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

INTERNET DISCLOSURE ITEMS FOR THE
NOTICE OF CONVOCATION OF THE 51st
ANNUAL GENERAL MEETING OF
SHAREHOLDERS

Matters concerning stock acquisition rights
Status of the accounting auditor
System for ensuring appropriate business operationand overview of its operating status
Consolidated statement of changes in equity
Notes on consolidated financial statements
Non-consolidated statement of changes in equity
Notes on non-consolidated financial statements(April 1, 2021 to March 31, 2022)

Mitsubishi HC Capital Inc.

Based on laws and regulations, and provisions in Article 15 of the Articles of Incorporation of theCompany, the Company provides shareholders with information by posting on the Company’s website(https://www.mitsubishi-hc-capital.com/).

-1-Matters concerning stock acquisition rights(1) Overview of stock acquisition rights, etc. delivered as compensation for execution of duties andheld by officers of the Company on the last day of current fiscal year

Name
(Date ofresolution on
issuance)

9th stockacquisitionrights(September 27,
2017)
10th stockacquisitionrights(June 28,2018)
11th stockacquisitionrights(June 25, 2019)12th stockacquisitionrights(June 24, 2020)
13th stockacquisitionrights(June 25, 2021)

Number ofholders
Directorsof theCompany Number ofstock(Excluding
Audit and acquisitionrightsSupervisory
Committee
members
and Outside
Directors)

Type andnumber ofshares to bedeliveredupon
exercisingstockacquisitionrights

1

307

1

1

1

6

Amount to
be paid forstock
acquisitionrightsAmount ofassets to becontributed
upon
exercisingstockacquisitionrightsStock acquisitionrights exercise
periodMajor
conditions
to exercise
stockacquisitionrightsCommonshares of theCompany
30,700 shares¥566 pershare¥1 per share

October 14, 2017 to
October 13, 2047(*)

Commonshares of the
248
Company
24,800 shares¥590 pershare¥1 per share

July 14, 2018 to
July 13, 2048(*)

¥513 pershare¥1 per share

July 13, 2019 toJuly 12, 2049(*)

¥424 pershare¥1 per share

July 16, 2020 toJuly 15, 2050(*)

¥499 pershare¥1 per share

July 16, 2021 toJuly 15, 2051(*)

Commonshares of theCompany
32,100 shares
Commonshares of the323
Company
32,300 shares
Commonshares of the
1,800
Company
180,000 shares
321

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

-2-(2) Overview of stock acquisition rights, etc. delivered as compensation for execution of duties of theCompany Executive Officers, etc. during current fiscal year

Name
(Date ofresolution on
issuance)

13th stockacquisitionrights(June 25, 2021)

Number ofrecipients
Executive
Officers ofthe
Number ofCompany,stocketc.
acquisition(Excluding
rights issued
thoseserving
concurrentlyasDirectors)
55

Type andnumber ofshares to bedeliveredupon
exercisingstockacquisitionrightsAmount to
be paid forstock
acquisitionrightsAmount ofassets to becontributed
upon
exercisingstockacquisitionrightsStock acquisitionrights exercise
periodMajor
conditions
to exercise
stockacquisitionrightsCommonshares of the
6,863
Company
686,300 shares¥499 pershare¥1 per share

July 16, 2021 toJuly 15, 2051(*)

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

(3) Other important matters related to stock acquisition rights, etc.
None.

-3-

Status of the accounting auditor(1) Name of Accounting Auditor of the Company
Deloitte Touche Tohmatsu LLC(2) Remuneration, etc. for Accounting Auditor in current fiscal year(i) Remuneration, etc. for Accounting Auditor in current fiscal year of the Company¥296 million(ii) Total amount of cash and other property benefits to be paid to the Accounting
Auditor by the Company and its consolidated subsidiaries.

¥505 million

A total of 21 of the important subsidiaries of the Company receive auditing (limited to the provisions of
the Companies Act or the Financial Instruments and Exchange Act, including equivalent laws andregulations in foreign countries) from the certified public accountants or auditing firms (including
persons with equivalent certifications in foreign countries) besides the Accounting Auditor of theCompany.
(3) Reason that Audit and Supervisory Committee agreed to remuneration for Accounting Auditor
The Audit and Supervisory Committee agrees to this remuneration as it has confirmed that theseamounts are determined after sufficient discussion with the Accounting Auditor by using the number ofauditing days and of auditors required to perform appropriate and efficient accounting auditing as thebasis for calculation.
(4) Compensated non-auditing services by the Accounting Auditor to the Company
The Company entrusted the Accounting Auditor with the preparation of comfort letters and otherservices, which are services other than those stipulated in Article 2, paragraph (1) of the Certified Public
Accountants Act (non-auditing services), and paid compensation thereto.
(5) Policies on decisions of dismissal or non-reappointment of Accounting Auditor
If the Accounting Auditor falls under the conditions prescribed in each item of Article 340, paragraph (1)of the Companies Act, the Audit and Supervisory Committee shall deliberate the dismissal of the
Accounting Auditor. If the Audit and Supervisory Committee determines that the Accounting Auditor
must be promptly removed, the Audit and Supervisory Committee shall dismiss the Accounting Auditor
based on the agreement of all members of the Audit and Supervisory Committee.
In addition to the above, if it is determined that the Accounting Auditor should be changed, such as incases of obstacles hindering their ability to execute the duties of Accounting Auditor, the Audit andSupervisory Committee shall decide the details of the proposal relating to dismissal or nonreappointment of the Accounting Auditor that will be submitted to the General Meeting of Shareholders.

-4-System for ensuring appropriate business operation and overview of its operating status
The Company has resolved to establish a system for ensuring appropriate business operation of thecompany (internal control system), as follows, in accordance with Article 399-13, paragraph (1), (b) and (c)of the Companies Act, as well as relevant laws and regulations. The Company became a company with anaudit and supervisory committee on April 1, 2021 due to the merger with Hitachi Capital Corporation, andpassed a resolution regarding a system for ensuring appropriate business operation. At the Board of
Directors meeting held on December 22, 2021, the Company resolved the partial amendments (mainly
underlined parts) to the system. An overview of the partial amendments resolved on December 22, 2021 is
as follows:(i) The revised [Internal Audit System] has made clear that the internal audit results are reported not only
to Representative Director but also to the Audit and Supervisory Committee.
(ii) The [Risk Management System] has made clear that the Board of Directors supervises appropriate
implementation of risk evaluations and decisions, internal control of the entire Group, and operation of
the Risk Management System.
Going forward, the Company will review this system as needed due to environmental changes and aim tofurther improve and enhance it.
Hereinafter, “the Group” refers to the Company, its subsidiaries, and its affiliates. “Group Company” refers
to subsidiaries and affiliates of the Company.
Specific uses of the Internal Control System in the Group companies are adjusted and implemented
appropriately based on the business, scale, and importance of each Group company.
[System for Group Management](1) The Company shall establish the Mitsubishi HC Capital Group Code of Ethics and Code of Conduct inorder to share fundamental values and ethics to be embraced by all members of the Group and reflect
them in business.
(2) The Company shall establish the management method between the Company and the Group companies,
in order to ensure the propriety of the business activities of the Group companies, and establish internal
rules to improve the management efficiency and corporate value of the Group as a whole, through theGroup carrying out activities with a strong sense of solidarity.
(3) The Company shall receive reports, etc. from the Group companies and conduct management of theGroup in line with various internal rules established for the Group management, in adherence to theallocation of duties.
(4) The Company shall establish management and operational methods for internal controls pertaining to thefinancial reports of the Group, and shall effectively develop and operate the internal controls of theGroup as a whole, so that the Company’s financial reports will be prepared appropriately, in accordancewith the provisions of the Financial Instruments and Exchange Act, etc.
[System for Compliance with Laws and Regulations](1) The Company shall establish the Mitsubishi HC Capital Group Code of Ethics and Code of Conduct inorder to share fundamental values and ethics to be embraced by all members of the Group and reflect
them in business.
(2) The Company shall establish a system for ensuring that the officers and employees of the Group comply
with laws and regulations and the Articles of Incorporation, by establishing and disseminating various
internal rules and the Compliance Manual.
-5-(3) The Company shall establish the Compliance Committee, which deals with establishment, maintenance,
management, etc., of the Group’s compliance system, in addition to the Chief Compliance Officer (Headof Risk Management Division), who is responsible for the compliance of the Group, and the Legal &Compliance Department, which is tasked with enforcing compliance.
The Group Companies shall, if there are any legal risks, etc. intrinsic to the business activities of suchcompany, cooperate with the Company as necessary, and develop an appropriate compliance system.
(4) The Company shall formulate compliance programs (specific plans to ensure that the officers andemployees of the Group comply with laws and regulations, etc., including education for the Group’s
officers and employees) and monitor how the Group’s officers and employees are working on those
programs.
(5) The Company shall establish the Compliance Hotline System as an internal whistleblowing framework
under which the Group’s officers, employees, etc., can report to or seek consultations with the Company
regarding unfair practices and other conduct.
(6) The Group shall take a resolute stance against anti-social forces, which threaten the peace and stabilityof civil society, and work to prevent transactions with such forces.
(7) The Company shall be aware of the possibility that funds transacted through the Group may be used forvarious criminal activities and/or terrorism, and shall work to prevent money laundering.
[Information Disclosure System](1) The Group shall establish internal rules for appropriately disclosing information regarding decisions andoccurrences concerning the Group in a timely manner, in accordance with accounting standards andother relevant laws and regulations. The Group Companies shall cooperate with the Company asnecessary.
(2) The Company shall establish a Disclosure Committee for deliberating on the appropriateness of
information disclosures regarding the Group and the effectiveness of internal controls and procedures
related to information disclosures, among other matters.
[Internal Audit System](1) The Company shall establish internal rules to smoothly and effectively promote audit activities byclarifying procedures for planning, implementing, and reporting internal audits and providing
instructions for improvement within the Group.
(2) The Company shall establish the Internal Audit Department as a department in charge of internal audits.
The Internal Audit Department shall systematically implement internal audits related to the Group basedon an annual audit plan and report the audit results to the Representative Director and the Audit andSupervisory Committee. The Internal Audit Department shall also identify matters discovered andprovide guidance on improvement to the parties subject to audit of the Group. Effectiveness of the audit
shall be ensured through having the results of improvements reported to the General Manager of theInternal Audit Department of the Company after the audit, and having significant matters and guidanceon improvement reported to the Representative Director by the Internal Audit Department.
(3) The General Manager of the Internal Audit Department of the Company shall periodically build
collaborative relationships with the Audit and Supervisory Committee members of the Company,
Auditors and other relevant persons of the Group Companies, and the Accounting Auditor, such as byexchanging relevant information with them, and shall work to ensure the efficient implementation of theaudit.
-6-

[Risk Management System]<Company-level risk management>(1) The Company shall establish a company-level risk management system in line with the policy that takes
risks within the scope of control determined by the Executive Committee and the Board of Directors,
etc., after comprehensively grasping various risks in the Group and fully examining diverse risks
forecasted in new services. Company-level risk management shall aim to fulfill CSR for stakeholders
including customers, shareholders, employees and local communities by ensuring sound management
and contributing sustainable improvement of the corporate value.
(2) The Company shall plan to build a basis for the stable recording of returns that commensurate with risk,
for achievement of an appropriate capital structure, and appropriate allocation of resources, primarily byidentifying and recognizing, evaluating and measuring, controlling, monitoring, and reporting the risksof the Group and by implementing continuous comprehensive risk management.
(3) The Company shall establish individual risk management methods and their implementations, byclassifying significant risks into the following categories based on characteristic features of businesses
and services of the Group.
i)

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

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

of the Group, and establish a system, etc. that ensures continuous management of operations in generaland recovery of normal functions to fulfill social responsibility and minimize losses of the Group.
(2) The Company shall, in peacetime, clarify the departments responsible for events in crisis based on thecharacteristics of their business, prepare systems that deal with different levels of events in crisis, andestablish rules, etc. that enable activities to collect information and collaborate in crisis, and allow
business continuity and recovery. The Group Companies shall establish internal rules within eachcompany.
[Framework for Ensuring the Efficient Execution of Duties](1) The Company shall set management targets for the Group and draw up management plans to manage
business based on appropriate methods. The Group Companies shall conduct business management
based on appropriate methods, based on the Group’s management targets and management plans.
(2) The Company shall establish the Executive Committee, to which decisions, etc., regarding certain
matters are delegated by the Board of Directors to the President subject to deliberation at the Executive
Committee. The Executive Committee will hold discussions and make decisions on important matters,
including the business management of the Group, in addition to conducting preliminary considerationsof matters that are to be submitted to the Board of Directors to facilitate decision-making by the Board of
Directors. In addition, various committees shall be established as advisory bodies for the Executive
Committee.
(3) In order to efficiently conduct the execution of duties based on the decisions of the Board of Directors,
the Company shall build an employee rank framework, organizational structure, etc., in accordance with
the internal rules, and shall assign the execution of duties. The Group Companies shall provide
appropriate cooperation such as reports to and consultations with the Company on necessary matterspursuant to the internal rules.
[Other Matters Related to the Execution of Duties by Directors](Framework for ensuring that the execution of duties by Directors complies with laws, regulations, and the
Articles of Incorporation, framework for retention and management of information, and framework for reports
to the Company of matters related to the execution of duties by subsidiaries’ Directors)(1) The Company shall establish the Executive Committee to deliberate and decide on importantmanagement matters. The Audit and Supervisory Committee member(s) selected by the Audit andSupervisory Committee shall attend the meeting, confirm the details of the deliberation, and receive
reports.
(2) The Company shall clearly define the authority and responsibilities of the Board of Directors andDirectors regarding material decision-making matters including compliance management, as well as
matters decided at the discretion of the Board of Directors.
(3) The Board of Directors shall receive and confirm reports of material information related to the executionof duties by Executive Directors, and utilize an internal whistleblowing system.
(4) The Company shall retain and manage material documents and other data related to the execution ofduties by Directors pursuant to the provisions of the internal rules.
(5) The Company shall request reports of matters related to the execution of duties by Directors of theGroup Companies pursuant to the provisions of the internal rules.

-8-[Framework Concerning Employees Who Assist with Duties of the Audit and Supervisory Committee](1) The Company shall establish an Audit and Supervisory Committee Office to assist with duties of the Audit
and Supervisory Committee.
(2) The Company shall allocate employees to assist with duties of the Audit and Supervisory Committee to the
Audit and Supervisory Committee Office.
(3) The above employees shall not be subject to the directions and instructions of Directors excluding Directors
who are Audit and Supervisory Committee members.
(4) When implementing personnel transfers or disciplinary action for the above employees, prior consent of the
Audit and Supervisory Committee shall be obtained. When determining performance evaluation,compensation, etc., related to those employees, the prior consent of the Audit and Supervisory Committee
member(s) selected by the Audit and Supervisory Committee shall be obtained.
(5) Executive Directors shall cooperate in developing working environments and other relevant conditions sothat the above employees can assist with duties of the Audit and Supervisory Committee smoothly.
[Framework for Reporting to the Audit and Supervisory Committee](1) Directors, Executive Officers and other relevant executives, and employees must repost the following
matters without delay to the Audit and Supervisory Committee or the Audit and Supervisory Committee
member(s) selected by the Audit and Supervisory Committee:
1. when they discover any facts that are likely to cause significant damage (including loss of credit) to theCompany or when significant damage occurs, they shall immediately report that effect (including
matters concerning material lawsuits);
2. the status of whistleblowing through an internal whistleblowing system developed by Directors;
3. the status of management concerning elimination of transactions, and blocking of relationships, with
anti-social forces; and4. other matters that the Audit and Supervisory Committee requests to be reported.
(2) Directors, Auditors, and employees of subsidiaries or persons who receive reports from any of those
persons must report to the Audit and Supervisory Committee or the Audit and Supervisory Committee
member(s) selected by the Audit and Supervisory Committee without delay, if any of the matters set forthin the preceding paragraph occurs.
(3) The Audit and Supervisory Committee member(s) selected by the Audit and Supervisory Committee shallcooperate closely with the Auditors of Group Companies and other relevant persons, through means such as
exchanging information necessary for the execution of duties.
(4) If required by the Audit and Supervisory Committee, Directors, Executive Officers and other relevant
executives and employees must attend the Audit and Supervisory Committee meeting and explain matterswith necessary materials. In addition, they have a similar duty to explain if required by the Audit andSupervisory Committee member(s) selected by the Audit and Supervisory Committee.
(5) The Company shall not treat the persons who have made the reports under (1) to the Audit and Supervisory
Committee or any Audit and Supervisory Committee members disadvantageously, just because they madethose reports.
(6) The Company shall not treat the persons who have made reports just because they made those reports using
an internal whistleblowing system disadvantageously, and the Company shall specify this in the internal
rules and fully inform all employees through internal training and on other occasions.

-9-[Matters Concerning Policies Regarding the Expenses or Liabilities Arising from the Execution of Duties by
the Audit and Supervisory Committee Members](1) The Audit and Supervisory Committee Office shall promptly process expenses or liabilities when each
Audit and Supervisory Committee member makes requests with respect to the prepayment of expenses andother payments, except in cases where such requested expenses or liabilities are deemed to be clearly
unnecessary for the execution of the duties of an Audit and Supervisory Committee member.
[Other Frameworks for Ensuring Effective Audits by the Company’s Audit and Supervisory Committee
Members](1) The Audit and Supervisory Committee should create an opportunity to conduct interviews regularly with
Directors, Executive Officers and other relevant executives, and employees, concerning the business, andconduct a regular meeting to exchange opinions with the President and the Accounting Auditor.
(2) The Audit and Supervisory Committee may request opinions from lawyers, the Accounting Auditor, etc. asnecessary, for cases that require expertise.
(3) The Audit and Supervisory Committee should receive in advance an audit plan from the Accounting
Auditor, and regularly receive an audit implementation report; in addition, the Audit and Supervisory
Committee should conduct an interview as necessary, regarding the implementation of audit.
(4) The Audit and Supervisory Committee should make efforts to enhance the effectiveness of the audit, bycooperating with the Internal Audit Department and conducting an audit, regularly or in a timely manner, ofthe offices, etc. including the subsidiary, and by understanding the actual situation.
(5) The employee, who should assist the duties of an Audit and Supervisory Committee member selected by
the Audit and Supervisory Committee and the duties of the Audit and Supervisory Committee, may attend
the Executive Committee, committees and other important meetings and make necessary statements
thereat, and view important documents.
(6) An Audit and Supervisory Committee member selected by the Audit and Supervisory Committee should
request that the Company and its subsidiaries report on its business, or investigate the situation of the duties
and properties, and the Company and its subsidiaries should cooperate therewith.
(7) The personnel of the General Manager of the Internal Audit Department should be decided upon priorconsultation with the Full-time Audit and Supervisory Committee member selected by the Audit andSupervisory Committee.
(8) The Internal Audit Department should make a report to the Audit and Supervisory Committee regarding theinternal audit plan, internal audit result, and the amendment and abolition of the important rules related tointernal audit, and should respond to requests by the Audit and Supervisory Committee in relation to
information provision, investigation, and report.
(9) Directors, Executive Officers and other relevant executives, and employees should provide the necessary
cooperation for the execution of duties of the Audit and Supervisory Committee, based on the Audit andSupervisory Committee Regulations, standards for audit, etc. of the Audit and Supervisory Committee, andstandards for the Audit and Supervisory Committee to conduct an audit regarding an internal control
system.

- 10 -

(Overview of the operating status of the system for ensuring appropriate business operation)
An overview of the operating status for the 51st fiscal year (fiscal year ended March 31, 2022) of the systemfor ensuring appropriate business operation (internal control system) is as follows.
[System for Group Management](1) The Company has established and disclosed the Our Mission that embraces the goals of the Group, and the
Our Vision that leads to realizing the Our Mission. The Company has established and disclosed the
Mitsubishi HC Capital Group Code of Ethics and Code of Conduct in order to share fundamental values
and ethics to be embraced by all members of the Group and reflect them in business.
(2) The Company has established seven Sub-Committees (risk management, information disclosure,compliance, ALM, sustainability, IT/DX, and investment strategy) as consultative bodies under the
Executive Committee, and each of the Sub-Committees examine and report controlling matters to the
Executive Committee and, significant matters to the Board of Directors. In addition, the Company has
established internal rules for the management of the Group Companies and assigned their departments andoffices responsible for the internal rules. The Company receives timely reports from such departments andoffices and provides necessary advice and instruction.
(3) The Company has documented the content of financial reports of the Group based on the internal rules andevaluated such reports for effectiveness through periodical verifications.
[System for Compliance with Laws and Regulations](1) The Company has established and disclosed the “Mitsubishi HC Capital Group Code of Ethics and Code of
Conduct.” In addition, the Company has established different types of internal rules and the Compliance
Manuals and made them known well to the Group.
(2) The Company has assigned the Chief Compliance Officer (Head of Risk Management Division) as
Supervisor and installed the Legal & Compliance Department that will build compliance promotion
systems for the Group. The Legal & Compliance Department has formulated compliance programs to workfor compliance promotion through monitoring and holding training programs and served as theadministrative office to the Compliance Committee (that opened four meetings in the current businessyear), which is a consultative body under the Executive Committee, and reported legal compliance mattersto the Executive Committee and the Board of Directors.
(3) The Company has established the Compliance Hotline System as an internal whistleblowing frameworkthat allows employees to report to or seek consultations with the Company regarding unfair practices, etc.,
and periodically made the system known well to officers, etc. and firmly protect reporting or consulting
persons from disadvantageous treatment.
(4) The Company has formulated treatment rules and accordingly established internal rules and manuals of
how to prevent deals with anti-social forces and money-laundering and make officers and employeesfamiliar to those rules and manuals though holding internal trainings, etc.
[Information Disclosure System](1) The Company has established and disclosed the “Information Disclosure Policy” as the basic policy of theGroup’s information disclosure. In addition, the Company has formulated internal rules to make timely andappropriate disclosure and developed a system to receive timely report from the Group. The information
disclosure of the Group is reported to the Executive Committee after its appropriateness and procedural- 11 -

effectiveness is examined at the Information Disclosure Sub-Committee (which held four meetings in thecurrent business year).
[Internal Audit System](1) The Company has enacted internal rules to clarify procedures related to planning, implementing, andreporting internal audits and providing instructions for improvement within the Group and familiarizedthese internal rules in the Group.
(2) The Company has established the Internal Audit Department as a department responsible for internal audits.
The Internal Audit Department has formulated annual audit plans, systematically implemented internal
audits related to the Group, and reported the audit results to the Representative Director and the Audit andSupervisory Committee. In addition, results of improvement in findings in audits have been reported toGeneral Manager of the Internal Audit Department and audit effectiveness has been ensured throughPDCA.
(3) General Manager of the Internal Audit Department of the Company has exchanged relevant information ina periodical and timely manner with the Audit and Supervisory Committee members of the Company,
Auditors and other relevant persons of the Group Companies and the Accounting Auditor, and worked for
efficient implementation of audits.
[Risk Management System]<Company-level risk management>(1) The Company has established internal rules that stipulate matters concerning the Group’s basic policies forrisk management, risk management methods, operations, the system, etc. and familiarized such matters in
the Group.
(2) The Company has established the Risk Management Department that integrates the Group’s risk
management. The Risk Management Department has comprehensively grasped the Group’s risks,monitored its risk management operation statuses, worked as the administrative office for the Risk
Management Committee (holding four meetings in the current business year), which is a consultative bodyto the Executive Committee, and reported integrated risks and individual risk statuses to the Executive
Committee and the Board of Directors.
<Crisis management>(1) The Company has installed the Chief Crisis Management Officer (CCMO) who is responsible forsupervising the entire Group in building and operating the crisis management system. In addition, theCompany has specified crisis events subject to crisis management, established internal rules that clarify
basic thoughts, judging standards, and handlings of different levels of crises, familiarized those matters in
the Group, and developed a system that receives reports from the Group, to perform crisis management in aGroup-wide manner. Moreover, the Company has shaped the position of the countermeasure headquartersthat deals with crisis events, periodically held disaster control trainings, and worked for enhancing
effectiveness of the trainings by resolving problems identified through such trainings.
[Framework for Ensuring the Efficient Execution of Duties](1) The Company has established a smooth decision-making system, as a company with the Audit andSupervisory Committee, by delegating President to decide execution of significant operations subject todeliberation at the Board of Directors’ and the Executive Committee’s examinations.

- 12 -

(2) The Company holds, in principle, an Executive Committee meeting every week, and examines agendas
scheduled to be examined at Board of Directors’ meetings that are useful to the Board of Directors’decision-makings, besides consulting and deciding on significant matters including the Group’s business
management. Furthermore, the Company has established different types of sub-committees as consultative
bodies under the Executive Committee, and introduced a system that enables to report significant agendas,
among those examined at such sub-committees, to the Executive Committee and the Board of Directors, inorder to execute appropriate business management.
(3) The Company has established internal rules that stipulate an employee rank framework, organizational
structure, and allocation of business operations to perform efficient executions of duties, and performed
such execution of duties based on the allocation of business operations.
[Other Matters Related to the Execution of Duties by Directors](Framework for ensuring that the execution of duties by Directors complies with laws, regulations, and the
Articles of Incorporation, framework for retention and management of information, and framework for reports
to the Company of matters related to the execution of duties by subsidiaries’ Directors)(1) The Audit and Supervisory Committee members that are elected by the Audit and Supervisory Committee
have attended important meetings of the Executive Committee, etc. to confirm what are deliberated at suchmeetings.
(2) The Company has clarified the powers and responsibilities of the Board of Directors and Directors in theinternal rules and disseminated them in the Group, and the Board of Directors has received reports on
significant information related to the execution of duties in the Group.
(3) The Company shall retain and manage material documents and other data related to the execution of duties
by Directors pursuant to the provisions of the internal rules.
[Framework Concerning Employees Who Assist with Duties of the Audit and Supervisory Committee](1) The Company has installed the Audit and Supervisory Committee as the organization that effectively
performs the duties of the Committee and assigned dedicated employees. Personnel affairs, etc. of suchdedicated employees are subject to consent by the Audit and Supervisory Committee, reflecting theindependence of the Audit and Supervisory Committee.
[Framework for Reporting to the Audit and Supervisory Committee](1) The Company has stipulated in its internal control system the significant matters that shall be reported to
the Audit and Supervisory Committee or to its members elected by the Audit and Supervisory Committee
and familiarized said matters within the Group. Situations of finance, risk management and internal audits
in the Group, and situations of compliance including the operation of the internal whistleblowing system
are reported to the Audit and Supervisory Committee.
(2) The scheme of the internal whistleblowing system is made periodically familiarized to officers, etc. andreporting persons are firmly protected from disadvantageous treatment. In addition, the Company has
stipulated that the full-time Audit and Supervisory Committee members are one of the internal
whistleblowing system windows.
(3) For efficient auditing, the Audit and Supervisory Committee members who are elected by the Audit andSupervisory Committee periodically exchange information necessary for the execution of their duties withthe departments concerning internal control of the Company (Risk Management Department, Legal &- 13 -

Compliance Department, Treasury Department, Accounting Department, etc.) and Audit & Supervisory
Board Members, etc. of the Group companies.
[Matters Concerning Policies Regarding the Expenses or Liabilities Arising from the Execution of Duties by
the Audit and Supervisory Committee Members](1) The Company has stipulated in the audit standards of the Audit and Supervisory Committee that Audit andSupervisory Committee members may demand from the Company the expenses and/or liabilities arisingduring execution of their duties and the Company has paid accordingly.
[Other Frameworks for Ensuring Effective Audits by the Company’s Audit and Supervisory Committee
Members](1) The Audit and Supervisory Committee has made periodical exchanges of opinions with the President, theInternal Audit Department and the Accounting Auditor, respectively. The Committee has performed
periodical or timely collaborations with the Internal Audit Department and the Accounting Auditor, in
addition to receiving audit plans and results of audits from such bodies, and worked for improvement in theeffectiveness of audit by collecting information from, including investigation into, offices and subsidiaries,etc.
(2) The Audit and Supervisory Committee members that are elected by the Audit and Supervisory Committee
have attended significant meetings including the Executive Committee, etc. to make necessary remarks andview important documents.
(3) Personnel affairs of the General Manager of the Internal Audit Department shall be decided upon priorconsultation with the Full-time Audit and Supervisory Committee members selected by the Audit andSupervisory Committee.
(4) The audit standards of the Audit and Supervisory Committee has a stipulation that when the Audit andSupervisory Committee receives advice from outside experts including lawyers, it may demand the expensefrom the Company.

- 14 -

Consolidated statement of changes in equity(April 1, 2021 to March 31, 2022)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of
period as of April 1, 2021
Cumulative amounteffected from changes in
the accounting policies
Balance at beginning of thecurrent period reflectingchanges in the accounting
policies

33,196

Capitalsurplus167,280

Retainedearnings
571,459

Total
shareholders’equityTreasuryshares(1,528)(3,123)33,196167,280

568,335

770,407(3,123)(1,528)767,283(18,022)

363,457

Changes during fiscal year
Increase due to themerger381,480

Dividends from surplus
Net income attributableto owners of the parent
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other than shareholders’equityTotal changes during fiscal
year
Balance at end of period asof March 31, 2022

(29,693)(29,693)

99,401

99,401

(113)

(113)

(3)

(3)

-

381,306

69,707(17,840)

433,172

33,196

548,586

638,043(19,369)

1,200,456- 15 -

Accumulated other comprehensive income
Valuationdifference Deferredongains oravailable- losses on
for-salehedgessecurities
Balance at beginning of
period as of April 1, 2021
Cumulative amounteffected from changes in
the accounting policies
Balance at beginning of thecurrent period reflectingchanges in the accounting
policies

30,67830,678(15,519)(15,519)

Foreign
Remeasucurrency
rementstranslaof definedtion
benefitadjustplans
ment
22,27822,278

(925)

(925)

Total
NonaccumuStockcontrolllatedacquisition
ing
other
rightsinterests
comprehensive
income36,51236,512

1,552

1,552

Total equity

12,760821,233(203)(3,327)

12,557

817,906

Changes during fiscal year
Increase due to themerger363,457

Dividends from surplus(29,693)

Net income attributableto owners of the parent
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other than shareholders’equityTotal changes during fiscal
year
Balance at end of period asof March 31, 2022

99,401

(113)

(3)
123
(15,725)

16,97970,4971,049

72,800308

9,278

82,387(15,725)

16,97970,4971,049

72,800308

9,278

515,560

14,953

1,460

92,776

123

109,313

1,861

21,835

1,333,467- 16 -

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

Matters related to scope of consolidation(1) Number of consolidated subsidiaries: 266
The names of the major consolidated subsidiaries are listed in Business Report 1. (6) Statusof major subsidiaries.
Mitsubishi HC Capital UK PLC and other 53 companies are included in the scope of
consolidation due to the merger with Hitachi Capital Corporation. In addition, Japan
Infrastructure Initiative Company Limited, which was an equity method affiliated company,
is removed from the scope of equity method application but included in the scope of
consolidation.
The scope of consolidation for the current fiscal year includes Mitsubishi HC Finance
America LLC and six other companies due to their establishments, Shirakanezaka Solar
Power, Inc. and two other companies due to their increased significance, and CAI
International, Inc. and 28 other companies due to the acquisition of equity, etc. in theircompanies.
Regional Healthcare Investment Limited Partnership and 13 other companies due to thecompletion of liquidation and GK KAIHATSU 8 and one other company due to the partial
assignment of their subscriber’s share on the capital are excluded from the scope of
consolidation.
(2) Names of major non-consolidated subsidiaries
There are no major non-consolidated subsidiaries which should be disclosed.
Reason for exclusion from scope of consolidation
Of the non-consolidated subsidiaries, 137 companies are proprietors conducting leasing businesses
primarily through silent partnerships. Their assets, liabilities, and gains/losses are not attributableto pertinent subsidiaries or have barely any transactions with the subsidiary. Therefore, they are
excluded from the scope of consolidation.
Of the non-consolidated subsidiaries, 64 companies are small businesses. Their total assets,revenues, net income or loss (amount corresponding to equity), retained earnings (amountcorresponding to equity), etc. do not significantly impact the consolidated balance sheet nor
consolidated statement of income. Therefore, they are excluded from the scope of consolidation.

2.

Matters related to the application of the equity method(1) Number of non-consolidated subsidiaries applying equity method: 1
There are no major non-consolidated subsidiaries which should be disclosed.
(2) Number of affiliates applying equity method: 73
Names of major equity method affiliates
Mitsubishi Electric Credit Corporation
Mitsubishi Auto Leasing Holdings Corporation
Chubu Electric Power & MHC Germany Transmission GmbH
- 17 -

Hitachi Auto Service Co., Ltd. and 11 other companies are included in equity method affiliatedcompanies due to the merger of Hitachi Capital Corporation. In addition, Japan Infrastructure
Initiative Company Limited, which was an equity method affiliated company, is removed from thescope of equity method application but included in the scope of consolidation.
Godo Kaisha RenetS and four other companies due to their establishments, Minokamo Biomass
Plant LLC due to the increased significance, and LOGI FLAG DEVELOPMENT Co., Ltd. and six
other companies due to the acquisition of equity, etc. are included in equity method affiliatedcompanies in the current fiscal year.
GK KAIHATSU 8 and one other company due to the partial assignments of their subscriber’s
share on the capital in the current fiscal year are excluded from consolidation but included in thescope of equity method affiliated companies.
Pool 40 LLC and one other company due to the completion of their liquidation and Kochi Solar
LLC and one other company due to the assignment of their subscriber’s share on the capital, etc.
are excluded from the scope of equity method application since the current fiscal year.
Mobility Mixx B. V. due to the Company’s additional acquisition of equity is removed from thescope of equity method application but included in the scope of consolidation since the current
fiscal year.
(3) Names of major companies, etc. among non-consolidated subsidiaries or affiliates not applying
equity method
There are no major non-consolidated subsidiaries or affiliates which should be disclosed.
Reasons not to apply equity method
Of the non-consolidated subsidiaries, 137 companies are proprietors conducting leasing businesses
primarily through silent partnerships. Their gains/losses are not attributable to pertinentsubsidiaries or have barely any transactions with the subsidiary. Therefore, they are excluded fromthe scope of equity method application.
Of the non-consolidated subsidiaries and the affiliates, 63 non-consolidated subsidiaries and 29
affiliates have insignificant impact on the consolidated balance sheet and consolidated statement ofincome from a perspective of net income or loss (amount corresponding to equity share), retained
earnings (amount corresponding to equity share), etc., even when excluded from equity method.
As they are also not important overall, they are excluded from the scope of equity method
application.
3.

Matters related to fiscal year of consolidated subsidiaries(1) Consolidated subsidiaries with balance sheet dates that differ from consolidated balance sheet date
April 30:3

May 31:

1June 30:

4July 31:2

August 31:

2

September 30:

3

October 31:

14

November 30:

4

December 31:

139- 18 -

January 31:

22

February 28 (or 29): 1(2) Consolidated subsidiaries with balance sheet dates of the ends of April, July, and October are
consolidated in financial statements based on provisional closings conducted as of the end ofJanuary.
Consolidated subsidiaries with balance sheet dates of the ends of May, August, and November are
consolidated in financial statements based on provisional closings conducted as of the end of
February.
Consolidated subsidiaries with balance sheet dates of the ends of June and September are
consolidated in financial statements based on provisional closings conducted as of the end of
December.
Further, for 12 of the consolidated subsidiaries with balance sheet dates of the end of December,provisional closings are calculated based on the results at the consolidated balance sheet date.
Other consolidated subsidiaries use the financial statements as of their respective balance sheet
dates.
Also, important transactions that occur between the consolidated balance sheet date and the abovebalance sheet dates will be adjusted as needed in consolidation.
4.

Matters related to accounting policies(1) Valuation standards and methods for important assets(i)Securities
Of available-for-sale securities, bonds and other securities held for earning financial revenues for
operating purposes (operational investment securities)- Other than shares that have no market value
Fair value method(Valuation differences are included directly in net assets and costs of securities sold aredetermined by the moving average method.)- Shares with no market value, etc.
Cost method based mainly on the moving average method
For investments in limited liability investment partnerships and similar entities (deemed to
be securities based on Article 2, paragraph (2) of the Financial Instruments and ExchangeAct), these are stated by the net amount corresponding to the Company’s equity sharebased on the most recent obtainable financial statements depending on the reporting dateestablished by the partnership agreement.
In addition, investments in partnerships, etc. invested by certain consolidated subsidiaries
outside Japan are recorded on the valuation of the market value that each of the invested
companies recognized and accordingly the net amounts equivalent to the equity interests
are included.
Available-for-sale securities not included above- Other than shares that have no market value
Fair value method(Valuation differences are included directly in net assets and costs of securities sold aredetermined by the moving average method.)- Shares with no market value, etc.
- 19 -

Cost method based on the moving average method
For investments in limited liability investment partnerships (deemed to be securities basedon Article 2, paragraph (2) of the Financial Instruments and Exchange Act), these arestated by the net amount corresponding to the Company’s equity share based on the mostrecent obtainable financial statements depending on the reporting date established by thepartnership agreement.
(ii) Derivatives
Fair value method(iii) Inventories
Cost method based on the specific-cost method(Balance sheet values are calculated using the method of writing down the book value based on
declining profitability)(2) Methods of depreciation and amortization of significant depreciable and amortizable assets(i)Leased assets
Depreciation is calculated with the lease period or estimated useful lives of assets considered as
the depreciation years, and using the straight-line method based on the standard that theestimated disposal value of a leased asset at the fulfillment of the period to be the residual value.

(ii) Other operating assets
Depreciation is calculated with the estimated useful lives of assets considered as the depreciation
years, and using the straight-line method.
(iii) Own-used assets
Depreciation is calculated by primarily adopting the declining balance method.
However, for buildings (excluding equipment attached to buildings) acquired on or after April 1,
2000, equipment attached to buildings and structures acquired on or after April 1, 2016, use rightassets of the consolidated subsidiaries outside Japan that adopt the International Financial
Reporting Standards or the U.S. accounting standards, and other certain own-used assets,
depreciation is calculated using the straight-line method.
(iv) Other intangible assets (excluding goodwill)
For software (used internally), amortization is calculated using the straight-line method based on
expected usable period (five years) in the Company.
For other amortizable assets, amortization is calculated using straight-line method based on
expected effective period.
(3) Accounting policy for significant allowances and provisions(i)

Allowance for doubtful accounts
To reserve for loss on doubtful accounts, estimated uncollectible amounts are booked based on
historical default rates for general receivables, or based on individual consideration ofcollectability for doubtful receivables and distressed receivables (receivables from legally or
substantially bankrupt obligors).
Also, the Company applies the “Treatment on the calculation of default estimates” established in“Treatment for Accounting and Auditing of Application of Accounting Standard for Financial- 20 -

Instruments in Lease Industry” (The Japanese Institute of Certified Public Accountants Industry
Committee Practical Guidance No. 19, November 14, 2000).
With respect to the amount of distressed receivables, the amount expected to be recoverable isdeducted from the receivable amount, and the remainder, which is treated as the estimatedamount of uncollectible receivables, is directly deducted from the receivable amount. This
amount is ¥9,441 million.
In addition, the consolidated subsidiaries adopting the International Financial ReportingStandards outside Japan post allowance for doubtful accounts after measuring their projectedcredit loss based on the loan loss provision ratio that is adjusted after past bad debt records andcurrent and future economic situations, etc. are counted.
(ii) Provision for bonuses
The Company and certain consolidated subsidiaries book the amount expected to be paid in thefollowing fiscal year that are attributable to the current fiscal year in order to issue payment forbonuses to employees.
(iii) Provision for bonuses for directors (and other officers)
The Company and certain consolidated subsidiaries book the amount expected to be paid in thefollowing fiscal year that are attributable to the current fiscal year in order to issue payment forbonuses to officers and executive officers.
(iv) Provision for retirement benefits for directors (and other officers)
Certain domestic consolidated subsidiaries book the full amount to be paid at the end of the
fiscal year based on the internal payment rules in order to issue payment for retirement benefits
of officers and executive officers.
(4) Method of accounting for retirement benefits(i)Method of attributing estimated retirement benefits for periods of service
In the calculation of retirement benefit liabilities, the method of attributing the estimated amountof retirement benefits to the period until the end of the current fiscal year is on the benefit
formula basis.

(ii) Amortization of actuarial gains and losses and past service cost
Past service cost is amortized using the straight-line method for the average remaining service
years of employees (6 to 21 years) at the time of occurrence.
Actuarial gains and losses are amortized with the pro-rata amount calculated using the straightline method for a certain number of years (10 to 20 years) within the scope of the averageremaining service years of employees when incurred in each fiscal year from the respective
following fiscal years.
(5) Accounting standards for important income and expenses(i)

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

(ii) Accounting standards of revenues related to operating lease transactions
The Company books lease fees corresponding to the elapsed period based on a standard of a
- 21 -

monthly lease fee to be received under the lease agreement for the duration of the leaseagreement period.
The Company and consolidated subsidiaries inside Japan book disposal amount and cost related
to disposal of leasing assets as revenues and cost of revenues.
(iii) Accounting policy for revenue from contracts with customers
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ
Statement No. 29, March 31, 2020) and other relevant ASBJ regulations and it has recognizedrevenue at the time the control of promised goods or services is transferred to the customer at theamount expected to be received upon exchange of said goods or services. The description ofmajor performance obligations of major businesses and the times recognizing revenues arestated as follows:(Sales from maintenance contracts)
Along with concluding lease contracts, maintenance and other services are offered to customers.
At the time when service is delivered, the performance obligation is judged as met and revenue
is recognized.
(Sales from selling merchandise, sales from disposal of lease properties)
Sales from selling merchandise and disposal of lease properties on maturities of lease contracts
by consolidated subsidiaries outside Japan adopting the International Financial ReportingStandards or the U.S. accounting standards are recognized as revenue when the delivery of said
properties to customers is completed and, therefore, the fulfillment obligation is considered asmet.
(Electricity sales)
Electricity sales to customers for the accounting year are calculated and recorded as revenue inaccordance with electricity supply volumes to the customers.
(6) Translation criteria of major assets or liabilities denominated in foreign currencies into Japanese yen
Monetary claims and liabilities denominated in foreign currencies are translated into Japanese yen
by using the spot exchange rates on the consolidated balance sheet date, and the difference arisingfrom such translation is stated as gain or loss. Monetary claims and liabilities denominated inforeign currencies subject to allocation treatment, such as currency swaps, etc., are translated into acurrency swap in Japanese yen.
Assets and liabilities of foreign consolidated subsidiaries are translated into Japanese yen by using
the spot exchange rates on their respective balance sheet dates. Income and expenses are translated
into Japanese yen using the average exchange rates during the period. The difference arising fromsuch translation is included in foreign currency translation adjustment and non-controlling interestsin the equity section.
(7) Important hedge accounting methods(i)

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

- 22 -

(ii) Hedge instruments and hedged items
Hedge instruments ... Interest rate swap instruments, foreign currency interest rate swap
instruments, forward exchange contracts, investment in equity for overseas
consolidated subsidiaries and overseas affiliates, and other liabilities
denominated in foreign currencies related to available-for-sale securities
denominated in foreign currencies
Hedged items ... Borrowings, bonds payable, accounts payable - trade, time deposits
denominated in foreign currencies, lease receivables, operating loans
receivables, commercial papers, current maturities of loans from thesecuritizations of the minimum future rentals on lease contracts, investment inequity for overseas consolidated subsidiaries and overseas affiliates, andavailable-for-sale securities denominated in foreign currencies(iii) Hedge policies and methods to evaluate hedge effectivenessIn order to hedge interest rate and foreign currency rate fluctuation risks, and maintain a stable
income, the Company performs derivative transactions based on internal rules.
Regarding interest rate fluctuation risks, lease fee receivables and installment receivables, etc.,
the primary operating assets of the Company, adopt a long-term fixed interest rate. On the other
hand, because there are variable interest rates within the financing through bank borrowings,
etc., the Company manages and performs comprehensive hedges of liabilities so that the
expected principal of derivative transactions that are hedging instruments is within the scope ofhedged liabilities based on the comprehensive management of assets and liabilities (ALM).
Furthermore, the Company hedges by interest rate swaps for the purpose of locking in profit on
individual projects.
Regarding foreign currency exchange rate fluctuation risks, the Company hedges throughcurrency swaps, forward exchange contracts, and liabilities denominated in foreign currencies
for individual assets and liabilities denominated in foreign currencies, investment in equity foroverseas consolidated subsidiaries and overseas affiliates, and available-for-sale securities
denominated in foreign currencies.
The Company evaluates the effectiveness of hedges by verifying whether the interest rate ofhedged items and the foreign currency exchange rate fluctuation risk are diminished. However,interest rate swaps performed by special treatment are not included in the evaluation ofeffectiveness.
In this connection, transaction status is reported quarterly to the President.
For derivative transactions of consolidated subsidiaries, the status of hedge with derivativetransactions and applicable claims and liabilities, contract participants, transaction amount,remaining period, and transaction market value are reported quarterly during the transaction
period to the Company, by applying internal rules of the Company mutatis mutandis.
(Hedge related items applying the “Practical Solution on the Treatment of Hedge Accounting for
Financial Instruments that Reference LIBOR”)
Of the above-mentioned hedge related items, as stipulated in the following practical solution,
special treatment is applied to all of the hedge related items that are covered in the scope of
application of “Practical Solution on the Treatment of Hedge Accounting for Financial
Instruments that Reference LIBOR” (ASBJ, Practical Solution No. 40, March 17, 2022).
Description of hedge related items to which said practical solution is applied is as follows:- 23 -

Method of hedge accounting ... Special treatment of deferred hedge processing or interest rate
swaps
Hedge instruments ... Interest rate swaps
Hedge items ... Borrowings
Type of hedge transactions ... What makes cash flow fixed(8) Method and period of amortization of goodwill
Goodwill is amortized in equal amounts over 20 years.
(9) Other significant matters that are the basis for preparing the consolidated financial statements
Accounting method of bonds and other securities held for earning financial revenues for
operating purposes (operational investment securities)
Those bonds and other securities are booked including ¥154,456 million in investment securitiesand ¥1,413 million in securities.
Further, these financial revenues (interest income, redemption difference, and partnershipgains/loss corresponding to equity share) is booked under revenues.
(10) Accounting standards for consolidated subsidiaries outside Japan
In the event that the financial statements of a consolidated subsidiary of the Company locating
outside Japan is prepared pursuant to the International Financial Reporting Standards or the U.S.
accounting standards, those financial statements are used to prepare consolidated settlement ofaccounts.
In the event that the financial statements of a consolidated subsidiary of the Company locating
outside Japan is prepared pursuant to the generally accepted accounting standards in its residing
country other than the International Financial Reporting Standards or the U.S. accounting
standards, said financial statements are prepared primarily pursuant to the International
Financial Reporting Standards.

- 24 -

<Notes on changes in accounting policies>
Application of Accounting Standard for Revenue Recognition, Etc.
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 31, 2020) and relevant ASBJ regulations from the beginning of the current fiscal year, and it hasrecognized revenue at the time the control of promised goods or services is transferred to the customer at theamount expected to be received upon exchange of said goods or services.
The application of the Accounting Standard for Revenue Recognition and relevant ASBJ regulations issubject to the transitional treatment provided for in the proviso to paragraph (84) of the Accounting Standard
for Revenue Recognition. Accordingly, revenues and cost of revenues for the current consolidated
accounting year decreased by ¥9,400 million respectively. However, the impact on net income before
income taxes is minor. Furthermore, the impact on the beginning retained earnings balance in the
consolidated statement of changes in equity is minor.
Application of Accounting Standard for Market Value Calculation, Etc.
“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019), etc. has been
applied from the beginning of the current fiscal year. The Company has accordingly decided to apply the
new accounting policies stated in the Accounting Standard for Fair Value Measurement, etc. over futurefiscal years in accordance with the transitional treatment provided for in paragraph (19) of the AccountingStandard for Fair Value Measurement and in paragraph (44-2) of the Accounting Standard for Financial
Instruments (ASBJ Statement No.10, July 4, 2019). The new application has no impact on the consolidated
financial statements. In addition, in “Notes on financial instruments,” the Company has decided to makenotes on items, etc. related to breakdown, etc. by market values of financial instruments.
Changes in Accounting Policies due to the Merger of Hitachi Capital Corporation
The Company merged with Hitachi Capital Corporation on the merger conclusion day of April 1, 2021.
Accordingly, from the current fiscal year, the Company and certain consolidated subsidiaries of theCompany have changed accounting policies on the items stated below.
In this connection, retrospective application of changes in accounting policies is adopted and cumulative
effect is reflected on the book value of net assets of the beginning of the current fiscal year.
<Method for How to Post Re-leasing Revenues in Lease Transactions>
In the past, the Company booked revenues from re-lease charges on the beginning day of re-lease charges(normally, for one year) but changed to monthly charges by prorating one-year charges onto monthly
charges for the re-leasing periods.
After the merger, outstanding assets of re-leasing contracts have increased; many of the typical re-leasing
contracts have received re-leasing charges in a lump at the beginning of the re-leasing contracts; when suchcontracts are cancelled, many of them do not need to refund for the unexpired period; accordingly, theCompany has posted re-leasing charges as revenues in a lump at the beginning of re-leasing contracts.
However, for re-leasing contracts that are transactions of asset leases, the Company judges that the change
into the method for prorating re-leasing charges onto the remaining months more appropriately reflects
revenues from re-leasing contracts into consolidated financial statements.
Following the change, the beginning retained earnings balance decreased by ¥6,926 million in the
consolidated statement of changes in equity to which retrospective application of the changes was applied.

- 25 -

<Method for Posting Lease Transactions as Finance>
In the past, the Company processed certain lease contracts as virtually financial transactions based on theirtransaction form, processed such contracts as operating loans receivables in the consolidated balance sheet
and posted amount equivalent to interest receivables as lease sales in the consolidated statement of income.
However, to meet the contract form, the Company has changed the processing of those items to posting aslease loans receivables and investments in leases in the consolidated balance sheet, and lease sales and lease
costs in the consolidated statement of income.
The Company so far posted and presented lease transactions as virtually financial transactions by posting
lease properties as collateral based on the intent of the lease parties and the content of the lease properties,
etc. in accordance with the processing of loans receivables. However, after the end of lease transactions,
returns of the lease properties to the Company have been on the increase, indicating more obvious nature offinance lease. Furthermore, after the merger, outstanding amount of assets from the same kind of leasetransactions has increased, which is also an additional reason for the change.
Following the change, the beginning retained earnings balance increased by ¥1,732 million in the
consolidated statement of changes in equity to which retrospective application of the changes was applied.
<Method for Posting Deferred Assets (Bond Issuance Cost)>
The Company has changed the processing of bond issuance costs into interest rule, namely to the method foramortizing such costs over the period of redemption, unlike in the past where the Company processed bondissuance costs as full expenses at the time of their issuance for the Company and its subsidiaries in Japan.
This change has been made because bond issuance costs are fundraising costs like bond interest payables;
the international accounting standard for posting expenses stipulates that cost amortization should follow
interest rule; bond issuance costs for the subsidiaries of the Company outside Japan have been posted ininterest rule. The change will more appropriately reflect the Group’s fundraising activities into theconsolidated financial statements.
Following the change, the beginning retained earnings balance increased by ¥2,070 million in the
consolidated statement of changes in equity to which retrospective application of the changes was applied.

- 26 -

<Notes on accounting estimates>(Amounts of posting assets and liabilities underwritten following the business combinations)
The Company had concluded business integration with Hitachi Capital Corporation on April 1, 2021.
Following the business integration, the amounts of posting the assets and liabilities underwritten on the
day of the business combination reflect distributed acquisition costs based on the market value on the dayof the business combination. The Company used valuation models according to the characteristics of thebusiness and calculated market values based on future cash flows to be generated from assets andliabilities, discount rates, and estimated replacement costs.
The amounts of the assets accepted and the liabilities underwritten on the day of the business combination
are as stated in <Other notes>, Notes on business combinations in the notes on consolidated financial
statements, and the amounts of major assets and liabilities and the valuation models are as follows:
Amount posted (Millionsof yen)Major valuation model

1,510,238

Discounted cash flow method

Operating loans receivables

782,794

Discounted cash flow method

Leased assets (property, plant and equipment)

536,791

Replacement costs method

83,324

Replacement costs method

25,494

Discounted cash flow method

996,245

Discounted cash flow method

1,065,564

Discounted cash flow method

Lease receivables and investments in leases

Other operating assets (property, plant andequipment)
Intangible assets (valuation amounts of power supply
and reception contracts in electricity selling business)
Bonds (including those redeemable within one year)
Long-term borrowings (including current portion of
long-term borrowings)

Impact of COVID-19
The global spread of COVID-19 impacted the business activities of the Group. The accounting estimatesin the current fiscal year take into consideration the future impact of COVID-19 on businesses.
Impairment of leased assets
If there are signs of impairment for leased assets, the Company determines whether to recognize
impairment loss. If impairment loss is recognized, the Company depreciates the book value of the leased
asset to the recoverable value and books the depreciation amount as an impairment loss.
Future cash flow used in the recoverable value is calculated by an estimate based on future lease fees,
lease period, and value remaining upon fulfillment. The Company determines this estimate to be rational.
However, if there are changes to the conditions precedent or the business environment, there may besignificant impact on the consolidated financial statements from the next fiscal year on.
For the aircraft held by JSA International Holdings, L.P. group, which leases aircraft in the U.S.
(¥926,454 million in leased assets at the end of the current fiscal year), the Company regularly confirms
the future cash flow and determines whether to recognize impairment losses according to the U.S.
accounting standards. In this determination, the Company compared book value and future cash flow
before discount. For the assets whose future cash flow before discount is less than the book value, theCompany booked the amount by which the book value exceeds the fair value as an impairment loss.
Future cash flow comprises current lease fees, future lease fees, value remaining upon fulfillment,
disposal costs, lease period, off-lease period, and renewal period. Future lease fees and the value
remaining upon fulfillment are determined by an appraisal company. Disposal cost, lease period, off-lease
period, and renewal period are calculated by estimating them based on past results, etc.
- 27 -

The Company booked ¥2,673 million in impairment losses for aircraft in cost of revenues in the
consolidated statement of income for the current fiscal year.
Valuation of goodwill
If there are signs of impairment for goodwill, the Company determines whether to recognize impairment
loss. If impairment loss is recognized, the Company depreciates the book value of goodwill to therecoverable value and books the depreciation amount as an impairment loss.
Future cash flow across remaining amortization period of goodwill used in the recoverable value iscalculated by an estimate based on the business plan, etc. prepared by considering the past businessresults and future business environment of the relevant company. The Company determines this estimate
to be rational. However, if there are changes to the conditions precedent or the business environment,
there may be significant impact on the consolidated financial statements from the next fiscal year on.
At the end of the current fiscal year, the Company booked ¥90,326 million as goodwill.
Allowance for doubtful accounts
Estimated uncollectible amounts are booked as allowance for doubtful accounts based on historicaldefault rates for normal receivables, as well as considering the collectability of highly doubtfulreceivables and distressed receivables (receivables from legally or substantially bankrupt obligors). The
estimated unrecoverable amount is calculated based on the financial status of the business partners andthe estimated recoverable value of collateral.
In addition, based on the projected credit loss model, the consolidated subsidiaries adopting theInternational Financial Reporting Standards located in outside Japan post allowance for doubtful accounts
after measuring their projected credit loss based on the loan loss provision ratio that is adjusted after past
bad debt records and current and future economic situations, etc. are counted.
The Company determines this estimate to be rational. However, if there are changes to the conditions
precedent or the business environment, there may be significant impact on the consolidated financial
statements from the next fiscal year on.
At the end of the current fiscal year, the Company booked ¥99,448 million as allowance for doubtful
accounts.

- 28 -

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

18,751
10,344539,490
144,83110
11,08822,307
943,31296,6282,725
35,4105,130
1,830,031

Cash and deposits
Installment receivables
Lease receivables and investments in leases
Operating loans receivables
Lease and other receivables
Merchandise
Other current assets
Leased assets
Other operating assets
Other intangible assets
Investment securities
Operating lease contract receivables
Total(2) Liabilities corresponding to assets pledged as collateral(Millions of yen)
Short-term borrowings
202
Long-term borrowings (including current portion of long746,611
term borrowings)
Bonds payable
11,009Current maturities of loans from the securitizations of the602,807
minimum future rentals on lease contracts (including longterm)
Other non-current liabilities
1,485
Total
1,362,115
Note: Of the assets pledged as collateral, ¥9,365 million in operating loans receivables,and ¥14,181 million in investment securities have revolving pledge and mortgages
as the collateral held by the investees for their borrowings from financial
institutions.

3. Total depreciation of property, plant and equipment(Millions of yen)

832,153
30,811
9,975
872,940

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

- 29 -

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

36,350Operating guarantees amount(2) Guarantee obligations, etc. for bank borrowings (including commitment to guarantee)(Millions of yen)

164
26
191
36,542MHC Capital (TWN) Ltd.
Other
Subtotal
Total

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

10,739–5,594

Receivables from contracts with customers (Note 1)
Contract assets
Contract liabilities (Note 2)

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

<Notes on consolidated statement of income>
1. Displayed figures are rounded down to the nearest million yen.
2. Impairment loss
The following assets are booked as impairment loss.
Use
Leased assets
Leased assets

Type
Transportation equipment (aircraft)
Transportation equipment (aircraft
engines)

Impairment loss (Millions of
yen)

2,673
876

For certain consolidated subsidiaries of the Company, the book value of leased assets that declined in
profitability due to lower future cash flow expected to occur was depreciated to the recoverable value
and the depreciation amount was booked as an impairment loss.
The recoverable values of said assets are calculated mainly based on their utility value and the future
cash flow is discounted mainly by 3.7%.

- 30 -

<Notes on consolidated statement of changes in equity>
1. Displayed figures are rounded down to the nearest million yen.
2. Matters related to type and total number of issued shares(Thousands of shares)
Number of shares
Number of shares atdecreased during
end of current fiscal
current fiscal year
year

Number of shares at
beginning ofcurrent fiscal year

Number of shares
increased during
current fiscal year

Common shares

895,834

571,078–

1,466,912

Total

895,834

571,078–

1,466,912

Issued shares

Note: An increase of 571,078 thousand in the number of shares issued and outstanding is attributed to the merger with
Hitachi Capital Corporation concluded on April 1, 2021 (merger ratio is 1:5.1).

3. Matters related to dividends(1) Dividend payment amount(i) The following was resolved at the Board of Directors meeting held on May 17, 2021.
- Matters related to common share dividends¥11,366 million¥12.75(a) Total amount of dividends(b) Dividend amount per share(c) Record date(d) Effective date

March 31, 2021
June 11, 2021(ii) The following was resolved at the Board of Directors meeting held on November 12, 2021.
- Matters related to common share dividends¥18,667 million¥13.00(a) Total amount of dividends(b) Dividend amount per share(c) Record date(d) Effective date

September 30, 2021
December 10, 2021

(2) Of the dividends whose record date is within the current period, those whose effective date is in thenext period
The following is scheduled to be resolved at the Board of Directors meeting held on May 24, 2022.
- Matters related to common share dividends¥21,542 million(a) Total amount of dividends(b) Source of dividends(c) Dividend amount per share(d) Record date(e) Effective date

Retained earnings¥15.00March 31, 2022
June 13, 2022

- 31 -

4. Matters related to stock acquisition rights at end of current fiscal year
Date of resolution
by Board of
Directors
September 29, 2010
September 29, 2011
September 27, 2012
September 26, 2013
September 25, 2014
September 29, 2015
September 29, 2016
September 27, 2017
June 28, 2018
June 25, 2019
June 24, 2020
June 25, 2021

Type of shares to bedelivered

Number of shares to bedeliveredCommon shares
Common shares
Common shares
Common shares
Common shares
Common shares
Common shares
Common shares
Common shares
Common shares
Common shares
Common shares

52,10054,200154,600
152,200
192,300
228,400
340,000
414,100
383,600
479,700
496,300
850,300- 32 -

Number of outstanding
stock acquisition rights

521
542
1,546
1,522
1,923
2,284
3,400
4,141
3,836
4,797
4,963
8,503

<Notes on financial instruments>
1. Matters related to the status of financial instruments(1) Policies and initiatives for financial instruments
The Group mainly operates businesses of leasing, installments, and financial transactions.
In order to operate these businesses, the Group uses direct financing such as the issuance of bonds
and commercial papers and securitization of receivables, as well as indirect financing such as bankborrowings.
The Group conducts comprehensive management of assets and liabilities (ALM) in order to properly
manage and operate interest rate fluctuation risks that occur by the mismatch of interest rate formats
and contract periods for asset management and financing.
Also, derivative transactions are used to hedge interest rate and currency rate fluctuations risks. The
Group does not conduct such transactions for investment or short-term sales gains.
(2) Details and risks of financial instruments
The financial assets held by the Group are mainly receivables related to lease, installment, andfinancial transactions. There are credit risks stemming from non-payment of lease fees, etc. due tobankruptcy of the business partner.
Available-for-sale securities and investment securities are primarily shares, bonds, and investmentsin partnerships. The Company holds them for operating purposes for earning financial revenues orbusiness promotion. Each security bears a credit risk of the issuer, interest rate fluctuation risk, andmarket value fluctuation risk.
Borrowings, bonds payable, and commercial papers, etc., bear liquidity risks in which the Groupmay be unable to secure payment on the payment date in cases such as an inability to liquidate thesecurities in the market under certain conditions. Also, payment obligations with variable interest
rates bear interest rate fluctuation risks.
The main capital operation of the Group is lease, installment, and finance transactions. Certain
receivables related to lease fee receivables, installment receivables, and financing transactions isbased on fixed interest rate. On the other hand, some financing with variable interest rates bears
interest rate fluctuation risks. The Company uses interest rate related derivative transactions tocomprehensively hedge interest rate fluctuations risks and secure stable profit by guaranteeing profit
from individual sales projects. In order to hedge currency exchange rate fluctuation risks forindividual assets and liabilities denominated in foreign currencies, the Company hedges by currencyrelated derivative transactions and liabilities denominated in foreign currencies.
The Group applies hedge accounting related to derivative transactions, etc. Details are included in<Notes to basis of preparing consolidated financial statements> 4. Matters related to accounting
policies (7) Important hedge accounting methods.
The derivative transactions of the Group bear market risks and credit risks. The derivativetransactions of the Group play the role of reducing market risks of the entire Group because theymainly reduce interest rate and currency rate fluctuations risks of hedged assets and liabilities.
(3) Risk management System related to financial instruments(i) Credit risk management
The Group conducts credit management of each business partner group through individual credit
checks that are based on overall strategy, status of capital, and credit rating portfolio, incompliance with the Credit Risk Management Rules. Credit management is conducted through the- 33 -

sales department and credit department, which submit a proposal for deliberation and report to the
Risk Management Committee, Executive Committee, and Board of Directors regularly. Also, theinternal audit department verifies and audits management status.
(ii) Market risk management
The Group manages market risks, primarily interest rate fluctuation risk, based on the rules formarket risk management.
In order to properly manage and operate interest rate fluctuation risks, the Group regularly
monitors the status of mismatching in interest rate formats and contract periods for asset
management and financing, as well as always pays close attention to interest rate situations.
Regarding the status of interest rate fluctuation risks, the Company holds quarterly meetings of the
ALM Committee, comprising officers and department heads of related departments. This
committee analyzes market conditions and portfolios of assets and liabilities, and deliberates thecurrent risk management policy. In addition, the status of interest rate fluctuation risks is reported
to the Risk Management Committee, which is held quarterly.
(iii) Exchange rate fluctuation risk management
The Company hedges exchange rate fluctuation risk by using derivative transactions related tocurrencies and procuring liabilities denominated in foreign currencies corresponding to assets
denominated in foreign currencies. The status of exchange rate fluctuation risk is reported to the
Risk Management Committee.
(iv) Price fluctuation risk management
Regarding price fluctuation risks of securities and investment securities, securities with market
value and investment securities are reported to the Risk Management Committee. Furthermore,because most shares are held for the purpose of transaction promotion, the Company monitors thefinancial status of the business partner, confirms the status of the transaction, and verifies from acapital cost perspective to determine whether or not to continue the holding.
(v) Liquidity risk management related to financing
The Group monitors the capital management status of the entire Group and adjusts the long- toshort-term procurement balance. The Group also strives to secure capital liquidity by acquiring
commitment lines from multiple financial institutions and promoting diversification of financing
avenues. Regarding management of liquidity risks related to financing, the Company monitors theprobability of risks emerging in the financing environment based on the Liquidity Risk
Management Rules of the Company, and reports the status of liquidity risks monthly to thepertinent officers. Pertinent officers determine the stage of the liquidity risks and the results of thisdetermination are reported to the ALM Committee and Risk Management Committee. Also, theCompany establishes contingency plans for each stage and has constructed a system to execute theappropriate plan when the unexpected event occurs.
(vi) Total derivative transactions
Based on internal rules, use purpose and approval authority have been set for derivativetransactions. The use purpose of derivative transactions is to hedge against interest rate andcurrency exchange rate fluctuation risks. The Treasury Department implements them on individualtransactions of the Company. Regarding interest rate fluctuation risks, the Company
comprehensively manages assets and liabilities through ALM and manages currency exchange rate
fluctuation risks on an individual basis. The status of derivative transactions is reported quarterly
to the President. The Company also manages credit risk due to defaults by business partners by- 34 -

establishing credit limits based on the credit and transaction status of each business partner.
(4) Supplementary explanation about matters related to market value, etc. of financial instruments
The market value of financial instruments is determined as the value based on market prices or thevalue reasonably calculated when no market price is available. Because certain assumptions are
adopted to calculate the amount, the price may vary depending on different assumptions.

- 35 -

2. Matters related to details, etc. by market value level of financial instruments
Carrying amount, market value, and differences recorded in the consolidated balance sheet are as
follows: Besides, pursuant to paragraph (5) of the “Implementation Guidance on Disclosures about Fair
Value of Financial Instruments” (ASBJ Guidance No. 19, the “Fair Value Disclosure Implementation
Guidance”), shares with no market value, etc. are not included in the following table. Besides,
investment trust where transitional transfers were applied pursuant to paragraph (26) of the“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance
No.31, the “Fair Value Measurement Implementation Guidance”) and investment in partnerships, etc.
where the net amount equivalent to the equity interests in the consolidated balance sheet were recordedwith transitional transfers applied pursuant to paragraph (27) of the Fair Value Measurement
Implementation Guidance are also not booked in the following table.
The market values of financial instruments are categorized into the following three levels based on their
input observability and importance.
Level 1 market value: Of the inputs related to observable market value calculation, those calculated
based on the market prices of assets or liabilities that are objects to calculatemarket values in a brisk exchange market
Level 2 market value: Market value, other than level 1 market values, where directly or indirectly
observable inputs are used to calculate market values
Level 3 market values: Market values calculated by using important but not observable inputs
In the cases where multiple inputs having important impact on market value calculation are used, of
the inputs having a respective level, the input having the lowest level of priority order is used tocategorize market values.
(1) Financial instruments booking market values in the consolidated balance sheet(Millions of yen)
Market value
Level 2
Level 3Category

Level 1Total
(1) Securities and investment securities
Available-for-sale securities (*1)
Shares26,233
16,19442,428－Government bonds, municipal
2,604
2,604
－
－
bonds, etc.
Bonds payable
19,81919,819
－
－
Other
2,331
2,331
－
－
(2) Derivative transactions (*2, *3)
Currencies related(44,313)(44,313)－－Interests related
4,592
4,592
－
－
Total assets
28,838(19,902)
18,526
27,462(*1) Pursuant to paragraph (26) of the Fair Value Measurement Implementation Guidance, investment trust with transitional
treatment is not included in the above table. The amount of said investment trust in the consolidated balance sheet books¥5,229 million in investment in securities.
(*2) Net receivables and liabilities occurring by derivative transactions are presented by net amount. Amounts in parentheses
show that those are net liabilities.
(*3) Of the derivative transactions, the amount of the transactions adopting hedge accounting in the consolidated balance
sheet records ¥(28,883) million. Said hedges are subject to the Practical Solution on the Treatment of Hedge Accounting
for Financial Instruments that Reference LIBOR (ASBJ Practical Solution No. 40, March 17, 2022).

- 36 -

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

Category
Level 1

Level 2

Level 3Total

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

Carrying
amountDifference

244,032(1,268)––

251,647

251,647(2) Lease receivables
and investments inleases (*3)
Allowance for
doubtful accounts(*2)

242,7638,884

3,181,123(8,304)–75,9483,231,741

3,307,689(3) Operating loans
receivables
Allowance for
doubtful accounts(*2)

3,172,818

134,871

1,662,226(9,396)––

1,670,626

1,670,626(4) Other operatingloans receivables
Allowance for
doubtful accounts(*2)

1,652,829

17,797

183,749
(580)
–

211

183,737(5) Distressed
receivables
Allowance for
doubtful accounts(*2)

183,948

183,168779

108,188(76,769)––
31,41931,41931,419–Total assets–
76,1595,369,172
5,445,331
5,282,999
162,332(6) Bonds payable–
2,236,181–
2,236,181
2,263,891(27,710)(7) Long-term–
3,877,899–
3,877,899
3,923,672(45,773)borrowings(8) Current maturities
of loans from thesecuritizations of–609,674–
609,674
604,493
5,180
the minimum
future rentals on
lease contracts
Total liabilities–
6,723,754–
6,723,754
6,792,057(68,302)(*1) Carrying amount excludes deferred profit on installment sales.
(*2) Installment receivables, lease receivables and investments in leases, operating loans receivables, other operating loans
receivables, and distressed receivables exclude allowance for doubtful accounts for each.
(*3) Difference with the carrying amount on the consolidated balance sheet was ¥84,144 million in estimated remaining
value related to finance leases that do not transfer ownership.

- 37 -

Note 1: Description of the valuation method for market value calculation and of inputs related to market
value calculation
Financial instruments booking market values in the consolidated balance sheet(1) Securities and investment securities
Securities listed on the exchange market book market values at the market, which are categorized
into the market values at level 1. In this relation, of the non-listed securities, those using importantbut not observable inputs to calculate market values are categorized into market values at level 3.
Receivables with a market value at the exchange market book said market values, while
government bonds and municipal bonds are categorized as having level 1 market values, and thereceivables other than mentioned above are categorized as having level 2 market values. Bonds
having no exchange market value but having variable interest rates reflect the market interest rate
in a short term. Therefore, as long as the credit status of the issuer does not change significantly
after the issuance, the book value is shown as the market value because they are deemed to beclose to each other. On the other hand, the market value of securities with fixed interest rates is theamount of future cash flow discounted after the spread is added to the term-end risk free rate. Said
securities use observable inputs and are categorized as having level 2 market values.
(2) Derivative transactions
The market value of derivative transactions is determined based on the price presented by thefinancial institutions and is categorized into level 2 market value. Items using special treatment forinterest rate swaps or allocation treatment for forward exchange contracts and currency swaps aretreated together with long-term borrowings, etc. subject to hedge accounting. Therefore, theirmarket value is included in the market value of relevant liabilities (See “Financial instruments
except those with market values in the consolidated balance sheet” (7)).
Financial instruments except those with market values in the consolidated balance sheet(1) Installment receivables
The total recoverable amount in the categories based on internal rating, period, etc. is discounted
by the rate projected if a new installment is to be sold, or the total amount after estimated bad
debts are deducted from the amount of projected recoverable in the categories based on internalrating, period, etc. is discounted by the term-end risk free rate, to calculate market values, which
are categorized into level 3 market value.
(2) Lease receivables and investments in leases
The total amount after estimated maintenance costs are deducted from the projected recoverable
amount in the categories based on internal rating, period, etc. is discounted by the rate projected if
a new similar lease transaction is made, or the total amount after estimated maintenance costs andestimated bad debts are deducted from estimated amount recoverable in the categories based oninternal rating, period, etc. is discounted by the term-end risk free rate, to calculate market values.
In the case of using important but not observable inputs, level 3 market value is applied, and in thecase of not using such inputs, level 2 market value is applied to categorize.
(3) Operating loans receivables
Operating loans receivables with variable interest rates reflect the market interest rate in a shortterm. Therefore, as long as the credit status of the borrower does not change significantly after- 38 -

disbursement of the loan, the book value is shown as the market value because they are deemed to
be close to each other. For those with a fixed interest rate, the total principal and interest is
discounted by a rate projected if a similar new loan is made in the categories based on the type ofloan, internal rating, period, etc., or the estimated bad debts are deducted from the total of principal
and interest in the categories based on the type of loan, internal rating, period, etc. which is thendiscounted by the term-end risk free rate, to calculate market values. These are categorized intolevel 3 market values.
(4) Other operating loans receivable
The total principal and interest is discounted by a rate projected if a similar new loan is made in
the categories based on the type of loan, internal rating, period, etc., or the estimated bad debts are
deducted from the total of principal and interest in the categories based on the type of loan,internal rating, period, etc. which is then discounted by the term-end risk free rate, to calculatemarket values. For items settled in a short term, the book value is shown as the market value
because they are close to each other. Securities using important but not observable inputs are
categorized as having level 3 market values, while the other securities are categorized as having
level 2 market values.
(5) Distressed receivables
Estimated unrecoverable amount of distressed receivables is calculated based on the expected
recoverable amount, etc. through collateral and guarantees. Therefore, the market value is deemed
to be close to the amount obtained by deducting the estimated unrecoverable amount from thecarrying amount on the consolidated balance sheet date, and thus said amount is shown as themarket value, which are subject to the category of level 3 market value.
(6) Bonds payable
Of the bonds issued by the Group, the book value is shown as the market value for those settled ina short term because they are close to each other. In addition, of the bonds settled in a long term,
those with variable interest rates reflect market interest rates in a short term, and the credit statusof the Group did not change significantly after actual issuance. Therefore, the book value is shownas the market value because they are deemed to be close to each other. The bonds with a market
value, except those mentioned above, is based on the market value, while the market value ofbonds with no market value is mainly calculated by discounting the total principal and interest of
said bonds categorized by certain periods by the rate expected in the case where the similar
funding. These are categorized as having level 2 market values.
(7) Long-term borrowings
Of long-term borrowings, those with variable interest rates reflect market interest rates in a shortterm, and the credit status of the Group did not change significantly after the borrowing.
Therefore, the book value is shown as the market value because they are deemed to be close toeach other. The market value of long-term borrowings with fixed interest rates is calculated bydiscounting the total principal and interest of long-term borrowings (*) categorized by set periodsby the rate expected in the case where the similar funding. These are categorized as having level 2
market values.
(*) Long-term borrowings subject to special treatment for interest rate swaps use the total amountof the principal and interest treated together with the interest rate swap. Long-term borrowings- 39 -

subject to allocation treatment for currency swaps use the total amount of the principal and interest
treated together with the currency swap.
(8) Current maturities of loans from the securitizations of the minimum future rentals on lease contracts
Of current maturities of loans from the securitizations of the minimum future rentals on lease
contracts, those with variable interest rates reflect market interest rates in a short term, and thecredit status of the Group did not change significantly after issuance. Therefore, the book value isshown as the market value because they are deemed to be close to each other. The market value of
items with fixed interest rates is calculated by discounting, by the rate expected at similar funding,the total principal and interest of current maturities of loans from the securitizations of theminimum future rentals on lease contracts categorized by certain periods. These are categorized ashaving level 2 market values.

- 40 -

Note 2: Information on the financial instruments having level 3 market value in the consolidated balance sheet(1) Financial instruments with a market value in the consolidated balance sheet
Category

Valuation method

Important but notobservable inputs

Scope of inputs

Weighted averageof inputs

EV/RAV multiplying
power

1.37 times

1.37 times

Securities and investment securities
SharesMultiple method

Other financial instruments are omitted from presentation due to their insignificance in terms of monetary value.

(2) Table of adjustments from the beginning balance to the term-end balance, valuation loss and profit
recognized in the current fiscal year
(Millions of yen)
Securities and investment securities
Category
Total
Other
SharesBeginning balance
9,829
–
9,829
Income/loss or other comprehensive income for the current year
Recorded as income or loss (*1)
226
–
226
Recorded as other comprehensive
1,386
–
1,386
income (*2)
Purchase, disposal and redemption
Purchase (*3)
4,776
3,746
8,522
Disposal and redemption(24)(1,414)(1,439)Transfer to level 3 market value–––
Transfer from level 3 market value–––
Balance at end of fiscal year
16,1942,331
18,526
Valuation gain or loss (*1) on financial
assets and financial liabilities held in the
226
–
226
consolidated balance sheet as of thesettlement day, of their amounts of gain orloss recorded for the current fiscal year(*1) Included mainly in sales in the consolidated statement of income.
(*2) Included mainly in valuation difference on available-for-sale securities in the consolidated statement of comprehensive
income.
(*3) Purchase include the increase due to the merger and the increase transferred from other accounting items.

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

- 41 -

<Notes on rental properties>
The Company owns rental office buildings, commercial facilities, and housing units in major cities acrossJapan. Gain on leases related to rental properties in the current fiscal year was ¥17,157 million (major
rental income and expenses are booked to revenues and cost of revenues).
The carrying amount of rental properties, amount change during fiscal year, and market value are as
follows.
Carrying amount
Balance at beginning ofcurrent fiscal year

Amount change during
current fiscal year

Balance at end of current
fiscal year

¥318,620 million¥99,505 million¥418,126 million

Market value at end ofcurrent fiscal year

¥482,922 million

Notes: 1. Carrying amount is the amount subtracting accumulated depreciation amount from historical cost.
2. Of the increase (decrease) for the current fiscal year, the major increase (amounted to ¥73,370 million) isowing to the merge with Hitachi Capital Corporation.
3. The market value of major properties at the end of the current fiscal year is the amount determined by thecapitalization method and the amount based on a real estate appraisal evaluation by an outside real estateappraiser. However, if there are no important changes to indicators that is considered to reflect the certain
valuation amount and appropriate market price from the most recent valuation, market value will be themost recent valuation amount adjusted appropriately. For other properties, market value is the amountbased on indicators that is considered to reflect market price and the amount reasonably calculated inhouse based on the capitalization method. The market value of properties newly acquired during thecurrent fiscal year such as some buildings in which the changes to market value and depreciation will not
be significant is based on the proper book value.

- 42 -

<Notes on revenue recognition>(Information on disaggregation of revenue)
Information disaggregating revenue from contracts with customers(Millions of yen)
Reporting segment
Customerbusiness
Sales frommaintenancecontracts
Sales fromsellingmerchandiseElectricity
sales
Sales from
disposal oflease
properties (*2)
Other
Revenue fromcontracts withcustomers
Other revenue
(*3)
Total

Account
solution

Vendorsolution

Total

Environment &renewableenergyAviation

39,572

88

651

－

15

－

7,365

8,975

74

160

4,528

－

5,497

84

8

－

－

－

34,507－30

30,954

－

－

－

－

－

1,664

17,145

118

2,103

2,490

976

7,091

9,145

96,658

282

2,915

7,019

35,49912,588562,054

340,957

145,882

100,766

98,90812,247

143,938

571,200

437,615

146,165

103,682

105,927

47,746

156,526

Logistics

Revenue fromcontracts withcustomers
Other revenue(*3)

Real estate－(Millions of yen)Amountrecorded in
Adjusted
consolidatamounted(*1)
statement ofincomeReporting segment

Sales frommaintenancecontracts
Sales fromsellingmerchandiseElectricity
sales
Sales from
disposal oflease
properties (*2)
Other

Life

Mobility

Other

－

7,650

26

－

48,006

－

1,972

3,522

－

32,096－－－－

34,600

－

9,034

－

－

40,020

466

851

2,857

1,523

37,289466

19,509

6,405

1,523

192,01452,91673,28049,967(7,374)

1,573,545

53,382

92,79056,373(5,850)1,765,559

Notes: 1. The adjustment includes ¥(7,571) million of adjusted amount of sales following the merger with Hitachi
Capital Corporation to which the purchase method was applied.
2. Sales from disposal of lease properties are sales from disposal of lease properties due to the lease contract
maturities of the subsidiaries outside Japan that adopt the International Financial Reporting Standards or
the U.S. accounting standards.
3. Other revenue primarily includes finance lease sales, operating lease sales, revenue from operating loans,and installment sales.
- 43 -

As shown in the disaggregated revenue information, revenue from contracts with customers has poor
significance to sales. The Company, therefore, omitted the description that is the base to understand revenue
and the information to understand amounts of revenue for the current and next fiscal years on.
<Notes on per share information>
Equity per share¥912.19

Earnings per share¥69.24<Notes on significant subsequent events>
None.

- 44 -

<Other notes>
Notes on business combinations
Business combination by acquisition(Business integration with Hitachi Capital Corporation)
Mitsubishi UFJ Lease & Finance Company Limited (“Mitsubishi UFJ Lease”) and Hitachi Capital
Corporation (“Hitachi Capital”) made a business integration on April 1, 2021 (the “Business Integration”)
and changed the tradename to Mitsubishi HC Capital Inc. on the same day.
1. Overview of the business combination(1) Name and business of the company acquired
Name of the company acquired: Hitachi Capital Corporation
Description of business: General leases, installment sales, and other finances and services(2) Reason for the business combination
Background of the Business Integration① Social situations
Changes in the external environments have become intense in recent years. The climate change,
resource shortage, moving away from fossil fuels and other natural resources, changes in
population structure, progress in technologies, urbanization, shifts in world economic powers, themulti-polarized world, and other megatrends are accelerating, indicating decisive impact on thelong-term global economy including Japan.
Moreover, the entire socio-economic paradigm shift has been taking place due to the COVID-19
pandemic. Specifically, among others, innovations are apparently heading for qualitative
restructuring of the supply chain, digitalization, data economization, reforming into a cyclic
economy from mass-production and consumption.
② Recognizing challenging subjects
Along with the changes in the external environments, the role expected to lease companies ischanging to solving social problems through investment in and management of businesses, inaddition to existing lease finance.
Moreover, under the With/Post COVID-19 environment, industry-wide fast changes in businessmodel are apparently taking place beyond imagination. Companies seeking adjustment to suchenvironmental changes are expecting an increasing role from lease companies that are capable ofoffering diverse functions on assets and flexible services beyond finance functions.
Both companies, who had close collaboration in diverse industries, decided to seize theopportunity to expand and consolidate the business and financial bases in such extensive changesof the external environment taking place in the societies and industries. The challenge will lead tocreating social values and contribute to different customers and local communities.
Purpose of the Business Integration
Before the Business Integration, both companies respectively upheld its medium- to long-term visions
in the mid-term business plan. The efforts drove these visions into creating new social value for affluent
society by adjusting to the environmental changes and enhancing the sustainable corporate value. Under
the unified visions and corporate philosophy realized through the Business Integration, the newcompany will deploy business for powerful growth in order to achieve (i) mutual complementation in
the business areas, (ii) further reinforcement of management bases and, on these bases, (iii) creating- 45 -

new values.
(i) Mutual complementation in the business areas
Building an ideal mutual complementation enables to offer full lineup of services across the businessareas and the diversification of portfolios in the business areas and deployment regions. Thoughthese measures, the new company will acquire a robust and stable revenue base that is resilient toimpact from the external environment and boost the earning power by expanding investment
activities through the consolidated corporate strength.
(ii) Further reinforcement of management bases
The mobilization of our management resources and know-how, such as utilizing and strengthening
personnel (human resource), which is the source of corporate competitiveness, making the most ofpartners and the network, strengthening the financial base, enhancing the risk management, andpromoting digitalization, will lead to building a robust management base that supports sustainablegrowth.
(iii) Creating new values
Unlike existing lease companies, the new company will seek offering new values to customers bystrengthening and expanding areas in the business fields where the company has advantages and byadvancing into new business areas and regions.
The Business Integration will enable us to play as one of the leading global players in terms ofbusiness scale and field. Making the most of the expanding scale and cumulated know-how, theCompany will grow into a social-problem solving business for a new era, through detecting andmeeting correct changes in the needs of customers and local societies around the world.
(3) Date of business combination
April 1, 2021
(4) Legal form of business combination
Absorption-type merger where Mitsubishi UFJ Lease & Finance Company Limited is the surviving
company and Hitachi Capital Corporation is the merged company(5) Name of company after the combination
Mitsubishi HC Capital Inc.
(6) Voting ratio acquired
Voting ratio held immediately before the businesscombination
Voting ratio after the acquisition

4.20%
100.00%(7) Primary reasons for deciding on the acquiring company
The type of consideration was business combination in exchange of shares. The Company was to issue
said shares. The shareholders of the Company before the combination was going to acquire the largest
share of the voting ratios after the combination. These reasons made the Company to be the acquiring
company.

- 46 -

2. Period of acquired company’s performances included in the consolidated financial statements
April 1, 2021 to March 31, 2022
3. Acquisition cost of acquired company and breakdown in types of consideration
Consideration of acquisition: Market value of common shares held immediately
before the business combination on the day of business combination
Consideration of acquisition: Market value of common shares issued by the¥16,725 million¥381,480 million

Company on the day of business combination
Cost of acquisition¥398,205 million

4. Exchange ratios by share type, calculation method and the number of shares issued(1) Exchange ratios by type of share
Company name
Merger ratio

Mitsubishi UFJ Lease &Finance Company Limited(Surviving company)
1

Number of shares to be issued through theBusiness Integration

Hitachi Capital Corporation(Merged company)
5.10

Common shares: 571,078,084(2) Method for calculating share exchange ratios
To ensure the fair merger ratios, the concerned companies respectively decided to appoint an
independent third-party body to calculate the merger ratios. Mitsubishi UFJ Lease & Finance
Company Limited appointed Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. and Hitachi Capital
Corporation appointed Goldman Sachs Japan Co., Ltd.
Based on the calculation results, etc. reported by respective third-party calculation bodies, Mitsubishi
UFJ Lease & Finance Company Limited and Hitachi Capital Corporation had serious negotiations andconferences with each other on the merger ratios in consideration of their financial standings,
performance trends, stock price trends, etc. The above-mentioned merger ratios are the final result of
those negotiations, reflecting reasonable ratios. Both companies, therefore, accepted and decided on
the exchange ratios, which will contribute to the shareholders’ interest of both companies.
5. Detail and amount of major acquisition costs
Remuneration and fees for advisory service, etc.: ¥6,494 million
6. Cost of acquisition of the acquired company and the total and difference in acquisition costs bytransaction
Difference on step acquisition: ¥229 million
7. Amount of gain on bargain purchase and occurrence cause(1) Amount of gain on bargain purchase¥431 million(2) Occurrence cause
After the identification of recognizable assets and liabilities on the business combination day andafter the completions of their market values calculation and the subsequent distribution of theacquisition costs, net assets on the business combination day surpassed the acquisition costs and,
therefore, the difference was recognized as gain on bargain purchase.

- 47 -

8. Amounts and details of assets accepted and liabilities underwritten on the business combination day
Current assets
Non-current assets
Deferred assets¥2,853,966 million¥860,780 million¥978 million

Total assets¥3,715,725 million

Current liabilities¥1,376,757 million

Non-current liabilities¥1,921,232 million

Total liabilities¥3,297,990 million- 48 -

Acquisition of the subscriber’s share of CAI International, Inc. on the capital
The Company decided to acquire all the shares of CAI International, Inc. (“CAI Inc.”) at the Board of
Director’s meeting held on June 18, 2021 through Cattleya Acquisition Corp. (located in the State of Delaware,
hereafter referred to as the “Acquisition Subsidiary”), a wholly-owned subsidiary in the United Sates that theCompany has established to acquire said shares, by making the Acquisition Subsidiary merge with CAI Inc.
(reverse triangular merger). As a result, the Company concluded a merger contract between the Company, theAcquisition Subsidiary and CAI Inc. Pursuant to the merger contract, the Company completed the proceduresto acquire CAI Inc. on November 22, 2021 and made CAI Inc. a wholly-owned subsidiary.
1. Overview of the business combination(1) Name of acquired company and detail of business
Name of acquired company: CAI International, Inc.
Detail of business: Marine container lease(2) Reason for acquiring the subsidiary through acquisition
The Company decided on this acquisition, since we see that “global asset” is a growth driver in thefocusing areas to lead the medium- to long-term business strategy. CAI Inc., which is to become awholly-owned subsidiary of the Company, ranks 6th in the world in the marine container leasemarket share (TEU* basis) and has advantages with global platforms that are supported withmarketing operation bases and container stocking bases around the world. When it is combined with
Beacon Intermodal Leasing, LLC, a marine container lease business of the Company, the number ofcontainers stocked by the Group ranks 2nd in the world. The Company will stride forward to boost
revenue and accelerate growth through making the most of the platforms of both companies andintegrating their business experience and expertise. Through the merger, the Company is striving toenhance competitiveness in the marine container lease business in the global market and take in suchgrowth opportunities and reinforce the business as driving force to support the medium- to long-term
growth.
*TEU: A unit representing one 20-feet container(3) Date of business combination
November 22, 2021
(4) Legal form of business combination
Acquisition of shares in consideration of cash (reverse triangular acquisition)(5) Name of company after the combination
The name is not changed after the combination.
(6) Voting ratio acquired
100%(7) Primary reason to decide on the acquisition company
The Company has acquired a majority of voting rights of CAI Inc. in exchange of cash as
consideration.

- 49 -

2. Period of acquired company’s performances included in the consolidated financial statements
November 23, 2021 to December 31, 2021
3. Acquisition cost of acquired company and breakdown in types of consideration
Consideration of acquisition Cash:¥124,190 million

Cost of acquisition:¥124,190 million

4. Detail and amount of major acquisition costs
Remuneration and fees for advisory service, etc.: ¥1,595 million
5. Amount of goodwill occurred, occurrence cause, redemption method and redemption period(1) Amount of goodwill occurred¥33,613 million(2) Occurrence cause
Goodwill occurred from excess earning power in future that is expected from ongoing businessdeployment.
(3) Method and period of depreciation
Straight-line method for 20 years
6. Amounts and details of assets accepted and liabilities underwritten on the business combination day
Current assets¥127,629 million
Non-current assets¥337,407 million
Deferred assets¥6 million
Total assets¥465,043 million
Current liabilities¥38,173 million
Non-current liabilities¥302,356 million
Total liabilities¥340,529 million
7. Estimate of impact on the current consolidated statement of income and the calculation method if thebusiness combination is completed on the first day of the fiscal year
Revenues¥49,498 million
Operating income¥15,024 million
Recurring income¥14,951 million
Income before income taxes¥14,951 million
Net loss attributable to shareholders of parent¥(5,541) million
Net loss per share¥(3.86)(Method for calculating the estimate)
The estimate of impact is calculated as the difference between sales and gain/loss information if thebusiness combination is completed on the first day of the fiscal year and sales and gain/loss informationin the consolidated statement of income of the acquiring company. In addition, said estimate includes
the adjusted amount of goodwill depreciation on the supposition assuming that the goodwill that
occurred at the time of acquisition of control took place on the first day of the fiscal year.
In this connection, said estimate did not take audit certification.

- 50 -

Non-consolidated statement of changes in equity(April 1, 2021 to March 31, 2022)(Millions of yen)
Shareholders’ equity
Capital surplus

Balance at beginning of
period as of April 1, 2021
Cumulative amounteffected from changes in
the accounting policies
Balance at beginning of thecurrent period reflectingchanges in the accounting
policies

Retained earnings

SharecapitalLegalcapitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

33,19633,802

127,739

161,541

638

Other retained
earnings
Retained
Generalearnings
reserveforwarded
258,023

330,697(1,939)(1,939)256,084

328,757

Dividends from surplus(29,693)(29,693)

Net income

51,584

51,58433,19633,802

127,739

161,541

381,480

381,480638

72,035

Total
retainedearnings

72,035

Changes during fiscal year
Increase due to themergerPurchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other than shareholders’equityTotal changes during fiscal
year
Balance at end of period asof March 31, 2022

(60)

(60)

－

－

381,419

381,419－－

21,89021,89033,19633,802

509,158

542,960

638

72,035277,974

350,647- 51 -

Shareholders’ equity

TreasurysharesBalance at beginning of
period as of April 1, 2021
Cumulative amounteffected from changes in
the accounting policies
Balance at beginning of thecurrent period reflectingchanges in the accounting
policies(1,528)Valuation and translation adjustments

Totalshareholders’equityValuationdifferenceonavailablefor-salesecurities

523,906

29,656Stock
DeferredTotal
gains or valuation and acquisition Total equity
rightslosses ontranslation
hedgesadjustments
4,378

34,035

1,552(1,939)559,494(1,939)(1,528)521,966

29,656

4,378

34,035

1,552

557,554(18,022)

363,457

363,457

Dividends from surplus(29,693)(29,693)

Net income

51,584

51,584

(3)

(3)

(3)

184

123

123

Changes during fiscal year
Increase due to themergerPurchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other than shareholders’equityTotal changes during fiscal
year
Balance at end of period asof March 31, 2022

(17,676)(45,054)(62,731)308(62,422)(17,840)

385,468(17,676)(45,054)(62,731)308

323,046(19,369)

907,435

11,979(40,675)(28,696)

1,861

880,601- 52 -

Notes on non-consolidated financial statements<Notes on matters related to important accounting policies>
1. Valuation standards and method for securities(1) Subsidiary shares and affiliate shares
Cost method based on the moving average method(2) Of available-for-sale securities, bonds and other securities held for earning financial revenues for
operating purposes (operational investment securities)- Other than shares that have no market value
Fair value method(Valuation differences are included directly in net assets and costs of securities sold aredetermined by the moving average method.)- Shares with no market value, etc.
Cost method based on the moving average method
For investments in limited liability investment partnerships and similar entities (deemed to be
securities based on Article 2, paragraph (2) of the Financial Instruments and Exchange Act), theseare stated by the net amount corresponding to the Company’s equity share based on the mostrecent obtainable financial statements depending on the reporting date established by thepartnership agreement.
(3)

Available-for-sale securities not included above- Other than shares that have no market value
Fair value method(Valuation differences are included directly in net assets and costs of securities sold aredetermined by the moving average method.)- Shares with no market value, etc.
Cost method based on the moving average method
For investments in limited liability investment partnerships (deemed to be securities based on
Article 2, paragraph (2) of the Financial Instruments and Exchange Act), these are stated by the
net amount corresponding to the Company’s equity share based on the most recent obtainablefinancial statements depending on the reporting date established by the partnership agreement.

(4)

Investments in other securities of subsidiaries and associates
Cost method based on the moving average method
For investments in partnerships (deemed to be securities based on Article 2, paragraph (2) of the
Financial Instruments and Exchange Act), these are stated by the net amount corresponding to theCompany’s equity share based on the most recent obtainable financial statements depending on thereporting date established by the partnership agreement.

2. Valuation standards and method for derivatives
Fair value method- 53 -

3. Valuation standard and method for inventories
Cost method based on the specific-cost method(Balance sheet values are calculated using the method of writing down the book value based on
declining profitability)
4. Method of depreciation for fixed assets(1)

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

(2)

Own-used assets
Depreciation is calculated with declining balance method.
However, for buildings (excluding equipment attached to buildings) acquired on or after April 1,
2000, as well as equipment attached to buildings and structures acquired on or after April 1, 2016,
depreciation is calculated using the straight-line method.

(3)

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

(4)Long-term prepaid expenses
Calculated using the straight-line method.

5. Accounting method for deferred assets
Bond issuance costs are depreciated in interest rule for the period until their redemption.
6. Translation criteria of assets and liabilities denominated in foreign currencies into Japanese yen
Monetary claims and liabilities denominated in foreign currencies are translated into Japanese yen byusing the spot exchange rates on the balance sheet date, and the difference arising from such translationis stated as gain or loss. Monetary claims and liabilities denominated in foreign currencies subject toallocation treatment, such as currency swaps, etc., are translated into a currency swap in Japanese yen.
7. Accounting policy for allowances and provisions(1)

Allowance for doubtful accounts
To reserve for loss on doubtful accounts, estimated uncollectible amounts are booked based on
historical default rates for general receivables, or based on individual consideration of collectability
for doubtful receivables and distressed receivables (receivables from legally or substantiallybankrupt obligors).
Also, the Company applies the “Treatment on the calculation of default estimates” established in“Treatment for Accounting and Auditing of Application of Accounting Standard for Financial
Instruments in Lease Industry” (The Japanese Institute of Certified Public Accountants Industry
Committee Practical Guidance No. 19, November 14, 2000).
With respect to the amount of distressed receivables, the amount expected to be recoverable isdeducted from the receivable amount, and the remainder, which is treated as the estimated amount- 54 -

of uncollectible receivables, is directly deducted from the receivable amount. This amount is ¥3,938
million.
(2)

Provision for bonuses
The Company books the amount expected to be paid in the following year that are attributable to thecurrent fiscal year in order to issue payment for bonuses to employees.

(3)

Provision for bonuses for directors (and other officers)
The Company books the amount expected to be paid in the following year that are attributable to thecurrent fiscal year in order to issue payment for bonuses to officers, executive officers, etc.

(4)

Provision for retirement benefits
The Company books provisions based on expected pension assets and retirement benefit liabilities
at the end of the current fiscal year in order to pay employee retirement benefits.
(i) Method of attributing estimated retirement benefits for periods of service
In the calculation of retirement benefits liabilities, the method of attributing the estimatedamount of retirement benefits to the period until the end of the current fiscal year is on thebenefit formula basis.
(ii) Amortization of actuarial gains and losses and past service cost
Past service cost is amortized using the straight-line method for the average remaining service
years of employees (15 years) at the time of occurrence.
Pertaining to the actuarial gains and losses, the pro-rata amount calculated using the straightline method for the average remaining service years of employees (13 to 20 years) at the time ofoccurrence in each fiscal year is amortized from the respective following fiscal years.

8. Accounting standards for income and expenses(1)

Accounting method for lease transactions(i) Accounting standards of revenues and cost of revenues related to finance lease transactions
The Company books the revenues and cost of revenues corresponding to the elapsed period
based on a standard of a monthly lease fee to be received under the lease agreement for theduration of the lease agreement period.
(ii) Accounting standards of revenues related to operating lease transactions
The Company books lease fees corresponding to the elapsed period based on a standard of amonthly lease fee to be received under the lease agreement for the duration of the leaseagreement period.
Disposal amount and cost related to disposal of leasing assets are booked as revenues and costof revenues.

(2)

Accounting standards of revenues and cost of revenues related to installment sales transactions
Pursuant to the “Treatment of Installment Sale Transactions” stated in the “Treatment for
Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Lease
Industry” (The Japanese Institute of Certified Public Accountants Industry Committee Practical
Guidance No. 19, November 14, 2000), total of installment sale receivables is recorded as
installment receivables when an instalment sale contract is concluded, and installment sales and costof installment sales, which correspond to said policy duration based on the payment date in the
installment contract, are recorded.
Unrealized profit corresponding to installment receivables with a future payment date adopt- 55 -

deferred accounting as deferred profit on installment sales.
(3)

Accounting policy for financing expenses
Financing expenses are categorized and booked under financing expenses for operating income andother financing expenses.
Total assets are categorized as assets based on operating transactions and other assets. Based on thebalance of these assets, financing expenses corresponding to operating assets are booked in cost ofrevenues as capital costs while financing expenses corresponding to other assets are booked as nonoperating expenses.
Furthermore, capital costs are booked after deducting the interest income of corresponding deposits
from financing expenses related to operating assets.

9. Hedge accounting methods(1)

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

(2)

Hedge instruments and hedged items
Hedge instruments ... Interest rate swap instruments, foreign currency interest rate swap
instruments, forward exchange contracts, investment in equity for overseas
subsidiaries and overseas affiliates, and other liabilities denominated in foreign
currencies related to available-for-sale securities denominated in foreign currencies
Hedge items ... Borrowings, bonds payable, accounts payable - trade, time deposits denominated inforeign currencies, investment in equity for overseas subsidiaries and overseas
affiliates, and available-for-sale securities denominated in foreign currencies(3)

Hedge policies and methods to evaluate hedge effectivenessIn order to hedge interest rate and foreign currency rate fluctuation risks, and maintain a stable
income, the Company performs derivative transactions based on internal rules.
Regarding interest rate fluctuation risks, lease fee receivables and installment receivables, etc., theprimary operating assets of the Company, adopt a long-term fixed interest rate. On the other hand,because there are variable interest rates within the financing through bank borrowings, etc., theCompany manages and performs comprehensive hedges of liabilities so that the expected principalof derivative transactions that are hedging instruments is within the scope of hedged liabilities basedon the comprehensive management of assets and liabilities (ALM). Furthermore, the Company
hedges by interest rate swaps for the purpose of locking in profit on individual projects.
Regarding foreign currency exchange rate fluctuation risks, the Company hedges through currency
swaps, forward exchange contracts, and liabilities denominated in foreign currencies for individual
assets and liabilities denominated in foreign currencies, investment in equity for overseas
subsidiaries and overseas affiliates, and available-for-sale securities denominated in foreign
currencies.
The Company evaluates the effectiveness of hedges by verifying whether the interest rate of hedged
items and the foreign currency exchange rate fluctuation risk are diminished. However, interest rate
swaps performed by special treatment are not included in the evaluation of effectiveness.
- 56 -

Transaction status is reported quarterly to the President.
10. Other significant matters that are the basis for preparing the non-consolidated financial statements(1)

Accounting method of bonds and other securities held for earning financial revenues for operating
purposes (operational investment securities)
The Company booked ¥73,194 million in investment securities, ¥1,413 million in securities, and¥41,096 million in investments in other securities of subsidiaries and associates.
Further, these financial revenues (interest income, redemption difference, and partnership gains/loss
corresponding to equity share) is booked under revenues.

(2)

Accounting methods related to retirement benefits
The accounting method of unrecognized actuarial gains and losses related to retirement benefits andunaccounted amount of unrecognized past service costs differs from the accounting method in the
consolidated financial statements.

(3)

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

- 57 -

<Notes on changes in accounting policies>
Application of Accounting Standard for Revenue Recognition, Etc.
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No.
29, March 31, 2020) and relevant ASBJ regulations from the beginning of the current fiscal year, and it
has recognized revenue at the time the control of promised goods or services is transferred to thecustomer at the amount expected to be received upon exchange of said goods or services.
The application of the Accounting Standard for Revenue Recognition and relevant ASBJ regulations issubject to the transitional treatment provided for in the proviso to paragraph (84) of the AccountingStandard for Revenue Recognition. However, the impact on financial statements is minor.
Application of Accounting Standard for Market Value Calculation, Etc.
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement
No. 30, July 4, 2019) and other relevant regulations from the beginning of this current fiscal year, and it
has decided to apply new accounting policies stated in the Accounting Standard for Fair Value
Measurement in future in accordance with the transitional treatment provided for in paragraph (19) of
the Accounting Standard for Fair Value Measurement and in paragraph (44-2) of the AccountingStandard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019).
The new application has no impact on the financial statements.
Changes in accounting policies due to the merger of Hitachi Capital Corporation
The Company merged with Hitachi Capital Corporation on the merger conclusion day of April 1, 2021.
Accordingly, the Company has changed accounting policies concerning the items stated below from thecurrent fiscal year.
In this connection, retrospective application of changes in accounting policies is adopted and cumulative
effect is reflected on the book value of net assets of the beginning of the current fiscal year.
Method for How to Post Re-leasing Revenues in Lease Transactions
In the past, the Company booked revenues from re-lease charges on the beginning day of re-leasecharges (normally, for one year) but changed to monthly charges by prorating one-year charges onto
monthly charges for the re-lease periods.
After the merger, outstanding assets of re-leasing contracts have increased; many of the typical releasing contracts have received re-leasing charges in a lump at the beginning of the re-leasing contracts;
when such contracts are cancelled, many of them do not need to refund for the unexpired period;
accordingly, the Company has posted re-leasing charges as revenues in a lump at the beginning of releasing contracts. However, for re-leasing contracts that are transactions of asset leases, the Company
judges that the change into the method for prorating re-leasing charges onto the remaining months more
appropriately reflects revenues from re-leasing contracts into financial statements.
Following the change, the beginning retained earnings balance decreased by ¥5,742 million in the nonconsolidated statement of changes in equity to which retrospective application of the changes wasapplied.
<Method for posting lease transactions as finance transactions>
In the past, the Company processed certain lease contracts as virtually financial transactions based on
their transaction form, processed such contracts as operating loans receivables in the non-consolidated- 58 -

balance sheet and posted amount equivalent to interest receivables as lease sales in the non-consolidated
statement of income. However, to meet the contract form, the Company has changed the processing of
those items to posting as lease loans receivables or investments in leases in the non-consolidatedbalance sheet, as lease sales and lease costs in the non-consolidated statement of income.
The Company so far posted and presented lease transactions as virtually financial transactions byposting lease properties as collateral based on the intent of the lease parties and the content of the leaseproperties, etc. in accordance with the processing of loans receivables. However, after the end of suchlease periods, returns of the lease properties to the Company have been on the increase, indicating more
obvious nature of finance lease. Furthermore, after the merger, outstanding assets from the same kind oflease transactions has increased, which is also an additional reason for the change.
Following the change, the beginning retained earnings balance increased by ¥1,732 million in the nonconsolidated statement of changes in equity to which retrospective application of the changes wasapplied.
<Method for Posting Deferred Assets (Bond Issuance Cost)>
The Company has changed the processing of bond issuance costs into interest rule, namely to themethod for amortizing such costs over the period of redemption, unlike in the past where the Company
processed bond issuance costs as full expenses at the time of their issuance for the Company.
This change has been made because bond issuance costs are fund-raising costs like bond interests
payables. The international accounting standard for posting expenses stipulates that cost amortization
should follow interest rule. The change will more appropriately reflect the Company’s fundraising
activities into the financial statements.
Following the change, the beginning retained earnings balance increased by ¥2,070 million in the nonconsolidated statement of changes in equity to which retrospective application of the changes wasapplied.

- 59 -

<Notes on changes in presentation>(Non-consolidated balance sheet)“Loans receivable from subsidiaries and associates” was included in “Operating loans receivables” in“Current assets” until the preceding fiscal year. For enhancing disclosure transparency, the item ispresented independently from the current fiscal year.
In this connection, “Loans receivable from subsidiaries and associates” for the preceding fiscal year was¥1,090,195 million.
<Notes on accounting estimates>(Amounts of posting assets and liabilities underwritten following the business combinations)
The Company had concluded business integration with Hitachi Capital Corporation on April 1, 2021.
Following the business integration, the amounts of posting the assets and liabilities underwritten on the
day of the business combination reflect distributed acquisition costs based on the market value on the
day of the business combination. The Company used valuation models according to the characteristicsof the business and calculated market values based on future cash flows to be generated from assets andliabilities, discount rates, and estimated replacement costs.
The amounts of the assets accepted and the liabilities underwritten on the day of the businesscombination are as stated in <Other notes>, Notes on business combinations in the notes on nonconsolidated financial statements, and the amounts of major assets and liabilities and the valuation
models are as follows:

Lease receivables

Amount posted
Major valuation model(Millions of yen)
28,090 Discounted cash flow method

Investments in leases

472,826 Discounted cash flow method

Leased assets (property, plant and equipment)

150,138 Replacement costs method

Bonds (including current portion of bonds
payable)Long-term borrowings (including current
portion of long-term borrowings)

486,793 Discounted cash flow method
476,831 Discounted cash flow method(Allowance for doubtful accounts)
Estimated uncollectible amounts are booked as allowance for doubtful accounts based on historicaldefault rates for normal receivables, as well as considering the collectability of highly doubtfulreceivables and distressed receivables (receivables from legally or substantially bankrupt obligors).
The estimated unrecoverable amount is calculated based on the financial status of the business partners,
the estimated recoverable value of collateral, and future cash flow, etc. in the cash flow estimation
method. The Company determines this estimate to be rational. However, if there are changes to theconditions precedent or the business environment, there may be significant impact on the nonconsolidated financial statements from the next fiscal year on.
The Company booked ¥20,235 million in allowance for doubtful accounts at the end of the current
fiscal year.

- 60 -

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

Assets pledged as collateral(Millions of yen)

Installment receivables

1,630
1

Lease receivables

27,694

Investments in leases

104,074694

Cash and deposits

Operating loans receivables
Loans receivable from subsidiaries and associates

8,671

Investment securities
Investments in other securities of subsidiaries and associates

6,638
1,101
12,662

Operating lease contract receivables

1,362

Shares of subsidiaries and associates

164,530

Total

(2)

Liabilities corresponding to assets pledged as collateral
Current maturities of loans from the securitizations of the minimum future
rentals on lease contracts (including long-term)(Millions of yen)

112,776
1,073

Long-term guarantee deposits received

9

Other non-current liabilities

113,859

Total

Note: Of the assets pledged as collateral, ¥1,630 million in cash and deposits, ¥251 million in
investments in leases, ¥694 million in operating loans receivables, ¥8,671 million in loans
receivable from subsidiaries and associates, ¥6,638 million in investment securities, ¥1,101 million inshares of subsidiaries and associates, and ¥12,662 million in investments in other securities ofsubsidiaries and associates have revolving pledge and mortgages as the collateral held by theinvestees for their borrowings, etc. from financial institutions.

3. Total depreciation of property, plant and equipment(Millions of yen)

218,190
5,014

Leased assets
Own-used assets

223,205

Total- 61 -

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

34,742

Operating guarantees amount(2) Guarantee obligations, etc. for operating transactions of subsidiaries and associates (including
commitment to guarantee)(Millions of yen)Argos Shipping Pte. Ltd.

16,909
2,372
1,154

Other

2,459

MHC Capital & Finance (Hong Kong) Limited
Mitsubishi HC Capital Property Inc.

22,895

Subtotal(3) Guarantee obligations, etc. for liabilities including bank borrowings of subsidiaries and associates(including commitment to guarantee)(Millions of yen)574,752
445,319
160,864

Mitsubishi HC Capital UK PLC
Mitsubishi HC Finance America LLC
JSA International U.S. Holdings, LLC
MHC America Holdings Corporation
Mitsubishi HC Capital America, Inc.
MHC Capital & Finance (Hong Kong) Limited
Mitsubishi HC Capital (U.S.A.) Inc.
Jackson Square Aviation Ireland Ltd.
Bangkok Mitsubishi HC Capital Co., Ltd.
PT. Mitsubishi HC Capital and Finance Indonesia
Mitsubishi HC Capital (Singapore) Pte. Ltd.
Mitsubishi HC Capital Management (China) Limited
Mitsubishi HC Capital Leasing (Beijing) Co., Ltd.
Engine Lease Finance Corporation
Mitsubishi HC Capital (Shanghai) Co., Ltd.

73,43472,411
60,571
48,811
36,83135,214
26,292
19,57016,931
14,233
13,766
8,040
7,395
7,360
6,902
6,363
5,874
5,447
1,967
1,333
485

MHC Mobility GmbH
Mitsubishi HC Capital (Thailand) Co., Ltd.
PT.Takari Kokoh Sejahtera
Mitsubishi HC Capital Canada Leasing, Inc.
Mitsubishi HC Capital Canada, Inc.
MHC Mobility Holding B.V.
Dialease Maritime S.A.
PT.Arthaasia Finance
Other

1,650,174

Subtotal- 62 -

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

26

Employee (residential funds)

1,707,840

Total

5. Monetary claims and liabilities related to subsidiaries and associates(Millions of yen)
134,775
3,074
51,87424,985

Short-term monetary claims
Long-term monetary claims
Short-term monetary liabilities
Long-term monetary liabilities

6. The outstanding amounts of receivables generating from contracts with customers, contract assets, andcontract liabilities are as follows:(Millions of yen)
Receivables from contracts with customers (*1)
2,513
Contract assets
Contract liabilities (*2)
2,446
Notes: 1. Primarily included in lease and other receivables in the non-consolidated balance sheet.
2. Primarily included in advances received - lease in the non-consolidated balance sheet.

<Notes on non-consolidated statement of income>
1. Displayed figures are rounded down to the nearest million yen.
2. Transaction volume with subsidiaries and associates(Millions of yen)
50,563

Revenues
Cost of revenues

2,219

Selling, general and administrative expenses

4,002

Purchase of leased assets, etc.

19,878Other transaction volume except operating transactions

39,363

3. Breakdown of capital costs
Interest expenses(Millions of yen)
17,909Interest income

(92)
Total

17,816<Notes on non-consolidated statement of changes in equity>
1. Displayed figures are rounded down to the nearest million yen.
2. Matters related to the type and number of treasury shares
Number of shares at Number of sharesthe beginning of the increased during thecurrent fiscal year
current fiscal year
Treasury shares
Common shares(Note)
Total(Thousands of shares)
Number of shares
decreased during
the current fiscal
year

Number of shares atthe end of thecurrent fiscal year

4,368

26,984296

31,056

4,368

26,984296

31,056- 63 -

Notes: 1. The increase of 26,984 thousand in treasury shares of common shares is due primarily to theacquisition of 26,980 thousand common shares of former Mitsubishi UFJ Lease & Finance Company
Limited, which was owned by former Hitachi Capital Corporation, and to the purchase of fourthousand shares less than one unit.
2. The decline of 296 thousand treasury shares of common shares was due to the exercising of stock
options.

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

Deferred tax assets(Millions of yen)

Advances received - lease

18,3598,380

Allowance for doubtful accounts

6,881

Shares of subsidiaries and associates, etc.
Asset retirement obligations

6,520
4,603

Other

16,937Retained earnings from designated foreign subsidiaries(2)

Subtotal of deferred tax assets

61,683

Valuation allowance amount(6,798)

Total of deferred tax assets

54,885

Deferred tax liabilities(Millions of yen)

Valuation difference on available-for-sale securities(5,345)

Exceptions to deferred payment basis related to lease transfers(5,228)(4,560)

Other
Total deferred tax liabilities(15,134)

Net total of deferred tax assets

39,7502. Reconciliation of difference between the statutory effective tax rate and the actual effective tax rate ofincome taxes after application of tax effect accounting

(%)

30.6

Statutory effective tax rate
(Adjustments)
Items never included in income, such as dividend income
Retained earnings from designated foreign subsidiaries
Increase in valuation allowance
Other
Actual effective tax rate of income taxes after application of tax
effect accounting- 64 -(16.3)
3.6
1.3
0.3
19.5

<Notes on related-party transactions>
(1)
Type

Subsidiaries, affiliates, etc.
Name of company

Shutoken Leasing
SubsidiaryCo., Ltd.

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

Detail oftransactions

Lending business(Ownership)
Lending business funds
Directfunds
70.71%
Receivinginterest income

Mitsubishi HC
Subsidiary Business Lease
Corporation

Lending business(Ownership) Lending business funds (*3)
Direct 100% funds
Receivinginterest income

Mitsubishi HC
Subsidiary Capital Community
Corporation

Lending business(Ownership) Lending business funds (*3)
Direct 100% funds
Receivinginterest income
Lending business
funds

Mitsubishi HC
Subsidiary
Capital Property Inc.

Receiving
Lending business interest income(Ownership)
funds
Receiving lease
Direct 100%
Property leasing fees
Payment of landfees–

Diamond Asset
Subsidiary Finance Company
LimitedLending business(Ownership) Lending business funds
Direct 100% funds
Receivinginterest income

Mitsubishi HC
Subsidiary
Capital Realty Inc.

Lending business(Ownership) Lending business funds
Direct 100% funds
Receivinginterest income- 65 -

Balance at
end ofAccounting
fiscal year
title
(Millionsof yen)Loans
receivablefrom132,900
114,697
subsidiaries
andassociates

Transaction
amount(Millionsof yen)

274

–

Loans
receivable
from
9,985
subsidiaries
andassociates
304

–

Loans
receivable
from
5,402
subsidiaries
andassociates
226

–

Loans
receivablefrom
23,900subsidiaries
andassociates
585–

Investments
in leases
Long-term
693 guarantee
deposits
Long-term
guarantee–
deposits
received
Loans
receivablefrom
22,000subsidiaries
andassociates

13,173

1,183

–

Loans
receivablefrom
12,840subsidiaries
andassociates
250

–

–

138,975–

62,132–80,500–58,528355

23,533

164,587–

76,377–

Type

Name of company

Mitsubishi HC
Subsidiary
Capital Energy Inc.

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

Detail oftransactions

Lending business(Ownership) Lending business funds
Direct 100% funds
Receivinginterest income

Mitsubishi HC
Subsidiary Capital Auto Lease
Corporation

Lending business(Ownership) Lending business funds (*3)
Direct 100% funds
Receivinginterest income

JAPAN MEDICAL
Subsidiary LEASECORPORATION

Lending business(Ownershi
Lending business fundsp)
funds
Direct 100%

MHC Capital &(Ownership)
Guarantee of
Subsidiary FinanceIndirectobligation(Hong Kong) Limited 100%
Mitsubishi HC(Ownership) Guarantee of
Subsidiary Capital
Direct 100% obligation
UK PLC
Subsidiary

Mitsubishi HC(Ownership) Guarantee ofCapital America, Inc. Direct 100% obligation

Jackson Square
Subsidiary Aviation Ireland
LimitedBalance at
end ofAccounting
fiscal year
title
(Millionsof yen)Loans
receivablefrom
44,356
77,266
subsidiaries
andassociates
428

–

Loans
receivablefrom
17,357
subsidiaries
andassociates–

84,291

221
Loans
receivablefrom
56,600subsidiaries
andassociates

81,405

Receivinginterest income

218

–

–

Guarantee ofobligation

77,480––

Guarantee ofobligation

574,752––

Guarantee ofobligation

72,411––

Lending business(Ownership)
Lending business funds
Indirectfunds
100%Receivinginterest income

Lending business
Lending business funds(Ownership)
JSA Internationalfunds
Subsidiary
Indirect
U.S. Holdings, LLC
Guarantee of100%
Receivingobligationinterest income
Guarantee ofobligation
Guarantee ofGuarantee ofobligation
obligation
MHC America(Ownership)
Subsidiary
Underwriting
Holdings Corporation Direct 100%
Underwriting
capital increase
capital increase
Sharing officers
Mitsubishi HC(Ownership) Guarantee ofGuarantee of
Subsidiary Finance America
Indirectobligation
obligation
LLC
100%
Sharing officers- 66 -

Transaction
amount(Millionsof yen)Loans
receivablefrom
13,891
subsidiaries
andassociates

163,478

5,553

－

–

Loans
receivablefrom
20,299subsidiaries
andassociates

80,097

2,814

–

–

160,864––

73,434––

103,971––445,319

–

–

(2)
Type

Fellow subsidiaries, etc.
Name of company

Subsidiaryof othersubsidi- MUFG Bank, Ltd.
aries andassociates
Subsidiaryof othersubsidi- Lawson, Inc.
aries and (*4)
associates

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

(Owned)Direct3.50%–

Borrowingbusiness capital

Lease transaction

Detail oftransactions
Borrowing shortterm businesscapitalBorrowing longterm businesscapitalPayment ofinterest income
Receiving lease
fees

Transaction
amount(Millionsof yen)Balance at
end ofAccounting
fiscal year
title
(Millionsof yen)412,794

Short-termborrowings

43,113–Long-term
borrowings

355,225

8,206

–

–

17,957

Investments
in leases

111,623

Notes: 1. The transactions under Article 112, paragraph (2) of the Regulations on Corporate Accounting are
omitted.
2. The interest rate of business capital loans, lease transactions (including property leases), and borrowings
are decided by considering market interest rates, etc.
3. Loans in the pooling system where funds of subsidiaries are collected to the Company, which offers suchfunds to subsidiaries who have demand for funds. The interest rate on such a loan is determined aftermarket interest rates, etc. are taken into consideration. In this connection, the transaction amount of capitalloans is presented in the amount of increase or decrease from the beginning balance in the current fiscal
year.
4. Balance at end of fiscal year includes the amount of lease contracts, which aim to disperse credit risk,
including interest, presented in the non-consolidated balance sheet.

<Notes on per share information>
Equity per share¥612.00

Earnings per share¥35.93<Notes on significant subsequent events>
None.
<Notes on company subject to consolidated dividend regulations>
The Company is subject to consolidated dividend regulations.

- 67 -

<Other notes>
Notes on business combinations
Business combination by acquisition
Business integration with Hitachi Capital Corporation
Mitsubishi UFJ Lease & Finance Company Limited and Hitachi Capital Corporation made businessintegration as of April 1, 2021 and renamed the tradename “Mitsubishi HC Capital Inc.” on the same day.
The detail is described in <Other notes>, Notes on business combinations in the Notes on Consolidated
Financial Statements.
1. Amount of gain on bargain purchase and occurrence cause(1) Amount of gain on bargain purchase¥222 million(2) Occurrence cause
After the identification of recognizable assets and liabilities on the business combination day and after thecompletions of their market values calculation and the subsequent distribution of the acquisition costs, net
assets on the business combination day surpassed the acquisition costs and, therefore, the difference wasrecognized as gain on bargain purchase.
2. Amounts and details of assets accepted and liabilities underwritten on the business combination day(Millions of yen)

Current assets
Non-current assets
Deferred assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities

1,215,401
569,955
9781,786,334
483,181904,496
1,387,678- 68 -