 will be applied from the fiscal year starting on and afterJanuary 1, 2018, and Topic 606 will be applied from the fiscal year starting on or after December 15, 2017.
The basic policy of the ASBJ in developing the accounting standard for revenue recognition is, first, to take in the basic principles
of IFRS 15 to be consistent with it and keep comparability. If there are practices that are prevailing in Japan and need to be treateddifferently, then, the ASBJ develops an alternative accounting treatment to the extent it does not harm the comparability of the otheraccounting standard.
MHLS Group expects to apply the accounting standard and guidance for the fiscal year beginning on or after April 1, 2021, and isin the process of measuring the effects of applying the accounting standard and guidance in future applicable periods.
Integrated Report 201960

(2) Shares of the Company held in trust
Shares of MHLS held in trust are recorded as Treasury Stock in Equity at book value in the trust (excluding accompanying
expenses). The carrying amount of such Treasury Stock for the year ended March 31, 2019 was ¥399 million ($3,597 thousand), while
the number of such treasury stock was 146,500 shares.

3. Change in Presentation(1) Property and Equipment
On and prior to the years ended March 31, 2018, the depreciable assets in Property and Equipment section of the Consolidated
Balance sheet, namely, Leased Assets, Other Operating Assets and Own-used Assets were presented by subtracting the accumulated
depreciation amount from the acquisition cost. From the year ended March 31, 2019, such amounts are presented only net amounts in
the Consolidated Balance sheet and the numbers for the year ended March 31, 2018 are restated.
The acquisition cost and the accumulated depreciation of Leased Assets as of March 31, 2019 and 2018 were ¥317,103 million($2,856,532 thousand) and ¥87,286 million ($786,292 thousand), ¥251,467 million and ¥91,366 million, respectively. The acquisition
cost and the accumulated depreciation of Other Operating Assets as of March 31, 2019 and 2018 were ¥6,630 million ($59,732
thousand) and ¥319million ($2,879 thousand), ¥3,941 million and ¥52 million, respectively. The acquisition cost and the accumulated
depreciation of Own-used Assets as of March 31, 2019 and 2018 are ¥6,987 million ($62,945 thousand) and ¥3,626 million ($32,669
thousand), ¥6,315 and ¥3,322 million, respectively.
(2) Foreign Exchange Loss
Prior to April 1, 2018, Foreign Exchange Loss was included in “Other—net” in the Other Income (Expenses) section in theConsolidated Statement of Income. Since this fiscal year ended March 31, 2019, such amount is disclosed separately as the amountincreased significantly. The amount of “Other—net” of ¥57 million in the Other Income (Expenses) section for the year ended March 31,
2018, was restated as Foreign Exchange Loss of ¥31 million and Other—net of ¥26 million.

4. Business Combination(1) Business combination by acquisition(a) Outline of the business combination:(i) Name and business of the acquired company
Name of the acquired company:
PT. VERENA MULTI FINANCE Tbk(“VMF”)
The description of the business:
Auto finance business(ii) Reason for the implementation of business combination:
MHLS established PT. IBJ VERENA FINANCE, an Indonesian company, in a joint venture with VMF in August 2010, andprovided financial services to Japanese companies expanding into Indonesia, local state-owned companies and large privatecompanies, etc.
VMF is a listed company on the Indonesian Stock Exchange, with Indonesia’s leading commercial bank PT Bank Pan
Indonesia Tbk. as the largest shareholder. VMF is developing an auto finance business centered on retail in major cities inIndonesia.

61

Growth Strategy(1) Outline of Stock Compensation System
The Stock Compensation System is a performance-linked stock-based system where MHLS shares are acquired through a trust
by fund contributed by MHLS, and MHLS shares and/or the money equivalent to the market value of MHLS shares (the “MHLS Stock,etc.”) are paid to Directors, etc., through trusts in accordance with MHLS’s executive share benefit rules. Directors, etc., receive MHLS
Stock, etc., at a certain time after the end of each medium-term management plan period or after their retirement.

Indonesia, which boasts the largest economic scale of ASEAN, has a population of 260 million,and the car penetration rate
has been rising along with the expansion of the middle income class, and development and expansion of the car market is
expected in the future.
The acquisition of VMF shares is intended to expand the business area in the Asian region in which MHLS Group is
focusing.
(iii) Effective date of the business combination:
January 23, 2019(iv) Legal form of the business combination:
Acquisition of shares in consideration for cash(v) Company name after the business combination:
It will not change.
(vi) Ratio of voting rights acquired:
Ratio of voting rights before the date of the business combination
19.99%
Ratio of voting rights additionally acquired on the date of the business combination
43.64%
Ratio of voting rights additionally acquired after the date of the business combination
3.81%
Ratio of voting rights after the acquisitions
67.44%(vii) Reason for determining the acquiring company:
It is based on the fact that MHLS acquired the shares with cash consideration.
(b) Period for which the operations of the acquired company are included in the consolidated financial statements
As the deemed acquisition date is set to the end of the fiscal year, the results of VMF are not included in the consolidated statementof income for the year ended March 31, 2019.
(c) Acquisition cost of the acquired company and its breakdown
Millions of yen

The market value of VMF share held before the date of business combination
Consideration in cash for the acquisition of additional shares
Total

Thousands of U.S. dollars

2019

2019

¥

$ 4,659
32,253$ 36,912

517
3,580¥ 4,097

Strength to Support GrowthManagement Board Benefit Trust system (the “BBT”)
MHLS has introduced a performance-linked stock compensation system (the “Stock Compensation System”) for directors (excluding achairperson and outside directors) and executive officers who are not concurrently serving as director (directors and executive officers
are collectively referred to as “Directors, etc.”). The Stock Compensation System contributes to the improvement of medium- and longterm performance and increase in corporate value, and as a result, aims to share with shareholders the sense of increasing stock value,by clarifying the link between compensation for Directors, etc., and MHLS’s performance and stock value.

(d) Main acquisition-related costs
Advisory fee¥236 million ($2,130 thousand)(e) Difference between “acquisition cost of the acquired company” and “total transaction costs that resulted in the acquisition”
Gain on step acquisition¥42 million ($384 thousand)(f) Amount and cause of goodwill, and amortization method and period
Amount of goodwill
Cause of goodwill
Amortization method and period¥429 million ($3,868 thousand)As the acquisition costs exceed the fair value of the net assets acquired at the time of thebusiness combination, the difference is recognized as goodwill.
Amortized on a straight-line method over four years

Consolidated Financial Data and Corporate Information(aa) Additional Information

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information(g) Assets accepted and liabilities assumed at the date of the business combination and their main components
Millions of yen

2019

Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Long-term Liabilities
Total Liabilities¥ 15,486
1,910
17,397
10,125
1,770¥ 11,895

Thousands of U.S. dollars

2019$ 139,508
17,214
156,722
91,20915,947$ 107,156

Integrated Report 201962

(b) Accounting treatment applied for this business combination
This business combination was accounted for as transactions under common control in accordance with “Accounting Standard
for Business Combinations” (ASBJ Statement No. 21, September 13, 2013) and “Guidance for Business Combinations andBusiness Divestitures” (ASBJ Statement No. 10,September 13, 2013).

5. Marketable Securities, Operational Investment Securities and Investment Securities

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

Carrying
amount¥ 20,612
4,024
104,485
5,754¥ 134,877

Unrealizedloss¥ (366)—(182)¥ (549)Carrying
amount
¥ 752
1,494
6,129
¥ 8,376

Acquisition
cost
¥ 857
1,500
6,393
¥ 8,751

Unrealizedloss¥ (105)(5)(263)¥ (375)

Thousands of U.S. dollars

2019

Equity Securities Bonds
Corporate Bonds
Other
Total

Carrying
Acquisition
amountcost$ 5,675$ 8,978——
83,23684,883$ 88,911$ 93,861

Unrealizedloss$ (3,303)—(1,647)$ (4,950)(2) Proceeds from sales of Available-for-sale Securities for the years ended March 31, 2019 and 2018 were ¥6,499 million ($58,546
thousand) and ¥1,165 million, respectively. Gross realized gains on these sales were ¥1,071 million ($9,648 thousand) and ¥600
million for the years ended March 31, 2019 and 2018, respectively.
(3) MHLS Group recorded impairment losses on investment securities of ¥53 million ($481 thousand) and ¥16 million for the years
ended March 31, 2019 and 2018, respectively.

Millions of yen

2019

2018

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

2018

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

Acquisitioncost¥ 11,812
4,000
100,061
5,590¥ 121,464

Unrealized
gain¥ 8,800
24
4,424
163
¥ 13,412

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

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

Thousands of U.S. dollars

2018

2019

823,384
160,206
138,592
1,122,183
556,933
3,888¥ 1,683,005$ 8,380,489
2,070,987
1,314,191
11,765,667
6,386,363
56,853$ 18,208,883¥

Strength to Support Growth2019

Equity Securities Bonds
Corporate Bonds
Other
Total

Carrying
amount
¥ 630
—
9,239
¥ 9,870(1) Operating Assets as of March 31, 2019 and 2018 consisted of the following:

Millions of yen

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

Millions of yen

2019

6. Operating Assets(1) Available-for-sale Securities whose fair values are readily determinable as of March 31, 2019 and 2018 were as follows:
Available-for-sale Securities
Securities with carrying amounts exceeding acquisition costs

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

Securities with carrying amounts not exceeding acquisition costs

Growth Strategy(2) Transactions under common control, etc.
(a) Outline of the transactions:(i) Name of the business involved and the description of the business:
The name of the business involved:
Real estate leasing (operating leasing) business of MHLS
The description of the business:
Real estate leasing (operating leasing) business(ii) Effective date of the business combination:
March 29, 2019(iii) Legal form of the business combination:
An absorption-type corporate split, with MHLS, as the splitting company and ML Estate Company, Limited as the absorbing
company(iv) Company name after the business combination:
It will not change.
(v) Supplemental outline of the transaction:
MHLS has entered into a capital and business alliance agreement with Mizuho Bank, Ltd., a consolidated subsidiary ofMizuho Financial Group, Inc. (“MHFG”), and implemented a third-party allotment of capital for the purpose of making MHLS
an equity-method affiliate of MHFG. The alliance agreement is aimed at further expanding the business as competition
intensifies inside and outside the leasing industry, and moves to restructure the industry.

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information(*1) The amount of Installment Sales represents “Installment Sales Receivables” less “Deferred Profit on Installment Sales”.

Thousands of U.S. dollars(2) The total amounts of new contracts for the years ended March 31, 2019 and 2018 were as follows:

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

Unrealized
gain$ 54,842
29
35,7591,967$ 92,597

Millions of yen

2019

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

¥

374,218
120,31454,885549,418
996,700
2,698¥ 1,548,817

Thousands of U.S. dollars

2018

2019

283,525
87,28559,671
430,482
901,485
3,941¥ 1,335,909$ 3,371,038
1,083,816
494,417
4,949,271
8,978,477
24,305$ 13,952,053¥

Consolidated Financial Data and Corporate Information

2019

Carrying
Acquisition
amountcost$ 161,186 $ 106,344
18,04518,016
1,173,326
1,137,567
71,68969,722$ 1,424,246 $ 1,331,649(*1) The amount of Installment Sales represents “Installment Sales Receivables” less “Deferred Profit on Installment Sales”.

63

Integrated Report 201964

10. Short-term Borrowings and Long-term Debt

Millions of yen
Carrying Amount

Fair Value

April 1, 2018

Increase

March 31, 2019

March 31, 2019

¥ 112,432¥ 56,237¥ 168,670¥ 179,301

Millions of yen
Carrying Amount

Fair Value

April 1, 2017

Increase

March 31, 2018

March 31, 2018

¥ 95,653¥ 16,779¥ 112,432¥ 118,507

Millions of yen

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

Thousands of U.S. dollars

Weighted averageinterest rate

2019

2019

2018

2019

¥ 302,209¥ 270,743$ 2,722,364

1.09%

609,800
82,376¥ 994,386

453,800
63,621¥ 788,165

5,493,199
742,067$ 8,957,630

0.03%
0.12%

¥ 20,000
777¥ 20,000—$

177,182¥ 197,959

180,164
7,002

0.151~0.534%
10.000%

182,054

1,596,092

0.74%¥ 202,054$ 1,783,258(2) “Long-term Debt” as of March 31, 2019 and 2018 was as follows:

Thousands of U.S. dollars
Carrying Amount

April 1, 2018

$ 1,012,813

Millions of yen

Fair Value

Increase$ 506,602

March 31, 2019

March 31, 2019

$ 1,519,415$ 1,615,185(*1) Carrying amount recognized in the Consolidated Balance Sheets is net of accumulated depreciation.
(*2) “Increase” for the years ended March 31, 2019 and 2018 primarily represents the acquisition of certain properties for ¥95,602 million ($861,203 thousand) and ¥74,667
million, respectively.
(*3) Fair values of properties are mainly determined by appraisal reports issued by real estate appraisers.

8. Long-lived Assets
MHLS Group reviewed its long-lived assets for impairment as of March 31, 2019. As a result, certain consolidated subsidiaries
recognized an impairment loss aggregating ¥8 million ($76 thousand) as Other Expenses.
Impairment loss was recognized for certain software due to the replacement of the core system. The carrying amounts of such
assets were written down to the recoverable amount for the year ended March 31, 2019. The recoverable amounts are estimatedbased on the value in use, but they were evaluated as zero because no future cash flow is expected. There was no impairment loss in2018.

9. Pledged Assets
Assets pledged as collateral as of March 31, 2019 were as follows:
Millions of yen

2019

Lease Receivables and Investments in Lease
Installment Sales Receivable
Loans Receivables
Operational Investment Securities
Leased Assets
Own-used Assets
Investment Securities
Total¥ 13,835
7,926
6,470
24,541
15,580100
8¥ 68,464

Thousands of U.S. dollars

2019$ 124,637
71,40558,292
221,075
140,352909
75$ 616,745

Growth Strategy

The carrying amounts, changes in such balances and market prices of such properties are as follows:(1) “Short-term Borrowings” as of March 31, 2019 and 2018 was as follows:

Long-term Debt
Bonds payable
Long-term Debt from banks and otherfinancial institutions
Payables under securitized lease receivables
Total

2019

2018

¥ 85,000¥ 38,000

524,173
33,238¥ 642,411

Thousands of U.S. dollars

Weighted averageinterest rate

2019

2019

$

765,6970.151~0.534%

466,824

4,721,859

0.92%

41,196¥ 546,020

299,417$ 5,786,973

0.28%(*1) MHLS Group has entered into overdraft contracts with 58 and 63 financial institutions that provide MHLS Group with credit facilities amounting to ¥758,035 million($6,828,529 thousand) and ¥928,137 million as of March 31, 2019 and 2018, respectively. The unused facilities maintained by MHLS Group as of March 31, 2019 and2018 amounted to ¥494,715 million ($4,456,492 thousand) and ¥676,567 million, respectively.
(*2) “Payables under securitized lease receivables” is a type of financing based on the law for the regulation of specific claims. The lease receivables sold under this law as ofMarch 31, 2019 and 2018 were ¥142,889 million ($1,287,179 thousand) and ¥126,554 million, respectively.
(*3) The aggregate annual maturities of “Long-term Debt” as of March 31, 2019 were as follows:
Millions of yen

Strength to Support Growth

Certain domestic consolidated subsidiaries own certain rental properties such as commercial facilities with land in Tokyo and otherareas. Net rental income for these rental properties for the years ended March 31, 2019 and 2018 was ¥4,676 million ($42,123
thousand) and ¥2,755 million, respectively. Rental income and operating expenses are mainly recognized as “Revenues” and “Cost andExpenses”, respectively.
Gain on sales of rental properties for the years ended March 31, 2019 and 2018 was ¥165 million ($1,491 thousand) and ¥564
million, respectively. Proceeds from sales of rental properties and costs are recognized as “Revenues” and “Cost and Expenses”,
respectively, otherwise net gain on sales is recognized as “Other Income (Expense)”.

Thousands of U.S. dollars

Years Ending March 31

2019

2019

2021
2022
2023
2024
2025 and thereafter
Total¥ 160,632
157,575
85,173
94,569144,461¥ 642,411$ 1,447,012
1,419,464
767,258
851,900
1,301,339$ 5,786,973

11. Retirement and Pension Plans
Outline of plans
MHLS and certain consolidated subsidiaries have a corporate pension plan and/or lump-sum severance payment plan as a defined
benefit retirement benefits plan as well as a corporate retirement plan as a defined contribution retirement benefits plan. There are somecases in which extra retirement benefits are paid to employees when they retire.

Consolidated Financial Data and Corporate Information

7. Investment Property

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information

Defined benefit plan
(1) The changes in defined benefit obligation for the years ended March 31, 2019 and 2018, were as follows:

Liabilities secured by the above assets as of March 31, 2019 were as follows:

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

Millions of yen

Thousands of U.S. dollars

2019

2019

¥ 25,966
4,659
28,282¥ 58,908$ 233,911
41,970254,778$ 530,659

Millions of yen

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

Thousands of U.S. dollars

2019

2018

2019

¥ 6,505
365
25
(86)
(255)
¥ 6,555¥ 6,364
362
25
(33)
(212)
¥ 6,505$ 58,606
3,296
233
(777)
(2,301)$ 59,057(*1) Certain consolidated subsidiaries that have lump-sum severance payment plans use the simplified method in determining the projected benefit obligations.

65

Integrated Report 2019

66

2019

¥ 4,095
22
4
181
(196)
¥ 4,106¥ 3,831
34
201
177
(148)
¥ 4,095$ 36,889
207
37
1,630
(1,773)$ 36,990(3) Reconciliation between the liability recorded in the Consolidated Balance Sheet and the balances of defined benefit obligation andplan assets as of March 31, 2019 and 2018 :Millions of yen

Defined benefit obligation
Plan assets
Total
Unfunded defined benefit obligation
Net liability arising from defined benefit obligation

Thousands of U.S. dollars

2019

2018

2019

¥ 4,094(4,106)(11)
2,461¥ 2,449¥ 4,113(4,095)18
2,392¥ 2,410$ 36,884(36,990)(106)
22,172$ 22,066

Millions of yen

Asset for employees’ retirement benefits
Liability for employees’ retirement benefits
Net liability arising from defined benefit obligation

Thousands of U.S. dollars

2019

2018

2019

¥

¥

$

(11)
2,461
¥ 2,449—
2,410¥ 2,410(106)
22,172$ 22,066(4) The components of net periodic benefit costs for the years ended March 31, 2019 and 2018, were as follows:
Millions of yen

2019Service cost
Interest cost
Expected return on plan assets
Recognized actuarial losses
Net periodic benefit costs

Thousands of U.S. dollars

2018

¥ 365
25
(22)
1
¥ 370

¥ 362
25
(34)
9
¥ 362

2019

$ 3,296
233
(207)
14
$ 3,336(*1) Service cost includes retirement benefits expenses of certain consolidated subsidiaries that use the simplified method.

(5) Amounts recognized in other comprehensive income (before income tax effect) in respect of defined retirement benefit plans for theyears ended March 31, 2019 and 2018, were as follows:
Millions of yen

2019

Actuarial gains
Total

Thousands of U.S. dollars

2018

¥ 93
¥ 93

¥ 243
¥ 243

2019

$ 841
$ 841

(6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect of defined retirement benefit
plans as of March 31, 2019 and 2018, were as follows:
Millions of yen

2019

Unrecognized actuarial gains (losses)
Total

¥ 142
¥ 142

Thousands of U.S. dollars

2018

¥ 49
¥ 49

2019

$ 1,284$ 1,284

Domestic debt investments
Domestic equity investments
Foreign debt investments
Foreign equity investments
Insurance assets (general account)
Others
Total

2019

2018

19.6%
21.8
7.4
20.0
28.4
2.8
100.0%

18.4%
23.7
7.6
19.4
28.1
2.8
100.0%

b. Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the long-term rates of return that are expected currently
and in the future from the various components of the plan assets.
(8) Assumptions used for the years ended March 31, 2019 and 2018, are set forth as follows:
Discount rate
Expected rate of return on plan assets
Expected rate of future salary increases

2019

2018

0.30 - 0.47%
0.56%
4.38 - 9.27%

0.30 - 0.47%
0.89%
4.01 - 9.27%

Growth Strategy

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

Thousands of U.S. dollars

2018

Defined contribution plan
MHLS Group’s contributions to the defined contribution retirement plan for the years ended March 31, 2019 and 2018, were ¥61 million($550 thousand) and ¥59 million, respectively.

12. Income Taxes
MHLS and certain consolidated subsidiaries are subject to a number of taxes based on income, which, in the aggregate, resulted in anormal effective statutory tax rate in Japan of approximately 30.6% for the years ended March 31, 2019 and 2018.
Strength to Support GrowthMillions of yen

2019(7) Plan assets as of March 31, 2019 and 2018:a. Components of plan assets
Plan assets consisted of the following:

Deferred Tax Assets and Liabilities consisted of the following:
Millions of yen

Thousands of U.S. dollars

2019

2018

2019

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

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

¥ 1,194
550
435
213
169
3,568
6,131
(332)
5,799

$ 7,300
5,383
3,286
1,474
3,031
34,58155,055(2,959)52,096

Deferred Tax Liabilities:
Net unrealized gain on Available-for-sale Securities
Investments in Lease
Other
Total Deferred Tax Liabilities(2,925)(156)(458)(3,540)(3,938)(192)(422)(4,553)(26,358)(1,406)(4,128)(31,892)¥ 2,242¥ 1,245$ 20,204

Net Deferred Tax Assets

Consolidated Financial Data and Corporate Information(2) The changes in plan assets for the years ended March 31, 2019 and 2018, were as follows:

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information

A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying
consolidated statement of income for the years ended March 31, 2019 and 2018 is not presented as the difference is less than 5%of the effective statutory tax rate.

67

Integrated Report 201968

15. Selling, General and Administrative Expenses

Millions of yen

2019

Guarantee Obligations with respect to operating activities (*1)
Other Guarantee Obligations
Total¥ 11,221
15,933¥ 27,154

Thousands of U.S. dollars

2019$ 101,082
143,532$ 244,614(*1) The amount includes bank loans and trade receivables provided by Mizuho Bank, Ltd. and others, which are guaranteed by MHLS.

14. Equity
Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The significant provisions in the Companies
Act that affect financial and accounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to the year-end dividends upon
resolution at the shareholders meeting. Additionally, for companies that meet certain criteria such as (1) having a Board of Directors,(2) having independent auditors, (3) having a Board of Audit & Supervisory Board members, and (4) the term of service of the directors
being prescribed as one year rather than the normal two-year term by its articles of incorporation, the Board of Directors may declare
dividends (except for dividends-in-kind) at any time during the fiscal year if MHLS has prescribed so in its articles of incorporation.
However, MHLS cannot do so because it does not meet (4) of the above criteria.
The Companies Act permits companies to distribute dividends-in-kind (non-cash assets) to shareholders subject to certain
limitations and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles of incorporationof the company so stipulate. The Companies Act provides certain limitations on the amounts available for dividends or the purchase oftreasury stock. The limitation is defined as the amount available for distribution to the shareholders, but the amount of net assets after
dividends must be maintained at no less than ¥3 million.
(b) Increases / decreases and transfer of common stock, reserve and surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component ofretained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity account charged upon
the payment of such dividends until the total of the aggregate amount of legal reserves and additional paid-in capital equals 25% ofcommon stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserves may be reversed without
limitation. The Companies Act also provides that common stock, legal reserves, additional paid-in capital, other capital surplus andretained earnings can be transferred among the accounts within equity under certain conditions upon resolution of the shareholders.

Major components of Selling, General and Administrative Expenses were as follows:
Millions of yen

2019

Reversal for Doubtful Receivables
Accruals/(reversal) for Debt Guarantees
Salaries and Wages
Provision for Bonus Payments
Provision for Bonus Payments to Directors
Retirement Benefits Costs for Employees
Provision for Reserve for Management Board Benefit Trust¥ (586)
4
7,692
907
130
431
144

Thousands of U.S. dollars

2018¥ (746)
(40)
7,203
784
67
421
—

2019

$ (5,279)
39
69,298
8,179
1,172
3,887
1,297

16. Segment Information
Under ASBJ Statement No. 17, “Accounting Standard for Segment Information Disclosures,” and ASBJ Guidance No. 20, “Guidanceon Accounting Standard for Segment Information Disclosures,” an entity is required to report financial and descriptive information about
its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specified
criteria. Operating segments are components of an entity whose separate financial information is available and such information
is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.
Generally, segment information is required to be reported on the same basis as is used internally for evaluating operating segment
performance and deciding how to allocate resources to operating segments.

Growth Strategy(1) Commitments
MHLS had loan commitment agreements as of March 31, 2019 and 2018 of ¥7,620 million ($68,647 thousand) and ¥6,063 million,
respectively. The loans provided under these credit facilities as of March 31, 2019 and 2018 amounted to ¥6,674 million ($60,121
thousand) and ¥4,947 million, respectively. Many of these facilities expire without being utilized and the related borrowings are
subject to periodic reviews of the borrowers’ credibility. Any unused amount will not necessarily be utilized in full.
(2) Contingent Liabilities
Contingent Liabilities as of March 31, 2019 were as follows:(1) Description and revision of reportable segments
The reportable segments of MHLS Group are those for which separate financial information is available and regular evaluation by
MHLS management is being performed in order to decide periodically how resources are allocated among the MHLS Group.
MHLS Group provides total financial services such as leasing business, installment sales and loan business to a wide range ofcustomers from large companies to small and medium-sized companies. MHLS Group has three business segments based on its
services: “Leasing and Installment Sales”, “Finance” and “Other”.
“Leasing and Installment Sales” segment represents leasing business for industrial machinery, transportation equipment andinformation-related equipment (including sales of subject properties upon expiration or cancellation of lease agreements) andinstallment sales business. “Finance” segment represents loan business, factoring business and securities business which invests insecurities that are held for the purpose of generating operational revenues. “Other” segment represents buying and selling of usedproperties business and sales of solar power business etc.

Strength to Support Growth

13. Commitments and Contingent Liabilities

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information(2) Methods of measurement for the amounts of sales, profit, assets, liabilities and other items for each reportable segment

69

Consolidated Financial Data and Corporate Information(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of theBoard of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to the shareholders
which is determined by a specific formula.

Integrated Report 201970

(3) The accounting policies of each reportable segment are consistent with those disclosed in Note 2, “Summary of Significant
Accounting Policies”.
Information about sales, profit, assets, liabilities and other items for the years ended March 31, 2019 and 2018 was as follows:
2019
Reportable segment
Leasing andInstallment Sales

Sales:
Sales to external customers
Intersegment sales and transfers
Total
Operating Expenses
Segment Profit¥

Finance

Total

Other

366,095
333
366,429
348,382
18,046¥ 16,724
700
17,424
7,837¥ 9,587¥ 2,073
119
2,193
1,532
¥
660

¥

¥ 1,320,729¥ 842,165¥ 11,940¥ 2,174,835¥¥(*2) The details of Reconciliations to Segment Assets as of March 31, 2019 and 2018 were as follows:
Millions of yen

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

Millions of yen

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

384,893
1,153
386,047
357,753
28,294¥

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information

Thousands of U.S. dollars

2019

2018

¥ (49,664)
36,702¥ (12,962)¥ (29,865)
33,524¥ 3,6592019$ (447,390)
330,622$ (116,768)

Consolidated (*4)—
(1,153)(1,153)4,227¥ (5,380)¥¥ (12,962)¥ 2,161,872¥

384,893—384,893361,980
22,913(*3) Reconciliations of “Depreciation and Amortization” and “Capital Expenditure” are related to corporate assets not allocated to thereportable segments.
(*4) Segment Profits are reconciled to Operating Income in the Consolidated Statement of Income.
(4) Information about Geographical Areas
Property and Equipment
Millions of yen

—
—

—
—

11,460120,504

1,767
3,368

13,227
123,872

Sales:
Sales to external customers
Intersegment sales and transfers
Total
Operating Expenses
Segment Profit
Segment Assets
OthersDepreciation and Amortization
Capital Expenditure¥¥

386,007372
386,379
370,855
15,524¥ 12,510
337
12,8484,884¥ 7,963

Total¥ 1,220
107
1,327
934
¥ 393

¥

¥

¥ 9,515¥ 18,933

Asia

Total

¥ 413

¥ 245,531

Thousands of U.S. dollars$ 1,951,801

Reportable segment
Other¥ 216,669

Japan

2018
Finance

North America / Latin America

2019

Millions of yen

Leasing andInstallment Sales

EuropeGrowth Strategy

11,460120,504

2019
Japan

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

399,738817
400,555
376,674
23,881

¥

—
(817)
(817)
3,901
¥ (4,718)

Consolidated (*4)¥¥

399,738—
399,738
380,575
19,162¥ 1,199,470¥ 609,459¥ 8,692¥ 1,817,622¥ 3,659¥ 1,821,282

10,11992,767————

10,11992,767

1,544
1,637

11,664
94,404

EuropeNorth America / Latin America

Asia$ 85,716$ 170,556$ 3,725(*1) Assets are classified by country or region based on the location of MHLS and consolidated subsidiaries.
(*2) Information by geographic segment of Property and Equipment for the year ended March 31, 2018 is not presented as domestic assets exceeded 90% of all segments.
(*3) Information by geographic segment of Sales for the years ended March 31, 2019 and 2018 is not presented as domestic sales exceeded 90% of all segments.

(5) Impairment loss of long-lived assets per reportable segment:
Millions of yen

2019
Reportable segment
Leasing andInstallment Sales

Impairment loss¥—

Finance

¥—

Total

Other

¥—

Reconciliations

Consolidated¥8¥8Reconciliations

Consolidated

$ 76

$ 76

¥—

Thousands of U.S. dollars

2019
Reportable segment
Leasing andInstallment Sales

Thousands of U.S. dollars

2019

Total

$ 2,211,798

Strength to Support Growth

Segment Assets
OthersDepreciation and Amortization
Capital Expenditure

Impairment loss$—

Finance

$—

Total

Other

$—

$—

Reportable segment

Sales:
Sales to external customers
Intersegment sales and transfers
Total
Operating Expenses
Segment Profit
Segment Assets
OthersDepreciation and Amortization
Capital Expenditure

Finance

Other

Total

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

Consolidated (*4)

$ 3,297,860
3,006
3,300,866
3,138,301$
162,565$

150,659
6,308
156,967
70,60486,363$ 18,678
1,079
19,757
13,805$ 5,952$ 3,467,197
10,3933,477,590
3,222,710$
254,880$—(10,393)(10,393)
38,079$ (48,472)$ 3,467,197—
3,467,197
3,260,789$
206,408$ 11,897,394$ 7,586,391$ 107,561$ 19,591,346$ (116,768)$ 19,474,578$(6) Goodwill per reportable segment:
Not applicable

17. Lease Transactions
Operating Leases as lessee
The minimum rental commitments under non-cancellable operating leases at March 31, 2019 and 2018 were as follows:
Millions of yen

103,234
1,085,525

—
—

—
—

103,234
1,085,525

15,92030,340119,154
1,115,865(*1) The details of Reconciliations to Segment Profit for the years ended March 31, 2019 and 2018 were as follows:
Millions of yen

Elimination of intersegment transactions
Administrative expenses not allocated to the reportable segments
Total

71

Not applicable for the year ended March 31, 20182019

Due within one year
Due after one year
Total

¥ 7
14
¥ 21

Thousands of U.S. dollars

2018

¥ 6
8
¥ 15

2019

$ 65
130
$ 195

Thousands of U.S. dollars

2019

2018

2019

¥

¥

$ (3,846)(44,626)$ (48,472)(426)(4,953)¥ (5,380)

Consolidated Financial Data and Corporate Information

Leasing andInstallment Sales(256)(4,462)¥ (4,718)

Integrated Report 201972

Lease contract receivables
Estimated residual value
Interest income equivalents
Total

Thousands of U.S. dollars

2018

2019

¥ 948,306
1,187(94,500)¥ 854,993¥ 777,746
1,468(28,707)¥ 750,508$ 8,542,529
10,701(851,276)$ 7,701,954(2) Maturities of Lease Receivables for finance leases that were deemed to transfer ownership of the leased property to the lessee wereas follows:
Millions of yen

Thousands of U.S. dollars

2019

2020
2021
2022
2023
2024
2025 and thereafter
Total

2019

¥ 22,686
17,16913,905
9,522
5,449
9,515
¥ 78,250$ 204,365
154,669
125,267
85,78349,09285,721$ 704,897(3) Maturities of Investments in Lease for finance leases that were deemed not to transfer ownership of the leased property to thelessee were as follows:
Millions of yen

2020
2021
2022
2023
2024
2025 and thereafter
Total

Thousands of U.S. dollars

2019

2019

¥ 274,937
204,550
150,549
96,44375,354146,470¥ 948,306$ 2,476,689
1,842,635
1,356,182
868,784
678,804
1,319,435$ 8,542,529

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

Due within one year
Due after one year
Total

Thousands of U.S. dollars

2019

2018

¥ 96,880
119,341¥ 216,222¥ 48,099
96,358¥ 144,458

2019$872,720
1,075,051$ 1,947,771

Sub-lease transactions
Among the receivables and obligations relating to the sub-lease transactions, the amounts before deducting interest equivalents andincluded in the Consolidated Balance Sheet as of March 31, 2019 and 2018 were summarized as follows:
Millions of yen

Lease Receivable
Investments in Lease
Lease Payable

Thousands of U.S. dollars

2019

2018

2019

¥

¥ 1,082
5,933
7,223

$ 5,696
64,85872,132

632
7,199
8,007

18. Financial Instruments and Related Disclosures(1) Policy for financial instruments
MHLS Group provides comprehensive financial services, including leasing, installment sales and loans. From the perspective offinancial stability, MHLS Group diversifies its funding sources. In addition to the indirect funding from financial institutions, MHLS
Group utilizes direct funding such as issuing bonds, commercial paper and securitization of lease receivables. Further, MHLS Group
has an integrated Asset-Liability Management (ALM) program. Derivatives are used to avoid fluctuation risks such as interest rates
and to secure stable profits.
73

Growth Strategy

Millions of yen

2019(2) Nature and extent of risks arising from financial instruments
Financial assets held by MHLS Group mainly consist of lease receivables and investments in lease, installment sales receivables,
loans receivables, and factoring receivables mainly due from domestic business companies. These assets are exposed to the credit
risks triggered by a contractual default of a counterparty to the transactions. In the case of deterioration in the credit conditionsof counterparties caused by a change in economic conditions or the environment, it is possible that the repayment of obligations
under the contract may not be performed. Marketable securities and investment securities, which are mainly comprised of stocks,
bonds, preferred equities and investments in partnerships, are exposed to market price fluctuation risks if they are exchange-tradedin addition to the credit risk of issuers. Transactions related to real estate finance are exposed to the risk of price fluctuations in thetargeted real estate.
Borrowings, bonds and commercial paper are exposed to the interest rate fluctuation risk for floating interest rate funding, andthe liquidity risk that ready access to funds may not be available due to a change in the financial market environment. An ALM
analysis is employed in order to make stable profit as well as to manage these funding risks.
Derivative transactions are mainly composed of interest rate swaps arranged as a part of ALM. MHLS Group enters into interest
rate swap transactions as a hedging instrument and applies hedge accounting to the interest rate fluctuation risk associated withinterest bearing debt such as bank loans. It is MHLS Group’s basic policy to utilize hedge transactions within the limit of the debt
amount to reduce interest rate risks and to improve cash flow from financial activities. The effectiveness of the hedge transactions
are assessed by comparing the changes in the market price and cumulative cash flows between the hedging instrument and thehedged item from the beginning of the hedge to the time of assessment.
MHLS Group also utilizes derivative transactions such as foreign currency forward contracts and interest and currency swaps
etc. to control the level of the risk associated with the assets and liabilities denominated in foreign currencies.
(3) Risk management for financial instruments(a) Integrated risk management
MHLS Group places an extremely high priority on integrated monitoring and control of total financial risks, including credit risks andmarket risks which consist of interest rate risk and share price fluctuation risk. Thus, MHLS Group incorporates an integrated risk
management system into its management policy in order to improve the stability of the business. Specifically, MHLS Group manages
various quantified risks in an integrated fashion to control the total risk under a certain level of net equity (business capacity) of thecompany. In addition, a risk analysis is performed monthly, the results of which are reported to the Board of Directors.
(b) Credit risk management
MHLS Group aims to minimize credit costs by optimizing its credit management structure at all stages of each transaction, fromentrance to exit to manage the credit risks of business partners.
Firstly, at the initial stage of deal execution, MHLS Group assigns a credit rating to each debtor under its client credit rating
system and conducts a strict credit screening, makes judgments on contract arrangements based on the prospects of future valueof leasing assets and, from the perspective of the avoidance of excessive concentrations of credit, MHLS Group monitors its credit
administration ceiling by using its credit rating monitoring systems. Any large contract or matter requiring complex risk judgment
requires the deliberation and the decision by the Credit Committee which enhances the risk control process. When offering newservices or new products, MHLS Group thoroughly reviews the identification and evaluation of inherent risks through the Risk
Control Committee.
And next, as an ongoing management measure MHLS Group provides necessary write-offs or allowances in accordance withthe self-assessment rules for assets conforming to the financial inspection manual published by the Financial Services Agency,
as recommended by “Temporary treatment of accounting and auditing on the application of accounting standard for financial
instruments in the leasing industry”. Furthermore, regarding credit risk management for the portfolio as a whole, through thequantification of the volume of the risk based on the credit rating of business customers, MHLS Group endeavors to minimize credit
costs. Also, MHLS Group periodically follows up on non-performing assets and performs debt collection of assets for which MHLS
Group has already provided reserves to facilitate final disposal of non-performing assets.

Strength to Support Growth(1) The net investments in lease were summarized as follows:

Consolidated Financial Data and Corporate Information

Finance Leases as lessor

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information(c) Market risk management
MHLS Group establishes basic policies (e.g., funding policy, setting commercial paper program, hedging policy, securities trading
policy) at the Board of Directors that are designed based on market environments and financial strength meeting to control risks
in line with financial operations. In addition, monthly ALM operating policies based on these basic policies, position limits, and loss
limits, etc., are determined on a monthly basis at the PM · ALM Committee, and MHLS Group strives to maintain stable earnings
by controlling risk factors. Also, with regard to market transactions, in order to maintain a mutual check system, MHLS Groupseparately established the risk control department that is independent from departments that are responsible for executions or for
approval of delivery settlement.

Integrated Report 201974Millions of yen

2019

2018

2019

¥ (2,410)¥ 1,520¥ (2,550)¥ 1,350$ (21,710)$ 14,303

The VaR measurement method is as follows:
Variance-covariance model for linear risk
Quantitative criteria:(1) Confidence interval: 99%;(2) Holding period of one month; and(3) Historical observation period of one year

2019

Thousands of U.S. dollars

2018

¥0

(5) Supplemental explanation for fair values of financial instruments
Fair values of financial instruments are based on the quoted prices in active markets. If a quoted price is not available, anotherrational valuation technique is used instead. Such prices have been calculated using certain assumptions, and may differ if
calculated based on different assumptions.
(a) Fair values of financial instruments
Millions of yen

2019

March 31,
Carrying
amount

2019

¥0

$0

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

The VaR measurement method is as follows:
Quantitative criteria:(1) Confidence interval: 99%;(2) Holding period of one month; and(3) Historical observation period of one year.
The market price at the measurement date is employed for marketable securities. The moving-average acquisition costs or theamortized costs are used for other securities. General market risk (risk of suffering losses due to stock market movement) andindividual risk (price variance risk due to factors associated with the issuer of stock) are calculated and combined. Individual risk
for non-marketable securities is calculated assuming a fluctuation ratio of 8%.
(iii) Derivative transactions
The derivative transactions carried out by MHLS Group mainly consist of interest rate swaps, entered as a part of ALM, tohedge the interest rate risks. The operating policy of hedging is determined at the monthly PM · ALM Committee to control
the interest rate risk. Also, from an operational control perspective, in order to ensure a proper review function, MHLS Group
has an organizational structure whereby the transaction execution department is clearly separated from the market risk control
department, which is responsible for evaluation of the effectiveness of hedging transactions, and the operations department,
which is responsible for delivery settlement. For the use of derivative transactions, MHLS Group enters into such transactions
only with major financial institutions in order to mitigate counterparty risk.

Cash and Cash Equivalents
Securities (*1)
Available-for-sale Securities
Lease Receivables andInvestments in Lease (*2) (*3) (*4)
Installment Sales Receivables (*2) (*5)
Loans Receivables (*2)
Factoring Receivables (*2)
Long-term Receivables (*6)
Assets total¥

25,438Fair value¥

25,4382018
Unrealized
gain (loss)¥—

Carrying
amount¥29,607

Unrealized
gain (loss)

Fair value¥

29,607¥—

167,975

167,975—

143,253

143,253—914,870

950,81135,941

808,601

831,478

22,877

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

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

2,391
12,2001,563—¥ 52,097

138,472
229,707
125,118
2,281¥ 1,477,042

141,124
241,234
126,266
2,281¥ 1,515,246

2,652
11,527
1,148—¥ 38,204

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

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

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

788,1657,251
54,383748,074¥ 1,597,875¥

788,166
7,240
54,321
748,665¥ 1,598,393¥

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

¥

¥

¥

¥

¥

¥

¥

(30)
(956)
(987)

¥

(30)
(956)
(987)

Strength to Support GrowthMillions of yen

75(4) Supplemental explanation for quantitative information concerning market risk
Because quantitative information concerning market risk is based on statistical assumptions, the quantitative information may differ
depending upon the quantitative basis and measurement method assumed. Also, the quantitative information is a statistical result
based on certain assumptions. It is not intended to show the expected maximum losses. Because future market conditions may
differ considerably from past conditions, there are many limitations on the quantitative data that is estimated using observation
values of past data.
(Glossary)*BPV: BPV is one of the interest rate risk indices indicating the change in present value of subject assets or liabilities given a basis
point (0.01%) change in interest rates. MHLS Group adopts 10 basis points (0.1%) as the basis for change of value.
*VaR: VaR is a technique for estimating the probable maximum portfolio losses as a volume of risk when the market isaffected adversely based on the statistical analysis of historical data under a given time and probability (99% one-sided
confidence interval).

(ii) Price fluctuation risk management of securities such as stock
Relating to the price fluctuation risk of securities, the risk control department captures the volume of the risk using the VaR. In
addition, it monitors the status of compliance with our internal rules.
The VaR measurements in MHLS Group as of March 31, 2019 and 2018, are shown below. To measure the VaR, MHLS
Group created a model that shows the price fluctuation of each stock based on the stock price index fluctuation. MHLS Group
adopted the stock price fluctuation model that sets the stock price index fluctuation ratio represented by the risk factor ofgeneral market risk. Also, the inherent fluctuation portion of each stock that is unable to be shown by the stock price index isset as a risk factor of individual risk in our model.

Price variation risk of stock (VaR)(e) Liquidity risk management
MHLS Group manages liquidity risk by diversifying the method of funding and balancing its long-term and short-term funding needs,
depending upon the market environment.

¥

—
—
—

¥

316
(8)
308

¥

316
(8)
308

¥

¥

Consolidated Financial Data and Corporate Information

Sensitivity to interest rate (10BPV)Interest rate risk volume (VaR)

Thousands of U.S. dollars(d) Other price fluctuation risk management
The risk mainly consists of real estate price fluctuation risks for specified bonds, preferred shares, investments in partnerships andnon-recourse loans relating to a real estate finance vehicle. The risk is managed by estimating the fair value of real estate at exit andmonitoring the quantified risk for loss of principal.

Growth Strategy(i) Interest rate risk management
In order to manage interest rate risk, MHLS Group monitors the matching ratio (i.e., proportion of assets that is not exposed tointerest rate risk without allocation of the matching fixed/floating interest bearing debt to entire assets) under ALM. Also, MHLS
Group quantifies the interest rate and maturity of financial assets and liabilities based on *BPV (Basis Point Value). MHLS Groupanalyzes and monitors them using statistical techniques such as *VaR (Value at Risk).
In addition, compliance with the internal rules etc. is managed by the risk control department.
Sensitivity to interest rate (10BPV) interest rate risk volume (VaR) figures in MHLS Group as of March 31, 2019 and 2018, are
as shown below. The Internal Models Approach applied to measure VaR is based on the assumption that past price fluctuations
follow a normal distribution and the model calculates variance and covariance, based on which MHLS Group estimates
maximum losses statistically (variance/covariance method).

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information

(0)
10
62
(590)
(518)
—
—
—

Integrated Report 201976

Cash and Cash Equivalents
Securities (*1)
Available-for-sale Securities
Lease Receivables andInvestments in Lease (*2) (*3) (*4)
Installment Sales Receivables (*2) (*5)
Loans Receivables (*2)
Factoring Receivables (*2)
Long-term Receivables (*6)
Assets total$

229,155

Fair value$229,155

Unrealized
gain (loss)$—

1,513,158

1,513,158—

8,241,330

8,565,096

323,766

1,311,333
2,113,464
2,099,396
29,081$ 15,536,917

1,332,878
2,223,371
2,113,480
29,081$ 16,006,219

21,545
109,907
14,084—$ 469,302

Short-term Borrowings
Lease Payable
Accounts Payable — tradeLong-term Debt (*7) (*8)
Liabilities total$ 8,957,630
72,160504,828
7,570,230$ 17,104,848$ 8,967,394
72,445504,598
7,611,899$ 17,156,336$(9,764)(285)
230(41,669)$ (51,488)

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

$

$

$

$

(279)
(8,621)(8,900)$(279)(8,621)(8,900)$———(*1) Securities include Marketable Securities, Operational Investment Securities and Investment Securities.
(*2) Lease Receivables and Investments in Lease, Installment Sales Receivables, Loans Receivables and Factoring Receivables are stated net of Allowance for Doubtful
Receivables.
(*3) Investments in Lease are stated net of estimated residual value of lease assets for finance leases that are deemed not to transfer ownership of the leased property to
the lessee.
(*4) Unearned lease payments received are not included in Lease Receivables and Investments in Lease.
(*5) Installment Sales Receivables are stated net of Deferred Profit on Installment Sales.
(*6) Long-term Receivables are stated net of Allowance for Doubtful Receivables.
(*7) Current Portion of Long-term Debt is included.
(*8) Long-term Debt includes Payables under Securitized Lease Receivables.
(*9) Assets and liabilities incurred resulting from derivative transactions are netted. The net liability is presented in parenthesis.

Methods for determining the fair values of financial instruments are as follows:(a) Cash and Cash Equivalents
The carrying values of bank deposits approximate fair values because of their short maturities.
(b) Marketable Securities, Operational Investment Securities and Investment Securities
The fair values of securities are measured at the quoted market price of the stock exchange for the equity instruments. The
fair values of bonds are measured at the quoted price obtained from the financial institution for the debt instruments, or are
determined by discounting the future cash flows, by credit risk categories for risk management, at an appropriate benchmark
rate such as an interbank market rate plus a credit spread. Fair value information for securities by classifications is included in
Note 5. Marketable Securities, Operational Investment Securities and Investment Securities.
(c) Lease Receivables and Investments in Lease
The fair values of Lease Receivables and Investments in Lease are principally determined by discounting the future cash flows(lease payments received less maintenance fees), by credit risk categories for risk management, at an appropriate benchmark
rate such as an interbank market rate plus a credit spread.

(g) Short-term Borrowings
Short-term Borrowings from banks and other financial institutions
The fair values of Short-term Borrowings from banks and other financial institutions are measured at the amount of principal
plus interest to be paid at maturity discounted at an appropriate benchmark rate such as an interbank market rate plus a credit
spread.
Commercial Paper
The fair values of Commercial Paper are measured at the amount of principal plus interest to be paid at maturity discounted at
an appropriate benchmark rate such as an interbank market rate plus a credit spread.
Payables under Securitized Lease Receivables
The fair values of Payables under Securitized Lease Receivables are determined by discounting the future cash flows at an
appropriate benchmark rate such as an interbank market rate plus spread for securitization.

Growth Strategy

Carrying
amount(h) Lease Payable
The fair values of Lease Payable are principally determined by discounting the future cash flows at an appropriate benchmark
rate such as an interbank market rate plus a credit spread.
(i) Accounts Payable — trade
The carrying values of Accounts Payable - trade approximate fair value because they are settled within a short period. The fairvalues of long-term Accounts Payable are determined by discounting the future cash flows at an appropriate benchmark rate
such as an interbank market rate plus a credit spread.
(j) Long-term Debt
Bonds Payable
The fair values of Bonds Payable are measured at the amount of interest and principal to be paid at maturity discounted at an
appropriate benchmark rate such as an interbank market rate plus a credit spread.

Strength to Support Growth

2019

March 31,(f) Long-term Receivables
The carrying values of Long-term Receivables at the balance sheet date (net of Allowance for Doubtful Receivables)
approximate fair values, because the Allowance for Doubtful Receivables is determined based on the amount that is expected
to be recovered from collateral and guarantees.

Long-term Debt from banks and other financial institutions
The fair values of Long-term Debt from banks and other financial institutions are measured at the amount of interest andprincipal to be paid at maturity discounted at an appropriate benchmark rate such as an interbank market rate plus a credit
spread.
Payables under Securitized Lease Receivables
The fair values of Payables under Securitized Lease Receivables are determined by discounting the future cash flows at an
appropriate benchmark rate such as an interbank market rate plus spread for securitization.

Consolidated Financial Data and Corporate Information

Thousands of U.S. dollars

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information(k) Derivatives
Fair value information for derivatives is included in Note 19.

(d) Installment Sales Receivables
The fair values of Installment Sales Receivables are determined by discounting the future cash flows, by credit risk categories forrisk management, at an appropriate benchmark rate such as an interbank market rate plus a credit spread.
(e) Loans Receivables and Factoring Receivables
The fair values of Loans Receivables and Factoring Receivables are determined by discounting the future cash flows, by credit
risk categories for risk management, at an appropriate benchmark rate such as an interbank market rate plus a credit spread.

77

Integrated Report 201978

(b) Carrying amount of financial instruments whose fair values cannot be readily determined

Thousands of U.S. dollars¥ 17,575
53,124
3,533
29,590¥ 103,824

2019¥ 10,950
39,502
1,233
32,480¥ 84,166$ 158,323
478,558
31,835266,557$ 935,273(*1) As unlisted stocks do not have quoted market prices in an active market and their fair values cannot be readily determined, they are excluded from the disclosure of market
value information.
(*2) The impairment loss on certain unlisted stocks for the year ended March 31, 2019 and 2018 was ¥53 million ($481 thousand) and ¥16 million, respectively.
(*3) Investments in funds and partnerships are excluded from the disclosure of market value information, as they are composed of financial instruments whose fair values
cannot be readily determined, such as unlisted stocks.
(*4) These financial instruments are excluded from the disclosure of market value information, as they do not have quoted market prices in an active market and fair values
cannot be readily determined.

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

March 31, 2019

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

Due in one
year or less

¥ 25,438

Due after
one yearthrough
two years¥—

Due after
two years
throughthree years

Due after
three years
throughfour years

Due after
four years
throughfive years

¥

¥

¥

—

—

—

Due after
five years

¥

—

2,000

—

—

—

—

—

5,500
33,52625,3005,453

22,00010,04828,16010,697

21,6204,584

24,6008,287

270,736

201,256

148,710

95,11873,835

140,661

58,02454,883
210,157¥ 660,267

38,312
54,215
10,843¥ 335,380

24,91736,2844,557¥ 246,517

Due in one
year or lessDue after
one yearthrough
two years

Due after
two years
throughthree years¥

14,862
29,521
2,084¥ 180,444

7,205
25,4151,343¥ 134,004

4,657
34,9594,119¥ 217,285

Due after
three years
throughfour years

Due after
four years
throughfive years

Due after
five years¥¥

Millions of yen

March 31, 2018

Cash and Cash Equivalents
Securities
Available-for-sale Securities Bonds
National and Local
government Bonds
Corporate Bonds
Other
Lease Receivables andInvestments in Lease
Installment Sales Receivables
Loans Receivables
Factoring Receivables
Total¥ 29,607

¥

—

—

—

—

¥

March 31, 2019

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

—

—

—

—

—
6,338

5,500
23,28525,3004,831

22,0004,915

28,1605,120

20,6009,490

248,361

185,200

138,861

91,49849,104

110,357

52,28542,656
101,916¥ 483,166

36,511
44,5237,144¥ 304,166

23,69454,293
5,992¥ 252,973

14,27028,2884,134¥ 165,106

7,336
21,774
1,594¥ 113,090

4,752
38,8684,754¥ 188,824

229,155

$

—

$

—

$

—

Due after
four years
throughfive years$

Due after
five years

—

$

—

18,016

—

—

—

—

—

49,545302,015

227,90749,123

198,180
90,522

253,671
96,367

194,757
41,297

221,60274,6532,438,847

1,812,955

1,339,611

856,843

665,123

1,267,110

522,700
494,401
1,893,141$ 5,947,820

345,125
488,381
97,682$ 3,021,173

224,458
326,855
41,056$ 2,220,682

133,884
265,934
18,779$ 1,625,478

64,910228,947
12,103$ 1,207,137

41,954
314,924
37,109$ 1,957,352

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

Derivative transactions to which hedge accounting is not applied:(1) Foreign currency forward contracts
Millions of yen

2019

At March 31,

Selling U.S.$
Buying U.S.$

Contract
AmountContract
Amount due
after One Year

¥—
¥—

¥—
¥—

2018
Fair Value

Unrealized
Gain (Loss)

Contract
AmountContract
Amount due
after One Year

Fair Value

Unrealized
Gain (Loss)

¥—
¥—

¥—
¥—

¥ 2,317
¥
—

¥—
¥—

¥ 207
¥ —

¥ 207
¥ —

Fair Value

Unrealized
Gain (Loss)

¥ 109

¥ 109

Thousands of U.S. dollars

2019

At March 31,

Selling U.S.$
Buying U.S.$
2,000

$

Due after
three years
throughfour years(*1) Please see Note 10 for annual maturities of Long-term Debt.

—

2,000

Due in one
year or lessDue after
two years
throughthree years

Growth Strategy

2018

Due after
one yearthrough
two years

Strength to Support Growth

2019

Thousands of U.S. dollars

Contract
AmountContract
Amount due
after One Year

Fair Value

Unrealized
Gain (Loss)

$—
$—

$—
$—

$—
$—

$—
$—

(2) Interest rate and currency swaps
Millions of yen

Payment - floating ratein Japanese Yen,
receipt - floating rate in
U.S. dollars

2018

2019

At March 31,
Contract
AmountContract
Amount due
after One Year¥ 3,333¥ 3,333

Fair Value¥ (30)

Unrealized
Gain (Loss)

Contract
AmountContract
Amount due
after One Year¥ (30)¥ 3,333¥ 3,333

Consolidated Financial Data and Corporate Information

Millions of yen

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

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information

Thousands of U.S. dollars

2019

At March 31,

Payment - floating ratein Japanese Yen,
receipt - floating rate in
U.S. dollars

79

Contract
AmountContract
Amount due
after One Year$ 30,027$ 30,027

Fair Value$ (279)Unrealized
Gain (Loss)$ (279)Integrated Report 201980

Derivative transactions to which hedge accounting is applied:

Millions of yen
Millions of yen

2019

Short-term
Borrowings,
Long-term
Debt
Bonds
PayableHedged item

2018

Contract
AmountContract
Amount due
after One Year

Fair
Value

¥ 106,697¥ 88,224¥ (791)Hedged item

Payment - fixed rate,receipt - floating rate

Contract
AmountContract
Amount due
after One Year¥ 122,378¥ 93,750

Fair
Value

Payment - fixed rate, receipt - floating rate

¥ (85)
Payment - floating rate, receipt - fixed rate

8,000

¥

¥ 8,000

¥

40

—

—

Hedged item

Short-term
Borrowings,
Long-term
Debt
Bonds
PayableContract
Amount$ 794,747

Fair
Value

$ (7,134)
Payment - floating rate, receipt - fixed rate

$ 72,066$ 72,066$

Contract
Amount due
after One Year¥ 3,063¥ 3,063¥ 75,263¥ 65,214¥ 12,000¥ 12,000

Hedged item

Loans
Receivables
Long-term
Debt

Contract
AmountContract
Amount due
after One Year¥ 4,041¥ 4,041¥ 63,583¥ 47,030

—

—

—

2019
Hedged item

Contract
Amount due
after One Year

2018

Contract
AmountThousands of U.S. dollars

Payment - fixed rate, receipt - floating rate
$ 961,148

Long-term
Debt

At March 31,

2019

At March 31,

Loans
Receivables
Long-term
Debt—

Thousands of U.S. dollars

Payment - fixed rate,receipt - floating rate

2019

At March 31,

365

Loans
Receivables
Long-term
Debt
Long-term
Debt

Contract
AmountContract
Amount due
after One Year$ 27,600$ 27,600$ 677,988$ 587,466$ 108,098$ 108,098

Growth Strategy(1) Interest rate swaps
At March 31,

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information

20. Other Comprehensive (Loss) Income
The components of other comprehensive (loss) income for the years ended March 31, 2019 and 2018 were as follows:
2018

Hedged item

Contract
AmountContract
Amount due
after One Year

Payment - fixed rate inJapanese Yen, receipt fixed rate in U.S. dollars

Operational
Investment
Securities¥ 9,017

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

Long-term
Debt

¥

14

Fair
Value

Contract
AmountContract
Amount due
after One Year¥ 9,017¥ (207)¥ 2,457¥ 2,457

¥ 71

¥

¥

¥

¥

¥ 5

—

1

130

14

Fair
Value

Thousands of U.S. dollars

2019

At March 31,
Hedged item

Contract
AmountContract
Amount due
after One Year

Payment - fixed rate inJapanese Yen, receipt –fixed rate in U.S. dollars

Operational
Investment
Securities$ 81,230$ 81,230

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

Long-term
Debt

$

132

$

0

Fair
Value

$ (1,865)$

13Interest rate swaps to which specific accounting is applied:
The following interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not re-measured at market
value, however, the differential paid or received under the swap agreements is recognized and included in interest expense or income.
In addition, the fair value of such interest rate swaps in Note 18 is included in that of the hedged items (i.e., Loans Receivables andLong-term Debt).

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

81

Thousands of U.S. dollars

2019

2018

2019

¥ (2,081)(1,227)(3,308)(1,012)¥ (2,295)¥ 2,659(1,189)1,470
450¥ 1,020$ (18,746)(11,054)(29,800)(9,125)$ (20,675)¥ (1,234)
302
(932)
(285)
¥ (647)

¥

(10)
175
165
52
112

$ (11,122)
2,721(8,401)(2,569)$ (5,833)¥ (1,223)—(1,223)—¥ (1,223)

¥

126
—
126
—
126

$ ( 11,024)—( 11,024)—$ ( 11,024)

¥

91
1
93
28
64

¥

234
9
243
74
169

$

(40)
—
(40)

¥

97
—
97

$

¥
¥
¥

¥ (4,142)

¥

¥

¥

¥

¥ 1,525$$

Strength to Support GrowthMillions of yen

Millions of yen

2019

At March 31,

Consolidated Financial Data and Corporate Information(2) Interest rate and currency swaps

827
14
841
258
583
(368)
—
(368)

$ (37,317)

Integrated Report 201982

21. Supplemental Information on Changes in Equity

24. Per Share Information(1) The increase of 6,355,000 issued shares in common stock is due to the issuance of new shares through the third-party allotment.
(2) The increase of 146,544 shares of treasury stock is due to the acquisition of MHLS’s share under MHLS’s BBT of 146,500 sharesand the purchase of shares less than one unit of 44 shares. Issued shares in common stock at the end of fiscal year includes
treasury stock of 146,500 shares held by MHLS’s BBT. (See Note 2 (aa) for details on BBT.)

Details of basic net income attributable to owners of the parent per share (“EPS”) for the years ended March 31, 2019 and 2018 wereas follows:
Millions of yen

As described in Note 4(1), MHLS acquired shares of 67.44% in VMF and included it in the scope of the consolidation. The net payment
for the acquisition was calculated as the difference between the acquisition price and the cash and cash equivalents received. The
details of the calculation, assets acquired and liabilities assumed at the date of the acquisition were as follows:

Millions of yen

Thousands ofshares2019
Net income
attributable toowners of theparentWeightedaverage shares¥ 16,594

42,697EPS¥ 388.64

Yen

U.S. dollars

2018$ 3.50Net income
attributable toowners of theparentWeightedaverage shares¥ 13,643

42,648EPS¥ 319.91$ 2.88Transactions of MHLS Group with related parties, i.e., a major shareholder, parent company of a major shareholder, unconsolidated
subsidiaries, and fellow company for the years ended March 31, 2019 were as follows:
Thousands of U.S. dollars

2019$ 658,897
337,417
61,256
147,506
209
84
515,449
408,964
6,658

2019

¥ 73,144
37,456
6,800
16,37423
957,22045,399739

25. Effect of Bank Holiday
As financial institutions in Japan were closed on March 31, 2019, amounts that would normally have been settled on that day werecollected or paid on the following business day, April 2, 2019. The effects of the settlements on April 2 instead of March 31 include thefollowings:

Receivables:
Notes Receivable
Payables:Accounts Payable - trade
Other:
Notes Deposit for Installment Sales Receivables
Notes Deposit for Investments in Lease

Millions of yen

Thousands of U.S. dollars

2019

2019

¥

0

$

0

¥ 1,674$ 15,087¥$ 1,53391

170
10Growth Strategy

2019$ 139,508
17,215
3,868(91,209)(15,947)(16,139)
37,296(30,888)$ 6,408¥ 15,486
1,910
429(10,125)(1,770)(1,791)4,140(3,429)¥711

23. Related-Party Disclosures

Borrowing funds
Securitization of receivables
Issuance of commercial paper
Issuance of new shares through the third-party allotment
Payment of interest
Receipt of interest
Investment in Tokumei Kumiai
Return of investment in Tokumei Kumiai
Profit from investment

U.S. dollars

Thousands of U.S. dollars

2019

Millions of yen

Basic EPS
Net income available tocommon shareholders

Yen

26. Subsequent Events
Appropriation of Retained Earnings
The following appropriation of Retained Earning at March 31, 2019, was approved at MHLS’s shareholders’ meeting on June 25, 2019:
Millions of yen

Year-end cash dividends, ¥40.00 ($0.36) per share¥ 1,960

Strength to Support GrowthMillions of yen

Thousands ofsharesFor the year ended March 31,

22. Supplemental Information on Cash Flows

Current assets
Fixed assets
Goodwill
Current liabilities
Long-term debt
Non-controlling Interest
Acquisition cost of shares
Cash and cash equivalents
Net payment

Value Creation by the Mizuho Leasing Group

Consolidated Financial Data and Corporate Information

Thousands of U.S. dollars$ 17,657

The balances due to or from these companies at March 31, 2019 were as follows:
Thousands of U.S. dollars

2019

Operational investment securities
Accrued income
Short-term borrowings
Commercial paper
Payables under securitized lease receivables
Current portion of bonds payable
Bonds payable
Long-term debt
Long-term payables under securitized lease receivables
Accrued expenses

83¥ 81,367
310
119,349
72,70052,24820,00085,00066,177
29,418270$

2019732,976
2,796
1,075,125654,896
470,667
180,164
765,697
596,141
265,005
2,435

Consolidated Financial Data and Corporate Information

Millions of yen

Integrated Report 201984

Consolidated Financial Data and Corporate Information

Corporate Information

Value Creation by the Mizuho Leasing Group

Independent Auditor’s Report

Corporate Profile (As of October 1, 2019)
CompanyName

Mizuho Leasing Company, Limited

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

Number of Consolidated: 1,627; Non-consolidated: 661
Employees (As of March 31, 2019)

Date ofDecember 1, 1969
Establishment¥26,088 million

Business
Integrated financial services
Description

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

Sapporo Branch

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

Sendai Branch

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

Corporate Business Dept. (Metropolitan Area No. 2)

65-2, Naka-cho 2-chome, Omiya-ku, Saitama, Saitama 330-0845

Niigata Branch

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

Toyama Branch

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

Shizuoka Branch

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

Nagoya Branch

Osaka Business Dept.

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

Kobe Branch

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

Hiroshima Branch

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

Takamatsu Branch

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

Fukuoka Branch

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

Kyoto Branch

Strength to Support Growth

Head Office

Growth Strategy

Business Sites (As of October 1, 2019)

Sapporo Branch

Kyoto Branch
Kobe Branch

Toyama Branch

Sendai BranchConsolidated Financial Data and Corporate Information

Niigata Branch

Corporate Business Dept.
(Metropolitan Area No. 2)

Takamatsu Branch
Hiroshima Branch

Head Office

Fukuoka Branch
Shizuoka Branch
Nagoya Branch
Osaka Business Dept.

85

Integrated Report 201986

Consolidated Financial Data and Corporate Information

Paid-in Capital or Investment Business Activity

IBJL-TOSHIBA Leasing Company, Limited¥1,520 million(Company name will be changed to Mizuho-Toshiba Leasing Company, Limited.)

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

General leasing

Ownership

90%

Corporate Philosophy

Dai-ichi Leasing Co., Ltd.

¥2,000 million

2-6, Toranomon 1-chome, Minato-ku, Tokyo 105-0001
We aimto be a Group which contributes toGeneral leasing

DesiredFuturesociety by offering valued financial services¥50 million General leasing Image 90%
5-3, Kachidoki 6-chome, Chuo-ku, Tokyo 104-0054
of the Mizuho
whichMGlead
tofutureprosperity.
LeasingGroup
Leasing Corporation*
How the Group should be¥4,390
and stakeholders
million General leasing
50%
1-1, Hitotsubashi 2-chome, Chiyoda-ku, Tokyo 101-0003
the Group should consider
Mindsetof each employee
ML Estate Company,
LimitedStock Transfer Agency Department,
Mizuho Trust & Banking Co., Ltd.
2–1, Yaesu 1-chome, Chuo–ku, Tokyo

Major Shareholders (Top 20)

5.98

1,750

3.57

UNIZO Holdings Company, Limited.

1,546

3.15

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

1,283

2.62

Meiji Yasuda Life Insurance Company

1,251

2.55

Japan Trustee Services Bank, Ltd. (Trust Account)

1,141

2.33

DOWA HOLDINGS CO., LTD.

1,120

2.29

SSBTC CLIENT OMNIBUS ACCOUNT(Standing proxy: The Hongkong and Shanghai Banking Corporation Limited)

1,012

2.07

Japan Trustee Services Bank, Ltd. (TOSHIBA CORPORATION Retirement Benefit Trust
Account re-entrusted by the Mitsui Sumitomo Trust & Banking Co., Ltd.)

900

1.84

Japan Trustee Services Bank, Ltd. (Trust Account 9)

861

1.76

Japan Trustee Services Bank, Ltd. (Trust Account 5)

725

1.48

2.

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

Credit Saison Co., Ltd.

670

1.37

IINO KAIUN KAISHA, LTD.

666

1.36

3.

Strive to create a dynamic corporate culture full ofenergy and vitality in which proactive, ambitious
human resources are fostered and promoted.

Sompo Japan Nipponkoa Insurance Inc.

540

1.10

Nippon Life Insurance Company

504

1.03

Japan Trustee Services Bank, Ltd. (Trust Account 1)

472

0.96

Japan Trustee Services Bank, Ltd. (Trust Account 2)

444

0.91

JP MORGAN CHASE BANK 385151

436

0.89

The Master Trust Bank of Japan, Ltd.
(Retirement Benefit Trust, The Senshu Ikeda Bank, Ltd. Account)

405

0.83

Auto leasing

100%

Real estateleasing

100%

Used equipment
sales

100%

The Three Cs¥10 million

Office services

100%

ML Office Service Company, Limited

2-6, Toranomon 1-chome, Minato-ku, Tokyo 105-0001
IBJ Leasing (China) Ltd.

Management Policy(Company name will be changed to Mizuho Leasing (China), Ltd.)

1.

Respond to customers’ needs and provide precise
US$30,000
and prompt
services by combining the Group’s total
General leasing
100%
strength. thousandwith the law and its spirit, and aim to
IDR568,735,399
4. Comply
Generalrecognizes
leasing67%
be a Group which always
its social

thousand
responsibility and secures understanding andsympathy from society.

Sixth Mid-term Management Plan
IBJ Leasing (UK) Limited(Company name will be changed to Mizuho Leasing (UK) Limited.)

GBP6,000

General leasing

100%

The Group has rolled out the Sixth Mid-term Management Plan covering a five-year period
from April 2019.
thousandMizuho House 30 Old Bailey London EC4M 7AU, U.K.
Under the plan, we will continue to promote business together with clients and initiatives in focus areas in response toKrung
Thai IBJ
LeasingCo., Ltd.*changesin socialandindustrial
structures that have been implemented to date. At the same time, we will offer new
THB100,000
Generalandleasing49%
solutionsasabusinessdevelopment
partnerRoad,
for clientsin widely
expanded businessthousand
fields in Japanoverseas through18th Floor, Nantawan Bldg., 161 Rajdamri
Lumpini,
Pathumwan,
Bangkok
10330, Thailand
allianceswith strategic
business partners and take on the challenge of co-creating value with clients and expanding
business overseas with new business bases.
PNB-IBJL Leasing and Finance Corporation*(Company name will be changed to PNB-Mizuho Leasing and Finance Corporation.)

PHP1,000,000
thousand

General leasing
25%
PNB Makati
Center 5th Floor, 6754 Ayala
Ave. corner Legaspi
Street, challenges together with clients
VisionValue-creatingcompany
tackling
Makati City, Metro Manila, Philippines 1226

Flow for realization of the vision

Shareholders*Shareholding ratio is calculated by deducting treasury stock.

Stock Performance

Distribution of Shareholders

Stock price
(yen)
3,500

Individuals
and Others

Financial
Institutions

12.0%

54.5%

3,000

ForeignInvestors

2,500

12.1%

2,000

US$1

IBJ Air Leasing (US) Corp.
Tackle new businessThorough client-oriented
Promote business together
domainstranscending the
US$100160approach
Greentree Drive, suite 101
thetheirCitypartnerof Dover Country of
withStreet,clientsinas
frameworkof financing
Kent, DE 19904, USA

01 87(Office Location)

2,930¥310 million*An equity-method affiliate

Tokyo Stock Exchange, 1st section

NISSAN MOTOR CO., LTD. Retirement Benefit Trust Account,with the trustee being Mizuho Trust & Banking Co., Ltd., andre-trustee Trust & Custody Services Bank, Ltd.

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

Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda

Stock Exchange Listing

The Dai-ichi Life Insurance Company, Limited

ML Shoji Company,Action
LimitedGuidelines

IBJ Air Leasing Limited

Shareholder Registry
Administrator

Mizuho Trust & Banking Co., Ltd.

44,42723.03

2-6, Toranomon 1-chome, Minato-ku, Tokyo 105-0001(Corporate Finance Division)
Sentral Senayan III, 13th Floor, Jl. Asia Afrika No.8, Gelora Bung Karno,
Senayan, Jakarta Pusat 10270, Indonesia

49,004,000

Number of Shareholders

11,283Society¥10 million(Head Office)Bank Panin Building, 3rd Floor Jl. Pecenongan Raya No. 84 Jakarta
Pusat 10120

Number of Shares Issued

Mizuho Bank, Ltd.

Employees

PT. Verena Multi Finance Tbk

8425

Shareholding Ratio*(%)

Shareholders¥386 million

Room 1336, 13F Teem Tower, 208 Tianhe Road,
Tianhe District, Guangzho, PRC (510620)

Securities Code

Number of Shares Held
(1,000 shares)

Clients

Challenge(Shanghai Head Office)ChangeRoom 08-10, 20F, Metro Plaza, No. 555, Loushanguan Road,
Changning District, Shanghai, PRC (200051)
Create(Guangzhou Branch)

140,000,000

Growth Strategy

Mizuho Auto Lease Company, Limited

Number of Shares Authorized

90%

Universal Leasing Co., Ltd.

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

Stock Information

Strength to Support Growth

Company Name

Value Creation by the Mizuho Leasing Group(As of October 1, 2019)

Stock Information (As of March 31, 2019)

Consolidated Financial Data and Corporate Information

The Mizuho Leasing Group aims to make a further
leap forward by taking on challenges for enhancing
Major Group Companies
corporate
value and achieving value creation forstakeholders.

Aircraft leasing

75%

1,500
1,000

Fulfill corporate social
Aircraft leasing75%
responsibility

500
0

1Q

2Q

3Q

FY2016

4Q

1Q

2Q

3Q

FY2017

4Q

1Q

2Q

3Q

FY20184Q

1Q

2Q

FY2019Domestic
Corporations

19.1%

Financial
Instruments
Business
Operators

2.3%
Integrated Report 201988

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

www.mizuho-ls.co.jp

This report is printed on paper certified by the Forest
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