Annual Report 2015

ーManagement Philosophy
Century Tokyo Leasing Group will grow alongside its customers andcontribute to society as a comprehensive financial services enterprisethat continually challenges itself.

Become a robust
comprehensive ﬁnancial
services enterprise andrealize further innovativechanges as well assustainable growth

Century Tokyo Leasing Group operates in a wide arrayof businesses. Our industry-leading equipment leasing
business has a customer base of approximately
25,000 companies in Japan and emphasizes ourstrengths in information and communications
equipment. Our specialty financing business includes
ships, aircraft, environment and energy, real estate, andmedicine and healthcare, while our industry-leading
automobile financing business includes automobile
leasing to corporations and individuals and car rental.
Our international business encompasses an extensive

Contents
2
4
6
8

Our Position
Our Businesses
Our Strengths
Financial Highlights

10 Management Strategy
１１ Focused on Results
12 An Interview with President & CEO Shunichi Asada

17 Features
18 Feature 1: Overseas Automobile Financing Business
22 Feature 2: Aviation Financing Businessindustry-leading network of businesses in Asia that

25 Review of Operations

spans East Asia, ASEAN and India, as well as Europe

26
28
30
32

and the Americas.
During our second medium-term management
plan, which culminates at the end of fiscal 2015, ourbasic policy is to become a robust comprehensive

Equipment Leasing
Specialty Financing
Automobile Financing
International Business

34 Management and CSR

innovative changes as well as sustainable growth.

35 Management Organization
36 Corporate Governance
41 CSR

Unconstrained by our traditional business model,

43 Financial Section

financial services enterprise and realize further

we will fully leverage our strengths and take new
directions in services to become a robust
comprehensive financial services enterprise while
continuing to innovate and generate sustainable growth.

44 Six-Year Summary
46 Management’s Discussion and Analysis of Operating
Results
51 Consolidated Balance Sheet
53 Consolidated Statement of Income
54 Consolidated Statement of Comprehensive Income
55 Consolidated Statement of Changes in Net Assets
56 Consolidated Statement of Cash Flows
57 Notes to Consolidated Financial Statements
83 Report of Independent Auditors
84 Main Subsidiaries and Affiliates
86 Stock Information / Bond Ratings
87 Corporate Information
Forward-Looking Statements
Statements in this annual report with respect to Century Tokyo Leasing Group’splans, forecasts, strategies, presumptions and other statements that are nothistorical facts are forward-looking statements and are based on management’s
assumptions and beliefs grounded on information that was available when thisreport was written. The actual performance of the Company may differ
considerably from that discussed in the forward-looking statements.

Century Tokyo Leasing Corporation Annual Report 2015

1

Our Position

Century Tokyo Leasing Group has
consistently grown alongside its customers.
Ordinary Income

Net Income¥60.7 billion

Operating Assets (Including Business Guarantees)¥34.1 billion

10.0% year-on-year increase. Record for the sixth
consecutive fiscal year.

¥2,914.2 billion
Operating assets including business guarantees
increased 10.1% from a year earlier. Record for the
fourth consecutive fiscal year.

3.3% year-on-year increase. Record for the fourthconsecutive fiscal year.

ROE (Ratio of net income to shareholders’ equity)

12.5%
Over 12% for the sixth consecutive fiscal year because of ourstrong profitability and operating efficiency. Our strategy is tomaintain ROE at a level significantly higher than our peers.

¥2,914.2
billion▶ Century Tokyo Leasing Group’s Growth Trajectory

Growing withour customers¥2,646.8

Century Tokyo Leasing Groupbillionhas accelerated its growth bygenerating record ordinary income
for the sixth consecutive fiscal year

Operating Assets¥2,276.6

since April 2008 (simple sum ofbillionpre-merger company results for¥2,143.2¥2,118.2¥2,049.8

billion¥1,962.0¥60.7

billionbillion¥55.2

billion

¥44.2

¥46.3

¥46.3

billionbillionbillionfor four consecutive fiscal years.
We have also maintained the key
performance indicators of return on

billionbillionfiscal 2008) and record net income

assets (ROA) and return on equity(ROE) at the high levels of
approximately 2.2% and 14%,

Ordinary Income

respectively, for the past several
years and have generated growth in

¥22.3

¥33.4

earnings per share (EPS) of 10% forbillionthe fourth consecutive fiscal year.

billionWe will continue to emphasizethese key performance indicators,
and intend to further increase ROA

2009/3*

2010/3

2011/3

2012/3*Data for the year ended March 31, 2009, the year immediately prior to the merger on April 1, 2009, is a simple aggregationof data for the former Century Leasing System, Inc. and the former Tokyo Leasing Co., Ltd.

2

Century Tokyo Leasing Corporation Annual Report 20152013/3

2014/3

2015/3and maintain our established paceof EPS growth to keep ROE at ahigh level.

Century Tokyo Leasing Corporation Annual Report 20153

Our Businesses

We have transformed our business portfolio
and deliver value in a wide array of markets.

to meet customer needs▶ Operating Assets* in Four Growing Businesses
Driving the growth of Century Tokyo Leasing Group are four core businesssegments that have evolved and expanded to meet customer needs. The first isequipment leasing. The other three are the highly profitable specialty financing,Equipment Leasing¥1,712.0 billion¥1,515.8 billion

automobile financing and international businesses, which are growing rapidly.
* Including business guarantees

International
Business
Automobile
Financing9%

For details, see pages 26-27

09/3

Equipment leasing leverages the Group’s
comprehensive capabilities and potent customer
base to provide products and services spanninga broad array of machinery and equipment
including information and communications
equipment, factory equipment, medical devices,
construction equipment and commercial
equipment.

15/3

Specialty Financing

13%¥2,914.2
billionSpecialty
FinancingEquipment
Leasing

For details, see pages 28-29¥764.5 billion

52%

We have acquired specialized knowledge ofvarious products to create new growth fields
beyond leasing and financing services. We areconcentrating on four areas: ships, aircraft,environment and energy, and real estate.

¥260.0 billion

26%
09/3

15/3

Automobile Financing¥382.9 billion

As of March 31, 2015

We offer automobile leasing for companies
and individuals as well as car rental with aleading lineup of services in Japan, providing
optimum services according to the customer’s
intended use. Overseas, we also offer a full
lineup of products including automobile
leasing and loans to meet customer needs.

¥67.7 billion

4%3%

For details, see pages 30-31

09/3

15/3

International Business

12%¥251.0 billion¥2,118.2 81%
billion¥78.5 billion

09/3

For details, see pages 32-33

Overseas, we provide local financial support
to Japanese corporations and cooperatewith local partners, financial institutions,manufacturers and dealers to meet customer
needs and provide specialized services thatmeet the unique requirements of the regions
we serve.

15/3

As of March 31, 20094

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 20155

Our Strengths

We create value beyond the leasing business▶ Group Network

Century Tokyo Leasing Group’s strengths are the experience and expertise it has developedand its powerful network of relationships with leading companies in Japan and overseas.

by concentrating our Group strengths.
Century Tokyo Leasing Group has been operating overseas since 1972. As of April 1, 2015, our▶ Overseas
Operations

network spanned 37 countries worldwide. We support capital investment by Japanese

We combine our ability to provide services, our network of partner companies, and ourcompanies advancing overseas and offer financing programs to the sales companies of

product appeal to create additional value that precisely meets customer needs.

manufacturers and dealers that sell facilities and equipment to non-Japanese companies.
The overseas network that we have built up over the past 40 years is our foundation as wePartner Companies

leverage the unique expertise we have developed in the Japanese market to expand in rapidlyPartner Companies

growing overseas markets by providing services that align with customer and local needs.

・FUJITSU LIMITED・IHI Corporation
・Shiseido Company, Limited・NHK Group・Orient Corporation

・CIT Group Inc.
・Kyocera Corporation

Investment

Investment

Joint Ventures

Joint Ventures

Overseas Network

2 countries
in East Asia

15 countries
in Europe
・Fujitsu Leasing Co., Ltd.
・IHI Finance Support Corporation
・S.D.L Co., Ltd.
・ITEC Leasing Co., Ltd.
・Orico Business Leasing Co., Ltd.

・TC-CIT Aviation Ireland Limited
・TC-CIT Aviation U.S., Inc.
・Kyocera TCL Solar LLC

ve

In

t

en

1 country
in South Asia

m

st

m

t
es

2 countries
in NorthAmerica

Operations in

t

en

v
In

Equipment Leasing

37countries

Specialty Financing
5 countries
in ASEAN

International BusinessNote: Hong Kong is included in China.
Taiwan is counted as a separate country.

ve
In

t

en

m

st

st

m

ve

・Nippon Car Solutions Co., Ltd.
・Orico Auto Leasing Co., Ltd.

(As of April 1, 2015)

en

In

Joint Ventures

primarily in East Asia and ASEANt

Automobile Financing

Joint Ventures

Ce
Century
Tokyo Leasing China Corporation
・C
・Century
・PT. Century Tokyo Leasing Indonesia
・TISCO Tokyo Leasing Co., Ltd.
・President Tokyo Corporation
・Tong-Sheng Finance Leasing Co., Ltd.
・BPI Century Tokyo Lease & Finance Corporation
・HTC Leasing Co., Ltd.
・P.T. Hexa Finance Indonesia

Overseas Business Development

With bases in over 30 countries,
CSI Leasing, Inc. became an
equity-method afﬁliate.
IrelandPartner Companies

・NIPPON TELEGRAPH AND TELEPHONE CORPORATION
・Orient Corporation

6

Century Tokyo Leasing Corporation Annual Report 2015

・ITOCHU Group・TISCO Financial Group Pcl.
・Uni-President Enterprises Group・Bank of the Philippine Islands
・Hitachi Construction Machinery Group

Hong Kong

2013

1972

2011

United Kingdom

1979

1983

Philippines

2008
2007

1985

2014
2012

TaiwanInvestment
Partner Companies

2015

Indonesia
Malaysia

Investment

12 countries
in Central andSouthAmerica

1997

India

2006
Thailand
China

United States
Singapore

Century Tokyo Leasing Corporation Annual Report 20157

Financial Highlights▶ Highlights for the Year Ended March 31, 2015
Net Income per ShareTotal revenues increased 6.6% year on year to ¥883.0 billion due to factors¥322.84

including an increase in financing revenues from the consolidation of an

Ordinary Income

automobile financing company during the fiscal year. Ordinary income¥60.7 billion

Net income per share increased for the fourth consecutive year, gaining
3.6% year on year to ¥322.84. ROE decreased 1.4 percentage points to

ROE2

increased 10.0% year on year to ¥60.7 billion, a record for the sixth

12.5% because shareholders’ equity increased 16.0% from a year earlier.

12.5%

consecutive fiscal year.

Operating Assets¥2,914.2 billion

Operating assets including business guarantees increased 10.1% from a year earlier
to a record ¥2,914.2 billion. By segment, leasing and installment sales accounted forremained at a relatively high level of 2.2% for the past several years.

2.2%
Total Assets¥3,151.9 billion

Total assets increased 9.3% from a year earlier to ¥3,151.9 billion due to the■ Operating Income(Billions of yen)

58.4

60
51.4

50
40

41.0

41.9

10
0

12/3

13/3

14/3

15/3

year to 20.1%, reflecting our emphasis on the balance between shareholder
returns and growth investment.

(Billions of yen)
70

(Billions of yen)

(Yen)

(%)

(Yen)

40

350

322.84 28.0
311.64

70

24.0

60

20.0

50

16.0

40

12.0

30

60.7

55.2
44.2

46.3

33.1
30

46.3

23.6

26.2

34.1

28.9

300
250
200

20

272.32221.8014.8

245.82
14.5

14.0

13.9

150

20

100

8.0

20

50

4.0

10

0

0

10

0

11/3

12/3

13/3

14/3

0

15/3

■ Operating Assets (Including Business
Guarantees) & ROA(Billions of yen)(Billions of yen)

3,500
2,884.8

3,000
2,500

2,184.6 2,260.4

3,151.9

2,465.8
2,000
1,500

1,500

2,914.2

3,000

2,646.8

2,500

2,000

11/3

12/3

13/3

14/3

0

15/3

11/3

12/3

13/3

14/3

2,049.8
2.2

2,143.2

500

500

0

0

11/3

12/3

13/3

14/3

15/3

(%)

3.0

2,276.6
2.5

2.2

2.1

2.2

(Billions of yen)

336.5

350

178.8

2.0

8.5

11/3

12/3

13/3

Operating assets（Left scale）

14/3

15/3

1.5

0

11/3

12/3

13/3

14/3

15/3

8.4

11/3

12/3

13/3

15/3

14/3

1,939.2

0

11/3

12/3

13/3

14/3

15/3

■ Number of Employees

1,474.1

1,500

1,409.4

1,072.7(Persons)

4,500

4,113

4,000

1,178.8

3,500

3,309

3,000

893.9

2,500
2,000

600

1,715

1,722

1,676

11/3

12/3

13/3

1,500
1,000

300

11/3

1,741.9 1,783.2

1,500

500

7.8
0

2,211.7

500

900

8.0

50

44

2,000

52

2,419.9

2,500

1,000

1,200

9.0
8.8

100

40

48

■ New Transactions Volume

9.3

201.3

150

(Billions of yen)

65

(Billions of yen)

9.5

9.0

233.7

■ Interest-bearing Debt

ROE（Right scale）

(%)

285.5

250
200

2.2

15/3

■ Shareholders Equity Ratio■ Net Assets

300

1,000

1,000

12.5

30

Net income per share（Left scale）■ Total Assets■ Dividends per Share■ Net Income per Share & ROE3

10

11/3

¥65

■ Net Income

40

20

sixth consecutive fiscal year. The payout ratio increased 3.4 points year on■ Ordinary Income

5030Dividends per share increased ¥13 year on year to ¥65, a record for the

2. Ratio of net income to shareholders’ equity

60

42.0

a 12.3% increase in the financing segment.

Dividends per Shareincrease in operating assets.

1. Ratio of ordinary income to operating assets

billion, a record for the fifth consecutive fiscal year due to factors including¥1,474.1 billion¥2,154.3 billion, financing for ¥747.8 billion, and other for ¥12.0 billion. ROA has

ROA1

The new transactions volume increased 4.6% year on year to ¥1,474.1

New Transactions Volume

12/3

13/3

14/3

15/3

0

11/3

12/3

13/3

14/3

15/3

0

14/3

15/3

ROA（Right scale）

3. The average ROE of companies listed on the First Section of the Tokyo Stock Exchange was 8.16% for fiscal 2014 (as of June 30, 2015; source: Tokyo Stock
Exchange website).

8

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 2015

9

Focused on Results

Century Tokyo Leasing Group has consistently exceeded its management targets by steadily executing its
strategy of fully leveraging its unique strengths. Our superior earning capabilities have created a virtuous
cycle for amassing the operating assets, including business guarantees, that are the source of future
earnings. This cycle is well regarded in capital markets, and as a result our market capitalization has grownsignificantly since the merger that created the Group.

Management Strategy
Generate signiﬁcant growth by expanding our businesses.
Target additional growth.

Century Tokyo Leasing Group is executing its second medium-term management plan with afundamental policy of becoming a robust comprehensive financial services enterprise and realizing
further innovative changes as well as sustainable growth. Unconstrained by our conventional
business model and markets, we will achieve sustainable growth with a view toward expanding our

Signiﬁcant Income Growth

Record Operating Assets

Ordinary income: ¥60.7 billion

Operating assets including businessguarantees: ¥2,914.2 billion

From the fiscal year immediately
prior to the merger 1

Record ordinary
income for six
consecutive ﬁscal
years

Record operating
assets for four
consecutive ﬁscal
years

Proﬁtability and Productivity
Remain HighTop-Class ROE in
Japan’s Financial Sector

ROA: 2.2%

ROE: 12.5%

Over 2.1%
for ﬁve consecutiveﬁscal years

Over 12.0%
for six consecutiveﬁscal years

Signiﬁcant Growth in Market
Capitalization

Stable Shareholder Returns Balancedwith Growth Investments

Market capitalization:
Approximately ¥390 billion 2

Committed to a 20% payout ratio

About sixfold
growth since
the merger

Dividend increases
for six consecutiveﬁscal years

businesses by entering growth markets.

Contents● Focused on Results ................................................... 11● An Interview with President & CEO Shunichi Asada .... 12

From the fiscal year immediately prior
to the merger 1

1. Data for the year ended March 31, 2009, the year immediately prior to the merger on April 1, 2009, is a simple aggregation of data for the former
Century Leasing System, Inc. and the former Tokyo Leasing Co., Ltd.
2. Calculated using closing share price as of March 31, 2015.

10

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201511

An Interview with President & CEO Shunichi Asada

specialty financing, automobile financing andinternational businesses, the equipment leasing
business’s operating assets now stand at ¥1.5 trillion,

Further Growth after Record Earnings for Six
Consecutive Fiscal Years

but account for about 50% of Group operating
assets. Moreover, profitability has steadily improved■ Operating Assets (Including Business Guarantees)& Ordinary Income(Billions of yen)

2,500

significant change, allowing us to achieve ROA and

2,000

Century Tokyo Leasing Group has steadily improved its results compared with the fiscal year prior to the merger.

80

2,914.2

3,000

as the composition of operating assets has undergone
ROE that are higher than the industry average.

(Billions of yen)

3,500

1,500

2,646.8
1,962.0

2,049.8

2,143.2

44.2

46.3

2,276.6
55.2

60.7

46.3

40

33.4

1,000

Operating assets including business guarantees totaled ¥2,914.2 billion as of March 31, 2015, or about 1.4 times the total
as of March 31, 2009. Ordinary income for fiscal 2014, the year ended March 31, 2015, was ¥60.7 billion. This was about

500

2.7 times the total for fiscal 2008, the year ended March 31, 2009, and a record for the sixth consecutive year since the0fiscal year prior to the merger. Net income for fiscal 2014 was ¥34.1 billion, a record for the fourth consecutive fiscal year.

60

20

10/3

11/3

12/3

Operating assets（Left scale）

13/3

14/3

15/3

0

Ordinary income（Right scale）

In addition, our market capitalization has increased from ¥64.0 billion as of April 1, 2009 to ¥389.7 billion as of March
31, 2015, a sixfold increase.
I would like to thank our customers and shareholders for the warm support that enabled these achievements.

Q2

What is the outlook for fiscal 2015?

President & CEO

A

Q1
A

Please discuss Century Tokyo Leasing Group’s growth trajectory since themerger.

Our operating environment is more competitive

We have been strengthening the sales foundation

than ever because interest rates have been low for anwith a growing number of new initiatives that haveextended period as a result of the economic and fiscal

resulted from our focus on differentiating ourpolicies of the Japanese government and the Bank ofproducts and enhancing services in the equipment

Japan that are designed to end deflation. Century

leasing business. For example, in collaboration with aTokyo Leasing Group has been differentiating its

major Japanese printer sales company we haveproducts and enhancing services in the equipment

begun offering comprehensive one-stop, fixed-costleasing business while expanding revenues throughservices to customers who have installed

initiatives in specialty financing, automobile financing

multifunction printers. We differentiate ourselves andand international business, which have strong growthincrease earnings when both product and service

potential. We have also rigorously controlled expenses

providers and the customers they serve benefit.
In the specialty financing, automobile financing and

The Group has implemented a number ofduring the second medium-term management plan.

initiatives since the merger. We launched the first

The second medium-term management plan

administrative expenses. As a result, for fiscal 2015 weinternational businesses, fiscal 2015 will be a key year

medium-term management plan in fiscal 2010, thebegan in fiscal 2013, the year ended March 31, 2014,

forecast that sales will increase 3.1% year on year tofor enhancing both the sales and management

year ended March 31, 2011, to maximize synergies

and culminates at the end of fiscal 2015, the year

¥910.0 billion, ordinary income will increase 5.5% tofoundations. We greatly encouraged equity participationfrom the merger and transition to the next stage ofending March 31, 2016. We are leveraging our¥64.0 billion, and net income attributable to owners ofand established joint ventures up to fiscal 2014. We will

growth. We were quickest in the industry to integrate

extensive customer base and business portfolio inparent will increase 6.9% to ¥36.5 billion. We expect toensure that these initiatives become growth drivers

our systems and also combined our organizations,

implementing the basic policy of this plan, which is toset new records for ordinary income for the seventh

during the next medium-term management plan bypersonnel systems, credit investigation systems andbecome a robust comprehensive financial services

consecutive fiscal year and for net income attributable

fortifying the corporate governance structure forother systems with a sense of urgency, which

enterprise, and realize further innovative changes as

to owners of parent for the fifth consecutive fiscal year.

Century Tokyo Leasing Group.

enabled us to maximize synergies from the merger. In

well as sustainable growth.

including funding costs and selling, general andFiscal 2015 is the final year of our second

addition, our transition to the next stage of growth

The equipment leasing business accounted for

medium-term management plan and a key year for

involved aggressively allocating resources to theover 80% of operating assets as of March 31, 2009,solidifying our foundation for generating significant

specialty financing and international businesses,

just before the merger. As a result of steady growth

and rapid growth in the third medium-term

which has supported improved earning capabilities

over the past six years in the highly profitable

management plan starting in fiscal 2016, the year
ending March 31, 2017. We have already achieved
the quantitative targets of the second medium-term
management plan, but I realize that implementationof our management strategy of strengthening oursales and management foundations is still ongoing.

12

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201513

An Interview with President & CEO Shunichi Asada

Philippine Islands, the oldest and one of the largest

Q3
Abanks in the Philippines. We also invested in Hitachi

Please discuss issues and initiatives for achieving sustainable growth.
We are steadily expanding our business portfolio¥100 billion over the next several years. We also

by building partnerships with leading companies indemonstrated our highly specialized knowledge ineach region and business we serve to generateareas such as ships and real estate to build

sustainable growth for the Group.

relationships with leading companies in Japan andoverseas, which we expect to contribute further toInitiatives in Equipment Leasing

earnings.

Personnel, capital and risk management are key

Construction Machinery Group’s sales financeissues for growth. In tandem with our rapid growth,

subsidiaries in Thailand and Indonesia, andwe are aggressively recruiting personnel withpurchased automobile leasing assets including

advanced knowledge in businesses such as specialty

associated receivables from a Thai subsidiary offinancing and international operations where

Mitsui & Co., Ltd. In March 2015, we acquired shares

specialized skills are required. We are also placingin CSI Leasing, Inc., the largest independent leasing

more emphasis on hiring multilingual university

company in the United States, and made it an equity-

graduates.

method affiliate. CSI Leasing is strong in leasing

We will also need to diversify access to capital

information and communications equipment and has

through funding denominated in foreign currencies

maintain operating assets at approximately ¥1.5

Initiatives in Automobile Financing

operational bases in over 30 countries. We therefore

because we expect to further expand overseas assets.

trillion and enhance earnings by leveraging our baseof approximately 25,000 corporate customers andIn the automobile financing business, Nippon
Car Solutions Co., Ltd., an industry-leading

expect strong synergy with Century Tokyo Leasing

differentiating ourselves from other companies. For

automobile leasing company, and Nippon Rent-A-Car

example, in April 2015 we made a full-scale entry into

Service, Inc., one of Japan’s main car rental

the vendor leasing business by establishing jointcompanies, became consolidated subsidiaries inventure Orico Business Leasing Co., Ltd. with Orient

2013. With the addition of these companies to Orico

Corporation. We are also building a medium-to-long-

Auto Leasing Co., Ltd., Japan’s only company

term foundation in the business of providing

specializing in leasing automobiles for individuals,

consulting services to nursing care providers throughvehicles under management in our automobile

initiatives including a joint venture with Souseikai

leasing business was among the highest in theGroup, a leading Japanese company.

industry at about 540,000 as of March 31, 2015. Of

In the equipment leasing business, we will

Initiatives in Specialty Financing
We expect further growth in the specialty
financing business. Demand in the aviation businessis expected to grow globally, and in 2012 we madeGA Telesis, LLC an equity-method affiliate to becomea one-stop source for leasing and sales of usedaircraft, engines and parts, and aircraft dismantling.

with significant capacity for growth because of thewhich has the sixth largest share of the global aircraft
leasing market. This established a platform for us inrigorously evaluate creditworthiness to minimize

information and communications equipment market

doubtful account costs, while raising the sophisticationin Japan. We will promote business collaboration withof our risk management capabilities in areas such asa view to the possibility of making CSI Leasing a

asset risk and country risk because we expect toconsolidated subsidiary.

expand ship, aircraft and overseas assets.

shift from automobile ownership to usage. Orico Auto
Leasing is a leading company in automobile leasing
for individuals, and has steadily expanded its
business foundation through initiatives including an

Q4alliance formed in 2014 with leading automotive
product marketer AUTOBACS SEVEN Co., Ltd.

A

In 2014, we established aircraft leasing joint venturesin the United States and Ireland with CIT Group Inc.,For risk management, we will continue toGroup, which holds the top share in the leasing

We will diﬀerentiate ourselves in our four operating segments
and the regions we serve, leveraging our uniqueness to achieve
further growth.

note, automobile leasing for individuals is a market

14

Initiatives for Growth

Initiatives in the International BusinessIn our international business, we have traditionallyexpanded through joint ventures and alliances with

What are your thoughts on people, the source of growth for Century Tokyo
Leasing Group?
Century Tokyo Leasing Group believes that its

women to fully demonstrate their individual

people are an asset that drives development, and wecapabilities. One example is the appointment of a

are aggressively implementing initiatives such as

locally hired female employee as a director at a

recruiting foreign nationals to work at the head officesubsidiary in Indonesia.

in Japan and helping women to excel.
We recruited our first foreign national, a student

In fiscal 2015, we established the Diversity
Promotion Office within the Personnel Division. In

the primary market for aircraft. In the environment

leading banks and companies in the regions weand energy business, we entered the electric powerserve. In fiscal 2014, we started an automobile

studying abroad who graduated from a Japanese

addition, we are reviewing certain components of oursales business by establishing the joint ventureleasing business in Suzhou, China by establishing

university, in 1987. Today, this employee is the

personnel system to include highly motivatedKyocera TCL Solar LLC with leading Japanese solar

Tong-Sheng Finance Leasing Co., Ltd. as apresident of a Singapore subsidiary. Over the past

administrative employees in the pool of managerial

power generation module manufacturer Kyocera

subsidiary of President Tokyo Corporation, which is aseveral years, foreign nationals have come to accountcandidates, providing further opportunities for them

Corporation in conjunction with the start of thejoint venture with Uni-President Enterprises Group of

for about 10% of new hires because of theto excel.

feed-in tariff scheme for renewable energy. This

Taiwan. We also invested in Suzhou New District

globalization of our businesses.

venture had 20 operating mega-solar power

Furui Leasing Co., Ltd., a new leasing company

We also have a female executive officer, still ageneration sites in Japan with total generating

established by government-affiliated Chinese firm

rarity among financial institutions. She plays a central

capacity of 38.4 MW as of March 31, 2015, thus

Suzhou New District Hi-Tech Industrial Co., Ltd., androle in our overseas mergers and acquisitions. The

establishing the foundation for medium-to-long-term

made it an equity-method affiliate. In ASEAN, weGroup had 19 female managers as of July 1, 2015. In

earnings as we expand operating assets to overinvested in the leasing subsidiary of Bank of theaddition, we are providing many opportunities forCentury Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201515

An Interview with President & CEO Shunichi Asada

Q5A

Please discuss shareholder returns.

fiscal 2015. We are confident that as highly

companies listed on the First Section of the Tokyo

independent external directors, their presence will

Stock Exchange, which was 8.16%.* We have been

help strengthen Group governance.

selected for the JPX Nikkei Index 400 and as a

Cultivate new markets with the ability to propose uniqueproducts and services. Capture growth in expanding markets.

“Competitive IT Strategy Company” in a themed
stock initiative co-sponsored by the Tokyo Stock■ Dividends per Share

Exchange and the Ministry of Economy, Trade and(Yen)

Industry. Moreover, we committed to a payout ratio of

80

20% in November 2014, and raised our annual cash

70

dividends per share for fiscal 2014 by ¥13 from the60

previous fiscal year to ¥65 as net income increased50¥1.1 billion to ¥34.1 billion. For fiscal 2015, we plan to40further increase annual cash dividends per share by30¥5 to ¥70. As a result, beginning with fiscal 1998, the20year ended March 31, 1999, as the former Tokyo

10

Lease Co., Ltd., we will have increased dividends for0

18 consecutive fiscal years.
Century Tokyo Leasing Group has numerous
growth sectors and is further expanding business
opportunities. ROA, EPS and ROE will remain key
performance indicators for us as we manage theGroup with a balance of growth investment andFeatures

We also brought on two external directors during

Our ROE for fiscal 2014 was 12.5%, which wassignificantly higher than the average ROE for

70

65

40
28 26

44

48

52

Century Tokyo Leasing Group has achieved growth by identifying customer needs and market
changes to develop unique products and services with high added value. The features introduce

32

strategies and successful examples in the overseas automobile financing business and the aviation
financing business, which are the most profitable businesses for the Group and offer growth prospects.

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3
(Forecast)Century Tokyo Leasing Corporation
Former Century Leasing System, Inc.
(Consecutive annual dividend increases from FY2004 to FY2008
after listing)Contents● Feature 1: Overseas Automobile Financing Business ... 18● Feature 2: Aviation Financing Business .................... 22

Former Tokyo Leasing Co., Ltd.
(11 consecutive annual dividend increases from FY1998 to FY2008)

shareholder returns.
* The average ROE of companies listed on the First Section of the Tokyo Stock Exchange was 8.16% for fiscal 2014 (as of June 30, 2015;
source: Tokyo Stock Exchange website).

Q6
A

Please close by discussing your vision for the future of Century Tokyo Leasing
Group.
While we expect Japan’s economy to recover

Going forward, we will significantly increase ourmoderately in the near term, the low interest ratebusiness opportunities by approaching our businessenvironment means that the traditional businessas a comprehensive financial services company,

model centered on leasing will be brutally competitive

instead of restricting ourselves to the leasing

for all participants, including banks. In thisbusiness field. We ask stakeholders for theirenvironment, the key issue is generating stable,

understanding and support as we expand oursustained earnings, so we must create new

business portfolio in a broad range of fields andbusinesses with a long-term perspective.

strengthen our earning capabilities to generate

During the six years since Century Tokyo Leasingsustainable growth that meets their expectations.

Group was created, we have steadily expanded ourbusiness portfolio beyond our traditional businessmodel, increasing operating assets and transforming
their composition to achieve industry-leading
profitability.

16

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201517

Automobile financing is a core business of Century Tokyo Leasing Group. In Japan, we haveOverseas
Automobile
Feature 1
Financing Businessstrengthened our operating foundation through management integration and provide automobile
leasing to companies and individuals, and car rental services. At the same time, we support
Japanese companies overseas as well as providing various financing services to local companies
in the regions in which we operate. We are expanding our businesses in East Asia and ASEAN,
with a focus on steady motorization in emerging countries over the past several years.

Management Strategy: Enhance Initiatives in the Automobile Financing Business in Japan and Overseas

Strengths in the Automobile Financing Business in Emerging Countries

In April 2015, we reorganized the former Automobile

comprehensive lineup of services for the corporate market

Business Promotion Division as the Automobile Department

and for the individual market, which consists of automobile

generated double-digit growth in operating assets during theto enhance initiatives in the automobile financing business inleasing and car rental and is expected to expand. Overseas,

year ended March 31, 2015, with the automobile financing

Japan and overseas. The Automobile Department now

the automobile financing business operates in Singapore,business as its main business.

consists of two divisions: Automobile Division I, which is

Malaysia, Thailand, the United States and Taiwan, and also

responsible for operations in Japan; and Automobile Division

works with leading local companies to expand business in

II, which is responsible for expanding the automobile

China, India and the Philippines. We are placing particular

Equipment Leasing Businessfinancing business overseas.

emphasis on leasing demand, which we expect to increase

Century Tokyo Leasing Group started overseas

rapidly because of expanding motorization in emerging countries.

Our automobile financing business in Japan has a

The East Asia and ASEAN Business Department■ Utilizing the Infrastructure of the Overseas

businesses in 1972, and has expanded its overseas network
to 37 countries worldwide as of April 1, 2015. We utilize thebusiness infrastructure and overseas network that we haveTrends in the Vibrant Markets of East Asia and ASEAN
China stands out in East Asia because of continued

ASEAN is expected to reach approximately 750 million
around 2050 according to United Nations estimates. Surveysof the correlation between passenger vehicles and per capita

nation. Including domestic commercial vehicle sales and

GDP indicate that demand shifts from two-wheel to four-

exports, new vehicle unit sales increased 6.9% year on year

wheel vehicles when nominal GDP exceeds U.S.$4,000 per

to 23,490,000 in China in 2014, exceeding 20,000,000 units

capita. ASEAN countries Thailand, Indonesia and thefor the second consecutive year, to lead the world for thePhilippines have already surpassed this level, and newsixth consecutive year. At the same time, ASEAN, anothervehicle unit sales* in 2014 totaled approximately 880,000,

million people and a nominal GDP of U.S.$1.8 trillion. Trade

1.2 million and 230,000 in these countries, respectively.

Singapore
Japan

Country

Malaysia

Population(Million)

2011

2012

2013

China

1,339.7

18,51019,30021,980India

1,210.2

3,290

3,580

2,550

Thailand

64.5

790

1,430

1,330

cooperation with leading local companies to expand our
automobile financing business in East Asia and ASEAN.

Beijing Dalian
QingdaoSuzhouShanghaiChengduAutomobile Financing Business

Guangzhou

28.4

610

620

650

subsidiaries with a fleet of approximately 540,000 vehicles

Singapore

5.2

290

―

340

under management, which is among the market leaders. The

Taiwan

23.2

340

340

340

superiority of the automobile financing business we have built

Philippines

95.9

140

180

200

Vietnam

86.9

120

80

100

Japan

128.1

4,200

5,360

5,380

India

2015

Source: Prepared using data from the April 2015 World Economic Outlook Database (includes
certain IMF forecasts)

TaiwanHong Kong

ThailandPhilippines

Malaysia

Century Tokyo Leasing Group’s domestic automobile

Malaysia

Vietnam

Wuhan■ Demonstrating Our Expertise in the Domestic

ThailandCentury Tokyo Leasing Corporation Annual Report 2015

■ Network of Bases in East Asia and ASEAN

domestic automobile financing business while accelerating

Annual Automobile Sales(New automobiles; thousand units)

1,230

2014

Insurance process

the experience, expertise and business model of our

1,110

Philippines

Vehicle sale process

Insurancecompany

analysis expertise, to use the partner companies’ customer

890

2013

Tax payment

major local companies enables us to obtain strong credit

237.6

2012

Vehiclebuyer

Joint operation of businesses with leading local companies

Indonesia

2011

Tax ofﬁce,
etc.

is a key feature and strength of Century Tokyo Leasing

China

Indonesia

18

Local Companies

recruitment and local funding. In this way, we maintain a■ New Automobile Unit Sales in Asia

7,500

0

Maintenance process

rapidly establishing ourselves in local markets. We will use

Taiwan2,500

Vehicle purchase processbalance between risk management and profitability while(U.S. dollars)

5,000

Maintenancefacility■ Operating Businesses Jointly with Majorbases, and to utilize their resources including management,*ASEAN Automobile Federation (AAF) survey■ Nominal GDP per Capita in Asia

10,000DealerGroup’s automobile financing business. Cooperating withwithin ASEAN totals U.S.$2.1 trillion, and the population of

60,000

Customer

automobile financing business.

GDP for 2014, and its status as the world’s largest trading

Community (AEC) in 2015, and has a total population of 600

Leasing agreement

built up over more than 40 years to operate smoothly in thestrong growth, including 7.4% year-on-year growth in real

economic powerhouse, plans to create the Asian Economic■ Automobile Leasing Modelfinancing business consists of three consolidated

Singapore

Indonesia

by integrating the product appeal and the expertise we havecultivated in Japan is a decisive factor in starting joint
businesses with leading local companies.

Source: Prepared based on data from “Automobile Productionand Sales by Country in 2013,” Japan External Trade
Organization (JETRO)

Century Tokyo Leasing Corporation Annual Report 201519

Feature 1 : Overseas Automobile Financing BusinessInitiatives in Core Markets

Outlook for the Overseas Automobile Financing Business and Future Initiatives

We focus on automobile loans and leasing in our automobile financing business in East Asia and ASEAN.

■ Singapore

Century Tokyo Leasing Group advanced into Singapore in■ Philippines

Century Tokyo Leasing Group launched BPI Century

1979 and has gained recognition as a local pioneer with more

Tokyo Lease & Finance Corporation, a joint venture with thethan 30 years of operation. Our businesses here include used

Bank of the Philippine Islands (BPI), a major bank in thevehicle financing for individuals, which generates approximately

Philippines. We will integrate BPI’s network, customer base

80% of total earnings. We also have a corporate automobile

and operational infrastructure in the Philippines with Century

leasing business offering packages of various services.

Tokyo Leasing Group’s customer base, product appeal andexpertise to expand our business base in automobile leasing
and other businesses in the Philippines.

■ Malaysia

We entered the automobile leasing business in Kuala
Lumpur in 2007. Japanese staff members provide services
ranging from guidance during automobile selection to
support in the event of accidents and breakdowns.

■ Taiwan

We established the joint venture President Tokyo
Corporation in 1997 with leading Taiwanese food
manufacturing and distribution and service company UniPresident Enterprises Group. Automobile leases that include■ Thailand

TISCO Tokyo Leasing Co., Ltd. (TTL), a joint venture

maintenance are a core product that President Tokyo offers
to resolve various automobile-related issues of the customer,

between Century Tokyo Leasing Group and TISCO Financial

ranging from financial issues to administrative issues

Group Pcl., which is anchored by the major Thai bank TISCO

including maintenance and automobile inspections.

Bank Public Co., Ltd., concentrates on automobile leasing, toJapanese companies and TISCO customers.
In February 2015, TTL further strengthened its operations
by purchasing the vehicles under management and■ China

In April 2014, we established Tong-Sheng Financeassociated lease receivables of the automobile leasing

Leasing Co., Ltd. as a wholly owned subsidiary of equity-business of Mitsui Bussan Automotive (Thailand) Co., Ltd., amethod affiliate President Tokyo, primarily to serve theconsolidated subsidiary of Mitsui & Co., Ltd.

Suzhou automobile leasing market. We are leveraging theexpertise we have gained in Taiwan to develop the automobileand equipment leasing businesses with a focus on thecustomers of President Enterprises Group, which has
advanced into China, and of Taiwanese companies.

A Great Start in a Market with
Excellent Growth Potential

A standout feature of Century Tokyo Leasing

information and communications equipment

Group’s automobile financing business is theleasing has made customers highly receptive towide variety of products and services that differ

useful leasing services. Japanese automobiles

according to country and operational base. We

and corporate brands are well-trusted in ASEAN,

are well recognized for our efforts over more thanand concern about future environmental issues

40 years to develop business in East Asia andand compliance is also high. Century Tokyo

ASEAN by leveraging the product and service

Leasing Group’s strengths are the experiencecapabilities we have cultivated in our automobileand expertise gained from having about 540,000

financing business in Japan. We are also

vehicles under management in Japan and theaccelerating business expansion by cooperating

trust we receive as a leading Japanese corporate

with major local companies.

provider of fleet management.

The overseas automobile financing business

Generally, the focus in emerging countries isdeals with regulatory regimes and businesson ownership, so loans tend to be favored overcustoms that differ completely by country andleases. Leasing is slowly penetrating the ASEAN

region. For example, in the high-potential

market, as was the case in Japan. Once theChinese market, the definition of automobile

proper institutions are in place, we expect a rapid

leasing and car rental is different from that in

shift from loans to leases several years from now,

Japan, and owner and user are considered to be

driven by the speed of recent income growth andone and the same. More time is therefore neededby the progress of information technology.

for various systemic issues to be resolved. We
intend to identify risks and expand revenue
opportunities in the automobile financing
business in China through Tong-Sheng Finance
Leasing Co., Ltd., which we established in
Suzhou in April 2014.
In ASEAN, the market penetration of
automobile leasing is low, but the penetration of

Yukio Matsumoto
Chief Officer for East Asia Region
East Asia & ASEAN Business Department
General Manager, Automobile Business Division II

20

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201521

Aviation
Financing
Feature 2
Business

Within its specialty financing business, Century Tokyo Leasing Group places strong focus on shipping,aircraft, environment and energy, and real estate as business sectors with high profitability and growthpotential. In particular, aviation financing drives the growth of our specialty financing business,backed by the strong global demand for commercial aircraft, which is expected to double in the
coming 20 years. This feature covers our unique business model on which we base our efforts
to support the growth of the aviation industry.

Aviation Financing Business – at the Core of Our Management Strategy to Strengthen Our Financing and Overseas Businesses
Century Tokyo Leasing Group is focusing on creating

34.1% from the previous fiscal year. As the core management

new business beyond its current leasing and financing

strategy to strengthen both financing and overseas business,competence by developing expertise in each field.

we aim to grow specialty financing assets to a scale of ¥1

In specialty financing, we engage in highly profitablebusinesses. As of March 31, 2015, our operating assets intrillion over the next three years, with a particular focus onaviation financing.

the specialty financing business stood at ¥764.5 billion, up

Growing Trend of the Aviation Industry
The Japan Aircraft Development Corporation forecasts■ Global Airline Passenger Forecast

allowed us to significantly expand our capabilities to include

Telesis and CIT Group, global leaders in the aviation industry,

operating leases and aircraft-secured financing in addition to

we are committed to developing a unique business model

our existing JOL business. Through our partnerships with GA

that integrates the strengths of the three companies.

■ Alliance with GA Telesis Provides Access to a New Asset ClassGA Telesis has an extensive customer network withability to manage the life cycle of aircraft by building expertiseleading airlines across the globe. Its business encompasses

relating to aircraft part-out and parts redistribution as well as

part-out of aged aircraft, repair of engines and otheraircraft leasing and resale, thus differentiating itself fromcomponents for redistribution, maintenance, repair andcompetition. We strive to build a one-stop service platform

overhaul (MRO), engine lease and asset management

capable of capturing every possible business opportunity

service. Century Tokyo Leasing Group is strengthening its

across the life cycle of aircraft.

that the global commercial passenger aircraft market willgrow to approximately U.S.$4 trillion with 30,000 aircraft overthe next 20 years, backed by an annual growth rate of

Revenue passenger kilometers (RPK)(Billion RPK)

16,000approximately 5% in passenger travel demand. Global air
passenger demand in terms of revenue passenger kilometers(RPK) is expected to grow at an average annual rate of 4.9%
to 15.0 trillion RPK in 2033, which is 2.6 times that of 2013.
Routes connecting emerging countries in Asia, the Middle
East, Central and South America, and Africa in particular are
expected to expand.
Airlines shoulder a huge financial burden to procure
aircraft and the need for a leasing solution that provides
flexibility is increasing. More than 50% of new aircraft
acquisition is anticipated to be via leasing. The growth of2033 (Share)
Global total 14,962

ActualForecast

12,000

Other (Incl. CIS)

3,657 (24%)■ Joint Venture with CIT Group Expands Our Aircraft Leasing Platform

CIT Group is a global leader in aircraft finance with a¥70 billion as of March 31, 2015 with 14 commercial aircraft.

track record exceeding 35 years. Operating assets of TC-CIT

TC-CIT Aviation plans to invest approximately ¥200 billion

Aviation, a joint venture with CIT, stood at approximately

over the next two years targeting relatively new aircraft.

Asia/Pacific2013 (Share)

8,000

4,000

0

1993

2,085

5,696
1,141 (20%)
1,574 (28%)
1,514 (27%)
1,467 (26%)

5,526 (37%)
Europe2,939 (20%)
North America

2,840 (19%)■ Century Tokyo Leasing’s Aircraft Business Strategy

1993 1998 2003 2008 2013 2018 2023 2028 2033

Source: Prepared based on Worldwide Market Forecast 2014-2033,
Japan Aircraft Development Corporation

Investment in GA Telesis

Aircraft Business Joint Venture with CIT Groupemerging economies and the rise of low-cost carriers (LCCs)

Businesses made possibleby alliance with GA Telesis

have also contributed to the increased attention on theaviation financing industry.
70% investment
Loans

Unique Business ModelIn December 2012, Century Tokyo Leasing Groupacquired interests in GA Telesis LLC, a leading U.S. aircraft

expand our presence in aviation financing.
TC-CIT Aviation U.S., joint ventures with the CIT Group, aaftermarket business with an aim to build its aviation

global leader in aircraft leasing.

In October 2013, we established TC Aviation Capital
Ireland Limited, a subsidiary in Ireland, in order to further

Parts
sales

Aircraft parts
manufacturingParts
financing

Aircraftmanufacturing

Engineleasing

Airlinecompanies

In October 2014, we formed TC-CIT Aviation Ireland andparts distributor/services provider and entered the aircraft
financing business.

30% investment
Asset management

Operating leases

Sale and leaseback

Our aviation financing business previously centered onarranging Japanese operating leases (JOL) for investors.
However, our alliances with GA Telesis and CIT Group have

Aircraft
operatingleasesJOL

Investment in
Jetstar Japan,
Co., Ltd.

Airlines worldwide
Century Tokyo
T k L
Leasing’s
i ’ ttraditional
d
diti
lb
businessiffoundationd

22

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201523

Feature 2 : Aviation Financing Business

Aviation Financing Business Outlook and Future Initiatives

Aiming to Become an Industry Leader
by Utilizing Our Unique Business Model

Review of Operations
Target further growth in four core businesses.

The aviation financing business is not an easy

Century Tokyo Leasing Group focuses on four core businesses: Equipment leasing, specialty financ-

the buildup of its aviation financing businessmarket to enter, but we are developing ouring, automobile financing and the international business. We aim to be an industry leader in each offoundation since 2012. To date, we have financed

unique aviation financing business model

these businesses by delivering added value that is unique to the Group.

over 80 aircraft and have focused on life cycle

leveraging the expertise of our partners, GA

management of aircraft, providing pure operating

Telesis and CIT Group.

Century Tokyo Leasing Group has accelerated

leases and financing to airlines, and engaging in

Aircraft provide many business opportunities

engine leasing, inventory financing andfrom manufacturing to retirement due to theircomponent sales through equity participation inlong life spanning from 20 to 30 years. Our

an aircraft component supplier and an airline.

aviation financing business has expanded from

Experts predict half the newly deliveredleasing of new aircraft to used aircraft and engine● Equipment Leasing ................................................... 26● Automobile Financing ............................................... 30

aircraft in the global aviation market will be

and parts financing, which are contributing● Specialty Financing .................................................. 28● International Business .............................................. 32

procured via leasing going forward. In a fiercely

strongly to our earnings base.

competitive environment, Century Tokyo Leasing

Contents

We have rapidly expanded our aviation

Group has been expanding its presence byfinancing business and assets since our full-establishing a one-stop service platform capablescale entry in to the market four years ago. We

of providing consistent support across the life

are targeting operating assets of ¥300 billion bycycle in alliance with global leaders in aviation.

the fiscal year ending March 2017 by adding
prime assets to our portfolio.

Tatsuya Yamamoto
General Manager,
Aviation Finance Division and Ship Finance Division
Finance Business Department

24

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201525

Equipment Leasing■ Operating Assets (As of March 31, 2015)■ Operating Assets(Billions of yen)

1,600

Equipment leasing accounts for approximately 50% of Century Tokyo
Leasing Group’s operating assets. We use our sophisticated ability toprovide solutions to meet various customer needs. We offer leasing andinstallment sales for products including information and communications
equipment, factory machinery and equipment, and construction

Equipment Leasing

1,200

52%

800

machinery and commercial equipment. We also provide building

1,506.5

1,546.0

1,515.8

13/3

14/3

15/3

400

management and structuring of flexible financing programs incooperation with manufacturers and dealers.

0

Operating Strengths

Growth Strategies

Century Tokyo Leasing Group draws on the customer base

We are further differentiating and enhancing our services

The equipment leasing business has an overwhelming

We forecast that the operating environment in theof the Mizuho Financial Group and the ITOCHU Group, and hascustomer base that draws on the Group’s collective strengths.

equipment leasing business will continue to be challenging.

by refining our IT-LCM services, which involve value-added

consolidated subsidiaries that are the result of alliances withAccording to Nikkei Inc. estimates, we have maintained a

However, we will further ingrain a sales approach that

services such as property management and maintenance. In

leading Japanese manufacturers FUJITSU LIMITED and IHI

top-class share of the total volume of leasing transactions indifferentiates and enhance our services, and create newaddition, the Business Promotion Office that we established

Corporation. We serve approximately 25,000 corporate

Japan for the past several years. We are especially strong in

growth drivers.

in fiscal 2014 is expanding business that builds customer

customers in Japan through ongoing initiatives to differentiate

handling the personal computers, servers and otherand provide added value to the lease services we offer.

information and communications equipment and software

strengths in existing businesses and by further enhancingthat are widely used in various businesses.

current schemes to increase our earning power. As a specific■ Share of Leasing Transactions in Japan
Fiscal Year Ended March 2012

No. 1

No. 2

No. 3

We will create new growth drivers by exercising our■ Private Capital Investment & Capital
Investment Financed by Leasing

Fiscal Year Ended March 2013

Fiscal Year Ended March 2014

Sumitomo Mitsui Finance &Leasing Co., Ltd.

Century Tokyo Leasing
Corporation

Sumitomo Mitsui Finance &Leasing Co., Ltd.

10.7%

11.1%

12.4%

Mitsubishi UFJ Lease &Finance Co. Ltd.

Sumitomo Mitsui Finance &Leasing Co., Ltd.

Century Tokyo Leasing
Corporation

10.1%

10.7%

11.9%

(Trillions of yen)
100

(Trillions of yen)
10

60

76.8

Mitsubishi UFJ Lease &Finance Co. Ltd.

10.0%

10.6%

11.5%

71.0
60.7

6.3

61.9

64.3

64.9

40

4.4

4.1

68.2

4.2

4.5

4.8

4.4

and the Tokyo Stock Exchange selected us as a “Competitive

Orico Business Leasing Co., Ltd., a joint venture specializing

IT Strategy Company” in May 2015.

in vendor leasing (lease partnering with manufacturers andWe will continue to proactively employ IT services toenhance customer satisfaction and trust while exercising ourdealers).

08

09

10

creativity to enhance the Group’s unique expertise andcapabilities.

4

2

11

12

13

14

Private Capital Investment (Left scale)
Capital Investment Financed by Leasing (Right scale)
Source: Japan Leasing Association (As of June 8, 2015)

Overview of Fiscal 2014

decrease from 58.4% a year earlier. This, however, does notfinancing provider Orient Corporation (Orico) to establish

6

20

0
(Fiscal year) 07

as of March 31, 2015, or 52.0% of total operating assets, aservices, Japan’s Ministry of Economy, Trade and Industry

69.3

Source: Nikkei Inc. estimates

Equipment leasing operating assets were ¥1,515.8 billion

Recognizing Century Tokyo Leasing Group’s use of IT

example, we teamed up with experienced automobile

8

5.4

Mitsubishi UFJ Lease &Finance Co. Ltd.

proposing solutions for customer product sales.

ability to look beyond the conventional and exercise our
80Century Tokyo Leasing
Corporation

trust and offers benefits for both customers and the Group bythat emphasized profitability in the intensifying competitiveenvironment that resulted from low interest rates.
Low-margin leases have become the norm in Japan’s

indicate a trend toward decreasing operating assets in theleasing market. Century Tokyo Leasing Group prioritizedequipment leasing business. Rather, equipment leasing

profitability by broadly employing a sales approach that

accounted for a comparatively lower percentage of total

differentiates its services, while continuing to increase sales

operating assets because of rapid growth in specialty

opportunities. As a result, we achieved a record volume offinancing, automobile financing and the international

new contracts in fiscal 2014.

TOPICS

Vendor Lease Specialist Orico Business Leasing Co., Ltd. Established

0

Targeting further expansion of its business base, Century
Tokyo Leasing Group established Orico Business Leasing Co.,
Ltd., a 50-50 joint venture with Orico specializing in vendor
leasing.
Vendor leases are mainly for small and medium-sizedcompanies that seek to install small-ticket machinery andequipment. Currently, these leases account for approximately
20% ofofthetotal leasing transaction volume in Japan of about
Review
Operations¥5.2 trillion. We expect the share of vendor leases to increase.
Orico Business Leasing integrates Orico’s strong sales
foundation in the consumer finance industry with our
extensive operating capabilities in the leasing business tomeet various customer needs. It is targeting total assets of¥60 billion or more in the year ending March 2018.

Orico Business Leasing website
http://obl-net.co.jp

business. The relative decrease also reflects a sales strategy

26

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201527

Specialty Financing■ Operating Assets (As of March 31, 2015)■ Operating Assets

Specialty Financing

26%

Century Tokyo Leasing Group aims to create new business beyond its
current leasing and financing competence by developing expertise in(Billions of yen)

764.5

800

600

various products. We focus on the rapidly growing aviation financing
business, high-profile solar power generation, and also provide
medical and healthcare sectors by utilizing our expertise.

7.9

200

0

344.7

193.9

130.1

400

financial services for ships, real estate, structured finance, and the

570.0

520.0

23.7

13.5
280.7

245.7

272.9

101.3

116.9

123.2

13/3
Ships and Aircraft

14/3
Environment and Energy

15/3
Real Estate

Others**Others include assets from factoring business, securitization of receivables, medical
and healthcare ﬁeld, etc.

Operating Strengths

Growth Strategies

Specialty financing is a segment with the highest growth potential for Century Tokyo Leasing Group and we are expanding into

Specialty financing plays a crucial role in achieving our

expand the solar power generation business with Kyocera

global markets to generate further growth. We lay focus on our four core segments, which are ships, aircraft, environment andmanagement philosophy, which is to become a robust

Corporation and also look to finance base load power

energy, and real estate. In addition to these sectors, we also provide solutions to monetize a variety of assets such as accounts

comprehensive financial services enterprise. We will engage

sources such as thermal power and biomass. We will expand

receivable and inventories. We capture customer needs and add value by demonstrating our ability to make unique proposals, andin highly profitable growth markets and lead the company’s

the solar power generation business overseas with strategic

provide specialized services and expertise.

further growth.

partners, primarily in the United States and Southeast Asia.

We operate under a strategy to engage in businesses thatShips

∙ Our products include bulk carriers, car carriers andcontainer ships, as well as energy-related offshore
vessels including offshore wind power vessels.

Aircraft∙ We are structuring a well-balanced portfolio both inJapan and overseas.

go beyond our existing leasing and financing services andrenewable energy business consisting of geothermal,∙ We operate in the aircraft leasing business in a joint
venture with major U.S. leasing company CIT Group Inc.

strive to enhance profitability and strengthen the management

offshore wind and hydrogen power based on a long-range∙ We provide lifecycle management in the aircraftbusiness from new and used aircraft to aircraft parts
through an alliance with GA Telesis, LLC of theUnited States.

of our businesses on a consolidated basis. In line with ouraim to lead the future environmental energy industry.

growth, we are continuously working to strengthen ourorganizational structure, systems and controls.
In the aviation financing business, we have assigned
employees to CIT and GA Telesis, both U.S.-based
companies, and TCA, an Irish-based company. The addition∙ We have built a pipeline capable of generating
approximately ¥100 billion in the environment andenergy business as a whole.

Environment
and Energy∙ We have established numerous solar power
generation businesses in Japan, including a joint
venture with Kyocera Corporation.
∙ We are involved in ﬂoating solar power facilities
through an alliance with French company Ciel et
Terre International.

Real Estate∙ We are building a portfolio of prime assets byproviding real estate ﬁnancing (loans and equity) andlease products that meet the needs of quality partnercompanies.
∙ We are maximizing earnings by employing our
specialized knowledge and expertise when exiting
projects.

Overview of Fiscal 2014
The balance of operating assets in specialty financing

ventures in the United States and Ireland with the CIT Group(a leading U.S. provider of commercial lending and leasing

and aircraft accounted for 45.1% of the total, environment

services ranking sixth in the global aircraft leasing market) toand energy 3.1% and real estate 35.7%. Shipping, aircraft

engage in aircraft leasing, establishing a new platform forand environment and energy, sectors that we identified asleasing new aircraft. The business showed exponential

areas with strong growth potential, accounted for ¥368.4

growth, taking full advantage of the growing aviation market.
In the environment and energy field, we formed Kyocera¥161.0 billion (or 48.2% of the total consolidated operating

TCL Solar LLC, a joint venture with Kyocera Corporation, andassets of specialty financing).

built 20 solar power plants in Japan with a total capacity ofshipping company to jointly own a newly built LNG carrier,strengthening our position in the energy sector in line with thegrowing demand for transportation by LNG.

fees, and provide effective financing solutions to leadingedge facilities in regenerative medicine and elderly nursing
care that are growing in demand.
In the real estate field, we target the U.S. property market,
where steady growth is expected, in addition to our existing

strengthen our global marketing and business management

Japanese market. We will pursue opportunities to generatefunctions and will attract global aircraft demand.

profits through joint ventures with overseas subsidiaries ofIn the environment and energy field, we will continue toour strategic partners.

World’s Largest Mega-Solar Power Generation Project at Yamakura Dam in Chiba Prefecture

In the aviation financing business, we formed jointcompared with the end of the previous fiscal year. Shipping

In the ship financing business, we partnered with a major

In the healthcare field, we securitize medical and nursingof these two bases in the United States and Europe will

TOPICS

stood at ¥764.5 billion as of March 31, 2015, up 34.1%

billion in operating assets in total, a year-on-year rise of

We are also working to engage in a next-generation

38.4 megawatts (MW) as of March 31, 2015, establishing along-term revenue base.
In the real estate financing business, we made a full-scale
entry into the real estate development business by participating
in one of Japan’s largest redevelopment projects in Tokyo’s

Kyocera TCL Solar LLC, a joint venture established with Kyocera
Corporation, announced that it will develop and operate a 13.4-MW floating
solar plant, the world’s largest in scale,1 on the Yamakura Dam reservoir,
managed by Chiba Prefecture (east of Tokyo) for industrial water services.
The project will consist of approximately 50,000 Kyocera modules
installed over a water surface area of 180,000 square meters. The plant will
generate an estimated 15,635 megawatt-hours (MWh) of electricity a year,
which corresponds to the annual electricity needs of approximately 4,800
typical households,2 while offsetting about 7,800 tons of CO2 emissions
annually.3
1. Among ﬂoating solar power plants (as of December 22, 2014)
2. Calculated using a per-household ﬁgure of 3,254.4 kWh/year.
Source: Federation of Electric Power Companies of Japan
3. Calculation based on voluntary industry rules published by the Japan
Photovoltaic Energy Association (ﬁscal 2012)

prime business district.

28

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201529

Automobile Financing■ Operating Assets (As of March 31, 2015)■ Operating Assets

Automobile Financing

13%

Century Tokyo Leasing Group is a leader in the automobile financing
business in Japan with approximately 540,000 vehicles* under(Billions of yen)

400

360.8

382.9

300

management. Our comprehensive lineup consists of Nippon Car
Solutions Co., Ltd., Orico Auto Leasing Co., Ltd., and Nippon Rent-A-

200

Car Service, Inc., which lease automobiles to companies and individuals

116.7

and offer rental car services. We are therefore able to provide optimum

100

service according to the customer’s intended use. Our overseas
operations also serve automobile-related needs by providing automobile0

leasing and loans, primarily in East Asia and ASEAN.

13/3

14/3

15/3

*Total of Nippon Car Solutions, Orico Auto Leasing, and Nippon Rent-A-Car Service

Operating Strengths

Growth Strategies

Our motorized society of today has developed to the■ Main Differences among Automobile Leasing, Rental and Ownershippoint of maturity. Automobile needs have also shown signs ofchange with an accelerating transition from ownership tousage. Century Tokyo Leasing Group has built an industryleading organization that meets modern needs with a well-

Intended use

balanced range of businesses from automobile leasing forcompanies and individuals to car rental. We will integrate theservices of Group companies to further strengthen our

Loan or rental
contract term

automobile financing business.

Automobile
Leasing

Rental Car Services

Nippon Rent-A-Car Service, Inc. (63.2%)

Temporaryand short-term
intensive usage

Long-term(years)Note: Early termination is generally
not possible

Short-term(hours, days,
weeks, months)

30

consolidated management, develop close collaborative

companies overseas have only recently joined us. We will

operating ties with the Group, and generate synergies. Orico

Automobile loan
contracts are
long-term

therefore implement growth strategies for each of them, fully

Auto Leasing will expand dealership marketing schemes with

exercise consolidated management and expand businessthe objective of further increasing vehicles under management

Note: Early repayment is possible

collaboration with the Group to further enhance efficiency

to strengthen its hold as the industry leader in automobile

and profitability. We established the Automobile Businessleasing for individuals. We will cultivate new channels in the

Department in April 2015 as an organization that willautomobile leasing market for individuals to draw on the huge

implement potent initiatives in Japan and around the world.

50 million-vehicle potential of this market.

License platesCannot be distinguished fromprivately owned
vehicles“Wa” and“Re” numbers

Regular, privately owned
vehiclesCustomers obModel selection tain their desired
vehicleSelection fromrental car company vehicles

Purchase ofdesired vehicle

Generallyhandled by theleasing company.
Included inlease payment
depending on
the contract

Handled by
the car rental
company andincluded in therental fee

Purchaser pays
as costs are
incurred

Nippon Car Solutions, a key Group company in theits reputation as a leader in the automobile financing

measures largely to increase gross profit from financing andbusiness through unique proposals and services mademaintenance. It will also move its head office to the vicinity ofpossible by increased collaboration among Group companies.

close collaborative operating ties with the Group while raising

TOPICS
Philippine Islands (BPI), a major Philippines bank, an equity-¥382.9 billion. In addition, vehicles under management inbusiness base including automobile leasing by integrating

Japan increased 10.2%, or 50,000 vehicles from a year

BPI’s network, customer base and infrastructure in theearlier, to 540,000 vehicles. As a key initiative, we completed

Philippines with Century Tokyo Leasing Group’s customer

integrating the operations of Nippon Car Solutions, a majorbase, product appeal and expertise. President Tokyo, ourautomobile leasing company that became a consolidated

joint venture with Uni-President Enterprises Group of Taiwan,

subsidiary during fiscal 2013, which has made extensive

established Tong-Sheng Finance Leasing in Suzhou, China,

collaboration with the Group possible. We also concluded anwhich initiated commercial operations in mainland China.

agreement covering automobile leasing for individuals

Moreover, we strengthened our base in the automobile

between Orico Auto Leasing, which leases automobiles toleasing business in Thailand by purchasing automobile

individuals, and AUTOBACS SEVEN Co., Ltd., a major

leasing assets including vehicles under management andmarketer of automotive products and services.

associated lease receivables from a Thai subsidiary of Mitsui& Co., Ltd.

Century Tokyo Leasing Group will live up to and enhance

automobile financing business in Japan, will implement

the Group’s head office to maximize synergies and build

method affiliate and made preparations to expand ourCentury Tokyo Leasing Corporation Annual Report 2015

management. Nippon Rent-A-Car Service will also move its
head office to the Group’s head office building to strengthenof March 31, 2015 increased 6.1% from a year earlier toOverseas, we made a subsidiary of the Bank of the

Leasing Group’s businesses worldwide because of its
automobile financing companies in Japan and Group

Overview of Fiscal 2014
Operating assets in the automobile financing business as

operating efficiency and strengthening consolidated

outstanding efficiency and profitability. However, many of ourSpecified(owner)

Payment for
insurance,
maintenance,
taxes and inspections

Automobile financing stands out among Century Tokyo

Long-term continuous usage

Multiple unspecified customers

Nippon Car Solutions Co., Ltd. (59.5%)

Orico Auto Leasing Co., Ltd. (50.0%)

Routine, continuous usage(incl. theuse of loans)Specified customers(Percentages in parentheses are Century Tokyo Leasing’s percentage of voting shares as of March 31, 2015)

Mainly for Individuals

RentalUsers■ Century Tokyo Leasing Group Automobile Financing Companies

Mainly for Companies

Leasing

Ownership

Orico Auto Leasing Expands Automobile Leasing for Individuals,
Exceeding 50,000 Vehicles under Management

Individuals own 50 million vehicles in Japan. Automobile
leasing now encompasses several hundred thousand vehicles,
and awareness of leasing is increasing. Orico Auto Leasing,the industry leader in automobile leasing for individuals, hasbeen providing leases to customers under its Koala Club brandsince its establishment in 2008. As of January 31, 2015, it hadover 50,000 vehicles under management. In October 2014, it
began jointly developing and marketing automobile leasing
products that enhance driver convenience in collaboration with
AUTOBACS SEVEN, which has over 14 million members andapproximately 580 retail outlets in Japan. We will provide
automobile leasing products that make maximum use of Orico
Auto Leasing’s expertise and AUTOBACS SEVEN’s uniqueautomotive products, insurance and maintenance services toindividuals who are considering acquiring an automobile.

■ Overview of Services in Collaboration with AUTOBACS SEVEN
Customers can receive maintenance services at the
AUTOBACS SEVEN Group’s approximately 580 retail
outlets throughout Japan

Customers can select and install appealing products
from the full lineup of automotive products at AUTOBACS
stores and include the cost in lease payments

All fees for inspections and regular maintenance suchas oil changes and tire rotations can be included inlease payments

Century Tokyo Leasing Corporation Annual Report 201531

International Business■ Operating Assets (As of March 31, 2015)■ Operating Assets

International Business9%

Century Tokyo Leasing Group began operating overseas in 1972.
Focusing on fast-growing East Asia and ASEAN, our network now(Billions of yen)

300

251.0

240

spans 37 countries worldwide. We provide financing support to
170.0

180

Japanese companies operating overseas, and are also significantly

133.4

growing transactions with non-Japanese companies through120

cooperation with local partners, financial institutions, manufacturers
60

and dealers. We are enhancing our service offerings to meet the needsof the customers and regions we serve and building businesses with0

strategic partners to further expand our international operations.

Operating Strengths

13/3

15/3

Growth Strategies
overseas remarketing deals. We will also strengthen joint

Century Tokyo Leasing Group uses its broad overseas

alliances with excellent local companies, and expanding

network centered on East Asia and ASEAN to support thepartnerships with Japanese vendors operating globally. In

overseas bases in the six years since the April 2009 merger

businesses with strategic U.S. partner CSI Leasing, the Tata

overseas advance of our approximately 25,000 corporate

this way, we are focusing on growing transactions with local

that created Century Tokyo Leasing Group. In this and otherGroup in India, and TES-AMM Pte Ltd. in Singapore.

customers in Japan, and has built an organization that is able

non-Japanese companies, which we expect to be highly

ways, the international business has driven Group growth,

to meet various customer needs through close cooperation

profitable, mainly in Asia and the United States.

with particular success in East Asia and ASEAN.

with the head office sales base. In addition, we are building■ Fiscal 2014 International Business Highlights

We have approximately tripled the operating assets of our

In East Asia and ASEAN, we continue to promote our
TISCO Tokyo Leasing in Thailand issued
baht-denominated unsecured bonds

TISCO Tokyo Leasing in Thailand became
a consolidated subsidiary, strengthening
our relationship with the TISCO Group

Invested in CSI Leasingin the United States

2014

April

2015

January

and investments with the objective of generating steady growth

region. Our strengths are a powerful base of Japanese

by balancing risks and returns in the regions we serve, with acorporate customers, global partnerships with Japanese

focus on East Asia, ASEAN and the United States.

international network. The strengths of the leading local

February

March

Purchased automobile leasing businessfrom Mitsui Bussan Automotive (Thailand)

Invested in a leasing company established bygovernment-affiliated Chinese firm
Invested in Hitachi Construction Machinery Group’s sales financesubsidiaries in Thailand and Indonesia and made them joint ventures■ Breakdown of Operating Assets

to assess and take risks, the customer base and channel
infrastructure, and the ability to handle funding and tax
regimes. We integrate all of these strengths in proposals andEstablished Tong-Sheng Finance Leasing in
China as a joint venture with Uni-President
Enterprises Groupsustaining growth and combine strategic business alliances

vendors, expertise in various leasing businesses, and a broad

BPI Century Tokyo Lease & Finance, a joint venturewith BPI of the Philippines, began operatingMay

We will demonstrate the unique strengths of Century Tokyo
Leasing Group in the international business to achieve self-

strategy of alliances with leading local companies in eachcompanies that are our partners in each region are the ability

41.0%

services that are unique to Century Tokyo Leasing Group,with the aim of further expanding local businesses.

Ltd., a company established by government-affiliated¥251.0 billion.

Chinese firm Suzhou New District Hi-Tech Industrial Co., Ltd.,
became an equity-method affiliate in February 2015. In Marchwe accelerated our traditional approach of building our2015, we entered the two largest ASEAN construction

businesses through joint ventures and alliances with leading

equipment markets by acquiring shares in Hitachibanks and operating companies in the regions we serve. Key

Construction Machinery Group’s sales finance subsidiaries ininitiatives and successes included the start of an automobile

Thailand and Indonesia and making them joint ventures. We

leasing business in Suzhou, China with the April 2014

also strengthened our automobile leasing business inestablishment of Tong-Sheng Finance Leasing Co., Ltd. by

Thailand by purchasing automobile leasing assets from Mitsui

President Tokyo Corporation, which is a joint venture withBussan Automotive (Thailand) Co., Ltd., a local subsidiary of

Uni-President Enterprises Group of Taiwan. In May 2014, we

Mitsui & Co., Ltd. In addition, in the same month, the largest

made Thai corporation TISCO Tokyo Leasing Co., Ltd. a

independent leasing company in the United States, CSI

consolidated subsidiary. In December 2014, the leasing

Leasing, Inc. became an equity-method affiliate, which

subsidiary of Bank of the Philippine Islands, Southeast Asia’s

expanded our global network into the United States, Central

oldest bank and a major bank in the Philippines, became an

and South America, and Europe.

equity-method affiliate. These and other initiatives expanded
Century Tokyo Leasing Corporation Annual Report 2015

65.6%

Moreover, to expand business with non-Japanesecompanies and acquire new sources of earnings, we will
Japanese

Non-Japanese

our local network. Suzhou New District Furui Leasing Co.,2015 increased a substantial 47.6% from a year earlier to
In fast-growing East Asia and ASEAN, during fiscal 2014

Fiscal2014

59.0%

Southeast Asia in transactions with global vendors andOverview of Fiscal 2014
International business operating assets as of March 31,

34.4%
Fiscal
2011

expand globally, focusing on Europe, the United States and

32

14/3

TOPICS

CSI Leasing, the Largest Independent Leasing Company in the United States,
Becomes an Equity-method Afﬁliate

We began doing business with CSI Leasing in 2003,
formed an alliance in 2012, and then acquired a 35% stake inthe company in March 2015 to make it an equity-method
affiliate. CSI Leasing mainly handles information andcommunications equipment. The largest independent leasing
company in the United States, CSI Leasing has 40 U.S.
offices and does business in 30 countries. In the UnitedStates and Canada, It also markets information andcommunications equipment and operates a refurbishingbusiness to reuse and recycle equipment.
Century Tokyo Leasing Group is strong in Asian markets.
Adding CSI Leasing’s strong platform in North America,
Central and South America, and Europe will enable us toprovide more finely tuned services to customers operating
globally. We are targeting an even greater market presence
by integrating the respective expertise of Century Tokyo
Leasing Group and CSI Leasing.
■ Overview of CSI Leasing

Founded1972

Total assets$1,594 million

Net
income$13 million
Head office in Missouri, U.S.A.

Century Tokyo Leasing Corporation Annual Report 201533

Management Organization

Management and CSR
Practice CSR management through a sound and transparent
management organization.

Board of Directors

Corporate Auditors

Executive Officers

Chairman & Co-CEO,Representative Director

Standing Corporate Auditors

Senior Managing Executive Officers

Toshihito Tamba

Osamu Shibaya
Futoshi Okada2

President & CEO,
Representative Director

Yuichiro Ikeda
Takeshi Honda
Atsuhiko Iwatake

Corporate Auditors

Shunichi Asada

Shunsuke Wada2
Mikio Fukushima2, 3External Directors

Yoshinori Shimizu1, 3
Akio Nakamura1, 3
Deputy Presidents,
Directors and Executive Officers

Makoto Nogami
Koichi Nakajima

A leader in its industry, Century Tokyo Leasing Group does not simply target improved
performance. We are strengthening governance to ensure sound, transparent management,
contributing to society through our business activities, and promoting initiatives in areas suchas environmental conservation. We aim to be a company that society trusts by practicing CSR
management that achieves balance with the community and the environment.

Director and Senior Managing
Executive Officer

Masataka Yukiya
Directors and Executive Officers

Osamu Tamano
Akihiro NaruseSeiichi Mizuno

Contents● Management Organization ........................................ 35● Corporate Governance ............................................. 36

34

Century Tokyo Leasing Corporation Annual Report 2015

(As of June 25, 2015)● CSR ........................................................................... 41

Managing Executive Officers

Takashi Muramatsu
Noboru Akatsuka
Yasuo Mori
Kenji Murai
Yoichiro Nakai
Takashi Ito
Yasushi Yoshino
Shogo Ozaki
Takashi Kamite
Executive Officers

Yoshio Nomura
Osamu Miyata
Koichiro Sato
Mahoko Hara
Kazuhiro Shibata
Toshifumi Takashima
Tomoyuki Akamatsu
Koichi Baba

1. External directors as stipulated by Article 2-15 of the Corporation Law of Japan
2. External auditors as stipulated by Article 2-16 of the Corporation Law of Japan
3. Designated independent officer as stipulated by the Tokyo Stock Exchange

Century Tokyo Leasing Corporation Annual Report 201535

Corporate GovernanceCentury Tokyo Leasing Corporation recognizes that effective corporate governance is an important management issue in maximizing■ External Directors, External Corporate Auditors and Reasons for Appointment

corporate value. We therefore strive to maintain a sound and highly transparent management system that enables swift and precise

External Directors

decision-making in response to changes in the business environment. We also enhance the soundness and transparency of corporate
management with internal control and risk management systems that operate properly and effectively.

Yoshinori Shimizu

Management System
Century Tokyo Leasing’s management organization reflects the will

■ Independence of Management Oversight Structure

・Honorary Professor, Hitotsubashi University
・External Director, Nisshinbo Holdings Inc.

Century Tokyo Leasing does not have specific standards or policies itof shareholders. It centers on the Board of Directors and Board of
Corporate Auditors, which consist of directors and corporate auditors,

follows with regard to independence when appointing its external directors

respectively, who are elected by the General Meeting of Shareholders.

and auditors. However, we appoint external directors and auditors who we

Furthermore, we have an executive officer system to accelerate

believe are able to objectively supervise management, based on their

management strategy decisions and further strengthen supervision andextensive background in corporate management, specialized knowledge,

execution. One of the 26 executive officers is female.

and common sense.
Our external directors have highly advanced knowledge of■ Board of Directors

financial economics, finance and economics in general, and use thisThe Board of Directors consists of 10 directors, two of whom areexternal directors as specified in Article 2-15 of the Corporation Law
of Japan. The Board of Directors deliberates on and decides

Akio Nakamura
・Chairman,

Sompo Japan Nipponkoa Research Institute Inc.

・Special Partner, Tanabe & Partners

expertise in the management of the Company from a macro
standpoint. At the same time, our external directors fulfill the
responsibility of independently monitoring management.

important issues associated with the management of Century Tokyo
Leasing and its Group companies as well as matters specified bymonitoring function. They rely on the extensive experience and broad

governing the Board of Directors. Moreover, it supervises theknowledge they have gained as managers and through theexecution of operations by directors and executive officers.

management of financial institutions to check operations from anCentury Tokyo Leasing Corporation’s Articles of Incorporation

outside perspective on a regular basis.

limit the number of directors to 12 or fewer.

External Director Yoshinori Shimizu, External Director Akio
Nakamura and External Auditor Mikio Fukushima are designated■ Board of Corporate Auditors

Century Tokyo Leasing has adopted the organizational structure

independent officers as stipulated by the Tokyo Stock Exchange

Futoshi Okada
・Auditor, IHI Finance Support Corporation
・Auditor, Orico Business Lease Co., Ltd.
・Auditor, TC Business Experts Corporation
・Auditor, Century Tokyo Leasing China Corporation
・Auditor, Century Tokyo Factoring China Corporation(TSE). No conflicts of interest exist between the Company and itsof a company with a board of corporate auditors. The Board of
Corporate Auditors consists of four corporate auditors, two of whom
corporate auditors as defined by Article 2-16 of the Corporation Law

organizations as listed on the following page.

of Japan. The Board of Corporate Auditors meets regularly andrigorously executes independent and fair audits of compliance andShunsuke Wada

the appropriateness of corporate activities including the performance

・President, Nissay Culture Foundation
・President, Tokyo Opera City Cultural Foundationof duties by directors and executive officers.

Shareholders’ Meeting
Election/Dismissal
Coordination

Board of Corporate Auditors

Independent Auditor

Coordination

Audit

Audit

Election/Dismissal

Audit Division

ReportInternal Audit
Audit

Evaluation ofInternal Control
Audit

Mikio Fukushima
・Advisor, JFE Shoji Trade Corporation

Business Risks Management Division
Appointment

Direction/
Supervision

Executive Officer

Management
Meeting

External Corporate Auditor Futoshi Okada simultaneously holds positions as Auditor at IHI FinanceSupport Corporation, Auditor at Orico Business Lease Co., Ltd., Auditor at TC Business Experts
Corporation, Auditor at Century Tokyo Leasing China Corporation and Auditor at Century Tokyo
Factoring China Corporation. All of these companies are consolidated subsidiaries. Mr. Okada has work
experience at Mizuho Bank, Ltd. and its affiliated companies, and three people from these companies
have been appointed directors at Century Tokyo Leasing. As of March 31, 2015, Mizuho Bank, Ltd.
owned a 4.40% stake in Century Tokyo Leasing. In addition, as of March 31, 2015 Century Tokyo
Leasing Group had business loans totaling ¥309,332 million from Mizuho Bank, Ltd. Century Tokyo
Leasing conducts business with Mizuho Bank, Ltd. and its affiliated companies, but the prices and othertransaction conditions are the same as transactions with other entities.

External Corporate Auditor Shunsuke Wada simultaneously holds positions as President of Nissay
Culture Foundation and President of Tokyo Opera City Cultural Foundation. Mr. Wada has work
experience at Nippon Life Insurance Company, and one person from Nippon Life Insurance Company isa director at Century Tokyo Leasing. Nippon Life Insurance Company had a 2.09% stake in Century
Tokyo Leasing as of March 31, 2015. In addition, Century Tokyo Leasing Group had business loans
totaling ¥28,796 million from Nippon Life Insurance Company as of March 31, 2015. Century Tokyo
Leasing conducts business with Nippon Life Insurance Company and its affiliated companies, but theprices and other transaction conditions are the same as transactions with other entities.

ReportProject Evaluation
Meeting
Election/Dismissal/Supervision

External Corporate Auditor Mikio Fukushima successively held the titles of President and CEO andChairman at JFE Shoji Trade Corporation, and assumed his current position as an advisor in April 2014.
As of March 31, 2015, JFE Shoji Trade Corporation and its affiliated companies owned a 1.84% stake inCentury Tokyo Leasing. Century Tokyo Leasing has a 0.32% stake in JFE Holdings, a company affiliatedwith JFE Shoji Trade Corporation. Century Tokyo Leasing conducts business with JFE Shoji Trade
Corporation and its affiliated companies, but the prices and other transaction conditions are the same astransactions with other entities.
(Reason for Appointment)
Mr. Fukushima uses his extensive experience as a manager and his broad knowledge in Century Tokyo
Leasing’s audit functions.

Chief Compliance Officer

President & CEOGroup Companies

Century Tokyo Leasing Corporation Annual Report 2015

Coordination

Election/Dismissal/Supervision

Operation Headquarters/Business Headquarters

36

Company’s Counsel

Board of Directors

Coordination(Reason for Appointment)
Mr. Nakamura uses his extensive experience in finance and taxation and his broad insight to provide
accurate and objective advice on the overall management of Century Tokyo Leasing, and monitors
management from an independent perspective.

(Reason for Appointment)
Mr. Wada uses his extensive experience in management and his broad knowledge in Century Tokyo
Leasing’s audit functions.

■ System of Corporate Governance and Internal Control (As of June 25, 2015)

Election/Dismissal

External Director Akio Nakamura is Chairman of Sompo Japan Nipponkoa Research Institute Inc. and aSpecial Partner at the law firm Tanabe & Partners. Sompo Japan Nipponkoa Research Institute Inc. isrelated to Sompo Japan Nipponkoa Insurance, Inc., which owned a 1.21% stake in Century Tokyo
Leasing as of March 31, 2015. In addition, Century Tokyo Leasing Group had business loans totaling¥3,000 million from Sompo Japan Nipponkoa Insurance, Inc. and the Group does business with both
Sompo Japan Nipponkoa Research Institute Inc. and Sompo Japan Nipponkoa Insurance, Inc., but theprices and other transaction conditions are identical to transactions with other entities.

(Reason for Appointment)
Mr. Okada uses his extensive experience in the management of financial institutions and broad
knowledge in Century Tokyo Leasing’s audit functions.

external directors and auditors. The two external directors and threeexternal auditors also hold positions at other companies andare full-time corporate auditors and three of whom are external(Reason for Appointment)
Mr. Shimizu has highly advanced knowledge as a monetary economics research professional. He uses
this expertise in the management of the Company from a macro standpoint, and monitors managementfrom an independent perspective.

External Corporate Auditors

The external corporate auditors have the role of maintaining thesystem that ensures the objectivity and neutrality of the management

prevailing laws, regulations, articles of incorporation, and rules

External Director Yoshinori Shimizu holds the titles of Honorary Professor at Hitotsubashi University andExternal Director at Nisshinbo Holdings Inc. Century Tokyo Leasing conducts business with Hitotsubashi
University and Nisshinbo Holdings Inc., but the prices and other transaction conditions are identical totransactions with other entities.

■ Management Meeting

Committees
・ALM Committee
・Internal Control Committee
・Comprehensive Risk
Management Committee
etc.

The Management Meeting consists of the President and officers■ Project Evaluation Meeting

The Project Evaluation Meeting consists of the President andappointed by the President. Chaired by the President, it deliberates on

officers appointed by the President. It discusses and makes

particularly important matters concerning the execution of operations

decisions about major business transactions being considered byand makes decisions for the entire Group.

Century Tokyo Leasing and Group companies, as well as transactions
that warrant complex risk analysis.

Century Tokyo Leasing Corporation Annual Report 201537

Corporate Governance■ Committees

ensure the internal control system functions effectively. Chaired by the◎ ALM Committee

director responsible for the Audit Division, the Internal Control

Century Tokyo Leasing created the Asset Liability Management

Committee discusses general internal control matters including

Compliance
We recognize that thorough compliance is essential for the(ALM) Committee to identify and minimize the exposure of assets andevaluation of the effectiveness of the financial reporting system and theliabilities to risks including fluctuations in interest and foreign currency

scope of evaluation and reports to the Management Meeting.

management system that ensures that every officer and employee

exchange rates. Chaired by the President, the ALM Committee◎ Credit Risk Management Committee

operates under the principle of fairness and with the highest ethicaldiscusses matters relevant to managing market, liquidity and otherrisks and reports to the Management Meeting.

Century Tokyo Leasing created the Credit Risk Management
Committee to manage credit risk. Chaired by the director responsible forcontinued existence of a corporation. Therefore, we aim to establish astandards to earn the trust of society.
The Chief Compliance Officer takes the lead in promoting

the Credit Supervision Divisions, the Credit Management Committee

compliance in accordance with compliance programs, implementing

discusses matters including the Group’s credit portfolio as a whole andcontinuous education and training through the use of e-learning andManagement Committee to address exposure to a wide array of risks.

credit risk management and reports to the Management Meeting.

other initiatives and enhancing compliance awareness.

Chaired by the director responsible for the Business Risks Management◎ IT and Administration Strategy Management Committee◎ Comprehensive Risk Management Committee

Century Tokyo Leasing created the Comprehensive Risk

Division, the Comprehensive Risk Management Committee discusses

Century Tokyo Leasing created the IT and Administration Strategy

matters including construction of the risk management system andManagement Committee to address system risk and administration risk.

approaches to measuring risk. It also periodically assesses Century

Chaired by the President, the IT and Administration Strategy

Tokyo Leasing’s risk exposure and reports to the Management Meeting.

Management Committee discusses matters including IT strategy, IT◎ Internal Control Committee

investment plans, and administrative organization plans and reports toCentury Tokyo Leasing created the Internal Control Committee tothe Management Meeting.

external law office, with whom employees can consult on complianceissues and to whom they can provide information on fraudulent
actions and practices. We also operate a whistle-blower system that

All officers, managers and employees are expected to refer to theManagement Philosophy as a basic policy for performing their work.
Guided by our management philosophy, we have established an

for all officers, managers and employees, and training at the divisionaland branch level by compliance officers using compliance information
as instructional material.
system to ensure appropriate business execution is an importantmanagement responsibility. We will upgrade this system to respond tochanges in our internal and external environment.

■ Comments from Our External Directors

Yoshinori Shimizu

Akio Nakamura

Professional Background

Professional Background1989 Apr. Professor, Faculty of Commerce and Management,
Hitotsubashi University

1978 Apr. Joined the Ministry of Finance2005 Apr. Director-General, Fukuoka Regional Taxation Bureau,
National Tax Agency
2006 Apr. Deputy Director-General (Debt Management), Financial
Bureau, Ministry of Finance2007 Apr. Deputy Director-General (Fiscal Investment and Loan Program, National
Property), Financial Bureau, Ministry of Finance2009 Jul. Director-General, Osaka Regional Taxation Bureau, National Tax Agency
2010 Jul. Director-General, Financial Bureau, Ministry of Finance2011 Oct. Chairman, Sompo Japan Research Institute Inc. (current position; now
called Sompo Japan Nipponkoa Research Institute Inc.)
2013 Mar. Special Partner, Tanabe & Partners (current position)2015 Jun. External Director, Century Tokyo Leasing Corporation (current position)2000 Apr. Professor, Graduate School of Commerce andManagement, Hitotsubashi University
2003 Apr. Vice President, Hitotsubashi University
2004 May President, Japan Society of Monetary Economics
2008 May Director, Japan Society of Monetary Economics
2010 May Executive Director, Japan Society of Monetary Economics
2010 Jul. Advisor, Century Tokyo Leasing Corporation2010 Oct. Director and Vice President, The Mont Pelerin Society
2011 Apr. Honorary Professor, Hitotsubashi University (current position)2011 Jun. External Director, Century Tokyo Leasing Corporation (current position)2012 Jun. External Director, Nisshinbo Holdings Inc. (current position)

I energetically discuss issues with an external perspective tosupport practical corporate governance.
I am an external director with experience as a monetary economics
research professional rather than as a manager at a private company. I believethat my role in Century Tokyo Leasing’s corporate governance is to frankly
express opinions with an external perspective as an independent officer toguide Century Tokyo Leasing’s management in a direction that contributes tothe company’s social mission and sustainable growth. I have therefore
attended meetings of the Board of Directors and other required meetings todeepen my understanding of Century Tokyo Leasing’s businesses while
expressing opinions from my standpoint as a financial economics researchprofessional. Century Tokyo Leasing is a comprehensive financial services
enterprise that operates globally. Its Board of Directors definitely functions as avenue for frank discussions, and all directors, whether internal or external,
debate which decisions are best in exercising their duty to make management
judgments on behalf of all stakeholders.
I will continue to make appropriate judgments as an external director infulfilling my obligation to further social contribution and growth and to stakeholders.

38

External Director

Century Tokyo Leasing Corporation Annual Report 2015

Making transparent, fair, swift and resolute decisions
I became an external director (independent officer) of Century Tokyo
Leasing Corporation on June 25, 2015.
The term corporate governance refers to the framework for making
transparent, fair, swift and resolute decisions in light of the company’s
relationships with stakeholders including shareholders, customers, employees
and communities. As an external director who takes part in this process, mygoal is to improve the effectiveness of Century Tokyo Leasing’s corporate
governance from a standpoint that differs from internal directors in ways such
expressing opinions based on my knowledge and experience and making
proposals that draw on my broad worldview. I intend to proactively visit
frontline business operations for a direct dialogue with employees and otherstakeholders to deepen my understanding of Century Tokyo Leasing’s
management strategy and measures, and to use that understanding in mymanagement judgments.
I will help to make Century Tokyo Leasing Group an organization in which
employees can discuss matters frankly, enabling them to continuously take onchallenges to support the Group’s international growth.

June 2014

New managers(rank-based
training)

・Understanding compliance as a manager
・Internal control system
・Compliance and risk management

Julyand October
2014

All officers,
managers andemployees(e-learning)・Response to Anti-Social Forces
・Century Tokyo Leasing Group
consulting/whistle-blower system andinsider trading regulations
・Drinking-related trouble
・Bribery of foreign officials
・Abuse of authority (Management-related)

February 2015

Compliance・Sales complianceofficers
・Insider trading regulations, including(communication overview, awareness of internal rules,of information)and judging infractions
・Eliminating all ties with antisocial forces
・Sexual and power harassment
・Case studies

internal control system with the recognition that creating and using aExternal Director

etc.
・Century Tokyo Leasing Group
consulting/whistle-blower system
・Revised sexual harassment
guidelines (effective July 2014)
・Drunk driving
・Use of personal mobile phones
during working hours■ Compliance Education

Century Tokyo Leasing Group instills a compliance mindset

TimingApril 2014

All officers,
managers andemployees(e-learning)strictly protects those reporting problems.

training for new employees and new managers, training via e-learning■ Basic Policy for the Internal Control System

ThemesIn addition, we have established several contacts, including an

through systematic, ongoing education. Initiatives include rank-basedInternal Control

TargetNew employees Compliance fundamentals including:(rank-based
・Sexual harassment
training)
・Abuse of authority
・Personal information security
・Insider trading regulations
・Unfair Competition Prevention Act
・Copyright infringement
・Social media submissions
・Handling of the loss of a mobile
phone or smartphone

Information
communicatedsix times

etc.

Optional
training at
divisions andbranches

Risk Management
Century Tokyo Leasing Group has proactively designed

personal information, and a management

appropriate risk countermeasures according to risk scale andsystem based on ISO 27001 standards.

likelihood. Our systematic countermeasures to minimize the risk oflosses are as follows.
◎ System and Administration Risk
◎ Credit Risks

The Credit Risk Executive Committee sets basic policies inaccordance with its rules, measures credit risk, and manages risk.
The Project Evaluation Meeting uses a rule-based methodology to

The IT and Administration Strategy Management Committee wasestablished to discuss IT strategy, IT investment, and administrative
organization to address system risk and administration risk based on
the rules of the committee.

assess and decide on projects that require complex analysis, such as
major deals and new schemes.

◎ Operational Risk

The Business Risks Management Division addresses operational◎ Market and Liquidity Risks

The ALM Committee comprehensively manages and procures
funds based on committee rules to address interest rate fluctuations
and other market risks and liquidity risk related to funding.
◎ Information Security Risk

The Company manages information security risk based on arisk by identifying, quantifying and reviewing risk countermeasures,
while the Business Risk Management Committee comprehensively
reviews the Company’s overall risk controls, risk management
systems, policies and measures based on the rules of the committee.
In the event of a large-scale natural disaster or other crisis, thecommittee is organized to take immediate action.

basic policy regarding information security, rules for handling

Century Tokyo Leasing Corporation Annual Report 201539

Corporate Governance

Basic Stance toward Eliminating All Ties with Antisocial Forces and the Status of Implementation
Century Tokyo Leasing and its Group companies take an

Division is responsible for overseeing the Group’s response to

CSR

Basic Stance toward CSR Management
As an industry leader, Century Tokyo Leasing Group is committed

In addition, the Group is dedicated to ensuring sound andunwavering, categorical stance toward maintaining the basic policy ofantisocial forces. This division is a member of Tokubouren (a special-to helping realize a sustainable society. The Group contributes totransparent management by enhancing corporate governance, witheliminating any and all ties with antisocial forces. As a part of efforts

interest incorporated association set up within the Tokyo

society and helps protect the environment through its businessthe aim of earning the trust and fulfilling the expectations of all its

to put in place a structure that is designed to eliminate all ties with

Metropolitan Police Department to prevent violence). In close

activities while improving its results. The Group practices CSR

stakeholders, including customers, vendors, shareholders, investors,

antisocial forces, the Group has established specific procedures incollaboration with Tokubouren, every effort is made to sever all ties

management that balances social and environmental concerns tolocal communities and employees.

accordance with its Code of Conduct and engages in appropriate

with antisocial forces to earn the trust and confidence of society.

fulfill its corporate social responsibility.

management through wide-ranging initiatives that encompass suchfields as education and training. In addition, the General Affairs

Information Disclosure (IR Policy)
Environmental Protection Activities
The Company builds trust among shareholders and investors by

Based on all relevant statutory, regulatory and related■ Environmental Management System

offering them an accurate understanding of the Company through therequirements, we disclose information via the Electronic Disclosure

proactive and ongoing disclosure of management strategies,

for Investors’ NETwork (EDINET), which is the system for disclosing

business activity status and financial condition in a timely, fair anddocuments such as annual securities reports in accordance withenvironmental issues is an important social responsibility. The

accurate manner.

Japan’s Financial Instruments and Exchange Law, TDnet, theCompany and the four Group companies at the right have therefore

We disclose information based on various laws, including theCentury Tokyo Leasing Group recognizes that addressing

company announcement disclosure service provided by the TSE; andobtained ISO14001 certification, the international standard for

Financial Instruments and Exchange Law of Japan and rules on

the mass media. Upon completing disclosure via these outlets, we

environmental management systems. The entire Group is also

timely disclosure stipulated by the TSE. In addition, we disclose otheralso disseminate information via the Company’s website.

implementing ongoing activities to reduce its environmental load.

◎ Scope of coverage

・Century Tokyo Leasing Corporation (head office,Okachimachi office, Tatsumi Techno Center)・Nippon Car Solutions Co., Ltd. (head office)・Fujitsu Leasing Co., Ltd. (head office)・TRY, Inc.
・TC Agency Corporation

information determined to be appropriate and useful for promoting
the investment activities of market participants and a greater
understanding of the Company.

TOPICS

Social Contribution through Our Businesses
Selected as “Competitive IT Strategy Company”■ Initiatives at Joint Venture Kyocera TCL Solar LLC

In May 2015, Century Tokyo Leasing was selected as a“Competitive IT Strategy Company.” This designation comesfrom a joint program of the Ministry of Economy, Trade andIndustry (METI) and the TSE in which they select and publicize
outstanding companies by industry that execute competitive
strategies for investing in and deploying IT to increase earnings
and innovate their businesses. All enterprises listed on the TSE
were potential candidates.
Enterprises that take the lead in executing competitive IT
strategies are expected to increase corporate value and growover the mid-to-long term by creating new business models andenhancing profitability. They are also expected to increase theirstock prices through the appropriate understanding andappreciation they earn from investors.

METI and TSE selected 18 companies by screening all listedcompanies on the TSE using the criteria of competitive IT strategy
execution and average ROE for the past three years that was
higher than the industry average. In principle, one company was
selected in each industry; Century Tokyo Leasing was selected in
the “Other Financing Business” industry category.
Century Tokyo Leasing will continue to utilize IT to provide
services that enhance customer
convenience and alleviate burdens
associated with office work so that it cangrow alongside its customers andcontribute to society as a comprehensive
financial services enterprise that
continually challenges itself.

Century Tokyo Leasing Group operates in the renewable energy

Century Tokyo Leasing Group will proactively complement thebusiness through mega-solar power generation company Kyocera

solar power generation business of Kyocera TCL Solar with other

TCL Solar LLC, a joint venture established with Kyocera Corporation

renewable energy businesses such as geothermal and off-shore windin 2012. In July 2013, this company began operating its first solar

power to contribute to the sustainable development of society.

power plant, the Takamatsu Ikushima Mega-Solar Power Plant, andas of March 31, 2015 had a total of 20 power plants in operation with

* Based on average annual use of
3,254.4 kWh per household

a combined output of 38.4 MW. This annual output is equivalent tothe average annual electricity demand of 13,800 typical households inJapan.* In addition, Kyocera TCL Solar is developing 50 other power
plants for which it forecasts total investment will be approximately¥120 billion. Kyocera TCL Solar has recently complemented its
facilities on land with solar power plant development on the rooftops

The world’s largest floating mega-solar
power plant (as of May 11, 2015) at Kasai,
Hyogo Prefectureof logistics facilities and other buildings, and on bodies of water suchas agricultural reservoirs.

■ “Competitive IT Strategy Company” Selection Process1
Candidate selection

response to
1 by
surveyCandidate pool:
3,400 listedcompanies inJapan, selectedfrom 33
industries

Assignment of points

to2 according
selection criteria

3

Points were assigned formeeting evaluation criteriaother than matters about
IT investment, andcompanies that exceeded
the base reference figure
were selected.

Candidates werelimited to companies
that responded to thesurvey.

Stage 1

(Assessment according to selection criteria)

ROE scoring

Companies werescored according toaverage ROE for the
past three years2 as
calculated by the TSE.
2. As of March 31, 2014

Final assessment by

4 Selection Committee
The Selection
Committee (committee
chairperson: Kunio Ito,
Professor, Graduate
School of Commerceand Management,
Hitotsubashi University)
conducted a final
evaluation and selectedcompanies by mutual
consent.

Together with Stakeholders■ With Customers and Vendors

Many Japanese companies have been advancing into China andaffiliate. CSI Leasing is the largest independent leasing company inother Asian countries in step with the economic growth of the region.

the United States and has a network of bases in over 30 countries

Century Tokyo Leasing Group has been expanding its network ofaround the world.

bases mainly in East Asia and ASEAN in order to meet the capital

As of April 2015, Century Tokyo Leasing Group had a network ofinvestment and funding needs of these companies. In addition, inbases in 37 countries offering highly specialized services that comply

March 2015 the Group made CSI Leasing, Inc. an equity-methodwith local business customs and laws.

Stage 2

(Descriptive assessment)

1. Based on data available on the METI website

40

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 2015

41

CSR

■ With Shareholders and Investors
We have established a system for providing timely information to◎ Key Presentations during Fiscal 2014

stakeholders including shareholders and investors appropriately and

May 2014: Presentation of Results for Fiscal 2013

fairly to ensure the transparency of our corporate activities. We also

November 2014: Presentation of Results for theFirst Half of Fiscal 2014

deepen understanding of the Group’s strengths and strategies among
institutional investors and analysts through results briefings andindividual meetings, and among individual investors through venues
such as corporate briefings.

November 2014: Corporate Briefing for Individual
Investors (About 350 people attended each of two Corporate briefing forindividual investors
briefings held in Tokyo and Osaka)■ With Local Communities

Century Tokyo Leasing Group’s social contribution activities
include donating to non-profit organizations and groups working forthe public good. In addition, the Group contributes an amounthosts demonstrations to raise awareness of service dogs and theirvital role in society.
Moreover, the Group cleans up the area surrounding the headequivalent to 5% of the total amount of shareholder special benefits

office and the Okachimachi office twice a year. Our energetic

to the Japan Service Dog Association. Service dogs receive

volunteer activities to contribute to local communities also included

advanced training that enables them to assist people with physicalcleaning up Enoshima Katase Beach in May 2015.

disabilities in carrying out a host of daily activities. The Group also

Financial Section■ With Employees

Century Tokyo Leasing Group aims to create a vibrant

We also increase the percentage of employees receiving periodic

organization with a work environment that allows all employees to

medical examinations by having managers encourage employees tomaximize their skills and abilities. We encourage employees to dress

undergo examinations and providing the Board of Directors within accordance with the weather and implement shortened working

ongoing medical examination status reports. As a result, thehours during the hot summer months of July and August, when thepercentage of employees receiving periodic medical examinations

government asks companies to conserve electricity.

increased to 100% in fiscal 2014 from 90% in fiscal 2013 (including

In addition, we are working to improve work-life balance byoverseas employees but excluding employees who did not undergo

regularly seeking greater efficiency in daily work routines to reduce

medical examinations because they were on childcare leave). We will

the amount of overtime employees put in so they can spend moreenhance programs to support employee health.

Contents● Six-Year Summary ......................................................... 44● Management’s Discussion and Analysis of Operating

Results ........................................................................... 46● Consolidated Balance Sheet ......................................... 51● Consolidated Statement of Income ............................... 53● Consolidated Statement of Comprehensive Income ..... 54● Consolidated Statement of Changes in Net Assets ...... 55● Consolidated Statement of Cash Flows ........................ 56

time with their families and friends and pursue self development.

● Notes to Consolidated Financial Statements ................ 57● Report of Independent Auditors .................................... 83

TOPICS

Diversity in Human Resources and the Establishment of the Diversity Promotion Office

The workforce in Japan is shrinking because of the low birth

university graduate recruits is 30% of total new university

rate and the aging of society. Century Tokyo Leasing Group

graduate recruits. Once they enter the company, we provide

established the Diversity Promotion Office within the Personnel

skills development support tailored to career stage and also

Department on April 1, 2015 to address this and other changes

support career development with work and career designin our future operating environment and to promote diversity.

training. Century Tokyo Leasing Group wants to promote driven,

The Diversity Promotion Office’s activities include creating acapable women to supervisor and senior management positions.

corporate culture that empowers employees with diverse(As of July 1, 2015, the Group had one female executive officer.

capabilities and personalities regardless of gender or nationality

In addition, the number of female supervisors had increased 2.4

and enhancing measures to empowering women and foreign

times compared with April 1, 2014 to 19.)

nationals, support career building and skill development, andsupport employees raising young children.

Century Tokyo Leasing Group will continue to implement various
initiatives to be a company that empowers diverse human resources.

Empowering women is a focus. Our target for female

External Evaluation
Century Tokyo Leasing is a constituent stock in the FTSE4Good

included in the JPX-Nikkei Index 400, a stock price index composed of(SRI). This index is composed of companies that meet international

companies that are highly appealing to investors and that meet global

standards for environmental sustainability and human rights, and thatinvestment criteria, such as return on equity

have excellent labor standards along the supply chain and measures in(ROE) that demonstrates efficient use ofplace to prevent bribery and corruption. The index is used as acorporate capital.

benchmark by SRI funds when they screen for investment candidates.
In addition to being selected as a “Competitive IT Strategy

42Company” as previously mentioned, Century Tokyo Leasing is also

Index, a leading global indicator of socially responsible investment

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Group will continue
striving to increase its corporate value.

Six-Year Summary
Century Tokyo Leasing Corporation and Consolidated Subsidiaries
Years ended March 31

Millions of yen
2010

2011

2012

Yen

2013

2014

2015

Operating Results

2011

2012

2013

2014

2015

Revenues2¥ 758,674¥ 713,182¥ 716,342¥ 691,128¥ 828,558¥ 882,976

Net income¥ 239.57¥ 221.80¥ 245.82¥ 272.32¥ 311.64¥ 322.84

Leasing635,808

598,925

603,767

584,636

707,483

758,749

Net assets

1,410.61

1,594.57

1,796.62

2,092.46

2,386.02

2,776.37

Installment sales

105,412

94,114

88,95581,89886,76881,841Dividends

32.00

40.00

44.00

48.00

52.00

65.00

Finance

11,764

13,21014,03016,934

19,93822,921Other businesses

5,688
693,569

6,932

9,588

7,658

14,36819,464

641,589643,684

620,245731,229759,298

Leasing

567,883

531,387

538,691

525,372

628,745

656,537

18.5%

14.8%

14.5%

14.0%

13.9%

12.5%

Installment sales

88,442

84,156

77,265

81,77376,513Finance

98,377
2,476

1,687

1,148

1,705

1,046

1,704

Other businesses

4,830

5,584

8,129

6,036

10,481

14,111

Interest expenses

20,00065,105

14,487

11,558

9,864

9,183

10,431

71,59372,65770,882

97,329123,678

Costs

Gross profit on revenues
Sales revenues (Gross profit on revenues
before deducting interest expenses)
SG&A expenses
Personnel and non-personnel expenses

85,10534,80986,08030,55984,21530,78080,74728,909106,51345,912

134,109
65,235

29,152

29,42030,767

29,83845,986

66,299Allowance for doubtful accounts

5,656

1,138

12

(929)

(73)

(1,064)

Operating income
Ordinary income (Income before
extraordinary items and income taxes)
Extraordinary gains (losses)

30,29541,034

41,877

41,97351,41658,44333,414(249)

44,170(3,465)46,252(2,170)46,292(103)

55,167(96)

60,668(960)

Net income

25,541

23,64626,19428,93433,05034,132¥2,132,892¥2,184,599¥2,260,389¥2,465,817¥2,884,773¥3,151,871

1,962,008
1,410,109

2,049,803
1,383,695

2,143,217
1,375,761

2,276,574
1,473,866

2,646,781
1,783,880

2,914,195
1,914,950

200,539
327,306

191,836
448,190

187,986
530,655

201,559555,938

213,719593,105

239,390699,232—
24,053

—

—

—

6,770

12,01926,081

48,81545,21149,30548,602

1,749,775

1,741,897

1,783,173

1,939,219

2,211,673

2,419,856

158,115

178,752

201,272

233,668

285,484

336,537(28,314)¥ (171,023)

Financial Condition
Total assets
Operating assets, including businessguarantees
Leasing
Installment sales (after deducting
deferred profit on installment sales)
Finance
Other businesses
Business guarantees
Interest-bearing debt
Net assets

Cash Flows
Cash flows from operating activities¥ 194,308¥

48,551¥(26,425)¥(89,711)¥

Cash flows from investing activities(8,948)23,191(515)(5,592)

9,994(18,682)

Cash flows from financing activities(306,146)(89,762)

38,289135,868

54,486

156,885

50,94732,79344,53083,122

115,841

71,864

Cash and cash equivalents at end of year

44

2010

Per Share Data

Century Tokyo Leasing Corporation Annual Report 2015

Significant Indicators
Return on equity3 (ROE)
3

Return on assets (ROA)

1.5%

2.0%

2.1%

2.0%

2.1%

2.0%

Equity ratio

7.1%

7.8%

8.4%

9.0%

8.8%

9.3%

Overhead ratio3

44.8%

41.1%

42.3%

42.1%

47.2%

53.6%

1,732

1,715

Persons
1,722

1,676

3,309

4,113

Other Data
Employees

Notes: 1. In the fiscal year ended March 31, 2011, Century Tokyo Leasing reorganized the loan business and other business categories to create the finance business.
To reflect this change, fiscal 2009 revenues, the cost of loans and other items as well as operating assets have been retroactively revised.
2. Revenues do not include internal revenues or transfers between segments.
3. ROE = Net income / Equity (simple average of beginning and end of term balance sheet figures) X 100
ROA = Ordinary income / Total assets (simple average of beginning and end of term balance sheet figures) X 100
Overhead ratio = (Personnel expenses + Non-personnel expenses) / Gross profit on revenues X 100
4. Data are rounded down to the nearest million beginning with the financial statements for the fiscal year ended March 31, 2015. Data for prior fiscal years
have been restated accordingly.

Century Tokyo Leasing Corporation Annual Report 201545

Management’s Discussion and Analysis of Operating Results
Century Tokyo Leasing Corporation and Consolidated Subsidiaries
Years ended March 31

established joint ventures (consolidated subsidiaries) in theBusiness Environment and the Group’s Approaches

United States and Ireland.

For fiscal 2014, the year ended March 31, 2015, theordinary income increased ¥5,500 million, or 10.0%, toRevenues in Leasing and Installment Sales increased

Japanese economy continued to recover gradually despite a

We expanded our overseas businesses with several

temporary economic setback associated with the increase ininitiatives. We made TISCO Tokyo Leasing Co., Ltd. (TTL) in

year. Revenues increased ¥2,983 million, or 15.0%, in

the consumption tax rate. Corporate earnings and theThailand a consolidated subsidiary. We also acquired from

Finance, and ¥5,096 million, or 35.5%, in Other. As a result of

employment and income environment continued to improve

the Bank of the Philippine Islands, a major bank in the

year-on-year revenue growth in each business, revenues

Extraordinary losses increased ¥864 million comparedsteadily, backed by the ongoing depreciation of the yen andPhilippines, a 49% stake in its wholly owned subsidiary BPI

increased ¥54,417 million, or 6.6%, to ¥882,976 million.

with the previous fiscal year to ¥960 million. Despite a ¥1,218

strong stock prices.

Leasing Corporation, which we renamed BPI Century Tokyo

Revenues increased primarily because of the full-year

million decrease in impairment loss, gain on bargain purchase

Lease & Finance Corporation and made an equity-method

contribution of Nippon Car Solutions Co., Ltd. and Nippon

decreased 52.7% to ¥743 million, loss on devaluation ofentered the second year of its second three-year medium-term

affiliate. Moreover, we acquired a 35% stake in CSI Leasing,

Rent-A-Car Service, Inc., which were equity-method affiliates

investments in securities was ¥885 million, and expense

management plan, which we launched in fiscal 2013 with theInc. and made it an equity-method affiliate. CSI Leasing is thethat became consolidated subsidiaries during the previous

involved in system integration involving consolidated

aim of becoming a robust comprehensive financial services

largest independent leasing company in the United States,

fiscal year. The consolidation of these two subsidiaries also

subsidiaries and office transfer expenses together totaled

enterprise, and moved ahead with initiatives to further reinforce

and mainly handles information and communications equipment.

affected earnings, as discussed below.

¥1,121 million. As a result of these and other factors, income

Under these circumstances, Century Tokyo Leasing Group¥60,668 million.

¥46,338 million, or 5.8%, compared with the previous fiscal

Net Income

Reinforcing activities in the automobile financing businessthe Group’s sales base and management base.

before income taxes and minority interests increased ¥4,636

We reinforced our sales base by enhancing ourboth in Japan and overseas included establishing Tong-

competitiveness in the leasing business, bolstering theSheng Finance Leasing Co., Ltd., an automobile leasing

Gross profit increased ¥26,349 million, or 27.1%,

financing business, expanding overseas businesses, andcompany in China, as a wholly owned subsidiary of ourcompared with the previous fiscal year to ¥123,678 million.

¥1,561 million, or 7.8%, compared with the previous fiscal

reinforcing activities in the automobile financing businessTaiwan subsidiary President Tokyo Corporation.

Gross Profit and Operating Income

million, or 8.4%, to ¥59,707 million.
The total of current and deferred income taxes increased

Selling, general and administrative (SG&A) expenses

year to ¥21,607 million. Minority interests increased ¥1,992

To strengthen the management base, we have been

increased ¥19,322 million, or 42.1%, to ¥65,235 million. As amillion, or 100.9%, to ¥3,968 million.

reinforcing our financial base by diversifying our funding

result, operating income increased ¥7,026 million, or 13.7%,

Consequently, net income increased ¥1,081 million, orby leveraging Group resources to raise our comprehensive

methods, including ongoing issuance of unsecured bonds

to ¥58,443 million. A key factor was the consolidation of the

3.3%, compared with the previous fiscal year to ¥34,132 million.

proposal capabilities and further promoting differentiatedwith limited inter-bond pari passu clauses. TTL also met

two subsidiaries discussed above.

sales that provide optimal solutions. We also decided toincreased demand for funds in Thailand by locally issuingestablish a vendor leasing joint venture with Orientbaht-denominated unsecured straight bonds.

Corporation that specializes in lease partnering with*As of December 22, 2014

both in Japan and overseas.
We enhanced our competitiveness in the leasing business

Net income per share increased ¥11.20 year on year to¥322.84. ROE (the ratio of net income to shareholders’equity) decreased 1.4 percentage points to 12.5%, while

Ordinary Income

ROA (the ratio of ordinary income to total assets) decreased

Other income decreased ¥1,525 million, or 40.7%,

manufacturers and dealers.

0.1 percentage points to 2.0%.

compared with the previous fiscal year to ¥2,225 million.

In bolstering the financing business, we expanded ourOverview of Results

solar power generation business in the environment andOther income and expenses associated with foreign

Results by Reportable Segment

As a result of operation, new transactions volume

exchange increased ¥1,644 million. This is the net increaseenergy field. This included an initiative by Kyocera TCL Solar

increased 4.6% compared with the previous fiscal year toafter deducting the ¥918 million increase in expenses on

LLC, a joint venture with Kyocera Corporation, to create the¥1,474,070 million.

derivatives other than for trading or hedging from the ¥2,562

decreased 1.0% compared with the previous fiscal year toworld’s largest* floating megasolar power plant. In the

Revenues increased 6.6% compared with the previous fiscal

In Leasing and Installment Sales, the new transactions volume

million increase in foreign exchange gains. However, gain on¥794,801 million. Revenue from customers increased 5.8% toaviation financing business, we began operating jointly in theyear to ¥882,976 million, operating income increased 13.7% toamortization of negative goodwill decreased ¥589 million and¥840,590 million. Segment profit increased 6.6% to ¥46,439 million.

aircraft leasing business with CIT Group Inc., a major finance¥58,443 million, ordinary income increased 10.0% to ¥60,668

equity in earnings of affiliates decreased ¥2,533 million, or

In Finance, new transactions volume increased 12.3%

and leasing company in the United States with which wemillion, and net income increased 3.3% to ¥34,132 million.

83.1%, because Nippon Car Solutions and Nippon Rent-A-

compared with the previous fiscal year to ¥673,529 million.

■ Total Private Capital Investment■ Total Capital Investment
Financed by Leasing(Trillions of yen)(Trillions of yen)

60

(Billions of yen)

1,600

4

12/3

13/3

14/3

15/3

Source: Cabinet Ofﬁce Survey Preliminary data
announced on June 8, 2015 for the ﬁscal
year ended March 31, 2015

Century Tokyo Leasing Corporation Annual Report 2015

0

70

60

1.0

60

50

0.5

11/3

12/3

13/3

14/3

Source: Japan Leasing Association

15/3

0

11/3

12/3

13/3

Leasing
Financing
Other
Installment sales

14/3

15/3

0

12/3

13/3

14/3

15/3

-1.5

30

30

20

20

-1.0

11/3

40

40

-0.5

3

（％）

50

0

1

11/3

(Billions of yen)

1.5

6

400

10

(Billions of yen)

15

800

2

20

(Billions of yen)

9

3

30

■ SG&A Expenses/Overhead Ratio2

12

1,200

40

■ Credit Costs1■ Interest Expenses

5

50

0

■ New Transactions Volume

6

70

46

Car Service became consolidated subsidiaries. As a result,

Revenues

10

10

11/3

12/3

13/3

14/3

0

15/3

1. Credit costs represent the sum of doubtful account costs,
which were included in costs of sales, and allowance for
doubtful accounts, which was included in SG&A expenses.

11/3

12/3

13/3

14/3

15/3

0

SG&A expenses (Left scale)
Overhead ratio (Right scale)
2. Overhead ratio = (Personnel expenses + Non-personnel
expenses) ÷ Gross proﬁt on revenues X 100

Century Tokyo Leasing Corporation Annual Report 2015

47

Net Assets

Revenue from customers increased 15.0% to ¥22,921 million.

total funding available under these agreements increased

Net assets as of March 31, 2015 increased ¥51,052 million,

Segment profit increased 22.1% to ¥13,993 million.

¥147,186 million from a year earlier to ¥1,174,322 million.

or 17.9%, from a year earlier to ¥336,537 million. The primary

In Other, the new transactions volume decreased 17.5%
compared with the previous fiscal year to ¥5,739 million.

factor was an increase of ¥29,043 million in retained earnings.

Revenue from customers increased 35.5% to ¥19,464 million.
Segment profit increased 33.2% to ¥4,800 million.

Funding and Liquidity

The balance of unused facilities under the overdraft andfactors including higher exports and corporate earnings now¥700,732 million. The Group is confident that it has ensured

that the effect of the consumption tax rate increase has run

ample funding liquidity.

its course. Global economic uncertainties will likely include
slower economic growth in China, debt problems in Europe,

Cash Flows

Century Tokyo Leasing Group has a basic policy of
curtailing funding costs and enhancing funding stability. The

Total Assets

and the direction of interest rates in the United States.

Cash Flows from Operating Activities

Group therefore diversifies funding sources and methods

Total assets as of March 31, 2015 increased ¥267,098

We expect an operating environment in which theJapanese economy will continue to recover steadily due tocommitment line agreements as of March 31, 2015 was

Basic Funding Policy

Financial Condition

Fiscal 2015 Outlook

Net cash used in operating activities was ¥171,023 million,

Given this outlook, Century Tokyo Leasing Group willcontinue to minimize funding and credit costs while

million, or 9.3%, from a year earlier to ¥3,151,871 million.

while responding flexibly to changes in financial conditions.

a year-on-year increase compared with net cash used in

improving profitability in ways such as enhancing ourThis was mainly due to growth in operating assets.

The Group also uses asset-liability management (ALM) to

operating activities of ¥28,314 million for the previous fiscal

competitiveness in the leasing business, bolstering thecomprehensively analyze and appropriately control market risks.

year. The primary factor was the increase in new transactions

financing business, expanding overseas businesses, andvolume for operating assets.

reinforcing activities in the automobile financing business

Operating Assets

both in Japan and overseas.

Indirect and Direct Funding

The balance of operating assets, including businessCentury Tokyo Leasing Group’s funding consists ofguarantees, as of March 31, 2015 increased ¥267,413 million,

Cash Flows from Investing Activities

For fiscal 2015, the year ending March 31, 2016, wetherefore forecast that total revenues will increase 3.1% yearor 10.1%, from a year earlier to ¥2,914,195 million. By

indirect funding through debt financing from financial

segment, the balance of operating assets was ¥2,154,340

institutions and direct funding from capital markets.

compared with net cash provided by investing activities ofon year to ¥910,000 million, operating income will increase

million for Leasing and Installment Sales, ¥747,834 million

As of March 31, 2015, indirect funding increased¥9,994 million for the previous fiscal year. This was mainly

6.1% to ¥62,000 million, ordinary income will increase 5.5%(including business guarantees) for Finance, and ¥12,019¥166,554 million from a year earlier to ¥1,394,369 million.

due to purchases of investments in securities, primarily

to ¥64,000 million, and net income attributable to owners of

million for Other.

Direct funding through the issuance of commercial paper,

because the Group acquired shares of CSI Leasing and madeparent will increase 6.9% to ¥36,500 million.

straight bonds and other instruments increased ¥41,629

it an equity-method affiliate.

Net cash used in investing activities was ¥18,682 million,

million to ¥1,025,487 million. As a result, the direct financing

Liabilities
Total liabilities as of March 31, 2015 increased ¥216,045

ratio as of March 31, 2015 decreased 2.1 percentage points

million, or 8.3%, from a year earlier to ¥2,815,334 million. The

to 42.4%. In addition, the long-term funding ratio increased

primary factor was an increase in interest-bearing debt.

2.3 percentage points to 46.4%.

Cash Flows from Financing Activities
Net cash provided by financing activities increased toTotal interest-bearing debt increased ¥208,183 million, or
Ensuring Liquidity

9.4%, from a year earlier to ¥2,419,856 million. By component,

Century Tokyo Leasing Group has executed overdraft

short-term funding increased ¥60,648 million, or 4.9%, to¥1,297,267 million. Long-term funding increased ¥147,534

agreements and commitment line agreements with 86

million, or 15.1%, to ¥1,122,588 million.

financial institutions to ensure liquidity. As of March 31, 2015,

Basic Policy for the Distribution of Profits andDividends for Fiscal 2014 and Fiscal 2015
Century Tokyo Leasing Group increases corporate value¥156,885 million from ¥54,486 million for the previous fiscal

by continuously expanding its business operations andyear. Indirect funding provided cash totaling ¥127,077 million.

reinforcing its business structure. The Group does so with a

In the previous fiscal year, repayment of indirect funding usedbasic policy of enhancing internal capital reserves while

cash totaling ¥30,612 million.

providing stable distributions of profits to shareholders overAs a result, cash and cash equivalents as of March 31, 2015
decreased ¥43,977 million from a year earlier to ¥71,864 million.

the long term.
Management will effectively deploy internal capitalreserves largely to purchase quality operating assets.
For fiscal 2014, ended March 31, 2015, Century Tokyo■ Operating Assets by Segment■ Fund Procurement■ Total Net Assets/Equity Ratio■ Dividends per Share

Leasing initially forecast that it would pay an annual dividendof ¥56 per share consisting of a ¥28 per share interim(Billions of yen)(Billions of yen)

3,000

3,000

60

350

2,500

2,500

50

300

（％）

2,000

2,000

40
30

1,000

1,000

20

500

500

10

50

0

0

0

0

12/3

13/3

14/3

15/3

11/3

12/3

(Right scale)
Direct ﬁnancing

Century Tokyo Leasing Corporation Annual Report 2015

13/3

14/3

15/3

(Left scale)Commercial paper
Long-term borrowings
Short-term borrowings
MTN, corporate bonds, securitized lease assets

10
8
6

200

1,500

11/3

（％）

250

1,500

Leasing
Installment sales
Financing (Including business guarantees)
Other

48

(Billions of yen)

150

4

100

(Yen)

dividend and a ¥28 per share year-end dividend. On

70

November 4, 2014, the Company announced that it would

60

increase the annual dividend to ¥65 per share by increasing50

the interim dividend by ¥4 to ¥32 per share and the year-end

40

dividend by ¥1 to ¥33 per share.
For fiscal 2015, ending March 31, 2016, Century Tokyo30

Leasing plans to pay an annual dividend of ¥70 per share,

20

2

11/3

12/3

13/3

Total net assets (Left scale)
Equity ratio (Right scale)

14/3

15/3

0

which will consist of a ¥35 per share interim dividend and a

100¥35 per share year-end dividend, based on the above policy
11/3

12/3

13/3

14/3

15/3

for the distribution of profits to shareholders and inappreciation of the support of the shareholders.

Short-term ﬁnancing

Century Tokyo Leasing Corporation Annual Report 201549

Consolidated Balance Sheet
Century Tokyo Leasing Corporation and Consolidated Subsidiaries
As of March 31, 2015 and 2014
Thousands of
U.S. dollars(Note 1)Millions of yen

Business and Other Risks
The following are risks that may influence the Group’sbusiness performance, stock price and financial condition.

decline in capital investment financed by leasing could affect

Assetsthe Group’s performance.

Current assets:
Cash on hand and in banks (Notes 8, 13 and 18)

Credit Risk
Leasing transactions involve providing credit to customers,

Stock Price Volatility Risk
The Group may opt to strengthen its relationships withgenerally on an unsecured basis, over a relatively long period

partner companies by owning shares of their stock. The

averaging about five years. The expected profit is secured

Group periodically reviews stockholdings associated with

only when all leasing and other fees have been collected fromparticular business relationships, but stock price volatility

the customer. However, in the event of incidents such as

could affect the Group’s performance.

nonpayment by the customer, we collect as much as possible
through such measures as selling the leased property inquestion or leasing it to another customer.

The Impact of Fluctuations in the Value of Asset
Holdings and Investment Assets

2014

2015

decrease in private capital investment and a concomitant¥

70,560¥79,8402015$

586,682

Accounts receivable:
Installment sales (Notes 8, 9 and 18)
Lease receivables and investment assets (Notes 8, 16 and 18)
Loans (Notes 8, 9 and 18)
LeasesOperational investment securities (Notes 6 and 18)
Other operating assets
Short-term investment securities (Notes 6, 13 and 18)
Inventories (Note 9)

252,946

225,937

2,103,152

1,485,017

1,461,053

12,347,368

535,842474,155

4,455,327

18,63017,612

154,903

161,790111,965

1,345,225

—

5,097

—

2,760

25,14022,948

880

1,455

7,319

5,943

4,377

49,41656,80462,191

472,305(3,787)(3,410)(31,489)

2,587,387

2,465,415

21,513,160

67,34442,511559,941

Long-term loans and other assets

24,31423,040202,165

Claims provable in bankruptcy or rehabilitation (Note 18)
Deferred tax assets (Note 14)

2,239

4,305

18,623

3,575

3,895

29,732The Group minimizes credit risk by cautiously managing

Century Tokyo Leasing Group holds and invests in assets

Deferred tax assets (Note 14)

credit, assessing property, and controlling credit risks in its

with specified values, including ships, aircraft, real estate andOther current assets (Note 8)

portfolio of operating assets. However, the Group’s

automobiles, as a part of its operating lease and rental

performance may be affected if future economic trends cause

operations. While the Group takes great care in identifying

the creditworthiness of companies to deteriorate and bad

the value of these assets, asset values are subject to change.

debt to emerge.

Accordingly, a decline in the value of portfolio and investment

Allowance for doubtful accounts (Note 18)
Total current assets

assets could affect the Group’s performance.

Impact of Interest Rate Volatility and Changes in
the Funding Environment
In our main business of lease and installment sales

System Change Risk
The Group operates based on current legal, tax,

transactions, we set leasing fees according to factors

accounting and other systems and standards. Considerable

including the property purchase price and interest rates whenchange in these systems could affect the Group’s performance.

the contract is signed, and leasing fees do not vary during
the contract period. On the other hand, interest expense(financing costs) represents the cost of lease transactions,and is affected by fluctuations in market interest rates
because the Group funds the underlying assets using bothloans with variable interest rates and long-term fixed-rate
funding. Therefore, interest expense may increase if market
interest rates rise.
The Group funds its operations with indirect funding andAllowance for doubtful accounts (Note 18)

Risk of Unpredictable Events(1,372)(2,929)(11,411)

96,10170,824

799,050

The Group has established measures based on its
event of large-scale disasters including earthquakes, windand flood damage, fire and man-made disasters, or theoutbreak of infectious diseases, such as a new strain of

Property and equipment, at cost less accumulated depreciation:

influenza or SARS. Unpredictable events that cause

Leased assets (Notes 7 and 8)

429,659

322,535

3,572,456

economic damage could affect the Group’s performance.

Advances for purchases of property for lease

8,424

586

70,044

Other operating assets (Note 7)
Own assets in use (Note 7)

12,0196,770

99,940bonds. Changes in the funding environment may affect funding.
environment may affect the Group’s performance.

Total investments and other assets

business continuity plan (BCP) to ensure preparedness in the

direct funding that includes commercial paper and corporate
Interest rate volatility and changes in the funding

Investments and other assets:
Investments in securities (Notes 6, 8 and 18)

Other Risks
In addition to the above risks, the Group is exposed to

However, the Group rigorously controls funding risks using

various other risks including information system risks, such

ALM analysis, and hedges risks as necessary.

as failure and errors in sales management, contract

Property and equipment, net

9,219

8,061

76,655459,322337,9543,819,097

management, asset management, statistical operations and

The Impact of Changes in Private Capital
Investment Trends
Temporary differences notwithstanding, private capital
investment and capital investment financed by leasing areinterrelated. This trend is expected to continue in the future.
While the Group’s new transactions volume has not been
perfectly correlated with private capital investment andother areas; administrative risks due to improper
administrative procedures; and compliance risk that may
result in loss of social trust due to noncompliance with laws
or regulations or social norms.

Intangible assets:
Computer programs leased to customers
Goodwill
Other intangible assets
Total intangible assets
Total assets

273

290

2,272

4,139

4,871

34,420

4,646

5,416

38,6309,059

10,57875,322¥3,151,871¥2,884,773$26,206,630

The accompanying notes are an integral part of these statements.

capital investment financed by leasing in recent years, a large

50

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201551

Consolidated Statement of Income
Century Tokyo Leasing Corporation and Consolidated Subsidiaries
Years Ended March 31, 2015 and 2014
Thousands of
U.S. dollars(Note 1)Millions of yen

2014

2015
Current liabilities:
Short-term borrowings (Notes 8, 9 and 18)

Millions of yen

2015

2014

2015

Revenues¥882,976¥828,558$7,341,621

Costs

759,298

731,229

6,313,279

123,678

97,329

1,028,342

65,23545,912542,41058,44351,416

485,9312015

Liabilities and net assets

Thousands of
U.S. dollars(Note 1)Gross profit¥1,282,567¥1,217,919$10,664,072

Current portion of long-term debt (Notes 8 and 9)373,272

354,007

3,103,619

Notes and accounts payable – trade (Note 18)

202,880

222,505

1,686,878

Lease obligations (Note 18)

7,305

6,075

60,739Accrued income taxes (Note 14)

10,16014,781

84,481

Deferred tax liabilities (Note 14)

1,244

2,539

10,350

Deferred profit on installment sales (Note 18)

13,555

12,217112,711

Interest and dividend income

964

981

8,020

Interest expense

(458)

(515)

(3,815)Equity in earnings of affiliates

513

3,047

4,272

Other current liabilities
Total current liabilities

52,23444,272434,306

1,943,221

1,874,318

16,157,159

Selling, general and administrative expenses (Note 10)
Operating income
Other income (expenses):Gain on amortization of negative goodwill
Long-term liabilities:
Long-term debt (Notes 8, 9 and 18)
Lease obligations (Note 18)
Provision for directors’ retirement benefits

764,016

639,747

6,352,509

—

589

—

Foreign exchange gain (loss)

3,794

1,231

31,551

Expenses on derivatives other than for trading or hedging(2,782)(1,863)(23,135)

667

1,411

5,550

11,32910,472

94,198Gain on bargain purchase

445

291

3,704

Gain on sale of investments in securities

600

390

4,991

(885)

—

(7,358)Net defined benefit liability (Note 15)

7,119

7,170

59,199Loss on valuation of investments in securities

Deferred tax liabilities (Note 14)

3,381

918

28,119System integration related expenses (Note 11)

(791)

—

(6,577)

Office transfer related expenses (Note 11)

(330)

—

(2,747)Merger expenses of subsidiaries

—

(371)

—

Loss on step acquisitions

—

(241)

—

Other, net(28)(1,005)(238)

59,70755,071

496,446

24,39923,630202,871

Provision for automobile inspection costs
Other long-term liabilities
Total long-term liabilities
Total liabilities

911

951

7,576

84,90865,418705,980

872,1122,815,334

724,9692,599,288

7,251,289
23,408,448

Contingent liabilities (Note 17)

Income before income taxes and minority interests
Income taxes (Note 14):
Current

Net assets (Note 23):

Deferred

Shareholders’ equity (Notes 19 and 21):
Common stock without par value:

Income before minority interests

Authorized: 400,000,000 shares

Minority interests

Issued: 106,624,620 shares in 2015 and 2014

34,231

34,231

284,618

Capital surplus

5,537

5,537

46,045

233,650

204,606

1,942,713

Retained earnings
Treasury stock:
1,114,634 shares in 2015 and 821,663 shares in 2014
Total shareholders’ equity(2,876)(1,999)(23,918)

270,542

242,376

2,249,459

16,43910,338

136,690

(9)

(761)

(81)

6,026

1,057

50,110

(64)

(562)

(532)

22,392

10,071

186,186

Net income (Note 23)(2,792)(3,584)(23,217)

21,60720,045

179,654

38,10035,026

316,791

3,968

1,975

32,994¥ 34,132¥ 33,050$ 283,796

The accompanying notes are an integral part of these statements.

Accumulated other comprehensive income
Net unrealized holding gains on securities
Net unrealized gain (loss) on derivative instruments
Translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Share subscription rights (Note 21)
Minority interests
Total net assets
Total liabilities and net assets

491

312

4,089

43,11032,724358,447

336,537

285,484

2,798,181¥3,151,871¥2,884,773$26,206,630

The accompanying notes are an integral part of these statements.

52

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201553

Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Net Assets

Century Tokyo Leasing Corporation and Consolidated Subsidiaries
Years Ended March 31, 2015 and 2014

Century Tokyo Leasing Corporation and Consolidated Subsidiaries
Years Ended March 31, 2015 and 2014
Thousands of
U.S. dollars(Note 1)Millions of yen

Income before minority interests

2015

2014

2015

¥38,100¥35,026$316,791

6,136

992

51,024

748

(945)

6,221

4,912

4,361

40,845

667

—

5,547

Other comprehensive income (Note 12)
Net unrealized holding gains on securities
Net unrealized gain (loss) on derivative instruments
Translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of affiliates accounted
for using equity method
Total other comprehensive income
Comprehensive income

605

202

5,032

13,0694,611

108,670¥51,170¥39,637$425,462

Comprehensive income attributable to:Shareholders of Century Tokyo Leasing Corporation¥46,453¥37,404$386,242

Minority interests¥ 4,716¥ 2,232$ 39,219

The accompanying notes are an integral part of these statements.

Thousands of
U.S. dollars(Note 1)

Number of shares
Thousands

Common stock
Balance at beginning of year
Balance at end of year
Capital surplus
Balance at beginning of year
Disposal of treasury stock
Balance at end of year
Retained earnings
Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance at beginning of year
Net income for the year
Cash dividends
Disposal of treasury stock
Change of scope of consolidation
Balance at end of year
Treasury stock
Balance at beginning of year
Purchase of treasury stock
Disposal of treasury stock
Balance at end of year
Total shareholders’ equity
Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance at beginning of year
Cash dividends
Net income for the year
Purchase of treasury stock
Disposal of treasury stock
Change of scope of consolidation
Balance at end of year
Net unrealized holding gains on securities
Balance at beginning of year
Net changes of items other than shareholders’ equity
Balance at end of year
Net unrealized gain (loss) on derivative instruments
Balance at beginning of year
Net changes of items other than shareholders’ equity
Balance at end of year
Translation adjustments
Balance at beginning of year
Net changes of items other than shareholders’ equity
Balance at end of year
Remeasurements of defined benefit plans
Balance at beginning of year
Net changes of items other than shareholders’ equity
Balance at end of year
Total accumulated other comprehensive income
Balance at beginning of year
Net changes of items other than shareholders’ equity
Balance at end of year
Share subscription rights (Note 21)
Balance at beginning of year
Net changes of items other than shareholders’ equity
Balance at end of year
Minority interests
Balance at beginning of year
Net changes of items other than shareholders’ equity
Balance at end of year
Total net assets
Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance at beginning of year
Cash dividends
Net income for the year
Purchase of treasury stock
Disposal of treasury stock
Change of scope of consolidation
Net changes of items other than shareholders’ equity
Balance at end of year

Millions of yen

2015

2014

2015

2014

2015

106,624
106,624

106,624
106,624¥ 34,231
34,231¥ 34,231
34,231$ 284,618
284,618

5,537
—
5,537

5,538
(0)
5,537

46,045—46,045

204,60649
204,655
34,132(6,137)(7)
1,006
233,650

176,865—
176,865
33,050(5,307)(3)—
204,606

1,701,226
409
1,701,636
283,796(51,027)(58)
8,366
1,942,713(1,999)(913)
35(2,876)¥270,542
242,37649
242,425(6,137)
34,132
(913)
28
1,006
¥270,542(581)(1,436)19(1,999)¥242,376
216,052—
216,052(5,307)33,050(1,436)16—¥242,376(16,622)(7,593)297(23,918)$2,249,459
2,015,268
409
2,015,677(51,027)
283,796(7,593)239
8,366$2,249,459¥ 10,338
6,101
16,439

¥

$

(821)
(307)
14
(1,114)

(370)
(463)
12
(821)

9,423
914
10,33885,95950,730136,690

(761)
752
(9)

137
(899)
(761)

(6,334)
6,253
(81)

1,057
4,969
6,026

(3,282)
4,339
1,057

8,790
41,31950,110

(562)
498
(64)
22,392
10,071
12,321
22,392

—
(562)
(562)
10,071
6,279
3,791
10,071(4,675)
4,142(532)
186,186
83,740102,445
186,186

312
179
491

148
164
312

2,601
1,488
4,089

32,724
10,386
43,110336,537
285,48449
285,534(6,137)
34,132
(913)
28
1,006
22,886¥336,537

11,187
21,53632,724285,484
233,668—
233,668(5,307)33,050(1,436)16—
25,492¥285,484

272,089
86,357358,447
2,798,181
2,373,699
409
2,374,109(51,027)
283,796(7,593)
239
8,366
190,291$2,798,181

The accompanying notes are an integral part of these statements.

54

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201555

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements

Century Tokyo Leasing Corporation and Consolidated Subsidiaries
Years Ended March 31, 2015 and 2014

Century Tokyo Leasing Corporation and Consolidated Subsidiaries
March 31, 2015 and 2014

Thousands of
U.S. dollars(Note 1)Millions of yen

2015

2014

¥ 59,707¥ 55,071

70,83249,859588,942(2,074)
18,236885(3,794)(964)
10,890(600)(11,526)885(64,761)(46,900)(177,131)
2,134(19,877)
32,395(131,663)
1,505(11,093)(29,772)(171,023)(1,315)66,521—(1,231)
(981)
9,699
(390)
1,876
(92,544)(18,644)(8,703)(111,539)
1,415
27,031
21,911(1,964)
1,832(10,182)(18,000)(28,314)(17,245)
151,630
7,358(31,551)(8,020)90,546(4,991)(95,835)
7,362(538,470)(389,956)(1,472,779)
17,744(165,272)
269,358(1,094,732)
12,521(92,237)(247,545)(1,421,994)(3,297)
5,252(24,192)(2,595)
3,079
(791)

(27,420)
43,671(201,154)

—
9
3,546
(18,682)

11,76525(1,490)9,994—
75
29,489(155,338)

40,130409,236(311,441)
96,770(73,616)
3,757(6,137)(1,814)
156,885(13,151)(45,972)
115,841
1,995¥ 71,864

78,763
269,255(332,394)
90,974(46,700)
1,475(5,307)(1,580)54,486(3,447)32,718
83,122—¥ 115,841

333,670
3,402,649(2,589,519)
804,606(612,089)
31,241(51,027)(15,087)
1,304,444(109,352)(382,241)
963,176
16,587$ 597,522

2015

Cash flows from operating activities:
Income before income taxes and minority interests$

496,446

Adjustments to reconcile income before income taxes and minority interests
to net cash used in operating activities:
Depreciation and amortization of leased assets
Increase (decrease) in allowance for doubtful accounts
Loss on disposal of leased assets
Loss on devaluation of investments in securities
Foreign exchange loss (gain)
Interest and dividend income
Interest expense
Gain on sale of investments in securities
Decrease (increase) in installment sales receivable
Decrease (increase) in lease receivables and investment assets
Decrease (increase) in loans receivable
Decrease (increase) in operational investment securities
Purchases of leased assets
Decrease (increase) in claims provable in bankruptcy or rehabilitation
Increase (decrease) in trade notes and accounts payable
Other, net
SubtotalInterest and dividend income received
Interest expense paid
Income taxes paid
Net cash used in operating activities
Cash flows from investing activities:
Purchases of own assets in use
Proceeds from sales/redemptions of investments in securities
Purchases of investments in securities
Proceeds from purchase of investments in subsidiaries resulting in change
in scope of consolidation
Collection of loans receivable
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Increase (decrease) in short-term borrowings, net
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from stock issuance to minority shareholders
Cash dividends paid
Other, net
Net cash provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents from newly consolidated subsidiaries
Cash and cash equivalents at end of year (Note 13)

1. Basis of Presentation
Century Tokyo Leasing Corporation (the “Company”) and its
consolidated subsidiaries (collectively, the “Companies”)
maintain their books of account in accordance with theprovisions set forth in the Corporation Law of Japan (the“Law”), the Financial Instruments and Exchange Law ofJapan and in conformity with accounting principles generally
accepted in Japan (“Japanese GAAP”), which are different
in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards.
The accompanying consolidated financial statements
have been compiled from the consolidated financial
statements of the Companies, which were filed with the
Director of the Kanto Local Finance Bureau as required by
the Financial Instruments and Exchange Law of Japan. In
preparing the accompanying consolidated financial
statements, certain reclassifications and rearrangements
have been made to the consolidated financial statements
issued domestically in order to present them in a format
which is more familiar to readers outside Japan.
The translation of Japanese yen amounts into U.S.
dollar amounts is included solely for convenience, as amatter of arithmetic computation only, at ¥120.27 = US$1.00,
the approximate rate of exchange in effect on March 31,
2015. This translation should not be construed as arepresentation that Japanese yen amounts have been,
could have been, or could in the future be, converted into
U.S. dollar amounts at this or any other rate.

2. Summary of Significant Accounting Policiesa) Principles of consolidation
The consolidated financial statements include the accountsof the Company and its significant subsidiaries over which
the Company exerts control.
The Company’s share in the earnings or losses ofaffiliates over which it is able to exercise significant
influence in terms of their operating and financial decisions
is accounted for by the equity method and included in the
consolidated operating results.
The Company established TC-CIT Aviation Ireland
Limited as a consolidated subsidiary. In addition, 8 othernew companies have been included in the scope of
consolidation during the fiscal year ended March 31, 2015
due to establishment and so on.
TISCO Tokyo Leasing Co., Ltd. which was an affiliatedcompany accounted for by the equity method in theprevious year has been included in the scope of
consolidation from the fiscal year ended March 31, 2015
due to the criteria for control having been met. In addition,
14 other companies have been included in the scope of
consolidation from the fiscal year ended March 31, 2015
due to an increase in materiality.
A total of 4 companies, including TLC Orchid Ltd., havebeen excluded from the scope of consolidation due to thecompletion of liquidation procedures and other reasons
from the fiscal year ended March 31, 2015.
TISCO Tokyo Leasing Co., Ltd. has been excluded
from equity method accounting from the fiscal year ended
March 31, 2015, due to its inclusion in consolidation. BPI
Century Tokyo Lease & Finance Corporation and other 9companies have been included as affiliated companies
accounted for by the equity method from the fiscal year

ended March 31, 2015, due to the acquisition of theirshares and other reasons.
With respect to affiliated companies accounted for by
the equity method whose account closing dates differ fromthe closing date of the Company, the Company has mainly
used their financial statements as of their respective fiscal
year end.
The number of consolidated subsidiaries and affiliatedcompanies for 2015 are as follows:
Consolidated subsidiaries
Affiliated companies

2015
125
15

In preparing the consolidated financial statements as ofMarch 31, 2015, the financial statements of TLC Freesia
Co., Ltd. and 20 other subsidiaries were consolidated byusing their financial statements as of the parent fiscal year
end or as of December 31, 2014 and were prepared solely
for consolidation purposes. Century Tokyo Leasing (USA)and 21 other subsidiaries were consolidated using theirfinancial statements as of their respective fiscal year end,
which falls on December 31, 2014, and necessary adjustments
were made to their financial statements to reflect any
significant transactions from January 1 to March 31, 2015.

b) Foreign currency translation
Monetary receivables and payables denominated in foreign
currencies are translated into Japanese yen at the exchange
rates in effect at the balance sheet date. Foreign exchange
gain or loss on translation is recognized in the consolidated
statement of income.
The balance sheet accounts of the foreign consolidated
subsidiaries are translated into yen at the rates of exchange
in effect at the balance sheet date, except for thecomponents of net assets excluding minority interests
which are translated at their historical exchange rates.
Revenue and expense accounts are translated at the
average rate of exchange in effect during the year.
Differences arising from the translation are presented astranslation adjustments and minority interests in its
consolidated financial statements.

c) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand,deposits held at call with banks, net of overdrafts andshort-term investments with original maturities of threemonths or less which are readily convertible into cash andare subject to little risk of any change in their value.

d) Revenue recognition(Leases)
Lease revenues and the related costs on finance leases arerecognized on receipt of lease payment.
Revenues from operating leases are recognized on astraight-line basis over the scheduled lease terms, andleased assets are depreciated by the straight-line method
based on the scheduled lease terms of the respective assets.
(Installment sales)
Installment sales and the related costs are recognized wheneach payment becomes due under the respective
installment sales agreements.

The accompanying notes are an integral part of these statements.

56

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201557e) Allocation of interest expense
Interest expense is allocated to cost of sales and otherexpenses based on the balances of the respective
operating assets, which consist principally of leasereceivables, lease investment assets and loans. Interest
expense classified as cost of sales is stated net of interest
income.

f) Securities
Securities held by the Companies are classified asavailable-for-sale securities. Marketable available-for-salesecurities are carried at fair value with any unrealized gainor loss, net of the related income taxes, included directly in
net assets. Cost of securities sold is determined principallyby the moving average method. Non-marketable availablefor-sale securities are stated at cost determined principallyby the moving average method.
Hybrid financial instruments, from which an embedded
derivative cannot be separated, are stated at fair value andthe resulting gains or losses are recognized in the
consolidated statement of income. Investments in a limited
partnership are measured using the equity method. As of
March 31, 2015 and 2014, the Companies did not have any
trading securities.

tax bases and operating losses and tax credits carriedforward. Deferred tax assets and liabilities are measured
using enacted tax rates expected to be applied to taxable
income in the years in which these temporary differences
are expected to be recovered or settled.

k) Retirement benefits
Accrued retirement benefits for employees have been
provided mainly at the amount calculated based on theretirement benefit obligation and the fair value of thepension plan assets as of balance sheet date. The
Company and certain domestic subsidiaries have defined
benefit plans covering substantially all employees otherthan directors and corporate auditors. Under the terms ofthese plans, eligible employees are entitled to lump-sum or
annuity payments based on their level of compensation attermination and their years of service with the Company or
the subsidiaries. To provide coverage for part of the lumpsum or annuity payments, the Company and certain domestic
subsidiaries have joined a multi-employers’ welfare pension
fund (the “Fund”) established in accordance with the Welfare
Pension Insurance Law by the ITOCHU group companies.
In addition, accrued retirement benefits for directors
and corporate auditors are provided at an amount to berequired at the year-end according to internal regulations.

g) Inventories
Inventories held by the Company are stated at cost
determined by specific identification method (of whichcarrying values are calculated based on the method of
reduction of book value accompanied with decline inmarket value).

h) Property and equipment
Property and equipment is stated at cost less accumulated
depreciation. Depreciation of leased assets is computed by
the straight-line method based on the lease term of therespective assets. Depreciation of assets owned and usedby the Companies is computed primarily by the decliningbalance method (while the straight-line method is applied tobuildings acquired on and after April 1, 1998) based on theestimated useful lives of the respective assets which range
principally from 3 to 47 years for buildings, and from 3 to 20
years for equipment.

i) Intangible assets
Computer software leased to customers is amortized by thestraight-line method based on the lease term of therespective assets. Costs related to software purchased forinternal use are amortized by the straight-line method overthe estimated useful life (generally 5 years).
Goodwill is amortized by the straight-line method overa period between 5 and 13 years.

j) Income taxes
Provision is made for the Companies’ liabilities for various
types of income taxes, i.e., corporation, inhabitants andenterprise taxes.
Deferred tax assets and liabilities are accounted forunder the asset and liability method. Deferred tax assets
and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their

58

Century Tokyo Leasing Corporation Annual Report 2015

exchange on the date of forward contract is allocated overthe life of each contract.
Hedge effectiveness is assessed based on comparative
analysis between the accumulated future cash flows forhedged items and those for hedging instruments. As for the
future hedging transactions denominated in foreign
currencies, hedge effectiveness is assessed if substantial
terms and conditions such as amounts and periods of thehedging instruments and the hedged forecasted transactions
are the same. Hedge effectiveness is not assessed for theforeign currency exchange contracts which meet therequirements for allocation method and the interest rate
swaps which meet the requirements for short-cut method.
The consolidated subsidiaries for the Company assess
hedge effectiveness primarily based on the above methods.

(1) Overview
Under these revised accounting standards, the accounting
treatment for any changes in a parent’s ownership interestin a subsidiary when the parent retains control over thesubsidiary and the corresponding accounting for acquisitionrelated costs were revised. In addition, the presentation
method of net income was amended, the reference to“minority interests” was changed to “non-controllinginterests,” and transitional provisions for these accounting
standards were also defined.

m) Appropriation of retained earnings
Under the Law the appropriation of retained earnings withrespect to a given financial period is made by resolution of
the shareholders at a general meeting to be held subsequent
to the close of such financial period. The accounts for that
period do not, therefore, reflect such appropriations.
Under the Law, flexible payment of dividends ispermissible subject to certain limits on appropriation ofretained earnings as well as to approval by resolution of theshareholders.

(3) Impact of adopting revised accounting standards andguidance
The Company is currently evaluating the effect of
adopting these revised standards on its consolidated
financial statements.

l) Derivatives and hedging activities
The Companies enter into interest-rate swap contracts,
forward foreign exchange contracts, currency swaps andloans from banks in order to hedge interest-rate and foreign
currency exchange rate exposure on certain liabilities andassets, including loans from banks, installment salesreceivables, and loans receivables denominated in foreign
currencies and forecasted transactions. The Companies
utilize these derivatives to reduce the risk of cash flow
fluctuation inherent in the liabilities and assets hedged andsuch transactions are not entered into for speculative or
trading purposes.
For interest-rate swap contracts and forward foreignexchange contracts, the Companies follow “AccountingStandard for Financial Instruments” and “AccountingStandard for Foreign Currency Transactions.” Morespecifically, interest-rate swaps not designated as hedging
instruments are recorded at fair value in the consolidatedbalance sheet. Interest-rate swaps which qualify for hedge
accounting and meet specific matching criteria are notmeasured at fair value, but the differential paid or received
under the swap agreements is recognized and included ininterest expense or income. Other interest-rate swaps
which qualify for hedge accounting are measured at fairvalue as of the balance sheet date and the recognition of
any unrealized gain or loss is deferred until maturity.
For forward foreign exchange contracts, the Companies
follow the accounting method specified in “AccountingStandard for Financial Instruments” (“Allocation method”), if
the contracts qualify for hedge accounting. Under thismethod, foreign currency transactions and the relatedmonetary assets (installment sales receivables and loans
receivables) are to be translated at the fixed yen amount ofsuch foreign currency contracts at the settlement dates
based on the contracted rates. The difference between thisamount and the amount as translated at the current rate ofn) Allowance for doubtful accounts
The allowance for doubtful accounts is recorded on thebasis of historical experience to provide for possible losses
from bad debts related to general trade accounts and also
for the estimated amounts considered to be uncollectible
after individually reviewing the specific collectibility ofcertain doubtful accounts.
o) Consumption taxes
Transactions subject to consumption taxes are recorded at
amounts exclusive of consumption taxes.
p) Provision for automobile inspection costs
Under lease and maintenance service contracts, provision
for automobile inspection costs is recorded on the basis ofhistorical experience.
3. Standards Issued but Not Yet Effective
Accounting standards for business combinations
On September 13, 2013, the ASBJ issued “Revised
Accounting Standard for Business Combinations” (ASBJ
Statement No. 21), “Revised Accounting Standard forConsolidated Financial Statements” (ASBJ Statement No.
22), “Revised Accounting Standard for Business Divestitures”(ASBJ Statement No. 7), “Revised Accounting Standard for
Earnings Per Share” (ASBJ Statement No. 2), “Revised
Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business
Divestitures” (ASBJ Guidance No. 10), and “Revised
Guidance on Accounting Standard for Earnings Per Share”(ASBJ Guidance No. 4).

(2) Scheduled date of adoption
The Company expects to adopt these revised accounting
standards and guidance from the beginning of the fiscal
year ending March 31, 2016.

4. Accounting Changes
The Company adopted “Accounting Standard for Retirement
Benefits” (ASBJ Statement No. 26 of May 17, 2012)(hereinafter, the “Accounting Standard”) and “Guidance on
Accounting Standard for Retirement Benefits” (ASBJ
Guidance No. 25 of March 26, 2015) (hereinafter, the“Guidance”), specifically the provisions in the AccountingStandard, Paragraph 35, and the Guidance, Paragraph 67,
from the beginning of the fiscal year ended March 31, 2015.
These accounting standards require entities to review thecalculation methods for the retirement benefit obligation andservice costs. Specifically, the method of determining thediscount rates with reference to bonds was changed fromthe method based on a period approximate to the expected
average remaining working lives of employees to the method
using a single weighted average discount rate which reflects
the estimated timing and amount of benefit payments.
In addition, some consolidated subsidiaries changed themethod of attributing the expected retirement benefits toperiods from the straight-line basis to the benefit formulabasis. The effects of the change in the calculation methods
for the retirement benefit obligation and service costs havebeen recorded as an adjustment to retained earnings at the
beginning of the fiscal year ended March 31, 2015 inaccordance with the transitional treatment stipulated in the
Accounting Standard, Paragraph 37. As a result of thischange, net defined benefit liability decreased by ¥166
million ($1,385 thousand) and retained earnings increased by¥49 million ($409 thousand) at the beginning of the fiscal year
ended March 31, 2015. Operating income and income before
income taxes and minority interests for the fiscal year ended
March 31, 2015 increased by ¥33 million ($276 thousand),
respectively.
In addition, the effects on net assets per share, basic net
income and diluted net income per share are insignificant.

Century Tokyo Leasing Corporation Annual Report 201559

5. Change in Presentation Method(Consolidated Balance Sheet)“Accounts receivable-Other” under current assets in theamount of ¥10,152 million, “Unconsolidated subsidiaries
and affiliates” under investments and other assets in theamount of ¥8,200 million and “Other securities” underinvestments and other assets in the amount of ¥34,311
million, and “Guarantee deposits from customers” underlong-term liabilities in the amount of ¥25,046 million, whichwere presented separately in the previous year, are included
in “Other current assets”, “Investments in securities” and“Other long-term liabilities,” respectively, from the fiscal
year ended March 31, 2015 for clarity.

(Consolidated Statement of Income)“Impairment loss” in the amount of ¥1,218 million in theprevious fiscal year, which was presented separately, is
included in “Other, net” from the fiscal year ended March
31, 2015 since the amount was insignificant.
(Consolidated Statement of Cash Flows)“Impairment loss” in the amount of ¥1,218 million in theprevious fiscal year, which was presented separately under“Cash flows from operating activities,” is included in “Other,
net” under “Cash flows from operating activities” from thefiscal year ended March 31, 2015 since the amount was
insignificant.

Thousands of U.S. dollars

March 31, 2015
Cost orbook value

Unrealized
gain

Unrealized
loss

Equity securities$113,597$156,954$666$269,884

Debt securities

62,39963

398

62,064

Other

220,689

32,237—

252,927

Available-for-sale securities whose fair value was not readily determinable as of March 31, 2015 and 2014 were as follows:
Carrying amountThousands of
U.S. dollars

Millions of yen

6. Operational Investment Securities, Short-term Investment Securities and Investments in Securities
Operational investment securities, short-term investment securities and investments in securities at March 31, 2015 and 2014 consistedof the following:

Equity securities
Debt securities
Other

Thousands of
U.S. dollars

Millions of yen

Available-for-sale securities
Investments in unconsolidated subsidiaries and affiliates

2015

2014

2015

¥147,366¥171,417$1,225,297

84,5278,200

702,817¥231,894¥179,617$1,928,114

Available-for-sale securities included in operational investment securities, short-term investment securities and investments in securities
at March 31, 2015 and 2014 consisted of the following:

Equity securities¥ 42,735

2014¥ 36,835

Debt securities

7,764

6,719

Other

2015
$ 355,330
64,55996,866

127,862805,408¥147,366¥171,417$1,225,297

Unrealized
gain

Unrealized
loss

Equity securities¥13,662¥18,876¥80¥32,459

Debt securities

7,504

7

47

7,464

Other

26,542

3,877—

30,419

299

299

2,494

66,446

79,272552,480

Thousands of
U.S. dollars

2014¥8,281

2015$85,071

Realized gain

3,503

2,437

29,134

Realized loss

—

—

—

The impairment losses on securities recognized for the years ended March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars

Millions of yen

2015

2014

2015

¥ 885

¥ 0

$ 7,358

381

20

3,170

Available-for-sale securities:
Other
Investments in unconsolidated subsidiaries and affiliates:

March 31, 2015
Cost orbook value

2015$ 85,445

2015¥10,231

Proceeds

Unconsolidated subsidiaries

Millions of yen

2014¥ 8,014

Millions of yen

Equity securities
The carrying amounts and aggregate fair value of available-for-sale securities with determinable market value at March 31, 2015 and2014 were as follows:2015¥10,276

Proceeds from the sale of available-for-sale securities and the resulting realized gain or loss for the years ended March 31, 2015 and2014 were summarized as follows:

Thousands of
U.S. dollars

Millions of yen

2015

1

0

14

¥1,268¥21$10,543

Fair
value

7. Accumulated Depreciation for Property and Equipment
Accumulated depreciation for property and equipment at March 31, 2015 and 2014 was as follows:
Thousands of
U.S. dollars

Millions of yen
Millions of yen

2015

March 31, 2014
Cost orbook value

60

Unrealized
gain

Leased assets

Unrealized
loss

Fair
value

Equity securities¥15,353¥13,591¥124¥28,820

Debt securities

6,411

8

0

6,419

Other

47,4001,362

173

48,590Century Tokyo Leasing Corporation Annual Report 2015

Fair
value

Other operating assets
Own assets in use¥216,475

2014¥216,1362015$1,799,910

677

187

5,632

6,453

4,765

53,662

Century Tokyo Leasing Corporation Annual Report 201561

8. Short-Term Borrowings, Long-Term Debt and Assets Pledged

9. Derivatives

Short-term borrowings at March 31, 2015 and 2014 were as follows:In general, interest-rate swaps and forward foreign exchange contracts are exposed to market risk arising from fluctuation in interest
rates and foreign exchange rates, and to credit risk arising from the potential for default by the counterparties. As the derivative
instruments which the Companies utilize aim to reduce the risk of fluctuation in interest rates and foreign exchange rates associated withthe underlying assets and liabilities hedged, these derivatives function to reduce the overall market risk to which the Companies are
exposed. The Companies believe that any related credit risk is very low because all counterparties to the derivatives instrument are
financial institutions with high credit ratings.
With respect to the interest-rate swap contracts entered into by the Company, the Treasury Department, which is responsible forfinancing activities, handles the execution of, and monitors the internal control over, these transactions in accordance with theCompany’s internal regulations. The ALM Committee determines the Company’s hedging strategy for the coming six months based on
an analysis of market rate trends and the Treasury Department enters into derivatives transactions in accordance with this strategy.
The Treasury Department is also involved in the management of risk associated with foreign exchange rate fluctuation on an
individual contract basis.
Before the Company executes the transactions involving compound derivative instruments where credit derivatives are embedded,
persons responsible sufficiently confer on the type or management method of the risk beforehand, and then obtain approval inaccordance with the Company’s internal regulations.
The consolidated subsidiaries of the Company follow the Company’s internal regulations, and regularly report to the Company the
results of their hedging activities, the counterparties, the period remaining for each contract and the fair value of the transactions.

Thousands of
U.S. dollars

Millions of yen

Short-term loans from banks

2015¥ 470,167

2014¥ 415,2202015$ 3,909,270

0.67%

754,600

739,300

6,274,216

0.13%
0.19%

Commercial paper

57,80063,398

480,585¥1,282,567¥1,217,919$10,664,072

Payables under securitized lease receivables
Total

Weighted-averageinterest rateLong-term debt at March 31, 2015 and 2014 consisted of the following:Thousands of
U.S. dollars

Millions of yen

Long-term loans, principally from banks

Weighted-averageinterest rate2015
¥ 924,201

2014¥ 812,594

2015$ 7,684,386

0.67%

3,784

2,637

31,4670.23%

209,302178,5211,740,274

0.43%

1,137,288

993,754

9,456,128

Long-term payables under securitized lease receivables
Bonds payable
Total
Less current portion(373,272)(354,007)(3,103,619)¥ 764,016¥ 639,747$ 6,352,509

The following table presents the outstanding derivatives positions that do not qualify for hedge accounting at March 31, 2015:
Millions of yen
Notional amount(over one year)

The Companies have entered into overdraft contracts which provided the Companies with the overdraft facilities with 86 and 84
financial institutions as of March 31, 2015 and 2014 amounting to ¥1,174,322 million ($9,764,054 thousand) and ¥1,027,136 million,
respectively. The unused facilities maintained by the Companies as of March 31, 2015 and 2014 amounted to ¥700,732 million($5,826,331 thousand) and ¥606,464 million, respectively.

Receive/USD; Pay/SGD

Thousands of
U.S. dollars

2016¥ 373,272$3,103,619

2017

259,996

2,161,770

2018

227,176

1,888,888

2019
2020

84,352

701,359

122,325

1,017,092

2021 and thereafter

70,165583,398¥1,137,288$9,456,128

The Companies’ assets pledged as collateral, principally for liabilities of ¥117,564 million ($977,505 thousand), at March 31, 2015 were as
follows:

Millions of yen

Cash on hand and in banks

142

$

1,188

9,853

81,924

Accounts receivable–lease receivables and investment assets

97,657

811,986

Accounts receivable–loans
Advances for purchases of property for lease

98

818

730

6,072

Other current assets

6,278

52,206

Leased assets

19,103

158,841

Investments in securities

62¥

Century Tokyo Leasing Corporation Annual Report 2015

12

106

¥133,877$1,113,144

Fair
value

Unrealized
gain (loss)¥ 1,439
(—)

109

¥

¥

109

$ 11,970
(—)

$

909

$

909

1,188
(618)

(618)

(618)

9,881
(5,139)(5,143)(5,143)

10,126(9,819)(1,326)(1,326)84,198(81,645)(11,029)(11,029)¥ 12,754(10,437)¥(1,835)¥(1,835)$106,051(86,784)$(15,263)$(15,263)

Forward exchange contracts:
Put/RMB
Total

Note: Fair value is primarily based on the prices indicated by corresponding financial institutions.

The following table presents the outstanding derivatives positions that do not qualify for hedge accounting at March 31, 2014:
Millions of yen
Notional amount(over one year)

Currency swap contracts:
Receive/USD; Pay/SGD

Thousands of
U.S. dollars

Accounts receivable–installment sales

Notional amount(over one year)

Non-deliverable forward:
Put/RMB

Millions of yen

Thousands of U.S. dollars
Unrealized
gain (loss)

Currency swap contracts:

The aggregate annual maturity of long-term debt subsequent to March 31, 2015 is summarized as follows:Year ending March 31,

Fair
value

¥ 1,257(1,257)

Fair
value

Unrealized
gain (loss)

¥

¥

35

35

Non-deliverable forward:
Put/RMB

11,750(1,188)(4,143)(4,143)

Call/MYR

22
(—)

0

0

¥13,030(2,446)¥(4,107)¥(4,107)

Total

Note: Fair value is primarily based on the prices indicated by corresponding financial institutions.

Century Tokyo Leasing Corporation Annual Report 2015

63

The following table presents the outstanding derivative positions that qualify for hedge accounting at March 31, 2014:

The following table presents the outstanding derivative positions that qualify for hedge accounting at March 31, 2015:
Millions of yen
Hedgeditems

Thousands of U.S. dollars
Notional amount(over one year)

Fair
value

Notional amount(over one year)

Millions of yen

Fair
value

Hedgeditems

Allocation method:
Forward exchange contracts:

Notional amount(over one year)

Fair
value

Allocation method:
Forward exchange contracts:

Put

Put

USD

Accounts-receivable-installment sales¥ 5,059(3,002)¥(1,268)$ 42,068(24,966)$(10,544)

USD

Accounts-receivable-installment sales¥ 5,873(3,278)¥(767)

RMB

Accounts-receivable-installment sales

1,974(1,494)(303)

16,416(12,429)(2,523)

RMB

Accounts-receivable-installment sales

1,341(1,148)(48)

USD

Accounts-receivable-installment sales

11
(—)

0

96
(—)

0

SGD

Accounts-receivable-installment sales

12
(—)

0

EUR

Accounts-receivable-installment sales

42

4

351

36

USD

Inventories

754
(—)

1

(—)

Accounts-receivable-installment sales

3
(—)

(0)

USD

Inventories

1,049
(—)

0

USD

Inventories

1,049
(—)

1

Proposed transaction

4,594
(—)

31

¥14,676(4,427)¥(780)

Call

SGD

Call

(—)
27
(—)

(0)

Currency options:
Call

Currency swap contracts:
Receive/USD; Pay/MYR

Borrowings

4,955(1,119)475

41,200(9,309)3,956

Receive/USD; Pay/THB

Borrowings

2,524(2,269)(33)

20,986(18,872)(280)¥14,570(7,887)¥(1,125)$121,147(65,578)$ (9,356)

Total

Put

Note: Fair value is primarily based on the prices indicated by corresponding financial institutions.

Deferred hedges:
Forward exchange contracts:
Call
USD

Millions of yen
Hedgeditems

Notional amount(over one year)

Borrowings¥ 11,506(10,532)

Thousands of U.S. dollars
Fair
value

Notional amount(over one year)

Fair
value

$ 95,668(87,572)$ (146)

Interest rate swap
Deferral hedge accounting:
Pay/fixed; Receive/floating

Total

Note: Fair value is primarily based on the prices indicated by corresponding financial institutions.

¥

(17)

Millions of yen
Hedgeditems

Short-cut method:
Pay/fixed; Receive/floating

51,519(30,967)(1,044)428,367(257,482)(8,687)¥ 63,025(41,499)¥(1,062)$ 524,035(345,055)$(8,833)

Borrowings
Accounts-receivable-loans

Total

Note: Fair value is primarily based on the prices indicated by corresponding financial institutions.

Notional amount(over one year)

Fair
value

Interest rate swap
Deferral hedge accounting:
Pay/fixed; Receive/floating

Borrowings¥ 13,127(10,271)¥(0)

Borrowings
Accounts-receivable-loans

72,064(43,973)(798)¥ 85,191(54,245)¥(799)

Short-cut method:
Pay/fixed; Receive/floating

Total

Note: Fair value is primarily based on the prices indicated by corresponding financial institutions.

64

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201565

10. Selling, General and Administrative Expenses

13. Notes to the Consolidated Statement of Cash Flows

Major components of selling, general and administrative expenses for the years ended March 31, 2015 and 2014 were as follows:

Cash and cash equivalents at March 31, 2015 and 2014 are reconciled to the accounts reported in the consolidated balance
sheet as follows:

Thousands of
U.S. dollars

Millions of yen

Employees’ salaries, wages and bonuses

2015

2014

2015

Thousands of
U.S. dollars

Millions of yen

2015

2014

2015

¥70,560¥ 79,840$586,682¥28,112¥19,690$233,744

Rent expenses

9,206

4,752

76,547

Cash on hand and in banks

Provision for accrued bonuses for employees

2,799

2,234

23,279Time deposits with maturities of more than three months(1,106)(2,838)(9,198)2,410

24,84020,038

1,779

1,477

14,794

Cash equivalents included in short-term investment securities

Provision for accrued bonuses for directors

173

150

1,444

Receivables under resale agreements

Provision for directors’ retirement benefits

97

53

812

Provision of allowance for doubtful accounts(1,064)(73)(8,848)Retirement benefit expenses

Cash and cash equivalents—

13,999—¥71,864¥115,841$597,522

14. Income Taxes
The significant components of deferred tax assets and liabilities at March 31, 2015 and 2014 were as follows:

11. System Integration Related Expenses and Office Transfer Related Expenses
Certain consolidated subsidiaries incurred system integration related expenses of ¥791 million ($6,577 thousand) and office transfer
related expenses of ¥330 million ($2,747 thousand) in the fiscal year ended March 31, 2015. Office transfer related expenses
include impairment loss in the amount of ¥150 million ($1,252 thousand) and restoration expenses expected to be incurred upon
the office transfer in the future in the amount of ¥126 million ($1,048 thousand).

Net defined benefit liability

The following table presents reclassification adjustments and tax effects allocated to each component of other comprehensive
income for the years ended March 31, 2015 and 2014:
Thousands of
U.S. dollars

Millions of yen

2015

2014

2015

Net unrealized holding gains on securities
Amount arising during the year

2014

2015

¥ 2,175¥ 2,272$ 18,088

2,012

3,201

16,736

Loss on devaluation of investments in securities

1,922

1,816

15,982

Tax adjustments for lease transactions

1,438

176

11,961

Unearned revenue

1,155

1,274

9,610

Depreciation

1,084

1,177

9,013

Accrued bonuses

950

978

7,906

Accrued expenses

738

—

6,142

Loss on valuation of own assets in use

415

443

3,454

¥11,911¥ 3,624$ 99,041

Other

5,051

6,049

42,000Reclassification adjustments for gains and losses included in net income(3,506)(2,213)(29,151)

Subtotal

16,945

17,391

140,895

Amount before tax effect

8,405

1,411

69,890Less valuation allowance(494)(1,472)(4,115)

Tax effect(2,269)(419)(18,866)

Total deferred tax assets

16,45015,919136,780

6,136

992

51,024

Deferred tax liabilities:(7,322)(5,030)(60,883)

Amount arising during the year

(136)

(1,935)(1,134)

Depreciation of leased assets of foreign subsidiaries

(828)

(802)

(6,890)Reclassification adjustments for gains and losses included in net income

1,281

442

10,656Other(3,406)(5,271)(28,327)

Amount before tax effect

1,145(1,493)

9,522

Total deferred tax liabilities(11,558)(11,104)(96,101)

Tax effect

(396)

547

(3,300)Net deferred tax assets¥ 4,892¥ 4,814$ 40,678

748

(945)

6,221

4,912

4,361

40,845

Amount arising during the year

599

—

4,987

Reclassification adjustments for gains and losses included in net income

428

—

3,560

Amount before tax effect

1,028

—

8,547

Tax effect

(360)

—

(3,000)

667

—

5,547

Net unrealized holding gains on securities
Net unrealized gain (loss) on derivative instruments

Net unrealized gain (loss) on derivative instruments

Net unrealized holding gain on securities

Translation adjustments
Amount arising during the year
Remeasurements of defined benefit plans

Remeasurements of defined benefit plans
Share of other comprehensive income of affiliates accounted
for using equity method

66

2015
Deferred tax assets:
Allowance for doubtful accounts

12. Other Comprehensive Income

Thousands of
U.S. dollars

Millions of yen

Amount arising during the year

605

202

5,032

Total other comprehensive income¥13,069¥ 4,611$108,670

Century Tokyo Leasing Corporation Annual Report 2015

(Changes in Presentation)“Unearned revenue” and “Depreciation of leased assets of foreign subsidiaries,” which were included in “Other” under deferred tax
assets and deferred tax liabilities in the previous fiscal year, respectively, are presented separately for clarity. To reflect the changes
in presentation, the information of the previous fiscal year has been reclassified.
As a result, “Other” under deferred tax assets in the amount of ¥7,323 million in the previous fiscal year has been reclassified
as ¥1,274 million in “Unearned revenue” and ¥6,049 million in “Other”. In addition, “Other” under deferred tax liabilities in theamount of ¥6,073 million in the previous fiscal year has been reclassified as ¥802 million in “Depreciation of leased assets of foreignsubsidiaries” and ¥5,271 million in “Other”.
Reconciliations between the effective statutory tax rates and the effective tax rates for the years ended March 31, 2015 and2014 are not presented because the difference between the effective statutory tax rates and the effective tax rates is insignificant.
The “Act for Partial Amendment of the Income Tax Act, etc.” and the “Act for Partial Amendment of the Local Tax Act, etc.”
were promulgated on March 31, 2015.
As a result, the effective statutory tax rate used to measure the Company’s deferred tax assets and liabilities was changed from
35.6% to 33.1% and 32.3% for the temporary differences expected to be realized or settled in the fiscal year beginning April 1,2015 and from the fiscal year beginning April 1, 2016, respectively. The effect of the announced reduction of the effective statutory
tax rate was to decrease deferred tax assets after offsetting deferred tax liabilities by ¥234 million ($1,946 thousand) and increasedeferred income taxes by ¥1,000 million ($8,315 thousand) and unrealized holding gains on securities by ¥766 million ($6,376
thousand) as of and for the year ended March 31, 2015.
Century Tokyo Leasing Corporation Annual Report 2015

67

The components of retirement benefit expense for the years ended March 31, 2015 and 2014 are as follows:

15. Retirement Benefit Plans
1. Overview of Retirement Benefit Plans Implemented by the Company
The Company has implemented a corporate pension fund plan (multi-employer welfare pension fund) and a defined benefit
corporate pension plan under its defined benefit plan system, and a defined contribution pension plan under its defined contribution
plan system.
Some of the Company’s consolidated subsidiaries in Japan have a lump-sum payment plan and a defined benefit corporate pension
plan under their defined benefit plan system, and a defined contribution pension plan under their defined contribution plan system.
Some of the Company’s consolidated subsidiaries use the simplified method in the calculation of their retirement benefit obligation.
2. Defined Benefit Plans (except the simplified method)
The changes in the retirement benefit obligation during the years ended March 31, 2015 and 2014 are as follows:

Service cost

2015

2014

2015

¥17,036¥ 9,729$141,656

(76)

—

(636)

Restated balance

16,9609,729

141,019

Service cost

846

610

7,040

Interest cost
Actuarial gain and loss
Retirement benefits paid

241

264

753

(46)

264

241

2,198

(220)

(172)

(1,837)

Amortization of actuarial gain and loss

149

84

1,243

Amortization of prior service cost

242

252

2,016

¥1,282¥1,015$10,662

The components of remeasurements of defined benefit plans included in other comprehensive income (before tax effect) for theyears ended March 31, 2015 and 2014 are as follows:(384)

Past service cost

(11)

—

(94)

Adjustment from the simplified method to the principle method

607

—

5,050

—

6,194

—

¥18,104¥17,036$150,532

2014

2015
Actuarial gain and loss

(4,297)

Thousands of
U.S. dollars

Millions of yen

2,198

(492)

Increase due to business combination2015$ 7,040

Expected return on plan assets

Prior service cost

(516)

Balance at the end of the year

2014
¥ 610

Thousands of
U.S. dollars

Millions of yen

Cumulative effects of changes in accounting policies

2015
¥ 846

Interest cost

Retirement benefit expense

Balance at the beginning of the year

Thousands of
U.S. dollars

Millions of yen

Total

—

774

—

6,437

¥1,028—$8,547The changes in plan assets during the years ended March 31, 2015 and 2014 are as follows:

Unrecognized prior service costThousands of
U.S. dollars

2015

2014

2015

¥11,793¥ 8,388$ 98,058

Expected return on plan assets

220

172

1,837

Actuarial gain and loss

578

449

4,809

Contributions by the Company

731

681

6,085

Retirement benefits paid

(363)

(314)

(3,022)

—

2,415

—

¥12,961¥11,793$107,767

Balance at the beginning of the year

Increase due to business combination
Balance at the end of the year

The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheet as ofMarch 31, 2015 and 2014 for the Company’s and the consolidated subsidiaries’ defined benefit plans:
Thousands of
U.S. dollars

Millions of yen

2015

2014

2015

Funded retirement benefit obligation¥ 14,502¥ 16,039$ 120,579

Plan assets at fair value(12,961)(11,793)(107,767)

Thousands of
U.S. dollars

2015

2014

2015

¥ (17)¥236$ (147)

Unrecognized actuarial gain and loss

(137)

637

(1,140)Total¥(154)¥873$(1,287)

The fair value of plan assets, by major category, as a percentage of total plan assets as of March 31, 2015 and 2014 are as follows:

2015

2014

General accounts

52%

53%

Bonds

29%

28%

Stocks

17%

17%

Other

2%

2%

Total

100%

100%

The expected return on assets has been estimated based on the anticipated allocation to each asset class and the expectedlong-term returns on assets held in each category.
The assumptions used in accounting for the above plans are as follows:

2015

2014

Discount rates

0.7%–1.7%

1.2%–1.7%

1,540

4,246

12,812

Expected rates of return on plan assets

1.5%–3.2%

1.5%–3.2%

Unfunded retirement benefit obligation

3,602

997

29,952Estimated rates of salary increases

1.1%–7.0%

1.3%–7.0%

Net liability for retirement benefits in the balance sheet

5,143

5,243

42,765

Liability for retirement benefits

5,143

5,243

42,765¥ 5,143¥ 5,243$ 42,765

Net liability for retirement benefits in the balance sheet

68$2,110The components of remeasurements of defined benefit plans included in accumulated other comprehensive income (before tax
effect) as of March 31, 2015 and 2014 are as follows:

Millions of yen

Millions of yen

2015

¥ 253

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201569

3. Defined Benefit Plans (The simplified method)
The changes in liability for retirement benefits during the years ended March 31, 2015 and 2014 are as follows:

16. Lease Transactions

Thousands of
U.S. dollars

Millions of yen

2015

2014

2015

¥1,926¥ 506$16,019

Retirement benefits expense

289

183

2,409

Retirement benefits paid

(125)

(87)

(1,044)(64)

Balance at the beginning of the year

Contributions by the Company

(20)

(7)

Change of scope of consolidation

501

—

4,165

Adjustment from the simplified method to the principle method

(607)

—

(5,050)

Increase due to business combination
Balance at the end of the year

—

1,344

—

¥1,976¥1,926$16,434(Lessors’ accounting)
Finance leases that do not transfer ownership to lessee are capitalized as lease investment assets. Information relating tofinance leases of the Companies at March 31, 2015 and 2014 is summarized as follows:

2015

2014

2015

Future lease receivables¥1,200,469¥1,216,268$9,981,450

Estimated residual value

41,82142,507347,728

Future interest income(66,994)(70,787)(557,035)¥1,175,295¥1,187,988$9,772,143

The aggregate annual maturity of finance lease receivables that transfer ownership to lessees, subsequent to March 31, 2015 and2014, is summarized as follows:

The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheet as ofMarch 31, 2015 and 2014 for the Company’s and the consolidated subsidiaries’ defined benefit plans:
Thousands of
U.S. dollars

Millions of yen

2014

2015
Funded retirement benefit obligation
Plan assets at fair value

Thousands of
U.S. dollars

Millions of yen

Due within one year

2015

2014

2015

¥102,898¥ 93,014$ 855,561

2015

Due after one to two years

82,051

67,284682,231

67,84247,976564,082¥1,227¥ 957$10,207

Due after two to three years

(368)

(277)

(3,062)

Due after three to four years

48,627

41,586404,318

7,145

Due after four to five years

14,64828,299

121,7939,289

Due after five years

18,455

15,131

153,451¥334,523¥293,292$2,781,438

680

859
Unfunded retirement benefit obligation

Thousands of
U.S. dollars

Millions of yen

1,245

1,117

Net liability for retirement benefits in the balance sheet

1,976

1,926

16,434

Liability for retirement benefits

1,976

1,926

16,434

Net liability for retirement benefits in the balance sheet¥1,976¥1,926$16,434

The aggregate annual maturity of finance lease receivables that do not transfer ownership to lessees, subsequent to March 31,
2015 and 2014, is summarized as follows:

Retirement benefit expenses for the years ended March 31, 2015 and 2014 are as follows:

Thousands of
U.S. dollars

Millions of yen
Thousands of
U.S. dollars

Millions of yen

Retirement benefit expense

2015

2014

2015

¥289

¥183

$2,409

4. Contributions to the defined contribution pension plan by the Company and its consolidated subsidiaries during the years ended
March 31, 2015 and 2014 are as follows:

2014

2015

¥ 395,277$3,282,709

Due after one to two years

298,860

305,1942,484,911

Due after two to three years

220,462

222,054

1,833,067

Due after three to four years

148,586

147,562

1,235,438

Due after four to five years

72,802

84,557605,326

Due after five years

64,94561,621

539,997¥1,200,469¥1,216,268$9,981,450

Thousands of
U.S. dollars

Millions of yen

Contributions to the defined contribution pension plan2015
¥ 394,811

Due within one year

2015

2014

2015

¥177

¥110

$1,476

5. The following summarizes the most recent funded status of the multi-employer welfare pension fund as of March 31, 2015 and 2014.
Thousands of
U.S. dollars

Millions of yen

2015

2014

2015

Amount of plan assets¥ 16,132¥ 65,835$ 134,139

Benefit obligations under pension funding programs(30,177)(81,138)(250,913)

Difference¥(14,044)¥(15,303)$(116,774)

As for the lease accounting treatment for finance lease transactions that do not transfer ownership to lessees starting
before April 1, 2008, the amounts of “Leased assets” (net of accumulated depreciation) at March 31, 2008 were recorded as the
beginning balance of “Lease investment assets,” and the amounts of rental revenues were recorded by the straight-line method
based on the scheduled lease terms. As a result, “Income before income taxes and minority interests” increased by ¥2,374 million
for the year ended March 31, 2014 compared with the amount calculated on assumption that the finance lease transactions that do
not transfer ownership to the lessee starting before April 1, 2008 would have been accounted for using the interest method
retroactively from each lease commencement date.
In addition, the related information for the year ended March 31, 2015 is omitted because the amount is insignificant.

The differences at March 31, 2015 and 2014 above consisted of prior service cost under pension funding programs of ¥13,874
million ($115,364 thousand) and ¥11,954 million, respectively.
For the years ended March 31, 2015 and 2014, the ratios of the Company’s contributions to the multi-employer welfare pension
fund against total contributions are 6.07% and 5.92%, respectively.

70

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 2015

71

The future minimum lease income subsequent to March 31, 2015 and 2014 under non-cancellable operating leases is summarized
as follows:

18. Estimated Fair Value of Financial Instruments
The following table presents the carrying value and estimated fair value of financial instruments at March 31, 2015 and 2014. The
following table does not include financial instruments for which it is extremely difficult to determine the fair value.

Thousands of
U.S. dollars

Millions of yen

2015

2014

2015

Due within one year

¥ 89,972¥ 76,698$ 748,090

Due after one year

199,456

155,785

1,658,406¥289,429¥232,484$2,406,496

Millions of yen
Carryingvalue

As of March 31, 2015

Difference

Assets(1) Cash on hand and in banks¥

70,560(2) Accounts receivable-installment sales

252,946

Deferred profit on installment sales(13,555)

17. Commitments and Contingent Liabilities¥

70,560¥—239,390

The Companies’ contingent liabilities at March 31, 2015 and 2014 were as follows:

Allowance for doubtful accounts(*1)
Thousands of
U.S. dollars

Millions of yen

2015

2014

2015

(1,034)
238,356

240,5452,189

1,480,145

38,330534,471546,262

11,790(5) Operational investment securities

39,34339,343—(6) Short-term investment securities and investments in securities

30,99930,999—(7) Claims provable in bankruptcy or rehabilitation

2,239
867

867

—

¥2,356,412¥2,408,723¥52,310(3) Accounts receivable-lease receivables and investment assets

1,485,017

Estimated residual value(*2)(41,821)

As a guarantor of indebtedness of:

1,443,196

Loans and others¥50,980¥76,952$423,886

Asset purchases

3,150

3,035

26,194

153

175

1,274

¥54,284¥80,163$451,355

Employees housing loans

Estimated
fair value

The Companies, as lenders, have loan commitment agreements as of March 31, 2015 and 2014 amounting to ¥45,158 million($375,476 thousand) and ¥51,363 million, respectively. The loans provided under these credit facilities as of March 31, 2015 and2014 amounted to ¥8,258 million ($68,667 thousand) and ¥6,750 million, respectively. Many of the facilities may expire without
being utilized and the loans provided are subject to periodic reviews of the borrowers’ credit standing. The unused portion of thesefacilities may not be fully utilized.

Allowance for doubtful accounts(*1)(1,382)
1,441,814(4) Accounts receivable-loans

535,842

Allowance for doubtful accounts(*1)(1,370)Allowance for doubtful accounts(*1)
Total assets(1,372)

Liabilities(1) Notes and accounts payable-trade202,880

202,880—(2) Short-term loans from banks

470,167

470,167—(3) Commercial paper

754,600

754,600—(4) Payables under securitized lease receivables

57,80057,800—(5) Bonds payable

209,302207,689

1,613(6) Long-term loans, principally from banks

924,201

914,205

9,996(7) Long-term payables under securitized lease receivables

3,784

3,833

(49)

(8) Lease obligations

18,634

18,364270¥2,641,371¥2,629,540¥11,830(1,835)(1,835)—(17)(2,187)(2,170)(4,023)¥ (2,170)

Total liabilities
Derivatives
Hedge accounting not applied
Hedge accounting applied
Total derivatives

72

Century Tokyo Leasing Corporation Annual Report 2015¥

(1,853)¥

Century Tokyo Leasing Corporation Annual Report 201573

Millions of yen

As of March 31, 2014

Carrying
value

Estimated
fair value

Thousands of U.S. dollars
Difference

Assets(1) Cash on hand and in banks

Carryingvalue

As of March 31, 2015

Difference

586,682$

Assets
¥79,840¥79,840¥—(1) Cash on hand and in banks$

586,682(2) Accounts receivable-installment sales

225,937(2) Accounts receivable-installment sales

2,103,152

Deferred profit on installment sales(12,217)

Deferred profit on installment sales(112,711)

213,719
Allowance for doubtful accounts(*1)

214,669

1,981,840(3) Accounts receivable-lease receivables and investment assets

Allowance for doubtful accounts(*1)
1,450,523

318,7034,443,930

4,541,966

98,036(11,491)

33,658

11,988,148

474,155

Allowance for doubtful accounts(*1)

12,306,851

11,999,639(1,681)
1,416,865

18,203(347,728)

1,418,546(4) Accounts receivable-loans

2,000,044

12,347,368

Estimated residual value(*2)(42,507)

Allowance for doubtful accounts(*1)—(8,600)1,297

1,461,053

Estimated residual value(*2)$

1,990,441
Allowance for doubtful accounts(*1)(348)
213,371(3) Accounts receivable-lease receivables and investment assets

Estimated
fair value(4) Accounts receivable-loans

4,455,327

Allowance for doubtful accounts(*1)(1,358)(11,396)472,797

480,168

7,371(5) Operational investment securities

33,51733,517—(5) Operational investment securities

327,127

327,127—(6) Short-term investment securities and investments in securities

50,31350,313—(6) Short-term investment securities and investments in securities

257,749

257,749—(7) Claims provable in bankruptcy or rehabilitation

4,305(7) Claims provable in bankruptcy or rehabilitation

18,623

Allowance for doubtful accounts(*1)
Total assets

Allowance for doubtful accounts(*1)(2,929)
1,376

1,376

—

¥2,268,081¥2,310,409¥42,327

222,505

222,505—

Liabilities(11,411)
7,211

7,211

—

$19,592,690$20,027,633$434,942(1) Notes and accounts payable-trade

1,686,878

1,686,878—

Total assets
Liabilities(1) Notes and accounts payable-trade(2) Short-term loans from banks

415,220415,220—(2) Short-term loans from banks

3,909,270

3,909,270—(3) Commercial paper

739,300

739,300—(3) Commercial paper

6,274,216

6,274,216—(4) Payables under securitized lease receivables

63,39863,398—(4) Payables under securitized lease receivables

480,585

480,585—(5) Bonds payable

178,521

177,827694(5) Bonds payable

1,740,274

1,726,857

13,417(6) Long-term loans, principally from banks(6) Long-term loans, principally from banks

83,113

812,594

807,9934,600

7,684,386

7,601,272(7) Long-term payables under securitized lease receivables

2,637

2,676

(38)

(7) Long-term payables under securitized lease receivables

31,46731,876(408)(8) Lease obligations

16,54816,170378(8) Lease obligations

154,938

152,689

2,248¥2,450,726¥2,445,092¥ 5,634$21,962,017$21,863,647$ 98,370(4,107)(4,107)—(15,263)(15,263)—

30(1,579)(1,610)(146)(18,189)(18,043)(5,687)¥ (1,610)(33,453)$ (18,043)

Total liabilities
Derivatives

Derivatives

Hedge accounting not applied
Hedge accounting applied
Total derivatives

Total liabilities¥(4,077)¥

Hedge accounting not applied
Hedge accounting applied
Total derivatives$(15,409)$( 1)* General and specific allowances are deducted from the amounts of accounts receivable-installment sales, accounts
receivable-lease receivables and investment assets, accounts receivable-loans and claims provable in bankruptcy or rehabilitation, respectively.
( 2)* Estimated residual values included in lease receivables and investment assets are deducted.

(Note 1) Methods to determine the estimated fair value of financial instruments and other matters related tosecurities and derivative transactions.
Assets(1) Cash on hand and in banks
Since these items are settled in a short period of time, the carrying value approximates fair value.
(2) Accounts receivable-installment sales, (3) Lease receivables and investment assets and (4) Loans
Based on the classification by internal rating and contract terms, the fair value is estimated by the present value of the total ofprincipal and interest discounted by the interest rate to be applied if similar contracts were entered into.
(5) Operational investment securities and (6) Short-term investment securities and Investments in securities
The fair values of the above securities are based on either market price or the prices provided by the counterparty financial institutions.
For information on securities by holding purpose, please refer to Note 6.
(7) Claims provable in bankruptcy or rehabilitation
The fair values of above are assumed to approximate their carrying value with the deduction of relevant allowances because theircarrying values are measured based on the fair value of the collateral and guarantees.

74

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 201575

Liabilities

Millions of yen(1) Notes and accounts payable-trade, (2) Short-term loans from banks, (3) Commercial paper and (4) Payables under securitizedlease receivables
Since these items are settled in a short period of time, the carrying value approximates fair value.
(5) Bonds payable, (6) Long-term loans, principally from banks and (7) Long-term payables under securitized lease receivables
The fair value is based on the present value of the total of principal and interest discounted by an interest rate to be applied if
similar new bonds or loan agreements were entered into.
(8) Lease obligations
Based on the classification by internal rating and contract terms, the fair value is estimated by the present value of the total ofprincipal and interest discounted by the interest rate to be applied if similar contract were entered into.
Derivatives
Assets and liabilities arising from derivative are shown at net value in the above table and with the amount in parentheses
representing net liability position. Please refer to Note 9 Derivatives regarding the details of derivative transactions.

Cash on hand and in banks

Thousands of
U.S. dollars

189,410

84,14387,48831,31934,161

47,631(1) Bonds

3,067

346

211

12

1,055

2,022

(2) Other

5,713

0

755

3,338

2,308

32,780

—

—

—

—

—

—

Operational investment securities:

Available-for-sale securities with maturities(1) Bonds

5,429

6,263

45,142Thousands of U.S. dollars

As of March 31, 2015

4,017

—
949,964

Total¥161,551¥95,786$1,343,237(2) Other
Total

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above financial
instruments are not included in (5) Operational investment securities and (6) Short-term investment securities and investments insecurities.

¥¥—
44,95458,469¥—27,604
49,843Due after
Five Years¥¥

12,71137,020——50¥59,603¥50,402¥92,500

Due after
Five Years

Due after
One Yearthrough
Two Years

Cash on hand and in banks$ 586,682 $Accounts receivable–installment sales

$

$

$

—

—

— $

—

737,402543,618

373,781229,522

105,694

113,131

1,853,944

867,644486,155

414,432

307,814525,336(1) Bonds

931

3,713

10,077

8,599—

41,573(2) Other

48,795

4,015

15,042

21,26339,518376,986

Available-for-sale securities with maturities
—

—

—

—

—

—

13,606(2) Other

—

—

—

—

—

—

$3,227,756 $1,418,991$885,057$673,817

63,182

Total$453,027 $1,057,028

The redemption schedules for long-term debt and lease receivables and investment assets are disclosed in Note 8 and Note 15,
respectively.

(1) Bonds

112

446

1,212

1,034

—

5,000

(2) Other

5,868

482

1,809

2,557

4,752

45,34019. Dividends(1) Dividends paid to shareholders
For the year ended March 31, 2015

Short-term investment securities and investments
in securities:
Available-for-sale securities with maturities(1) Bonds

—

—

—

—

—

—

(2) Other

—

—

—

—

—

—

¥388,202¥170,662¥106,445¥81,040¥54,485¥127,128

Century Tokyo Leasing Corporation Annual Report 2015

Due after
Four Years
throughFive Years(1) Bonds

Available-for-sale securities with maturities76

Due afterThree Years
through
Four Years—

Operational investment securities:

Total

—

Due after
Two Years
throughThree Years

Short-term investment securities and investments
in securities:

Due after
Four Years
throughFive Years——¥129,212

Available-for-sale securities with maturities

As of March 31, 2015

¥ 70,560—¥143,650

Operational investment securities:

Millions of yen

Due afterThree Years
through
Four Years—¥356,225

Due inOne Yearor Less

Accounts receivable–loans(Note 3) Redemption schedule for receivables and marketable securities with maturities subsequent toMarch 31, 2015 and 2014

Due after
Two Years
throughThree Years—

Accounts receivable–loans

2,494

Due inOne Yearor Less¥—

10,015299

Due after
One Yearthrough
Two Years¥

12,876299

68,990104,351—
24,933$ 345,636—

222,973¥

40,756¥16,214114,252

Accounts receivable–loans—

59,159¥ 41,569

Preferred equity investment securities

65,381¥—

Due after
Five Years

78,1942015

Investments in limited partnerships, etc.

88,687¥

Due after
Four Years
throughFive Years

Accounts receivable–installment sales

2014

Trust beneficiary rights

Accounts receivable–installment sales¥ 79,840

Due afterThree Years
through
Four Years

2015
Bonds

—

Due after
Two Years
throughThree Years

Short-term investment securities and investments
in securities:

Millions of yen

Cash on hand and in banks

Due inOne Yearor Less

Available-for-sale securities with maturities(Note 2) Financial instruments for which it is extremely difficult to determine the fair value

Unlisted shares

As of March 31, 2014
Due after
One Yearthrough
Two Years(Date of approval)
Resolution approved byType of shares(June 19, 2014)
Annual general meeting of the shareholders

Common stock(November 4, 2014)
Meeting of the Board of Directors

Common stock

AmountAmount per share

Millions of yen
Thousands of
U.S. dollars

Yen
U.S. dollars

Shareholders’
cut-off date

Effective
date¥2,750¥26.0March 31,

June 20,$22,872

$0.21

2014

2014

¥3,386$28,154

¥32.0
$0.26

September 30,

December 10,

2014

2014

Century Tokyo Leasing Corporation Annual Report 201577

For the year ended March 31, 2014

(Date of approval)
Resolution approved by(June 20, 2013)
Annual general meeting of the shareholders(November 5, 2013)
Meeting of the Board of Directors

AmountAmount per share

Type of shares

Millions of yen

Yen

Common stock¥2,550¥24.0

Common stock¥2,756¥26.0

Shareholders’
cut-off date

Effective
date

March 31,

June 21,

2013

2013

September 30,
2013

December 10,
2013

The volatilities of stock price are based on the historical volatility of the Company’s stock for the period equal to the option’s
estimated remaining outstanding period from the grant date. The estimated remaining outstanding period is based on the averageterm and average age as of retirement. The estimated dividends are based on the actual per share dividends of ¥56 ($0.46) made in thepreceding year for the year ended March 31, 2015. The risk free interest rate is based on the yield of Japanese government bonds
having a remaining life equal to the option’s estimated remaining outstanding period. The stock option activity for the fiscal years ended
March 31, 2015 and 2014 was as follows:
Number of shares
Stock option activity
Share subscription rights which are not yet

2013 stock option

2014 stock option

2015 stock option

vested(2) Dividends with a shareholders’ cut-off date during the current fiscal year but an effective date subsequent to the next fiscal year
(Date of approval)
Resolution approved by(June 25, 2015)
Annual general meeting of the shareholders

Type of shares(Paid from)

Common stock(Retained
earnings)

AmountAmount per share

Millions of yen
Thousands of
U.S. dollars

Yen
U.S. dollars

Shareholders’
cut-off date

Outstanding as of March 31, 2014

—

—

—

Granted

——76,000Forfeited———

Effective
date

Vested——76,000

Outstanding as of March 31, 2015

—

—

—

Share subscription rights which have already
101,600

59,300———76,000

9,100

5,100

—

¥3,481¥33.0

March 31,

June 26,$28,950

$0.27

2015

2015

been vested
Outstanding as of March 31, 2014
VestedExercised

20. Legal Reserve and Additional Paid-in CapitalIn accordance with the Law, the Company provides a legal reserve which is included in retained earnings. The Law provides thatan amount equal to 10% of the amounts to be disbursed as distributions of earnings be appropriated to the legal reserve until thesum of the legal reserve and additional paid-in capital equals 25% of the common stock account. The Law provides that neither
additional paid-in capital nor the legal reserve is available for the payment of dividends, but both may be used to reduce or eliminate
a deficit by resolution of the shareholders or may be transferred to common stock by resolution of the Board of Directors. The
Law also provides that, if the total amount of additional paid-in capital and the legal reserve exceeds 25% of the amount of common
stock, the excess may be distributed to the shareholders either as a return of capital or as dividends subject to the approvalof the shareholders. Under the Law, however, such distributions can be made at any time by resolution of the shareholders or by
the Board of Directors if certain conditions are met.

Forfeited
Outstanding as of March 31, 2015
Exercise price (yen)Weighted average exercise price (yen)

—

—

—

92,50054,20076,000

1

1

1

2,981

2,980

—

1,306

3,038

2,716

0

0

0

24.78

24.77

—

10.85

25.25

22.58

Weighted average fair value per stock at the
grant date (yen)Exercise price (U.S. dollars)
Weighted average exercise price (U.S. dollars)
Weighted average fair value per stock at the
grant date (U.S. dollars)

21. Stock Based Compensation
The Company has stock option plan for certain directors, executive officers and eligible employees. Under the plans, the rights topurchase the common shares of the Company are granted at an exercise price of ¥1 per share. The contractual term of the stock
options is 30 years. The stock option holders may exercise their stock acquisition rights only in a lump sum during the ten-day period
starting one year and a day after leaving their position as director, corporate auditor, executive officer or employee of the Company.
The stock options outstanding as of March 31, 2015 and 2014 were as follows:2013 stock option

2014 stock option

2015 stock option

7 directors
22 executive officers

7 directors
20 executive officers

7 directors
19 executive officers
6 eligible employees

the exercise of the share subscription rights

Common stock
113,700

Common stock
59,300Common stock
76,000Date of grant

October 15, 2012

September 24, 2013

September 29, 2014

The fair value per stock at the grant date

¥1,306 ($13.90)¥3,038 ($29.52)¥2,716 ($22.58)

Persons granted
Type and number of shares to be issued upon

The total stock-based compensation costs recognized for the years ended March 31, 2015 and 2014 were ¥206 million($1,716 thousand) and ¥180 million, respectively.
The fair value of the 2015 stock option is estimated using the Black-Scholes option pricing model with the assumptions noted in
the following table.

22. Segment Information
1. Overview of reportable segments
The Company’s reportable segments shall be part of its organizational units whose financial information is individually available,
and shall be subject to regular review by its Board of Directors for the purpose of deciding the allocation of its managerial resourcesand evaluating its business performance.
The Company is mainly engaged in leasing business and installment sales business as well as financing service business relating
to the main businesses. Therefore, the “Leasing and Installment Sales Business,” the “Financing Business” and the “Other
Businesses” constitute the Company’s reportable segments.
The “Leasing and Installment Sales Business” consists of leasing and installment sales of IT-related equipment and officeequipment, industrial machinery, commercial and service equipment, etc. (including sales of assets thereof pertaining to maturity
and/or cancellation before maturity of leasing transactions). The “Financing Business” consists of money-lending business andinvestment business such as capital investments in operational investment securities and silent partnerships. The “Other
Businesses” consists of commission transactions, solar power sales business, and other businesses.
2. Calculation method for amounts for revenues, profit or loss, assets, liabilities and other items by reportable segment
The accounting method for reportable business segments is the same as stated under “Summary of Significant Accounting
Policies” in Note 2.
3. Information on revenues, profit or loss, assets, liabilities and other items by reportable segment2015 stock option
Expected volatility
Expected holding period

78

30.3%
4.8 years

Expected dividend¥56 per share

Risk free interest rate

0.17%

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 2015

79Millions of yen

Year ended March 31, 2015

Revenues, profit and assets by reportable segments
Revenue from customers

Leasing andinstallment sales

Finance

Other

Total

¥ 840,590¥ 22,921¥19,464¥ 882,976

Inter-segment revenue—

Total revenue
Segment profit
Segment assets

¥

—

740

840,590

22,921

20,20546,439¥ 13,993¥ 4,800¥2,276,399¥723,028¥22,749

740

AssetsReportable segment total

70,832—¥

Increase in property and equipment and intangible assets¥ 177,131—¥ 5,739486

2015$25,128,271

Assets not attributable to reporting segment

129,694

160,229

1,078,359

Total assets on consolidated balance sheet¥3,151,871¥2,884,773$26,206,630

883,717¥

Millions of yen

65,233
Reportable segment
total¥3,022,177

2014

2015
¥

2014
¥2,724,544

2015¥3,022,177

Other items
Depreciation

Thousands of
U.S. dollars

Millions of yen¥

71,318¥ 182,870

Other items
Depreciation

Adjustments

Consolidated

2015

2014

¥ 71,318 ¥ 50,047¥3,745¥3,105 ¥ 75,063 ¥ 53,153

118,497

3,596

2,864

Increase in property and equipment and intangible assets

182,870

2014

2015

121,361

186,466

Millions of yen

Year ended March 31, 2014
Leasing andinstallment sales

Revenues, profit and assets by reportable segments
Revenue from customers

FinanceThousands of U.S. dollars

Other

Total

¥ 794,252¥ 19,938¥14,368¥ 828,558

—

—

677

677

794,252

19,93815,046829,236

Inter-segment revenue
Total revenue

Reportable segment
total

Segment profit¥

43,550¥ 11,457¥ 3,604¥

Segment assets¥2,094,524¥612,768¥17,250¥2,724,544¥

Adjustments

Consolidated

2015
Other items
Depreciation$ 592,985$31,140$ 624,126

1,520,497

29,9021,550,400

Increase in property and equipment and intangible assets

58,612

Information by products and services

Other items

Millions of yen

Depreciation¥

49,859—¥

Increase in property and equipment and intangible assets¥ 111,539—¥ 6,958187

50,047

March 31, 2015

¥ 118,497

Revenue from customers

Thousands of U.S. dollars

Finance
lease

Operatinglease

Installment
sales

Finance

Other

Total

¥573,116¥185,633¥81,841¥22,921¥19,464¥882,976

Year ended March 31, 2015

Revenues, profit and assets by reportable segments
Revenue from customers

Millions of yen

Leasing andinstallment sales

Finance$ 6,989,196$ 190,582$161,843$ 7,341,621

—

—

6,156

6,156

Inter-segment revenue
Total revenue

Other

Total

6,989,196

190,582

167,999

386,127$ 116,348$ 39,916$$18,927,408$6,011,711$189,151$25,128,271

Segment profit$

Segment assets

March 31, 2014

Revenue from customers$

588,942—$

Increase in property and equipment and intangible assets$ 1,472,779—$ 47,717

4,042$

592,985

Thousands of
U.S. dollars

2015¥883,717

2014¥829,236

2015$7,347,778

Inter-segment eliminations

(740)

(677)

(6,156)¥882,976¥828,558$7,341,621

ProfitReportable segment total

2015¥65,233

2014¥58,6122015$542,392

Inter-segment eliminations

(740)

(677)

(6,156)

Operating income on consolidated statement of income

80

Century Tokyo Leasing Corporation Annual Report 2015

Other

Total

¥580,667¥126,816¥86,768¥19,938¥14,368¥828,558

Thousands of U.S. dollars

March 31, 2015

Revenue from customers

Finance
lease

Operatinglease

Installment
sales

Finance

Other

Total

$4,765,245$1,543,473$680,478$190,582$161,843$7,341,621

Geographical information(a) Revenues
Information by geographic segment is not disclosed since revenues to third parties located in Japan for the years ended March 31,
2015 and 2014 represented more than 90% of the consolidated revenues for the respective years.
(b) Property and equipment
Information by geographic segment is summarized as follows:
Millions of yen

Thousands of
U.S. dollars

Millions of yen

General and administrative expenses not attributable to reporting segment

Finance$ 1,520,497

Revenues
Reportable segment total
Revenues on consolidated statement of income

Installment
sales

542,392

4. Difference between the total of reporting segments and the amounts on the consolidated financial statements and details forthe difference (The matter for the reconciliation of the difference)
Millions of yen

Operatinglease

7,347,778

Other items
Depreciation

Financelease(6,050)(6,517)(50,304)¥58,443¥51,416$485,931

March 31, 2015
Europe and North America
Japan

Ireland

OthersAsia

Central andSouth America

Total¥319,774¥84,553¥28,530¥3,058¥23,405¥459,322

Century Tokyo Leasing Corporation Annual Report 2015

81

Report of Independent Auditors

Thousands of U.S. dollars

March 31, 2015
Europe and North America
Japan

Ireland

OthersAsia

Central andSouth America

Total$2,658,807$703,029$237,224$25,430$194,604$3,819,097

Information for the year ended March 31, 2014 is not disclosed since the amount of property and equipment located in Japan
represented more than 90% of the consolidated property and equipment.
Information by main customer
Information by main customer for the years ended March 31, 2015 and 2014 is not disclosed due to no third party customer towhich revenues volume consisted 10% or more of the consolidated revenues.

23. Amounts Per ShareYen

U.S. dollars

2015¥2,776.37

2014¥2,386.02

2015$23.08Basic¥ 322.84¥ 311.64$ 2.68

Diluted¥ 322.28¥ 311.25$ 2.68

Net assets
Net income:Net assets per share are computed based on net assets available for distribution to the shareholders of common stock (i.e.,
net assets excluding minority interests) and the number of shares of common stock outstanding at each balance sheet date.
Basic net income per share is computed by dividing the net income available for distribution to shareholders of common
stock by the weighted-average number of shares of common stock outstanding during the period.
Diluted net income per share is computed based on the net income available for distribution to shareholders and theweighted-average number of shares of common stock outstanding during the period after giving effect to the dilutive potential ofshares of common stock to be issued upon the exercise of warrants and stock subscription rights.
The bases for calculation are as follows:
Thousands of shares

Weighted average number of shares of common stock2015
105,723

2014
106,055

185

132

Increase in shares of common stock
Exercise of share subscription rights

24. Subsequent Events
The Company issued the eleventh unsecured bond and the twelfth unsecured bond (with inter-bond pari passu clause) on April 22,
2015. The details are as follows:
The eleventh
The twelfth
Total amount issued¥10,000 million($83,146 thousand)Issuance priceInterest rate

¥100 ($0.83) per ¥100 ($0.83) of face value
0.140% per annum

Redemption price
Redemption date

April 20, 2018

April 22, 2020

Lump-sum redemption at maturity

Payment date

April 22, 2015
This bond is without any collateral or guaranty and there are no assets reserved forthis debenture.

Application of the fund82

0.307% per annum¥100 ($0.83) per ¥100 ($0.83) of face value

Redemption method

Collateral¥15,000 million($124,719 thousand)Century Tokyo Leasing Corporation Annual Report 2015

For the purchase of leasing property

Century Tokyo Leasing Corporation Annual Report 201583

Main Subsidiaries and Affiliates(As of July 31, 2015)
Note: Voting shares percentages are rounded to the nearest whole number.

Consolidated Subsidiaries (Domestic)■ TRY, Inc.

■ PT. Century Tokyo Leasing Indonesia■ Tokyo Leasing (UK) Plc■ Nippon Car Solutions Co., Ltd.

3-10-23 Tatsumi, Kouto-ku, Tokyo 135-0053
Telephone: +81-3-5569-1731■ Date Founded: May 2004
■ Paid-in Capital: ¥21 million■ Voting Shares: 100%
■ Main Business Operations: Refurbishment (reuse and recycling) of PCs

Wisma Keiai 11th Floor, Jl. Jend. Sudirman Kav. 3
Jakarta 10220, Indonesia
Telephone: +62-21-572-3411■ Date Founded: February 2011
■ Paid-in Capital: Rp300,000,000 thousand■ Voting Shares: 85%■ Main Business Operations: General leasing

2nd Floor, Capital Court, 30 Windsor Street, Uxbridge,
Middlesex UB8 1AB, U.K.
Telephone: +44-20-8429-1963■ Date Founded: May 1983
■ Paid-in Capital: GBP6,655 thousand■ Voting Shares: 100%
■ Main Business Operations: General leasing

Seavans North Bldg., 1-2-1 Shibaura, Minato-ku, Tokyo 105-0023
Telephone: +81-3-6436-1190■ Date Founded: February 1987
■ Paid-in Capital: ¥1,181 million■ Voting Shares: 60%■ Main Business Operations: Automobile leasing■ Orico Auto Leasing Co., Ltd.
Nittochi Okachimachi Bldg., 2-27-5 Taito, Taito-ku, Tokyo 110-0016
Telephone: +81-3-6865-5515■ Date Founded: March 2008
■ Paid-in Capital: ¥240 million■ Voting Shares: 50%■ Main Business Operations: Automobile leasing■ TC Agency Corporation
Nittochi Okachimachi Bldg., 2-27-5 Taito, Taito-ku, Tokyo 110-0016
Telephone: +81-3-5818-8370■ Date Founded: January 1987
■ Paid-in Capital: ¥10 million■ Voting Shares: 100%
■ Main Business Operations: Casualty insurance■ TC Business Service Corporation■ Nippon Rent-A-Car Service, Inc.
FUJISOFT Bldg., 3 Kanda-neribeicho, Chiyoda-ku, Tokyo 101-0022
Telephone: +81-3-6859-6111■ Date Founded: March 1969
■ Paid-in Capital: ¥720 million■ Voting Shares: 63%■ Main Business Operations: Automobile rental and leasing■ Fujitsu Leasing Co., Ltd.
FUJISOFT Bldg., 3 Kanda-neribeicho, Chiyoda-ku, Tokyo 101-0022
Telephone: +81-3-5843-6301■ Date Founded: March 1978
■ Paid-in Capital: ¥1,000 million■ Voting Shares: 80%■ Main Business Operations: IT-related equipment leasing■ TC Business Experts Corporation
Nittochi Okachimachi Bldg., 2-27-5 Taito, Taito-ku, Tokyo 110-0016
Telephone: +81-3-5818-8501■ Date Founded: April 2010
■ Paid-in Capital: ¥10 million■ Voting Shares: 100%
■ Main Business Operations: Business inspection services for the Group■ IHI Finance Support Corporation

Consolidated Subsidiaries (Overseas)

Yaesu First Financial Bldg., 1-3-7 Yaesu, Chuo-ku, Tokyo 103-0028
Telephone: +81-3-3275-3720■ Date Founded: December 1991
■ Paid-in Capital: ¥200 million■ Voting Shares: 67%■ Main Business Operations: Finance and general leasing■ Century Tokyo Leasing China Corporation■ S.D.L Co., Ltd.
Shimbashi Kikuei Bldg., 5-13-1 Shimbashi, Minato-ku, Tokyo 105-0004
Telephone: +81-3-3289-2028■ Date Founded: January 1991
■ Paid-in Capital: ¥100 million■ Voting Shares: 90%■ Main Business Operations: Automobile leasing, general leasing andrental business■ ITEC Leasing Co., Ltd.
Kyodo Bldg., #7, 1-4-1 Jinnan, Shibuya-ku, Tokyo 150-0041
Telephone: +81-3-5456-4760■ Date Founded: September 1984
■ Paid-in Capital: ¥20 million■ Voting Shares: 85%■ Main Business Operations: Broadcasting equipment leasing■ Orico Business Leasing Co., Ltd.
Nittochi Okachimachi Bldg., 2-27-5 Taito, Taito-ku, Tokyo 110-0016
Telephone: +81-3-5846-3951■ Date Founded: April 2015
■ Paid-in Capital: ¥240 million■ Voting Shares: 50%■ Main Business Operations: Leasing and related businesses■ TC Property Solutions Corporation
Uchikanda 282 Bldg., 2-15-9, Uchikanda, Chiyoda-ku, Tokyo 101-0047
Telephone: +81-3-5298-6275■ Date Founded: October 2011
■ Paid-in Capital: ¥100 million■ Voting Shares: 100%
■ Main Business Operations: Property management business

84

Nittochi Okachimachi Bldg., 2-27-5 Taito, Taito-ku, Tokyo 110-0016
Telephone: +81-3-5818-8076■ Date Founded: June 2004
■ Paid-in Capital: ¥20 million■ Voting Shares: 100%
■ Main Business Operations: Business processing services for the Group

Century Tokyo Leasing Corporation Annual Report 2015

■ PT. TCT Indonesia
Wisma Keiai 11th Floor, Jl. Jend. Sudirman Kav. 3
Jakarta 10220, Indonesia
Telephone: +62-21-572-4279■ Date Founded: April 2012
■ Paid-in Capital: US$600 thousand■ Voting Shares: 100%
■ Main Business Operations: General trading company■ TISCO Tokyo Leasing Co., Ltd.
48/30, TISCO Tower,16th Floor, North Sathorn Road, Silom, Bangrak,
Bangkok, 10500, Thailand
Telephone: +66-2-638-0900■ Date Founded: April 1993
■ Paid-in Capital: THB60,000 thousand■ Voting Shares: 49%■ Main Business Operations: General leasing■ HTC Leasing Co., Ltd.
1858/79, 1858/81-82, Interlink Tower 17th Floor, Bangna-Trad Rd.,
Bangna, Bangkok, 10260, Thailand
Telephone: +66-2-316-2409■ Date Founded: March 2015
■ Paid-in Capital: THB100,000 thousand■ Voting Shares: 70%■ Main Business Operations: Construction equipment finance

Unit B1, B2, B3, 28F V-Capital Bldg., No. 333 Xianxia Road,
Changning District, Shanghai, P.R.C. 200336
Telephone: +86-21-6237-0066■ Date Founded: July 2006
■ Paid-in Capital: US$47,500 thousand■ Voting Shares: 80%■ Main Business Operations: General leasing■ Tokyo Leasing (Hong Kong) Ltd.

■ Century Tokyo Factoring China Corporation■ Century Tokyo Leasing (USA) Inc.

Unit A11, 28F V-Capital Bldg., No. 333 Xianxia Road,
Changning District, Shanghai, P.R.C. 200336
Telephone: +86-21-3131-7099■ Date Founded: June 2013
■ Paid-in Capital: RMB150,000 thousand■ Voting Shares: 100%
■ Main Business Operations: Factoring services■ Century Tokyo Leasing (Singapore) Pte. Ltd.
8 Cross Street, #09-04/05 PWC Bldg., Singapore 048424
Telephone: +65-6532-3436■ Date Founded: May 1979
■ Paid-in Capital: S$19,340 thousand■ Voting Shares: 100%
■ Main Business Operations: General leasing■ Century Tokyo Capital (Malaysia) Sdn. Bhd.
Suite 20.01 & 20.01A, Level 20, Menara Citibank, No. 165, Jalan
Ampang, 50450 Kuala Lumpur, Malaysia
Telephone: +60-3-2162-9633■ Date Founded: June 2007
■ Paid-in Capital: RM86,435 thousand■ Voting Shares: 100%
■ Main Business Operations: General leasing

Room 301, 3rd Floor, Sun Hung Kai Centre, 30 Harbour Road,
Wan Chai, Hong Kong
■ Date Founded: October 1972
■ Paid-in Capital: HK$13,000 thousand■ Voting Shares: 100%
■ Main Business Operations: General leasing

2500 Westchester Avenue, Suite 310, Purchase, NY 10577, U.S.A.
Telephone: +1-914-697-9030■ Date Founded: December 1985
■ Paid-in Capital: US$26,513 thousand■ Voting Shares: 100%
■ Main Business Operations: General leasing■ TC Aviation Capital Ireland Limited
Fitzwilliam Business Centre, Suite number 1311,
77 Sir John Rogerson’s Quay, Dublin 2, Ireland■ Date Founded: October 2013
■ Paid-in Capital: €80 thousand■ Voting Shares: 100%
■ Main Business Operations: Aviation financing business■ TC-CIT Aviation U.S., Inc.
11 West 42nd Street, 12th Floor, New York, New York 10036, U.S.A.
■ Date Founded: October 2014
■ Paid-in Capital: US$22,262 thousand■ Voting Shares: 70%■ Main Business Operations: Aviation leasing and finance■ TC-CIT Aviation Ireland Limited
Fitzwilliam Business Centre, Suite number 1311,
77 Sir John Rogerson’s Quay, Dublin 2, Ireland■ Date Founded: October 2014
■ Paid-in Capital: US$67,620 thousand■ Voting Shares: 70%■ Main Business Operations: Aviation leasing and finance

Equity-Method Affiliates■ President Tokyo Corporation
12th Floor, No. 8 Dongxing Rd., Songshan District,Taipei City 10570, Taiwan, R.O.C.
Telephone: +886-2-2747-8188■ Date Founded: November 1997
■ Paid-in Capital: NT$588,000 thousand■ Voting Shares: 49%■ Main Business Operations: Automobile leasing and general leasing■ Tong-Sheng Finance Leasing Co., Ltd.
Room 1602, Building, 1, Harmony Xingzuo Business Plaza, No. 269,
Wangdun Road, Industrial Park, Suzhou, Jiangsu Province, P.R.C.
Telephone: +86-512-8686-7128■ Date Founded: April 2014
■ Paid-in Capital: US$10,000 thousand■ Voting Shares: 49%■ Main Business Operations: Automobile and equipment leasing■ Suzhou New District Furui Leasing Co., Ltd.
25th Floor, Golden River International Building, 35 Shi Shan Rd,
New District, Suzhou, Jiangsu, China
Telephone: +86-512-6809-6181■ Date Founded: November 2014
■ Paid-in Capital: RMB300,000 thousand■ Voting Shares: 20%■ Main Business Operations: Finance and leasing■ BPI Century Tokyo Lease & Finance Corporation
15th Floor, BPI Buendia Center, 372 Sen. Gil J. Puyat Ave., Brgy.
Bel-Air, Makati City, Metro Manila, 1200, Philippines
Telephone: +1-632-790-2555■ Date Founded: May 1970
■ Paid-in Capital: PHP80,899 thousand■ Voting Shares: 49%■ Main Business Operations: General leasing■ P.T. Hexa Finance Indonesia
Atrium Mulia Building 2nd Floor, Suite 205, JI. H.R. Rasuna Said Kav B
10-11 Jakarta 12910, Indonesia
Telephone: +62-21-290-39510■ Date Founded: March 2015
■ Paid-in Capital: Rp300,000,000 thousand■ Voting Shares: 20%■ Main Business Operations: Construction equipment finance■ CSI Leasing, Inc.
9990 Old Olive Street Road, St. Louis, MO 63141, U.S.A.
Telephone: +1-800-955-0960■ Date Founded: 1972
■ Paid-in Capital: US$38,499 thousand■ Voting Shares: 35%■ Main Business Operations: Information and communications
equipment leasing■ GA Telesis, LLC*
1850 NW 49th Street, Fort Lauderdale, Florida 33309, U.S.A.
Telephone: +1-954-676-3111■ Date Founded: April 2002
■ Voting Shares: 20%■ Main Business Operations: Provider of products, services and solutions
to the commercial aerospace industry*GA Telesis does not have a direct equivalent to paid-in capital because it is alimited liability company under U.S. law.
Century Tokyo Leasing Corporation Annual Report 201585

Corporate Information

Stock Information / Bond Ratings(As of March 31, 2015)

Transfer Agent

Mizuho Trust & Banking Co., Ltd.

Number of Shares of Common Stock Authorized 400,000,000 sharesCompany Name

Century Tokyo Leasing Corporation (Abbreviation: TC-Lease)

Stock Listing

Tokyo Stock Exchange, First Section

Number of Shares of Common Stock Issued

106,624,620 shares

Head Office

FUJISOFT Bldg., 3 Kanda-neribeicho, Chiyoda-ku, Tokyo 101-0022, Japan

Securities Code

8439

Number of Shareholders

10,270FoundedJuly 1, 1969

Trading Lot Size

100 shares

Paid-in Capital¥34,231 million

Company Representative

Chairman & Co-CEO Toshihito Tamba

Breakdown of Shareholders

Major Shareholders
Number ofshares held
(thousands)

Shareholders

26,656
15,3699,963
4,688

ITOCHU Corporation
Nippon Tochi-Tatemono Co., Ltd.
KSO Co., Ltd.
Mizuho Bank, Ltd.
Japan Trustee Services Bank, Ltd.
(Trust accounts)

3,569

25.0
14.4
9.3
4.4

Financial institutions

Foreign investors

22.9%

12.2%

2,972
2,228

2.8
2.1

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

1,919

1.8

Number of Employees

4,113 (1,023 on a non-consolidated basis) (as of March 31, 2015)

Closing of Accounts

March 31

Main Banks

Mizuho Bank, Ltd.; Sumitomo Mitsui Trust Bank, Limited; The Norinchukin Bank;
Mitsubishi UFJ Trust and Banking Corporation; Mizuho Trust & Banking Co., Ltd.

Individuals and other

5.2%

Securities companies

0.6%

3.3

Nippon Life Insurance Company

Seiwa Sogo Tatemono Co., Ltd.

President & CEO Shunichi Asada

Percentage ofsharesoutstanding (%)

Independent Auditor

Ernst & Young ShinNihon LLC

Network

Domestic:
Head Office, Sapporo, Sendai, Saitama, Tachikawa, Yokohama, Shizuoka, Nagoya, Kanazawa,

Treasury stock

1.1%

Kyoto, Osaka, Kobe, Okayama, Hiroshima, Fukuoka
Overseas:
We operate in 37 countries with a focus on East Asia and ASEAN (as of April 1, 2015).

Mizuho Trust & Banking Co., Ltd.
(Retirement Allowance Trust, Orient
Corporation AccountTrust & Custody Services Bank, Ltd.
re-entrusted)

1,900

1.8

Yushu Tatemono Co., Ltd.

1,716

1.6

Other domestic institutions

58.0%

IR Web Site

Stock Price and Trading Volume
Stock price (Right scale)

Trading volume (Left scale)(Thousands of shares)(Yen)

10,000

5,000

8,000

4,000

6,000

3,000

4,000

2,000

2,000

1,000

0

10/4

11/3

12/3

13/3

14/3

15/4

0

Bond Ratings (As of February 5, 2015)
Century Tokyo Leasing Corporation’s ratings assigned by Japan Credit Rating Agency, Ltd. and Rating and Investment Information, Inc.
Credit Rating
AgencyLong-term

Short-term

Japan Credit Rating Agency, Ltd. (JCR)

Rating and Investment Information, Inc. (R&I)(Long-Term Issuer Rating)Rating: A+
Outlook: Stable(Issuer Rating)Rating: A
Outlook: Stable(Preliminary Rating for Bonds Registered for Issuance)
Rating: A+
Expected Issue Amount: ¥200 billion
Issue Period: Two Years Beginning February 14, 2014

(Preliminary Rating for Bonds Registered for Issuance)
Rating: A
Expected Issue Amount: ¥200 billion
Issue Period: Two Years Beginning February 14, 2014

(Euro Medium-Term Note Program)
Rating: A+
Maximum Outstanding Amount: Equivalent of US$2 billion(Euro Medium-Term Note Program)
Rating: A
Maximum Outstanding Amount: Equivalent of US$2 billion(Commercial Paper)
Rating: J-1
Maximum Outstanding Amount: ¥650 billion(Commercial Paper)
Rating: a-1
Maximum Outstanding Amount: ¥650 billion

http://www.ctl.co.jp/english/ir/

For Further Information:
Investor Relations OfficeTelephone: +81-3-5209-6710

Note: Each bond will be rated by each rating company upon issuance.

86

Century Tokyo Leasing Corporation Annual Report 2015

Century Tokyo Leasing Corporation Annual Report 2015

87

FUJISOFT Bldg.,
3 Kanda-neribeicho, Chiyoda-ku,
Tokyo 101-0022, Japanwww.ctl.co.jp/english

Printed in Japan