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

OTHER MATTERS SUBJECT TO THE
ELECTRONIC PROVISION MEASURESFOR THE 52nd ANNUAL GENERALMEETING OF SHAREHOLDERS(MATTERS OMITTED FROMDOCUMENTS DELIVERED TO
SHAREHOLDERS)
Matters concerning the Status of the Group
Changes in assets and income (loss)
Principal business
Locations
Status of employees, Main lenders
Other important matters concerning the status of the Group

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

Status of the accounting auditor
System for ensuring appropriate business operation and overview of
its operating status
Consolidated statement of changes in equity
Notes on consolidated financial statements
Non-consolidated statement of changes in equity
Notes on non-consolidated financial statements(April 1, 2022 to March 31, 2023)

Mitsubishi HC Capital Inc.
-1-

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

FY201949th term

FY202050th term

FY202151st term(Millions of yen)
FY202252nd term(Current fiscal year)

Revenues

923,768

947,658

1,765,559

1,896,231

Recurring income

94,37664,968117,239

146,076

Net income
attributable to owners of theparent

70,75455,314

99,401

116,241

Earnings per share¥79.44¥62.07¥69.24¥80.95

Total assets

6,285,966

6,014,896

10,328,872

10,726,196

Total equity

798,820

817,906

1,333,467

1,551,029(Note) Effective from the 51st term, the Company changed its accounting policies for “Method for How to Post Re-leasing
Revenues in Lease Transactions,” “Method for Posting Lease Transactions as Finance,” and “Method for Posting
Deferred Assets (Bond Issuance Cost),” and the new accounting policies have been retrospectively applied to thefigures of the 50th term.

2)

Changes in assets and income (loss) of the Company

Category

FY201949th term

FY202050th term

FY202151st term(Millions of yen)
FY202252nd term(Fiscal year underreview)

Revenues

470,854492,019

838,475

764,506

Recurring income

41,087

61,392

34,00879,910Net income

38,76863,39951,58482,204

Earnings per share¥43.53¥71.14¥35.93¥57.24

Total assets

4,476,092

4,181,294

5,700,025

5,317,966

Total equity

508,589

557,554880,601

881,212(Note) Effective from the 51st term, the Company changed its accounting policies for “Method for How to Post Re-leasing
Revenues in Lease Transactions,” “Method for Posting Lease Transactions as Finance,” and “Method for Posting
Deferred Assets (Bond Issuance Cost),” and the new accounting policies have been retrospectively applied to thefigures of the 50th term.

-2-Principal business
The Group consists of the Company, its 442 subsidiaries and 101 affiliates. Other affiliated companies
include Mitsubishi Corporation and Mitsubishi UFJ Financial Group, Inc.
The Group is conducting its business in the seven segments of “Customer Solutions,” “Global Business,”“Environment, Energy & Infrastructure,” “Aviation,” “Logistics,” “Real Estate,” and “Mobility.”
The main services and businesses of each reportable segment are as follows.
Reportable segments

Main services and business description

Environment, Energy &Infrastructure

Finance solutions for corporations and public agencies,
sales finance in partnership with vendors, real estate leasing, financial services
Finance solutions and sales finance in partnership with vendors in Europe, theAmericas, China and ASEAN region
Renewable energy power generation business, energy-saving business, overseas
infrastructure investment business

Aviation

Aircraft leasing business, aircraft engine leasing business

Customer Solutions
Global Business

Logistics

Marine container leasing business, railway freight car leasing business

Real Estate

Real estate securitization finance, real estate revitalization investment business, realestate asset management business

Mobility

Auto leasing business and supplementary services

Regarding the next fiscal year (fiscal year ending March 31, 2024), in accordance with the organizationalchange, the reportable segment name in the “Environment, Energy & Infrastructure” is planned to bechanged to “Environment & Energy.”
Locations1) The Company
Head Office Chiyoda-ku, Tokyo
Branches, etc. Nishi-Shimbashi Office, Nagoya Office, Akasaka Office, Osaka Office, Sapporo Branch, Tohoku
Branch (Sendai), Omiya Branch, Tokyo Business Department No.4 (Shinjuku), Yokohama Branch,
Hokuriku Branch (Kanazawa), Hamamatsu Branch, Kariya Business Department, Kyoto Branch, Kobe
Branch, Chushikoku Branch (Okayama), Kyushu Branch (Fukuoka)

2)

Subsidiaries

As listed in “Status of major subsidiaries” of the Notice of Convocation.
Status of employees
Status of Group employees
Segment name

Number of employees

Customer Solutions

2,627 (down 46 from the end of the previous fiscal year)

Global Business

4,278 (up 235 from the end of the previous fiscal year)

Environment, Energy & Infrastructure

174 (down 3 from the end of the previous fiscal year)

Aviation

212 (up 14 from the end of the previous fiscal year)

Logistics

183 (down 13 from the end of the previous fiscal year)

Real Estate

188 (down 80 from the end of the previous fiscal year)

Mobility

231 (down 226 from the end of the previous fiscal year)

Company-wide (common)

755 (down 36 from the end of the previous fiscal year)

Total

8,648 (down 155 from the end of the previous fiscal year)(Notes) 1. The number of employees excludes those dispatched from the Group to outside companies but includes thosedispatched from outside companies to the Group.
2. The employees indicated as Company-wide (common) belong to administrative divisions, which cannot beclassified in any specific segment.
3. Reportable segments have been changed as of the current fiscal year. A description of the business in eachsegment is provided in “Principal business.”-3-

Main lenders
LenderAmountMillions of yen

MUFG Bank, Ltd.

1,336,303

Mizuho Bank, Ltd.

469,053

Sumitomo Mitsui Banking Corporation

386,984

Sumitomo Mitsui Trust Bank, Limited

255,303

The Norinchukin Bank

236,982

Other important matters concerning the status of the Group
None.

-4-

Matters concerning the Company’s shares(1) Total number of authorizedshares(2) Total number of issued shares(Excluding 30,416,158 treasury shares.)4,800,000,000
1,436,496,086(3) Number of shareholders

278,018(4) Major shareholders
Name

Shares held

Ownership (Note)

Mitsubishi Corporation

264,044,396 shares

18.38%

Mitsubishi UFJ Financial Group, Inc.

208,345,981 shares

14.50%The Master Trust Bank of Japan, Ltd. (Trust Account)

112,341,200 shares

7.82%

Custody Bank of Japan, Ltd. (Trust Account)

65,391,700 shares

4.55%

Hitachi, Ltd.

59,152,180 shares

4.11%

MUFG Bank, Ltd.

50,348,620 shares

3.50%

Mitsubishi UFJ Trust and Banking Corporation

28,431,000 shares

1.97%

Meiji Yasuda Life Insurance Company

27,990,390 shares

1.94%

JPMorgan Securities Japan Co., Ltd.

22,807,730 shares

1.58%

STATE STREET BANK WEST CLIENT - TREATY 505234

11,543,563 shares

0.80%(Note)

Treasury shares (30,416,158 shares) are excluded when calculating ownership.

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

None.

-5-

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

Name
(Date ofresolution on
issuance)

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

Number ofholders
Directors ofAmount ofType andtheMajor
assets to benumber ofCompany
conditions(excluding Number of shares to be Amount to be contributed
Share acquisition to exercise
upon
delivered upon paid for share
share
Directors
acquisition exercising rights exercise period share
exercising
who are acquisitionacquisition
sharerightsshare
rightsAudit &
rightsacquisitionacquisition
Supervisory
rightsrightsCommittee
Members
and Outside
Directors)

1

CommonOctober 14, 2017
shares of the ¥566 per307¥1 per share to October 13,
Companyshare
2047
30,700 shares(*)

1

Commonshares of the ¥590 per
July 14, 2018 to248¥1 per share
Company
share
July 13, 2048
24,800 shares

(*)

1

1

13th shareacquisitionrights(June 25, 2021)

514th shareacquisitionrights(June 28,2022)

6

Commonshares of the321
Company
32,100 shares
Commonshares of the323
Company
32,300 shares
Commonshares of the
1,600 Company
160,000
sharesCommonshares of the
1,864 Company
186,400
shares¥513 perJuly 13, 2019 to¥1 per share
share
July 12, 2049(*)

¥424 perJuly 16, 2020 to¥1 per share
share
July 15, 2050(*)

¥499 perJuly 16, 2021 to¥1 per share
share
July 15, 2051(*)

¥511 perJuly 16, 2022 to¥1 per share
share
July 15, 2052(*)

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

-6-(2) Overview of share acquisition rights, etc. delivered as compensation for execution of duties of theCompany Executive Officers, etc. during current fiscal year

Name
(Date ofresolution on
issuance)

14th shareacquisitionrights(June 28, 2022)

Number ofrecipient
Executive
Amount ofType and
Officers ofMajor
assets to benumber oftheconditions
Number of shares to be Amount to be contributed
Company,
Share acquisition to exercise
upon
delivered upon paid for share
share
etc.
acquisition exercising rights exercise period share
exercisingacquisition(Excluding
acquisition
sharerightsshare
rights issued
thoserightsacquisitionacquisition
servingrightsrightsconcurrentlyasDirectors)

55

Commonshares of the
6,690 Company
669,000
shares¥511 perJuly 16, 2022 to¥1 per share
share
July 15, 2052(*)

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

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

-7-

Matters concerning the Company’s officers
Overview of limited liability agreements
The Company has entered into limited liability agreements with non-Executive Directors, namely
Hiroyasu Nakata, Yuri Sasaki, Go Watanabe, Takuya Kuga, Akira Hamamoto, Koichiro Hiraiwa, Hiroko
Kaneko, and Masayuki Saito, as described below.
 In the event that a non-Executive Director is liable to the Company as a result of negligencein their duties, that liability shall be limited to the minimum liability set forth in Article 425,
Paragraph 1 of the Companies Act.
 The above limitation is recognized only when the non-Executive Director performed the
duty in question in good faith and without gross negligence.
(Note) On April 1, 2023 the Company entered into limited liability agreements under thesame terms with Seiji Kawabe and Takahiro Yanai, who became non-Executive
Directors on that day.
Matters concerning directors and officers liability insurance agreement
The Company plans to enter into a directors and officers liability insurance agreement as provided for in
Article 430, Paragraph 3, Item 1 of the Companies Act with an insurance company. The agreement will
cover losses incurred from damages compensation, legal fees, etc. in cases where an insured receives aclaim for damages from a shareholder or third party. In addition, as a measure to ensure that thelawfulness of the execution of duties of the insured person is not compromised, the following losses, etc.
are excluded from coverage.
1) Damage arising from the fact that the insured illegally obtains private gain or benefit
2) Damage arising from criminal acts of the insured3) Damage arising from the insured’s acts committed with the knowledge that they violate laws or
regulations
The insureds under this agreement are the Directors, Directors who are Audit & Supervisory Committee
Members, Audit & Supervisory Board Members, and Executive Officers of the Company and its 40
subsidiaries in Japan. There is no insurance premium to be paid by the insureds.

-8-Matters concerning Outside Directors
1) Concurrent positions of executive Directors, etc. at other corporations, etc. and the Company’s
relationships to those corporations, etc.
Category

Director

Name

Other corporation

Concurrent position

Relationship to the other corporation, etc.

Takuya Kuga

Mitsubishi
Corporation

Executive Vice
President

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

Koichiro Hiraiwa

Dream Estate Tokyo
Inc.

Representative
Director

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

Masayuki Saito

DIC Corporation

Chairman of theBoard of Directors

There is a trade relationship such as leaseagreements between the Company and
DIC Corporation.

Director(Audit &Supervisory
Committee
Member)Director(Audit &Supervisory
Committee
Member)2) Concurrent positions of Outside Officers at other corporations, etc. and the Company’s relationships tothose other corporations, etc.
Category

Director

Name

Yuri Sasaki

Director(Audit &Supervisory
Committee
Member)Other corporation

Concurrent position

Relationship to the other corporation, etc.

Meiji Yasuda Life
Insurance Company

Outside Director

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

Kanagawa Chuo
Kotsu Co., Ltd.

Outside Director

There is no significant trade or otherrelationship between the Company and
Kanagawa Chuo Kotsu Co., Ltd.

The Yokohama
Rubber Co., Ltd.

There is a trade relationship such as lease
Member of the Board
agreements between the Company and(Outside)
The Yokohama Rubber Co., Ltd.

Hiroko Kaneko-9-3) Main activities
Category

Name

Director

Hiroyasu
NakataAttendance at meetings
Board of Directors
meetings: 14/14
Governance Committee :3/3
Nomination Committee :5/5Main activities
Leveraging his deep knowledge as a legal expert, Hiroyasu Nakata
provides comments as necessary and appropriate when proposals
are discussed. In so doing, he contributes to proper decision-making
by the Board of Directors, etc. and supervision of management ingeneral.

Compensation Committee :8/8
Director

Yuri Sasaki

Board of Directors
meetings: 14/14
Governance Committee :3/3
Nomination Committee :5/5

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

Compensation Committee :8/8
Director

Go Watanabe

Board of Directors
meetings: 14/14
Governance Committee :3/3
Nomination Committee :5/5Compensation Committee :8/8

Director

Takuya Kuga

Board of Directors
meetings: 11/11
Governance Committee :2/2
Nomination Committee :4/4
Compensation Committee :7/7

Director(Audit &Supervisory
Committee
Member)Koichiro
Hiraiwa

Board of Directors
meetings: 14/14
Audit & Supervisory
Committee : 14/14
Governance Committee :3/3
Nomination Committee :5/5

Leveraging his extensive management experience and high level of
insight into internal and external finance from working at leading
Japanese financial institution and manufacturer, Go Watanabe
provides comments as necessary and appropriate from a practicalstandpoint when proposals are discussed. In so doing, he contributes
to proper decision-making by the Board of Directors, etc. andsupervision of management in general.

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

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

Compensation Committee :8/8- 10 -

CategoryDirector(Audit &Supervisory
Committee
Member)Name

Attendance at meetings

Hiroko Kaneko Board of Directors
meetings: 14/14
Audit & Supervisory
Committee : 14/14
Governance Committee :3/3
Nomination Committee :5/5Main activities
Leveraging her vast experience at a leading auditing firm and as auniversity professor, as well as her in-depth knowledge as anaccounting expert, Hiroko Kaneko conducts audits from a neutral
and objective standpoint and provides comments as necessary andappropriate when proposals are discussed. In so doing, she
contributes to ensuring the soundness of the Company’s
management.

Compensation Committee :8/8
Director(Audit &Supervisory
Committee
Member)Masayuki Saito Board of Directors
meetings: 10/11
Audit & Supervisory
Committee : 10/10
Governance Committee :2/2
Nomination Committee :4/4

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

Compensation Committee :7/7(Notes) 1. Because Director Takuya Kuga was newly elected as a Director at the Annual General Meeting of Shareholders
held on June 28, 2022, his attendance at the meetings of the Board of Directors held after that date is described.
2. Because Director Masayuki Saito was newly elected as a Director (Audit & Supervisory Committee Member) at
the Annual General Meeting of Shareholders held on June 28, 2022, his attendance at the meetings of the Boardof Directors and the Audit & Supervisory Committee held after that date is described.
3. Because Directors Takuya Kuga and Masayuki Saito became members of the Governance Committee,
Nomination Committee and Compensation Committee from June 28, 2022, their attendance at the meetings ofeach Committee held after that date is described.

- 11 -

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¥256 million(ii) Total amount of cash and other property benefits to be paid to the Accounting
Auditor by the Company and its consolidated subsidiaries¥495 million

A total of 18 of the important subsidiaries of the Company receive auditing (limited to the provisions of
the Companies Act or the Financial Instruments and Exchange Act, including equivalent laws andregulations in foreign countries) from the certified public accountants or auditing firms (including
persons with equivalent certifications in foreign countries) besides the Accounting Auditor of theCompany.
(3) Reason that Audit & Supervisory Committee agreed to remuneration for Accounting Auditor
The Audit & Supervisory Committee agrees to this remuneration as it has confirmed that these amounts
are determined after sufficient discussion with the Accounting Auditor by using the number of auditingdays and of auditors required to perform appropriate and efficient accounting auditing as the basis forcalculation.
(4) Compensated non-auditing services by the Accounting Auditor to the Company
The Company entrusted the Accounting Auditor with the preparation of comfort letters and otherservices, which are services other than those stipulated in Article 2, paragraph (1) of the Certified Public
Accountants Act (non-auditing services), and paid compensation thereto.
(5) Policies on decisions of dismissal or non-reappointment of Accounting Auditor
If the Accounting Auditor falls under the conditions prescribed in each item of Article 340, paragraph (1)of the Companies Act, the Audit & Supervisory Committee shall deliberate the dismissal of the
Accounting Auditor. If the Audit & Supervisory Committee determines that the Accounting Auditor must
be promptly removed, the Audit & Supervisory Committee shall dismiss the Accounting Auditor basedon the agreement of all members of the Audit & Supervisory Committee.
In addition to the above, if it is determined that the Accounting Auditor should be changed, such as incases of obstacles hindering their ability to execute the duties of Accounting Auditor, the Audit &Supervisory Committee shall decide the details of the proposal relating to dismissal or nonreappointment of the Accounting Auditor that will be submitted to the General Meeting of Shareholders.

- 12 -

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

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

- 14 -

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

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

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

- 15 -

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

- 16 -

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

- 17 -

[Other Frameworks for Ensuring Effective Audits by the Company’s Audit & Supervisory Committee
Members](1) The Audit & Supervisory Committee should create an opportunity to conduct interviews regularly with
Directors, Executive Officers and other relevant executives, and employees, concerning the business,and conduct a regular meeting to exchange opinions with the President and the Accounting Auditor.
(2) The Audit & Supervisory Committee may request opinions from lawyers, the Accounting Auditor, etc. asnecessary, for cases that require expertise.
(3) The Audit & Supervisory Committee should receive in advance an audit plan from the Accounting
Auditor, and regularly receive an audit implementation report; in addition, the Audit & Supervisory
Committee should conduct an interview as necessary, regarding the implementation of audit.
(4) The Audit & Supervisory Committee should make efforts to enhance the effectiveness of the audit, bycooperating with the Audit Department and conducting an audit, regularly or in a timely manner, of theoffices, etc. including the subsidiary, and by understanding the actual situation.
(5) The employee, who should assist the duties of an Audit & Supervisory Committee Member selected by
the Audit & Supervisory Committee and the duties of the Audit & Supervisory Committee, may attend
the Executive Committee, committees and other important meetings and make necessary statements
thereat, and view important documents.
(6) An Audit & Supervisory Committee Member selected by the Audit & Supervisory Committee should
request that the Company and its subsidiaries report on its business, or investigate the situation of theduties and properties, and the Company and its subsidiaries should cooperate therewith.
(7) The personnel of the General Manager of the Internal Audit Department should be decided upon priorconsultation with the Full-time Audit & Supervisory Committee Member selected by the Audit &Supervisory Committee.
(8) The Internal Audit Department should make a report to the Audit & Supervisory Committee regarding
the internal audit plan, internal audit result, and the amendment and abolition of the important rules
related to internal audit, and should respond to requests by the Audit & Supervisory Committee in
relation to information provision, investigation, and report.
(9) Directors, Executive Officers and other relevant executives, and employees should provide the necessary
cooperation for the execution of duties of the Audit & Supervisory Committee, based on the Audit &Supervisory Committee Regulations, standards for audit, etc. of the Audit & Supervisory Committee,
and standards for the Audit & Supervisory Committee to conduct an audit regarding an internal control
system.
(Overview of the operating status of the system for ensuring appropriate business operation)
An overview of the operating status for the 52nd fiscal year (fiscal year ended March 31, 2023) of thesystem for ensuring appropriate business operation (internal control system) is as follows.
[System for Group Management](1) The Company has established and disclosed the Our Mission that embraces the goals of the Group, andthe Our Vision that leads to realizing the Our Mission. The Company has established and disclosed the
Mitsubishi HC Capital Group Code of Ethics and Code of Conduct in order to share fundamental values
and ethics to be embraced by all members of the Group and reflect them in business.
(2) The Company has established seven Sub-Committees (risk management, information disclosure,compliance, ALM, sustainability, IT/Office, and investment strategy) as consultative bodies under the- 18 -

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
and offices responsible for the internal rules. The Company receives timely reports from suchdepartments and offices and provides necessary advice and instruction.
(3) The Company has documented the content of financial reports of the Group based on the internal rules
and evaluated such reports for effectiveness through periodical verifications.
[System for Compliance with Laws and Regulations](1) The Company has established and disclosed the “Mitsubishi HC Capital Group Code of Ethics and Codeof Conduct.” In addition, the Company has established different types of internal rules and theCompliance Manuals and made them known well to the Group.
(2) The Company has assigned the Chief Compliance Officer (Head of Risk Management Division) as
Supervisor and installed the Legal & Compliance Department that will build compliance promotion
systems for the Group. The Legal & Compliance Department has formulated compliance programs towork for compliance promotion through monitoring and holding training programs and served as theadministrative office to the Compliance Committee (that opened four meetings in the current businessyear), which is a consultative body under the Executive Committee, and reported legal compliancematters to the Executive Committee and the Board of Directors.
(3) The Company has established the Compliance Hotline System as an internal whistleblowing frameworkthat allows employees to report to or seek consultations with the Company regarding unfair practices,
etc., and periodically made the system known well to officers, etc. and firmly protect reporting or
consulting persons from disadvantageous treatment.
(4) The Company has formulated treatment rules and accordingly established internal rules and manuals of
how to prevent deals with anti-social forces and money-laundering and make officers and employeesfamiliar to those rules and manuals though holding internal education, etc.
[Information Disclosure System](1) The Company has established and disclosed the “Information Disclosure Policy” as the basic policy of
the Group’s information disclosure. In addition, the Company has formulated internal rules to maketimely and appropriate disclosure and developed a system to receive timely report from the Group. The
information disclosure of the Group is reported to the Executive Committee after its appropriateness andprocedural effectiveness is examined at the Information Disclosure Sub-Committee (which held four
meetings in the current business year).
[Internal Audit System](1) The Company has enacted internal rules to clarify procedures related to planning, implementing, andreporting internal audits and providing instructions for improvement within the Group and familiarizedthese internal rules in the Group.
(2) The Company has established the Internal Audit Department as the department in charge of internal
audits. The Internal Audit Department has formulated annual audit plans, systematically implemented
internal audits related to the Group, and reported the audit results to the Representative Director, Boardof Directors and the Audit & Supervisory Committee. In addition, results of improvement for mattersrequiring improvement where findings have been made and guidance given in audits (matters requiring- 19 -

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

- 20 -

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

- 21 -

[Other Frameworks for Ensuring Effective Audits by the Company’s Audit & Supervisory Committee
Members](1) The Audit & Supervisory Committee has made periodical exchanges of opinions with the President, theInternal Audit Department and the Accounting Auditor, respectively. The Committee has performed
periodical or timely collaborations with the Internal Audit Department and the Accounting Auditor, in
addition to receiving audit plans and results of audits from such bodies, and worked for improvement in
the effectiveness of audit by collecting information from, including investigation into, offices andsubsidiaries, etc.
(2) The Audit & Supervisory Committee Members that are elected by the Audit & Supervisory Committee
have attended significant meetings including the Executive Committee, etc. to make necessary remarks
and view important documents.
(3) Personnel affairs of the General Manager of the Internal Audit Department shall be decided upon priorconsultation with the Full-time Audit & Supervisory Committee Members selected by the Audit &Supervisory Committee.
(4) The audit standards of the Audit & Supervisory Committee has a stipulation that when the Audit &Supervisory Committee receives advice from outside experts including lawyers, it may demand theexpense from the Company.

- 22 -

Consolidated statement of changes in equity(April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of
period as of April 1, 2022

CapitalsurplusRetainedearnings

Total
shareholders’equityTreasuryshares33,196

548,586

638,043(19,369)

1,200,456

33,196

548,586

638,043(19,369)

1,200,456

Cumulative amounteffected from changes in
the accounting policies
Balance at beginning of thecurrent period reflectingchanges in the accounting
policies
Changes during fiscal year
Dividends from surplus(43,087)(43,087)

Net income attributableto owners of the parent

116,241

116,241

Change due to merger ofconsolidated subsidiaryand unconsolidated
subsidiary

(206)

(206)

Change in ownershipinterest of parent due totransactions with noncontrolling interests(1,191)(1,191)

Purchase of treasury
shares
Disposal of treasury
shares

(49)

(0)

(0)

211

161

Net changes in items
other than shareholders’equityTotal changes during fiscal
year–(1,241)

72,946

210

71,916

Balance at end of period asof March 31, 2023

33,196547,344

710,989(19,158)

1,272,372- 23 -

Accumulated other comprehensive income
Valuationdifference Deferredgains oronavailable- losses onhedgesfor-salesecurities
Balance at beginning of
period as of April 1, 2022

14,953Cumulative amounteffected from changes in
the accounting policies

394

Balance at beginning of thecurrent period reflectingchanges in the accounting
policies

15,3471,460

Foreign
Remeasucurrency
rementstranslaof definedtion
benefitadjustplans
ment
92,776

123

Total
NonaccumuSharecontrolllatedacquisition
ing
other
rightsinterests
comprehensive
income109,313

1,861

21,835394

1,460

92,776

123

109,707

Total equity

1,333,467

394

1,861

21,835

1,333,861

Changes during fiscal year
Dividends from surplus(43,087)

Net income attributableto owners of the parent

116,241

Change due to merger ofconsolidated subsidiaryand unconsolidated
subsidiary(206)

Change in ownershipinterest of parent due totransactions with noncontrolling interests(1,191)

Purchase of treasury
shares(0)

Disposal of treasury
shares161

Net changes in items
other than shareholders’equity(529)

51,591

93,7691,861

146,693276(1,717)145,252

Total changes during fiscal
year

(529)

51,591

93,7691,861

146,693276(1,717)217,168

Balance at end of period asof March 31, 2023

14,81753,051

186,545

1,985

256,400

2,138

20,118

1,551,029- 24 -

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: 254
The names of the major consolidated subsidiaries are listed in “Status of major
subsidiaries” of the Notice of Convocation.
The following companies were included in the scope of consolidation from the current
fiscal year: MHC Mobility Europe B.V. and four other companies due to theirestablishment; and Mirai Soden Chita Mihama G.K. and two other companies due toacquisition of equity, etc.
The following companies were removed from the scope of consolidation from the current
fiscal year: MUL HEALTHCARE CO., LTD. and 12 other companies due to thecompletion of liquidation, etc.; Diamond Asset Finance Company Limited and one othercompany due to the sale of their shares; MHC Capital & Finance (Hong Kong) Limited due
to its merger with Mitsubishi HC Capital (Hong Kong) Limited as the surviving company.
Beacon Intermodal Leasing, LLC was removed from the number of the consolidated
subsidiaries above due to its absorption-type merger with CAI International, Inc. as thesurviving company on January 1, 2023 (local time).
The following companies were removed from the scope of consolidation and included in
the scope of application of the equity method from the current fiscal year: Global New
Energy Togo Co., Ltd. and one other company due to the transfer of a portion of theirshares; and Mitsubishi HC Capital Auto Lease Corporation because of a reduction in the
Company’s ownership ratio due to a capital increase through third-party allocation.
(2) Names of major non-consolidated subsidiaries
There are no major non-consolidated subsidiaries which should be disclosed.
Reason for exclusion from scope of consolidation
Of the non-consolidated subsidiaries, 134 companies are proprietors conducting leasing
businesses primarily through silent partnerships. Their assets, liabilities, and gains/losses are
not attributable to the pertinent subsidiaries and the Company has barely any transactions
with the subsidiaries. Therefore, they are excluded from the scope of consolidation.
Of the non-consolidated subsidiaries, 54 companies are small businesses. Their total assets,revenues, net income or loss (amount corresponding to equity share), retained earnings(amount corresponding to equity share), etc. do not significantly impact the consolidatedbalance sheet nor consolidated statement of income. Therefore, they are excluded from thescope of consolidation.

2.

Matters related to the application of the equity method(1) Number of non-consolidated subsidiaries applying equity method: 1
There are no major non-consolidated subsidiaries which should be disclosed.

- 25 -

(2) Number of affiliates applying equity method: 70
Names of major equity method affiliates
Mitsubishi Electric Financial Solutions Corporation
Mitsubishi Auto Leasing Corporation
Chubu Electric Power & MHC Germany Transmission GmbH
Because equity, etc. in Beta Leasing II Limited was acquired, it has been included in thescope of application of the equity method from the current fiscal year.
The following companies have been removed from the scope of application of the equity
method from the current fiscal year: M-1955 Broadway Co-Investor, LLC and one othercompany due to the completion of liquidation, etc.; Repre Co., Ltd. and two other companies
due to the transfer of the shares of each company; GRIDSERVE Holdings Ltd because of areduction in the Company’s ownership ratio due to a capital increase through third-party
allocation; and Mitsubishi Auto Leasing Holdings Corporation due to its merger with
Mitsubishi Auto Leasing Corporation as the surviving company.
The following companies were removed from the scope of consolidation and included in thescope of application of the equity method from the current fiscal year: Global New Energy
Togo Co., Ltd. and one other company due to the transfer of a portion of their shares; andMitsubishi HC Capital Auto Lease Corporation because of a reduction in the Company’sownership ratio due to a capital increase through third-party allocation.
Mitsubishi Electric Financial Solutions Corporation changed its name from Mitsubishi
Electric Credit Corporation as of October 1, 2022.
(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, 134 companies are proprietors conducting leasing
businesses primarily through silent partnerships. Their gains/losses are not attributable to thepertinent subsidiaries and the Company has barely any transactions with the subsidiaries.
Therefore, they are excluded from the scope of equity method application.
Of the non-consolidated subsidiaries and the affiliates, 53 non-consolidated subsidiaries and
31 affiliates have insignificant impact on the consolidated balance sheet and consolidated
statement of income from a perspective of net income or loss (amount corresponding toequity share), retained earnings (amount corresponding to equity share), etc., even whenexcluded from equity method. As they are also not important overall, they are excluded fromthe scope of equity method application.
3.

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

May 31:

1June 30:

2

July 31:

2- 26 -

August 31:

2

September 30:

3

October 31:

14

November 30:

3

December 31:

130

January 31:

22

February 28 (or 29): –(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 13 of the consolidated subsidiaries with balance sheet dates of the end of December,provisional closings are calculated based on the results at the consolidated balance sheet date.
Other consolidated subsidiaries use the financial statements as of their respective balance sheet
dates.
Also, important transactions that occur between the consolidated balance sheet date and the abovebalance sheet dates are adjusted as needed in consolidation.
4.

Matters related to accounting policies(1) Valuation standards and methods for important assets(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.
- 27 -

Available-for-sale securities not included above
・ Other than shares that have no market value
Fair value method(Valuation differences are included directly in net assets and costs of securities sold aredetermined by the moving average method.)・ Shares with no market value, etc.
Cost method based on the moving average method
For investments in limited liability investment partnerships (deemed to be securities basedon Article 2, paragraph (2) of the Financial Instruments and Exchange Act), these arestated by the net amount corresponding to the Company’s equity share based on the mostrecent obtainable financial statements depending on the reporting date established by thepartnership agreement.
(ii) Derivatives
Fair value method(iii) Inventories
Cost method based on the specific-cost method(Consolidated balance sheet values are calculated using the method of writing down the bookvalue based on declining profitability)(2) Methods of depreciation and amortization of significant depreciable and amortizable assets(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 mainly calculated using the straight-line method
based on expected usable period (five years) in the Company.
For other amortizable assets, amortization is calculated using straight-line method based on
expected effective period.

- 28 -

(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
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 ¥16,770 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 thecurrent 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 (14 to 15 years) at the time of occurrence.
Actuarial gains and losses are amortized with the pro-rata amount calculated using the straightline method for a certain number of years (7 to 17 years) within the scope of the averageremaining service years of employees when incurred in each fiscal year from the respective
following fiscal years.

- 29 -

(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 amonthly lease fee to be received under the lease agreement for the duration of the leaseagreement period.
The Company and consolidated subsidiaries inside Japan book disposal amount and cost related
to disposal of leasing assets as revenues and cost of revenues.
(iii) Accounting policy for revenue from contracts with customers
The Company has recognized revenue at the time the control of promised goods or services istransferred to the customer at the amount expected to be received upon exchange of said goods
or services. The description of major performance obligations of major businesses and the times
recognizing revenues are stated as follows:(Sales from maintenance contracts)
Along with concluding lease contracts, maintenance and other services are offered to customers.
At the time when service is delivered, the performance obligation is judged as met and revenue
is recognized.
(Sales from selling merchandise, sales from disposal of lease properties)
Sales from selling merchandise and disposal of lease properties on maturities of lease contracts
by consolidated subsidiaries outside Japan adopting the International Financial ReportingStandards or the U.S. accounting standards are recognized as revenue when the delivery of said
properties to customers is completed and, therefore, the fulfillment obligation is considered asmet.
(Electricity sales)
Electricity sales to customers for the accounting year are calculated and recognized as revenue inaccordance with electricity supply volumes to the customers.
(6) Translation criteria of major assets or liabilities denominated in foreign currencies into Japanese yen
Monetary claims and liabilities denominated in foreign currencies are translated into Japanese yen
by using the spot exchange rates on the consolidated balance sheet date, and the difference arisingfrom such translation is stated as gain or loss. Monetary claims and liabilities denominated inforeign currencies subject to allocation treatment, such as 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.

- 30 -

(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.

(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.
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.

- 31 -

(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:
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 ¥156,907 million in investment securitiesand ¥2,199 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.

- 32 -

<Notes on changes in accounting policies>(Application of Application Guidelines for Accounting Standard for Market Value Calculation, Etc.)
The Company has applied the “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No.31, June 17, 2021, the “Fair Value Measurement Implementation
Guidance”) from the beginning of this current fiscal year, and it has decided to apply new accounting
policies stated in the Fair Value Measurement Implementation Guidance in future in accordance with thetransitional treatment provided for in paragraph (27-2) of the Fair Value Measurement Implementation
Guidance.
The impact of this change on the consolidated financial statements is insignificant.
(Application of Accounting Standards Update (ASU) 2016-02 “Leases”)
Certain overseas consolidated subsidiaries applied ASU 2016-02 “Leases” from the beginning of thiscurrent fiscal year. As a result, lease assets and lease liabilities are recognized in general on the consolidatedbalance sheet of these overseas consolidated subsidiaries for all lease transactions entered into as a lessee.
The impact of this change on the consolidated financial statements is insignificant.
<Notes on accounting estimates>
Impairment of leased assets
If there are signs of impairment for leased assets, the Company determines whether to recognize impairment
loss. If impairment loss is recognized, the Company depreciates the book value of the leased asset to therecoverable value and books the depreciation amount as an impairment loss. Future cash flow used in therecoverable 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 theconditions precedent or the business environment, there may be significant impact on the consolidated
financial statements from the next fiscal year on.
For the aircraft held by JSA International Holdings, L.P. group, which leases aircraft in the U.S. (¥1,098,940
million in leased assets at the end of the current fiscal year), the Company regularly confirms the future cash
flow and determines whether to recognize impairment losses according to the U.S. accounting standards. In
this determination, the Company compared book value and future cash flow before discount. For the assets
whose future cash flow before discount is less than the book value, the Company booked the amount bywhich the book value exceeds the fair value as an impairment loss. Future cash flow comprises current lease
fees, future lease fees, value remaining upon fulfillment, disposal costs, lease period, off-lease period, andrenewal period. Future lease fees and the value remaining upon fulfillment are determined by an appraisal
company. Disposal cost, lease period, off-lease period, and renewal period are calculated by estimating thembased on past results, etc.
The Company booked ¥5,635 million in impairment losses for aircraft in cost of revenues in the
consolidated statement of income for the current fiscal year.
Valuation of goodwill
If there are signs of impairment for goodwill, the Company determines whether to recognize impairment
loss. If impairment loss is recognized, the Company depreciates the book value of goodwill to therecoverable value and books the depreciation amount as an impairment loss.
Future cash flow across remaining amortization period of goodwill used in the recoverable value iscalculated by an estimate based on the business plan, etc. prepared by considering the past business results- 33 -

and future business environment of the relevant company. The Company determines this estimate to berational. However, if there are changes to the conditions precedent or the business environment, there may
be significant impact on the consolidated financial statements from the next fiscal year on.
At the end of the current fiscal year, the Company booked ¥91,497 million as goodwill.
(Allowance for doubtful accounts)
Regarding the allowance for doubtful accounts, the subject receivables are classified into normal
receivables, highly doubtful receivables and distressed receivables based on credit information such as thebusiness conditions and payment status of the business partners and in accordance with the Company’s
internal management regulations, and estimated uncollectible amounts are booked as allowance for doubtful
accounts based on historical default rates for normal receivables, as well as considering the collectability ofhighly doubtful receivables and distressed receivables (receivables from legally or substantially bankrupt
obligors). The estimated unrecoverable amount is calculated based on the financial status of the business
partners, the estimated recoverable value of collateral, and future cash flow, etc. in the cash flow estimation
method.
In addition, based on the projected credit loss model, the consolidated subsidiaries adopting the International
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 ¥90,900 million as allowance for doubtful
accounts.

- 34 -

<Notes on consolidated balance sheet>
1. Displayed figures are rounded down to the nearest million yen.
2. Assets pledged as collateral and corresponding liabilities(1) Assets pledged as collateral(Millions of yen)
19,20522,737533,785
153,039
8,923
19,122
1,030,226
94,091
2,534
48,8872,187
2,474
1,937,217

Cash and deposits
Installment receivables
Lease receivables and investments in leases
Operating loans receivables
Merchandise
Other current assets
Leased assets
Other operating assets
Other intangible assets
Investment securities
Other investments and other assets
Operating lease contract receivables
Total(2) Liabilities corresponding to assets pledged as collateral(Millions of yen)
Long-term borrowings (including current portion of long728,647
term borrowings)
Bonds payable
6,403
Current maturities of loans from the securitizations of theminimum future rentals on lease contracts (including long603,352
term)
Other non-current liabilities
1,395
Total
1,339,799
Note: Of the assets pledged as collateral, ¥9,207 million in operating loans receivables, and ¥23,660
million in investment securities have revolving pledge and mortgages as the collateral held by theinvestees for their borrowings from financial institutions.

3. Total depreciation of property, plant and equipment(Millions of yen)
1,055,425
45,655
14,334
1,115,414

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

4. Guarantee obligations, etc.
(1) Guarantee obligations, etc. in operations (including commitment to guarantee)(Millions of yen)
21,860Operating guarantees amount- 35 -

(2) Guarantee obligations, etc. for bank borrowings (including commitment to guarantee)(Millions of yen)
22
21,883

Employee (residential funds)
Total

5. The outstanding amounts of receivables generating from contracts with customers, contract assets, andcontract liabilities are as follows:
Receivables from contracts with customers (*1)
Contract assets
Contract liabilities (*2)(Millions of yen)
8,768
–
4,199

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

<Notes on consolidated statement of income>
1. Displayed figures are rounded down to the nearest million yen.
2. Gain on valuation of investment securities
Securities held by overseas consolidated subsidiaries to which international financial reporting
standards are applied were judged to have no significant influence due to a decline in the ownership
ratio, and were evaluated at market value due to their exclusion from the scope of application of theequity method.
3. Gain on step acquisitions
This was due to increasing the investment in a silent partnership operated by Mirai Soden Chita Mihama
G.K., which operates a solar power generation business, and making the company a consolidated
subsidiary.
4. Loss on sale of shares of subsidiaries and associates
This was due to selling all of the shares of Diamond Asset Finance Company Limited, which was aconsolidated subsidiary.
5. Impairment losses
The following assets are booked as impairment loss.
(1) Property, plant and equipment
Use

Type

Leased assets

Transportation equipment (aircraft)
Transportation equipment (aircraft
engines)
Transportation equipment (railway cars)

Leased assets
Leased assets

Impairment loss (Millions of
yen)
5,635
311
2,473

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 value of the asset is calculated by discounting future cash flow mainly by 3.7% whenthe value in use is used, and is calculated from an estimate based on current market conditions when the
net realizable value is used.

- 36 -

(2) Intangible assets
Use

Type

–

Goodwill (Mobility Mixx B. V.)–

Goodwill (EuroFleet Zrt.)

Impairment loss (Millions of
yen)
123
200

The Group uses a grouping method for determining impairment of goodwill for each company.
Due to the decision to sell all shares of Mobility Mixx B. V., a consolidated subsidiary of the Company,
the carrying amount of goodwill was reduced to the recoverable value, and the ¥123 million reduction
amount was recorded in extraordinary losses as an impairment loss.
The recoverable value of the asset was measured based on the value in use, and the recoverable value
was evaluated as zero.
As a result of revising its discount rate due to interest rate fluctuations, EuroFleet Zrt., a consolidated
subsidiary of the Company, reduced the estimated amount of future cash flows expected to occur in the
future to the recoverable value calculated by discounting it by 20.7%, and the ¥200 million reduction
was booked in the extraordinary losses as an impairment loss.
Use

Type

Business-used assets

Other intangible assets(EuroFleet Zrt.)

Impairment loss (Millions of
yen)
155

EuroFleet Zrt., a consolidated subsidiary of the Company, reduced the carrying amount of intangible
assets that were determined to have no prospect of future use to the recoverable value, and the ¥155
million reduction amount was recorded in the extraordinary losses as an impairment loss.
The recoverable value of the asset was calculated based on the value in use, and the recoverable value
was evaluated as zero.

- 37 -

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

Number of shares at
beginning ofcurrent fiscal year

Number of shares
increased during
current fiscal year

Common shares

1,466,912––

1,466,912

Total

1,466,912––

1,466,912

Issued shares

3. Matters related to dividends(1) Dividend payment amount(i) The following was 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) Dividend amount per share(c) Record date(d) Effective date

¥15.00March 31, 2022
June 13, 2022(ii) The following was resolved at the Board of Directors meeting held on November 10, 2022.
- Matters related to common share dividends¥21,545 million(a) Total amount of dividends(b) Dividend amount per share(c) Record date(d) Effective date

¥15.00
September 30, 2022
December 12, 2022

(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 23, 2023.
- Matters related to common share dividends¥25,856 million(a) Total amount of dividends(b) Source of dividends(c) Dividend amount per share(d) Record date(e) Effective date

Retained earnings¥18.00March 31, 2023
June 8, 2023

- 38 -

4. Matters related to share 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
June 28, 2022

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
Common shares

34,30054,200101,200
101,200
179,600
209,000
312,900
367,400
323,500
454,500
471,000
850,300
855,400- 39 -

Number of outstanding
share acquisition rights
343
542
1,012
1,012
1,796
2,090
3,129
3,674
3,235
4,545
4,710
8,503
8,554

<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 thesales department and credit department, which submit a proposal for deliberation and report to the- 40 -

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
Price fluctuation risks of securities and investment securities are reported to the Risk Management
Committee. Furthermore, because most shares are held for the purpose of transaction promotion,
the Company monitors the financial status of the business partner, confirms the status of thetransaction, and verifies from a capital cost perspective to determine whether or not to continue theholding.
(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) 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 and currency exchange
rate fluctuation risks. The Treasury Department implements them on individual transactions of theCompany. 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- 41 -

also manages credit risk due to defaults by business partners by establishing credit limits based on
the credit and transaction status of each business partner.
(4) Supplementary explanation about matters related to market value, etc. of financial instruments
Because certain assumptions are adopted to calculate the market value of financial instruments, theprice may vary depending on different assumptions.

- 42 -

2. Matters related to details, etc. by market value level of financial instruments
Carrying amount, market value, and differences recorded in the consolidated balance sheet are as
follows: Besides, pursuant to paragraph (5) of the “Implementation Guidance on Disclosures about Fair
Value of Financial Instruments” (ASBJ Guidance No. 19, the “Fair Value Disclosure Implementation
Guidance”), shares with no market value, etc. are not included in the following table. Besides,
investment in partnerships, etc. where the net amount equivalent to the equity interests were recorded in
the consolidated balance sheet with the handling pursuant to paragraph (24-16) of the “Implementation
Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, the “Fair
Value Measurement Implementation Guidance”) applied 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 to categorize
market values.
(1) Financial instruments with a market value in the consolidated balance sheet(Millions of yen)
Category(1) Securities and investment securities
Available-for-sale securities
SharesGovernment bonds, municipal
bonds, etc.
Bonds payable
Other(2) Derivative transactions (*1, *2)
Currencies relatedInterests related
Total assets(*1)

Market value
Level 2
Level 3

Level 1

Total

26,922–

21,238

48,161

3,624

–

–

3,624

–
–

29,610
5,420

–
1,618

29,6107,039––
30,546(38,249)
53,331
50,112––22,857(38,249)
53,331
103,516

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

(*2)

Of the derivative transactions, the amount of the transactions adopting hedge accounting in the
consolidated balance sheet records ¥19,402 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).
(2) Financial instruments except those with market values in the consolidated balance sheet
Cash and deposits, notes and accounts payable - trade, short-term borrowings and commercial paper
represent cash or are settled in a short-term, reflecting the value close to the booked value. Suchfinancial instruments are, therefore, not presented here.

- 43 -

(Millions of yen)
Market value

Category
Level 1

Level 2

Level 3Total

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

Difference

221,631(1,063)––

227,514

227,514(2) Lease receivables
and investments inleases (*3)
Allowance for
doubtful accounts(*2)

220,567

6,947

3,180,454(7,259)–79,9703,185,697

3,265,668(3) Operating loans
receivables
Allowance for
doubtful accounts(*2)

3,173,194

92,473

1,691,579(9,211)––

1,623,057

1,623,057(4) Other operating loans
receivables
Allowance for
doubtful accounts(*2)

1,682,367(59,310)219,632
(916)
–

263

219,435

219,698(5) Distressed
receivables
Allowance for
doubtful accounts(*2)
Total assets(6) Bonds payable(7) Long-termborrowings(8) Current maturities ofloans from thesecuritizations of theminimum future
rentals on lease
contracts
Total liabilities

Carrying
amount218,716

981

99,912(68,784)––––
80,2342,183,956

31,1285,286,833–

31,1285,367,067
2,183,956

31,1285,325,974
2,225,731–
41,092(41,775)–

4,137,837–

4,137,837

4,213,486(75,649)–

600,046–

600,046604,302(4,255)–

6,921,840–

6,921,840

7,043,521(121,680)(*1)

Carrying amount excludes deferred profit on installment sales.

(*2)

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

(*3)

Difference with the carrying amount on the consolidated balance sheet was ¥83,715 million inestimated remaining value related to finance leases that do not transfer ownership.

- 44 -

Note 1: Description of the valuation method for market value calculation and of inputs related to market
value calculation
Financial instruments with a market value in the consolidated balance sheet(1) Securities and investment securities
Securities listed on the exchange market book market values at the market, which are categorized
into the market values at level 1. In this relation, of the non-listed securities, those using importantbut not observable inputs to calculate market values are categorized into market values at level 3.
Receivables with a published market value are booked at said market value, while government
bonds and municipal bonds are categorized as having level 1 market values, and the receivables
other than mentioned above are categorized as having level 2 market values. Bonds having no
published market value but having variable interest rates reflect the market interest rate in a shortterm. Therefore, as long as the credit status of the issuer does not change significantly after theissuance, the book value is shown as the market value because they are deemed to be close to eachother. On the other hand, the market value of securities with fixed interest rates is the amount of
future cash flow discounted after the spread is added to the term-end risk free rate. Said securities
use observable inputs and are categorized as having level 2 market values.
(2) Derivative transactions
The market value of derivative transactions is calculated based on the price presented by financial
institutions or the discounted present value calculated using observable inputs, and is categorized
into level 2 market value. Items using special treatment for interest rate swaps or allocation
treatment for forward exchange contracts and currency swaps are treated together with long-termborrowings, etc. subject to hedge accounting. Therefore, their market value is included in themarket value of relevant liabilities (See “Financial instruments except those with market values in
the consolidated balance sheet” (7)).
Financial instruments except those with market values in the consolidated balance sheet(1) Installment receivables
The total recoverable amount in the categories based on internal rating, period, etc. is discounted
by the rate projected if a new installment is to be sold, or the total amount after estimated bad
debts are deducted from the amount of projected recoverable in the categories based on internalrating, period, etc. is discounted by the term-end risk free rate, to calculate market values, which
are categorized into level 3 market value.
(2) Lease receivables and investments in leases
The total amount after estimated maintenance costs are deducted from the projected recoverable
amount in the categories based on internal rating, period, etc. is discounted by the rate projected if
a new similar lease transaction is made, or the total amount after estimated maintenance costs andestimated bad debts are deducted from estimated amount recoverable in the categories based oninternal rating, period, etc. is discounted by the term-end risk free rate, to calculate market values.
In the case of using important but not observable inputs, level 3 market value is applied, and in thecase of not using such inputs, level 2 market value is applied to categorize.
(3) Operating loans receivables
Operating loans receivables with variable interest rates reflect the market interest rate in a shortterm. Therefore, as long as the credit status of the borrower does not change significantly after
disbursement of the loan, the book value is shown as the market value because they are deemed to- 45 -

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

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

- 46 -

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

Valuation method

Important but notobservable inputs

Scope of inputs

Weighted averageof inputs

EV/RAV multiplying
power

1.37 times

1.37 times

Securities and investment securities
SharesMultiple method

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

(2) Table of adjustments from the beginning balance to the term-end balance, valuation loss and profit
recognized in the current fiscal year
(Millions of yen)
Securities and investment securities
Category
Total
Other
SharesBeginning balance
16,1942,331
18,526
Income/loss or other comprehensive income for the current year
Recorded as income or loss (*1)
(273)
(167)
(441)
Recorded as other comprehensive
1,711
1
1,712
income (*2)
Purchase, disposal and redemption
Purchase (*3)
7,356
7,140
216
Disposal and redemption(4,297)(3,534)(762)
Transfer to level 3 market value––
Transfer from level 3 market value––
Balance at end of fiscal year
21,238
1,618
22,857
Valuation gain or loss (*1) on financial
assets and financial liabilities held in the
(273)
(167)
(441)
consolidated balance sheet as of thesettlement day, of their amounts of gain orloss recorded for the current fiscal year(*1) Included mainly in the loss on valuation of investment securities in the consolidated statement of income.
(*2) Included mainly in the foreign currency translation adjustment in the consolidated statement of comprehensive income.
(*3) Purchases include increases due to transfers from other accounting items.

- 47 -

(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.

- 48 -

<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 ¥12,550 million (major
rental income and expenses are booked to revenues and cost of revenues) and gain on sales was ¥9,261
million (major sale income and expenses are booked to revenues and cost of revenues).
The carrying amount of rental properties, amount change during fiscal year, and market value are as
follows.
Carrying amount
Balance at beginning ofcurrent fiscal year

Amount change during
current fiscal year

Balance at end of current
fiscal year

¥418,126 million¥(39,404) million¥378,721 million

Market value at end ofcurrent fiscal year
¥439,244 million

Notes: 1. Carrying amount is the amount subtracting accumulated depreciation amount from acquisition cost.
2. Of the increase (decrease) for the current fiscal year, the major increase (amounted to ¥27,236 million)
was due to the acquisition of real estate, and the major decrease (amounted ¥50,306 million) was due tothe sale of real estate.
3. The market value of major properties at the end of the current fiscal year is the amount determined by thecapitalization method and the amount based on a real estate appraisal evaluation by an outside real estateappraiser. However, if there are no important changes to indicators that is considered to reflect the certain
valuation amount and appropriate market price from the most recent valuation, market value will be themost recent valuation amount adjusted appropriately. For other properties, market value is the amountbased on indicators that is considered to reflect market price and the amount reasonably calculated inhouse based on the capitalization method. The market value of properties newly acquired during thecurrent fiscal year such as some buildings in which the changes to market value and depreciation will not
be significant is based on the proper book value.

- 49 -

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

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

Customer
SolutionsGlobalBusiness

Environment,
Energy &Infrastructure

34,61318,313

21

–

–

–

–

24,134

4,071–

10,668

–

7,092

586

–

326

31,431

–

–

–

–

–

50,514

–

–

902

–

8

7,468

11,247

931

8,396

940

3,470

989

66,21684,47332,38419,064

1,843

10,562

1,584

1,015,919

247,301

15,720147,958

114,827

83,04754,211

1,082,135

331,775

48,104

167,022

116,671

93,60955,796

Aviation

Logistics

Real estate

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

11

52,960–46,553–31,757–51,425

1,476

34,921

1,488

217,618(371)

1,678,613

1,116

1,896,231

Notes: 1. The adjustment includes ¥(3,062) 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.
4. Reportable segments have been changed as of the current fiscal year. A description of the business in eachsegment is provided in “Principal business.”- 50 -

As shown in the disaggregated revenue information, revenue from contracts with customers has poor
significance to sales. The Company, therefore, omitted the description that is the base to understand revenue
and the information to understand amounts of revenue for the current and next fiscal years on.
<Notes on per share information>
Equity per share¥1,064.46

Earnings per share¥80.95<Notes on significant subsequent events>(Regarding making CenterPoint Development Inc. a wholly-owned subsidiary)
On April 14, 2023, the Company executed a share transfer agreement to acquire all of the shares ofCenterPoint Development Inc. (“CPD”), an equity method affiliated company that provides investment
advice and asset management services related to logistics real estate, and the share acquisition wascompleted on April 21, 2023.
1. Overview of the business combination(1) Name of acquired company and detail of business
Name of acquired company: CenterPoint Development Inc.
Detail of business: Investment advice and asset management services related to logistics real estate(2) Reason for the business combination
The logistics market continues to grow against the backdrop of increasing demand due to the
expansion of domestic electronic commerce (e-commerce), and the rental market for logistics
facilities is also performing well. In addition to the expected continued expansion of e-commerce,
the needs concerning logistics facilities are increasing, such as responding to labor saving andautomation, consolidating and rebuilding facilities due to aging and obsolescence, and locating inareas with excellent transportation convenience.
Under these circumstances, the Company decided to make CPD, which is involved in thedevelopment logistics facilities that meet the needs of companies and asset management businessspecialized in such facilities, a wholly-owned subsidiary in order to strengthen and expand thelogistics facility-related business.
(3) Date of business combination
April 21, 2023
(4) Legal form of business combination
Acquisition of shares for cash consideration(5) Name of company after the combination
The name is not changed after the combination.
(6) Voting ratio acquired
Voting ratio held before the business combination

33.4%

Voting ratio after the acquisition

100.0%(7) Primary reason to decide on the acquisition company
The Company has acquired all of the voting rights of CPD in exchange of cash as consideration.
2. Acquisition cost of acquired company and breakdown in types of consideration
Not disclosed by agreement of the parties.
3. Detail and amount of major acquisition-related costs
Currently being calculated.
- 51 -

4. Amount of goodwill occurred, occurrence cause, redemption method and redemption period
Although it is currently being calculated, the Company plans to book the goodwill and the gain on step
acquisitions as a result of this transaction.
5. Amounts and details of assets accepted and liabilities underwritten on the business combination day
Currently being calculated.

- 52 -

Non-consolidated statement of changes in equity(April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained
earnings

SharecapitalLegalcapitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

33,19633,802

509,158

542,960

638

72,035277,974

350,647

33,19633,802

509,158

542,960

638

72,035277,974

350,647

Dividends fromsurplus(43,087)(43,087)

Net income

82,20482,204

Balance at beginning of
period as of April 1,
2022
Cumulative amounteffected from changes
in the accounting
policies
Balance at beginning of
the current period
reflecting changes in theaccounting policies
Changes during fiscal
year

Purchase of treasury
shares
Disposal of treasury
shares

(49)

(49)

Total
Retained retained
General earnings earnings
reserve brought
forward

Net changes in items
other thanshareholders’ equity
Total changes during
fiscal year
Balance at end of period
as of March 31, 2023

–

–

(49)

(49)

–

–

39,117

39,11733,19633,802

509,108

542,911638

72,035

317,091

389,764- 53 -

Valuation and translation
adjustments

Shareholders’ equity

Balance at beginning of
period as of April 1,
2022
Cumulative amounteffected from changes
in the accounting
policies
Balance at beginning of
the current period
reflecting changes in
the accounting policies
Changes during fiscal
year

TreasurysharesTotalshareholders’equityValuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedges(19,369)

907,435

11,979(40,675)

394(19,369)

907,435

12,374

Share
Total
valuation acquisitionrightsandtranslation
adjustments(28,696)

1,861

394

(40,675)(28,301)

Total
equity880,601

394

1,861

880,995

Dividends fromsurplus(43,087)(43,087)

Net income

82,20482,204

(0)

(0)

(0)

211

161

161

Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity(1,528)(37,808)(39,337)276(39,061)

Total changes during
fiscal year210

39,278(1,528)(37,808)(39,337)276

216

Balance at end of
period as of March 31,
2023(19,158)

946,713

10,845(78,484)(67,639)2,138

881,212- 54 -

Notes on non-consolidated financial statements<Notes on matters related to important accounting policies>
1. Valuation standards and method for securities(1) Subsidiary shares and affiliate shares
Cost method based on the moving average method(2) Of available-for-sale securities, bonds and other securities held for earning financial revenues for
operating purposes (operational investment securities)- Other than shares that have no market value
Fair value method(Valuation differences are included directly in net assets and costs of securities sold aredetermined by the moving average method.)- Shares with no market value, etc.
Cost method based on the moving average method
For investments in limited liability investment partnerships and similar entities (deemed to be
securities based on Article 2, paragraph (2) of the Financial Instruments and Exchange Act), theseare stated by the net amount corresponding to the Company’s equity share based on the mostrecent obtainable financial statements depending on the reporting date established by thepartnership agreement.
(3) Available-for-sale securities not included above- Other than shares that have no market value
Fair value method(Valuation differences are included directly in net assets and costs of securities sold aredetermined by the moving average method.)- Shares with no market value, etc.
Cost method based on the moving average method
For investments in limited liability investment partnerships (deemed to be securities based on
Article 2, paragraph (2) of the Financial Instruments and Exchange Act), these are stated by the
net amount corresponding to the Company’s equity share based on the most recent obtainablefinancial statements depending on the reporting date established by the partnership agreement.
(4) Investments in other securities of subsidiaries and associates
Cost method based on the moving average method
For investments in partnerships (deemed to be securities based on Article 2, paragraph (2) of the
Financial Instruments and Exchange Act), these are stated by the net amount corresponding to theCompany’s equity share based on the most recent obtainable financial statements depending on thereporting date established by the partnership agreement.
2. Valuation standards and method for derivatives
Fair value method
3. Valuation standard and method for inventories
Cost method based on the specific-cost method(Balance sheet values are calculated using the method of writing down the book value based on
declining profitability)- 55 -

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 amountof uncollectible receivables, is directly deducted from the receivable amount. This amount is ¥9,350
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.
- 56 -

(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 atthe 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 (14 to 15 years) at the time of occurrence.
Pertaining to the actuarial gains and losses, the pro-rata amount calculated using the straightline method for the average remaining service years of employees (13 to 17 years) at the time ofoccurrence in each fiscal year is amortized from the respective following fiscal years.
8. Accounting standards for income and expenses(1) Accounting method for lease transactions(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 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 of- 57 -

revenues 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 andoverseas 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, 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.
Transaction status is reported quarterly to the President.

- 58 -

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 ¥63,516 million in investment securities, ¥1,104 million in securities, and¥43,305 million in investments in other securities of subsidiaries and associates.
Further, these financial revenues (interest income, redemption difference, and partnership gains/loss
corresponding to equity share) is booked under revenues.
(2) Accounting methods related to retirement benefits
The accounting method of unrecognized actuarial gains and losses related to retirement benefits andunaccounted amount of unrecognized past service costs differs from the accounting method in the
consolidated financial statements.
(3)

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

<Notes on changes in accounting policies>(Application of Implementation Guidance on Accounting Standard for Fair Value Measurement)“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.
31, June 17, 2021, the “Fair Value Measurement Implementation Guidance”) has been applied from the
beginning of the current fiscal year. The Company has accordingly decided to apply new accounting
policies stated in the Fair Value Measurement Implementation Guidance over future fiscal years inaccordance with the transitional treatment provided for in paragraph (27-2) of the Fair Value
Measurement Implementation Guidance.
The impact of this on the financial statements is insignificant.
<Notes on accounting estimates>(Allowance for doubtful accounts)
Regarding the allowance for doubtful accounts, the subject receivables are classified into normal
receivables, highly doubtful receivables and distressed receivables based on credit information such as
the business conditions and payment status of the business partners and in accordance with theCompany’s internal management regulations, and estimated uncollectible amounts are booked asallowance for doubtful accounts based on historical default rates for normal receivables, as well as
considering the collectability of highly doubtful receivables and distressed receivables (receivables fromlegally or substantially bankrupt obligors).
The estimated unrecoverable amount is calculated based on the financial status of the business partners,
the estimated recoverable value of collateral, and future cash flow, etc. in the cash flow estimation
method. The Company determines this estimate to be rational. However, if there are changes to theconditions precedent or the business environment, there may be significant impact on the nonconsolidated financial statements from the next fiscal year on.
The Company booked ¥9,227 million in allowance for doubtful accounts at the end of the current fiscal
year.

- 59 -

<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)
13,305

Installment receivables
Lease receivables

25,201

Investments in leases

90,443Operating loans receivables

594

Loans receivable from subsidiaries and associates

8,613

Investment securities

12,767

Shares of subsidiaries and associates

1,042

Investments in other securities of subsidiaries and associates

16,500Operating lease contract receivables

680

Total

(2)

169,148

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

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

104,257

Long-term guarantee deposits received

1,016

Other non-current liabilities

4
Total

105,278

Note: Of the assets pledged as collateral, ¥218 million in investments in leases, ¥594 million in
operating loans receivables, ¥8,613 million in loans receivable from subsidiaries and associates,¥12,767 million in investment securities, ¥1,042 million in shares of subsidiaries and associates,and ¥16,500 million in investments in other securities of subsidiaries and associates have
revolving pledge and mortgages as the collateral held by the investees for their borrowings, etc.
from financial institutions.

3. Total depreciation of property, plant and equipment
Leased assets(Millions of yen)
230,877

Own-used assets

5,163
Total

236,041

4. Guarantee obligations, etc.
(1)

Guarantee obligations, etc. in operations (including commitment to guarantee)(Millions of yen)
21,375

Operating guarantees amount(2)

Guarantee obligations, etc. for operating transactions of subsidiaries and associates (including
commitment to guarantee)
Mitsubishi HC Capital (Hong Kong) Limited(Millions of yen)
10,480Mitsubishi HC Capital Property Inc.

2,372

Other

1,912
Subtotal

14,765- 60 -

(3)Guarantee obligations, etc. for liabilities including bank borrowings of subsidiaries and associates(including commitment to guarantee)(Millions of yen)
705,437

Mitsubishi HC Finance America LLC
Mitsubishi HC Capital UK PLC

676,823

Mitsubishi HC Capital America, Inc.

235,042

JSA International U.S. Holdings, LLC

201,116

CAI International, Inc.

114,333

Jackson Square Aviation Ireland Ltd.

88,611

MHC America Holdings Corporation

57,417

Mitsubishi HC Capital (U.S.A.) Inc.

40,943

Mitsubishi HC Capital (Hong Kong) Limited

39,893

Mitsubishi HC Capital Canada Leasing, Inc.

37,031

Bangkok Mitsubishi HC Capital Co., Ltd.

35,908Mitsubishi HC Capital Leasing (Beijing) Co., Ltd.

30,945

MHC Mobility Sp. z o.o.

29,190PT. Mitsubishi HC Capital and Finance Indonesia

23,025

MHC Mobility B.V.

19,558Mitsubishi HC Capital Canada, Inc.

19,355

Mitsubishi HC Capital (Thailand) Co., Ltd.

18,572

PT. Arthaasia Finance

17,739Mitsubishi HC Capital (Singapore) Pte. Ltd.

17,448MHC Mobility GmbH

14,942Engine Lease Finance Corporation

12,078Mitsubishi HC Capital (Shanghai) Co., Ltd.

8,617

PT. Takari Kokoh Sejahtera

8,447

Mitsubishi HC Capital Malaysia Sdn. Bhd.

4,673

Mitsubishi HC Capital Management (China) Limited

3,402

EuroFleet Zrt.

2,789

Mitsubishi HC Capital Asia Pacific Pte. Ltd.

2,560

Mitsubishi HC Capital Factoring (Shanghai) Co., Ltd.

1,555

Other

164
Subtotal(4)2,467,627

Guarantee obligations, etc. for bank borrowings other than of subsidiaries and associates (including
commitment to guarantee)(Millions of yen)
22

Employee (residential funds)
Total

2,503,790

5. Monetary claims and liabilities related to subsidiaries and associates
Short-term monetary claims
Long-term monetary claims
Short-term monetary liabilities
Long-term monetary liabilities- 61 -(Millions of yen)
121,4143,047
42,921
23,414

6. The outstanding amounts of receivables generating from contracts with customers, contract assets, andcontract liabilities are as follows:(Millions of yen)
1,911

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

Contract liabilities (*2)
1,569
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)
51,436

Revenues
Cost of revenues

1,759

Selling, general and administrative expenses

3,398

Purchase of leased assets, etc.

6,139

Other transaction volume except operating transactions

81,116

3. Breakdown of capital costs
Interest expenses(Millions of yen)
20,247

Interest income(1,236)
Total

19,011<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
Note:(Thousands of shares)
Number of shares
decreased during
the current fiscal
year

Number of shares atthe end of thecurrent fiscal year

31,056–338

30,71831,056–338

30,718The decline of 338 thousand treasury shares of common shares was due to the exercising of stock
options, etc.

- 62 -

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

Deferred tax assets
Retained earnings from designated foreign subsidiaries(2)(Millions of yen)
19,843

Advances received - lease

7,257

Shares of subsidiaries and associates, etc.

6,700

Allowance for doubtful accounts

5,344

Asset retirement obligations

4,560

Investments in other securities of subsidiaries and associates

3,164

Other

13,283

Subtotal of deferred tax assets

60,155

Valuation allowance amount(6,391)

Total of deferred tax assets

53,763

Deferred tax liabilities
Exceptions to deferred payment basis related to lease transfers(Millions of yen)
(5,103)

Valuation difference on available-for-sale securities(4,857)

Other(4,456)

Total deferred tax liabilities(14,417)

Net total of deferred tax assets

39,345

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

(%)
30.6

(Adjustments)
Items never included in income, such as dividend income(34.0)

Retained earnings from designated foreign subsidiaries

3.0

Foreign tax credits

(1.6)

Other

0.2

Actual effective tax rate of income taxes after application of tax
effect accounting- 63 -(1.8)

<Notes on related-party transactions>
(1)

Type

Subsidiary

Subsidiaries, affiliates, etc.
Holding(owned) ratio Relationship with
Name of company
the related partyof votingrights, etc.

Shutoken Leasing
Co., Ltd.

Detail oftransactions

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

Subsidiary

Mitsubishi HC(Ownership)
Capital Property Inc. Direct 100%

Mitsubishi HC
Business Lease
Corporation

SubsidiaryJAPAN MEDICALLEASECORPORATION

–

–

(359)

–

–

Receivinginterest income

682

Investments
in leases

53,797

Receiving leasefeesLong-term
12,926 guarantee
deposits

354

Payment of landfeesLong-term
guarantee
592
deposits
received

22,096Loans
receivable
from
2,978
subsidiaries
andassociates

141,953

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

Lending business(Ownership) Lending business funds (*3)
Direct 100% funds(Ownership) Lending business Lending businessDirect 100% funds (*4)
funds

- 64 -

327

115,635

Lending businessfunds (*3)

Receivinginterest income

SubsidiaryLoans
receivablefrom
115,300
subsidiaries
andassociates

77,119Receivinginterest income

Mitsubishi HC
Capital Community
Corporation

Balance at
end ofAccounting
fiscal year
title
(Millionsof yen)Loans
receivablefrom
29,200subsidiaries
andassociates

Lending businessfunds (*4)
Property leasing Lending business
funds

Subsidiary

Transaction
amount(Millionsof yen)

329

–

Loans
receivablefrom
20,337
subsidiaries
andassociates
273

–

Loans
receivablefrom35,100subsidiaries
andassociates–

82,469–83,051

Type

Holding(owned) ratio Relationship with
Name of company
the related partyof votingrights, etc.

Detail oftransactions

Lending businessfunds (*3)

(1,926)

–

–

235

–

–

Receivinginterest income

Subsidiary

Mitsubishi HC
Capital Energy Inc.

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

Subsidiary

Diamond Asset
Finance Company
Limited (*5)

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

Lending businessSubsidiary

Mitsubishi HC
Capital Realty Inc.

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

Affiliate

Mitsubishi HC
Capital Auto Lease
Corporation

Balance at
end ofAccounting
fiscal year
title
(Millionsof yen)Transaction
amount(Millionsof yen)Lending business(Ownership)
Lending business funds (*3)
Directfunds
50.00%
Receivinginterest income

Loans
receivablefrom32,571
subsidiaries
andassociates
571–

74,042–

Loans
receivablefrom65,240subsidiaries
andassociates

–

1,311

–

–

Loans
receivablefrom
18,650subsidiaries
andassociates
232

–

Loans
receivablefrom(7,143)subsidiaries
andassociates

63,450–77,147220––

Subsidiary

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

Guarantee ofobligation

676,823––

Subsidiary

Mitsubishi HC
Capital America,
Inc.

(Ownership) Guarantee of
Direct 100% obligation

Guarantee ofobligation

235,042––- 65 -

Type

Subsidiary

Holding(owned) ratio Relationship with
Name of company
the related partyof votingrights, etc.

Jackson Square
Aviation Ireland
Limited

Detail oftransactions

Lending business
Lending business funds(Ownership)
funds
IndirectGuarantee of100%
obligation(Ownership)funds
JSA International
IndirectGuarantee ofU.S. Holdings, LLC
100%
obligation

Subsidiary

CAI International,
Inc.

(Ownership)
Guarantee of
Indirectobligation
100%

Subsidiary

MHC America
Holdings
Corporation

Guarantee ofobligation(Ownership)
Underwriting
Direct 100%
capital increase
Sharing officers

Mitsubishi HC
Finance America
LLC(Ownership) Guarantee ofobligation
Indirect
Sharing officers
100%

Subsidiary- 66 -–

Balance at
end ofAccounting
fiscal year
title
(Millionsof yen)Loans
receivable
fromsubsidiaries
andassociates

153,906

Receivinginterest income

6,088

–

–

Guarantee ofobligation

88,611––

Loans
receivable
fromsubsidiaries
andassociates

63,344

Lending business
Lending business funds

Subsidiary

Transaction
amount(Millionsof yen)–Receivinginterest income

2,800

–

–

Guarantee ofobligation

201,116––

Guarantee ofobligation

114,333––

Guarantee ofobligation

57,417––

Underwriting
capital increase

125,789––

Guarantee ofobligation

705,437

–

–

(2)

Type

Fellow subsidiaries, etc.

Name of company

Subsidiary ofothersubsidiaries MUFG Bank, Ltd.
andassociates

Subsidiary ofothersubsidiaries Lawson, Inc. (*6)
andassociates

Holding(owned)Relationship withratio ofthe related party
votingrights, etc.

(Owned)Direct3.50%–

Borrowingbusiness capital

Lease transaction

Detail oftransactions

Transaction
amount(Millionsof yen)Balance at
end ofAccounting
fiscal year
title
(Millionsof yen)Borrowing shortterm businesscapital426,488

Short-termborrowings

43,346

Borrowing longterm businesscapital57,779Long-term
borrowings

399,765

Payment ofinterest income

12,886––

Receiving leasefees

19,799Investments
in leases

101,428

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

- 67 -

<Notes on per share information>
Equity per share¥612.09

Earnings per share¥57.24<Notes on significant subsequent events>(Transactions etc. under common control)
Based on a resolution of the Board of Directors meeting held on February 10, 2023, the Company
merged by absorption with its wholly-owned subsidiary, Japan Infrastructure Initiative Company
Limited (JII), on April 1, 2023.
This merger was implemented by the Company based on the simplified merger procedure pursuant to
Article 796 (2) of the Companies Act, and by JII based on the short form merger procedure pursuant to
Article 784 (1) of the Companies Act.
(1)

Overview of transaction(i) Overview of the counterpart company that was merged by absorption (fiscal year ending March 31,
2023)
・ NameJapan Infrastructure Initiative Company Limited

・ Details of business

Investment business in infrastructure businesses, money lending
business, other financial business, etc.

・ Total assets¥41,358 million

・ Liabilities¥33,380 million

・ Total equity¥7,978 million(ii) Date of business combination
April 1, 2023(iii) Legal form of business combination
Absorption-type merger where the Company is the surviving company, and JII is the absorbed
company(iv) Name of company after the combination
Mitsubishi HC Capital Inc.
(v) Purpose of transaction
JII has provided functions as an open financial platform that financially supports the export ofJapanese infrastructure industry, but the Company decided to absorb the company with the aim ofconcentrating management resources, know-how and expertise, and strengthening the system for
efficient business operation, by integrating JII’s business.
(2)

Overview of accounting treatment
It was treated as a transaction under common control based on the “Accounting Standard forBusiness Combinations” (ASBJ Statement No. 21, January 16, 2019) and the “Implementation
Guidance on Accounting Standard for Business Combinations and Accounting Standard forBusiness Divestitures” (ASBJ Guidance No. 10, January 16, 2019). As a result of this transaction,
the Company expects to post a loss on extinguishment of tie-in shares of approximately ¥4,800
million as an extraordinary loss in the statement of income for the fiscal year ending March 31,
2024. However, there is no impact on profit and loss in the consolidated statement of income
because it is set off as an internal transaction.
- 68 -

<Notes on company subject to consolidated dividend regulations>
The Company is subject to consolidated dividend regulations.

- 69 -