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Annual Reportは、ごうぎんの決算や活動内容にて海外の皆様に知っていただくために作成しています

As a LessorSummary of investments in lease assets as of March 31, 2014 and 2015 are as follows:Thousands ofU.S. DollarsMillions of Yen201420152015Gross lease receivables\26,459\24,969$207,780Expected residual values1,7151,59013,231Unearned interest income(1,939)(1,547)(12,873)Investments in lease assets\26,235\25,012$208,138Maturities of gross lease receivables for finance leases as of March 31, 2015 are as follows:Year ending March 31Millions of YenThousands ofU.S. Dollars2016\ 8,361$ 69,57620176,50654,13920184,68739,00320193,01925,12220201,38911,5582021 and thereafter1,0058,363Total\24,969$207,78016. Financial Instruments and Related DisclosuresDisclosure of Financial Instruments(1) Policy on financial instrumentsThe Group provides financial services including banking services such as deposit-taking, lending services and others.Accordingly, the Group has the risk of fluctuation of values and earnings of financial assets and liabilities resulting fromchanges in interest rates (interest rate risk) and the risk that the Group may suffer losses on collection of principal and intereston loans due to bankruptcy or deterioration of performances of counterparties (credit risk). In addition, the Group has pricefluctuation risk associated with equity securities in addition to interest rate risk and credit risk for securities investmentoperations. The Group conducts comprehensive Asset and Liability Management (ALM) aiming at appropriate riskmanagement and maximization of earnings and, as part of ALM, employs derivative transactions.(2) Nature and risk of financial instrumentsFinancial assets held by the Group principally consist of loans to domestic customers, which are exposed to interest rate riskand credit risk arising from nonperformance of contractual obligations. The Group holds securities principally consisting ofdebt securities and equity securities which are classified into trading securities, held-to-maturity securities and other(available-for-sale) securities depending on the holding purposes. They are exposed to credit risk of issuers, interest rate riskand price fluctuation risk. Financial liabilities held by the Group principally consist of deposits accepted from domesticcustomers, which are exposed to interest rate risk. Borrowed money is exposed to liquidity risk that the Group may not beable to settle on the maturity date when the Group might not be able to utilize the market under certain environments.Derivative transactions consist of forward foreign exchange contracts, currency swaps and currency options as currencyrelated derivatives and interest rate swaps and interest rate futures as interest rate related derivatives. Interest rate swapsand forward foreign exchange contracts which qualify for hedge accounting and meet internal policy as to the application ofhedge accounting are accounted for under hedge accounting. Derivative transactions which do not meet requirements ashedge accounting are exposed to interest rate risk, price fluctuation risk, credit risk and etc.(3) Risk management system for financial instrumentsCredit risk managementCredit risk management of the Group consists of“Strict review and control on individual transactions (micro base credit riskmanagement),”“Portfolio management and appropriate administration through credit risk quantification (macro base creditrisk management)”and“Strict self-assessment and implementation of appropriate write-offs and provision”based on“internalrating system.”With respect to control system on the volume of risk, status of self-assessment, internal rating, write-offs and provision,status on measurement of risk with VaR, etc., status of concentration of credit risk, status of profitability on lending and statuson doubtful accounts are reported to the Loan Review (executive management meeting), the Credit Risk Control Committeeand the ALM Committee on a regular basis and, if necessary, discussed in the executive management meeting. The Bankallocates capital to the credit risk exposure and monitors it to balance the volume of risk within the extent of the capacity(capital).Market risk management(a) Qualitative information on market risk managementWith respect to market risk management, the Bank identifies and controls the volume of risk using real risk subtracted holdinggain or loss and realized gain or loss from VaR for internal management purpose. The Bank allocates capital to the marketrisk exposure and monitors it to balance the volume of risk within the extent of the capacity (capital). In addition to dailymonitoring and controls of the real risk and VaR, the monthly ALM committee discusses and determines the means ofappropriate risk control.23