Century Tokyo Leasing Corporation Annual Report 2013

FUJISOFT Bldg.,
3 Kanda-neribeicho, Chiyoda-ku,
Tokyo 101-0022, Japanwww.ctl.co.jp/english

Aiming for a Comprehensive Financial Services Enterprise

Annual Report 2013
Printed in Japan

Century Tokyo Leasing Corporation

management philosophy
Century tokyo Leasing Group will grow alongside its
customers and contribute to society as a comprehensive
financial services enterprise that continually challenges itself.

Create new Business with LeaSInG
I n addition to pursuing its mainstay leasing business, Century tokyo Leasing

Corporation provides a wealth of high-value-added services as well as financing.
We strongly believe that the role of a leasing company is to contribute to customers’
businesses through the provision of financing. as an integral member within theservice industry, we are making the most of our flexibility and high degree of freedom
to pursue further expansion as a comprehensive financial services enterprise.

Corporate InformatIon
Company Name
Century tokyo Leasing Corporation (abbreviation: tC-Lease)
Head Office
fUJISoft Bldg., 3 Kanda-neribeicho, Chiyoda-ku, tokyo 101-0022, JapanFoundedJuly 1, 1969
Paid-in Capital¥34,231 million
Company Representative
president & Ceo Shunichi asada
Number of Employees
1,676 (1,028 on a non-consolidated basis) (as of march 31, 2013)
Closing of Accounts
march 31
Major Banks
mizuho Corporate Bank, Ltd. (currently mizuho Bank, Ltd.); Sumitomo mitsui trust Bank, Limited; the norinchukin Bank;
mitsubishi UfJ trust and Banking Corporation; nippon Life Insurance Company
Independent Auditor
ernst & Young Shinnihon LLC
Network
Domestic;
Head office, Sapporo, Sendai, tsukuba, Saitama, tachikawa, Yokohama, Shizuoka, nagoya, Kanazawa, Kyoto, osaka,
Kobe, okayama, Hiroshima, fukuoka
overseas;
China (Shanghai [2], Beijing, Dalian, Qingdao, Suzhou, Wuhan, Chengdu, Guangzhou, Hong Kong), taiwan (taipei,
taichung, Kaohsiung), thailand, malaysia, Singapore, Indonesia, India, U.S.a., U.K.

for further Information
Forward-Looking Statements
Statements in this annual report with respect to Century tokyo Leasing Group’s plans, forecasts, strategies, presumptions and other statements that are not historical facts are forwardlooking statements and are based on management’s assumptions and beliefs grounded on information that was available when this report was written. the actual performance of theCompany may differ considerably from that discussed in the forward-looking

Investor Relations OfficeTelephone: +81-3-5209-6710

73

Century
CenturyTokyo
Tokyo
Leasing
Leasing
Corporation
Corporation

11

Contents

2 Financial Highlights
3 To Our Stakeholders
4 An Interview with the President
10 Special Feature:

4

The Second Medium-Term
Management Plan
12
14
16

Bolster the Financing Business
Expand Overseas Businesses
Reinforce Activities in the Automobile
Financing Business both in Japanand Overseas

12

18 Segment Information
18
20

Leasing/Installment Sales Business
Financing Business22 Corporate Governance
25 Management
26 CSR

14

28 Corporate History
29 Financial Section
70 Main Subsidiaries and Affiliates
72 Stock Information/Bond Ratings
73 Corporate Information16

2 Century Tokyo Leasing Corporation

FINANCIAL HIGHLIGHTS
Century Tokyo Leasing Corporation and Consolidated Subsidiaries
Years ended March 31

Thousands of
U.S. dollars

Millions of yen

Operating Results
Revenues
Gross profit on revenues
Operating income
Ordinary income(Income before extraordinary items and income taxes)
Net income
Financial Condition
Total assets
Operating assets, including business guarantees
Business guarantees
Interest-bearing debt
Net assets

2011

2012

2013

2013

¥ 713,182
71,59341,034¥ 716,342
72,65841,878¥ 691,128
70,883
41,974$ 7,353,209
754,154446,576

44,17023,646

46,252
26,194

46,29328,935492,528
307,852¥ 2,184,599
2,049,804
26,081
1,741,897
178,752¥ 2,260,389
2,143,217
48,815
1,783,173
201,272¥ 2,465,817
2,276,575
45,211
1,939,219
233,669$26,234,887
24,221,459
481,019
20,632,184
2,486,103

Yen

Per Share Data
Net income
Net assets
Dividends¥

221.801,594.57
40.00¥

U.S. dollars

245.82
1,796.62
44.00¥

272.32
2,092.46
48.00

$

2.90
22.26
0.51

%

Significant Indicators
Return on equity (ROE )Return on assets (ROA)
Equity ratio

14.8
2.0
7.8

14.5
2.1
8.4

14.0
2.0
9.0

Note: Translated at ¥93.99= US$1.00, the approximate rate of exchange on March 31, 2013.

Operating income

Gross profit on revenues

Ordinary income/ ROA(Billions of yen)(Billions of yen)(Billions of yen)

（％）

80

50

50

2.5

40

40

2.0

30

30

1.5

20

20

1.0

10

10

0.5

60

40

20

0

0

2009 2010 2011 2012 201302009 2010 2011 2012 2013

Net income / ROE(Billions of yen)

Operating assets
（％）

40

20

30

15

20

10

10

0

5

2009 2010 2011 2012 201302009 2010 2011 2012 20130

Net assets / Equity ratio（％）(Billions of yen)(Billions of yen)

2,500

250

10

2,000

200

8

1,500

150

6

1,000

100

4

500

50

2

0

0

2009 2010 2011 2012 201302009 2010 2011 2012 2013

Graph figures for the year ended March 31, 2009 are the simple sums of values recorded by the former Century Leasing System, Inc.
and Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation

3

TO OUR STAKEHOLDERS
Harnessing the attributes of its major shareholders, namely the

income came to ¥46.3 billion, which represents a more thanrobust customer base of the Mizuho Financial Group and thetwofold increase compared with levels recorded at the time ofhigh-quality information resources of ITOCHU Corporation,

the merger in April 2009. As a result, the Group achieved all its

Century Tokyo Leasing Corporation engages in a broad

management targets. More importantly, these results were

spectrum of businesses across a wide range of countries anda c h i e ve d a m i d a h a r s h o p e r a t i n g e nv i r o n m e n t. O u rregions. Specifically, the Company builds on the strength of its

performance is a testament to the efforts of each and every

core business activities, including the leasing and installment

employee and a measure of our successful endeavors tosale of information and communications equipment, to provide

steadily build up our strength.

highly specialized financing in such fields as real estate, vessels,

The Century Tokyo Leasing Group launched its second

aircraf t, the environment and energy. In addition to an

three-year medium-term management plan in April 2013 underoutstanding presence in Japan, Century Tokyo Leasing

a basic policy of “to become a robust comprehensive financial

maintains an industr y-leading overseas network that isservices enterprise and realize further innovative changes as

particularly strong in Asia, including East Asia, the ASEAN

well as sustainable growth.” The Century Tokyo Leasing Groupregion and India. Having bolstered its automobile leasing

recognizes that the role of a leasing company is to contribute tobusiness for companies and individuals with the addition ofcustomers’ businesses through the provision of finance. The

rental car services, the Company also plays a prominent role

Group is also acutely aware that its service-based activities

through its automobile financing business. In addition to theseprovide the starting point for all of its endeavors. In this context,

business, the Century Tokyo Leasing Group works closely with

the Group will make the most of the flexibility and freedom

several leading manufacturers, including Fujitsu Limited, IHI

available to a leasing company that has the ability to invest andCorporation and Shiseido Co., Ltd. as its strives to become aengage in business in its own right. Unfettered by conventional

solutions-oriented company that delivers truly comprehensive

business models, we will raise our sights and open up

financial services that meet every possible customer need.

opportunities in domains that offer further growth. In addition,

The Century Tokyo Leasing Group positioned an “evolution

we will carry out our management strategies in a timely andscenario for maximizing merger synergies and moving to thedefinitive manner. In this way, we will work to build a structurenext stage of growth” at the heart of its first three-year medium-that is capable of consistently achieving the management target

term management plan, which kicked off in April 2010. Underof consolidated ordinary income of ¥50.0 billion or more while

this plan, the Group worked diligently to reinforce management

bringing to fruition sustainable growth.

as well as its sales base. In the final year of the plan, ended
March 31, 2013, the balance of operating assets, including

As we work toward achieving this goal, we kindly request thecontinued support and understanding of all stakeholders.

business guarantees, stood at ¥2,276.6 billion while ordinary

Chairman & Co-CEO Toshihito Tamba

President & CEO Shunichi Asada4 Century Tokyo Leasing Corporation

AN INTERVIEW WITH THE PRESIDENT
A In the fiscal year under review, the Japanese economy saw signs of a gradual

Q1

Please describe the Company’s
results in fiscal 2012, ended
March 31, 2013, the final year of
its first medium-term
management plan.

turnaround in the second half due to such factors as a weakening in the value of the
yen and an upswing in stock prices stemming from positive expectations regarding
the effects of the government’s financial and fiscal policies, including efforts to further
ease monetary conditions. Nevertheless, the outlook for the Japanese economy
remained uncertain owing mainly to such issues as the prolonged debt problem inEurope and a slowdown in the rates of growth in emerging economies.
Under these circumstances, the Century Tokyo Leasing Group continued topromote efforts aimed at strengthening its sales and management bases. As a result,the value of new contracts for the fiscal year under review was robust, climbing 9.9%
year on year to ¥1,178.8 billion, while the balance of operating assets, including
business guarantees, rose steadily, reaching ¥2,276.6 billion. Nevertheless, total
revenues declined 3.5% year on year to ¥691.1 billion on a consolidated basis.
Consolidated operating income, on the other hand, edged up 0.2% to ¥42.0 billion,
ordinary income improved 0.1% to ¥46.3 billion, and net income grew 10.5% to¥28.9 billion. From an income perspective, these results represented a record high at
each core earnings level.

Achievements under the First Medium-Term Management Plan
(Fiscal 2010 to Fiscal 2012)
Targets(A)
Ordinary income¥35.0 billion or more
Operating assets
Over ¥2.0 trillion
Shareholders’ equity ratio
Over 8.5%

Q2
What are your thoughts onachievements under theCompany’s first medium-term
management plan?

Balance of Operating Assets
in the Financing Business(Billions of yen)

800

600

400

200

0

2009 2010 2011 2012 2013

Results (Fiscal 2012) vs. Targets(B)(B) – (A)¥46.3 billion¥11.3 billion¥2.2 trillion¥0.2 trillion
9.0%
0.5 point

A Under our first medium-term management plan, which focused on an “evolution
scenario for maximizing merger synergies and moving to the next stage of growth,”
we achieved and exceeded all management targets and expectations.
First, in endeavoring to maximize merger synergies, the Group completed
information system integration at a pace that led the industry. At the same time,
successful steps were made to build an efficient structure that integrates
organizational, personnel and credit screening systems. We are very proud that wewere able to realize merger synergies at such an early stage.
In order to push forward an evolution scenario for moving to the next stage of
growth, we expeditiously channeled personnel into such growth areas as financing
and international operations. In financing operations we were active in pursuing
opportunities in the real estate, vessels, aircraft, the environment and energy fields
and took positive strides in establishing a second pillar of business to complement
our leasing and installment sales activities. As for international operations, we opened
six bases in China as well as offices in Indonesia and India. Through these and othermeans, we are working diligently to expand our global network, especially in Asia.
In addition to bolstering its aircraft business platform by acquiring equity interestsin the low-cost carrier (LCC) Jetstar Japan Co., Ltd. and U.S.-based GA Telesis, LLC,
one of the world’s largest providers of products, services and solutions to thecommercial aerospace industry, the Group entered the rental car services by
converting Nippon Rent-A-Car Service, Inc. into an equity-method affiliate (currently aconsolidated subsidiary).
Amid a persistently harsh operating environment, the Group has also taken steps
to entrench solution-oriented services at the heart of its leasing and installment sales
business marketing. The Group has successfully achieved targets for the value ofCentury Tokyo Leasing Corporation

5

new contracts set at the beginning of the most recent two accounting periods as well
as a year-on-year growth rate that exceeds the industry average. Based on these
efforts and results, we have picked up steam across all business fields.
In February 2013, external agencies upgraded the Company’s rating* by one-notch.
I believe this reflects a positive assessment of our endeavors.
* Japan Credit Rating Agency, Ltd. (JCR) raised the Company’s rating from A to A+ while Rating andInvestment Information, Inc. (R&I) lifted the Company’s rating from A- to A.

Under the Plan, we successfully achieved all establishedmanagement targets and improvemed our ratings. As aresult, I believe that we have established an outstanding trackrecord over the past three years.

Q3
Please tell us about the goals andkey points of the Group’s second
medium-term management plan,
launched in fiscal 2013.

A Under its second medium-term management plan, the Century Tokyo Leasing
Group has identified the basic policy of “to become a robust comprehensive financial
services enterprise and realize further innovative changes as well as sustainablegrowth.” The Century Tokyo Leasing Group recognizes that the role of a leasing
company is to serve specific needs and to contribute to customers’ businesses
through finance. With a strong awareness that our origins are rooted in the service
industry, we are determined to make the most of the flexibility and freedom available
to a leasing company that has the ability to invest and engage in business in its own
right. Unfettered by conventional business models, we are looking toward the horizon
with the intention of uncovering further areas of potential growth.
Specifically, our principal management strategies are to (1) enhance competitiveness in the leasing business; (2) bolster the financing business; (3) expand
overseas businesses; and (4) reinforce activities in the automobile financing businessboth in Japan and overseas. As one management goal, we are targeting ¥50.0 billion
or more in consolidated ordinary income. While leveraging our strengths, we will
steadfastly and swiftly carry out management strategies. These efforts will allow us tobuild a platform that is capable of generating a stable stream of consolidated ordinary
income of ¥50.0 billion or more and realizing sustainable growth.

Management Targets under the Second Medium-Term Management Plan
(Fiscal 2013 to Fiscal 2015)
Results (Fiscal 2012)

Targets (Fiscal 2015)

Ordinary income¥46.3 billion¥50.0 billion or more

Operating assets¥2.2 trillion¥2.6 trillion

9.0%

10.0%

Shareholders’ equity ratio

6 Century Tokyo Leasing Corporation

Q4
What is your view of growth in thefinancing business going forward?

A

The first thing that needs to be said is that the Company’s business activities canno longer be classified under the traditional accounting-based segments of leasing
and installment sales and financing. In its financing business activities in particular,
Century Tokyo Leasing is extending beyond the simple finance and leasing fields toprovide additional tailor-made services and product proposals across a wide varietyof specialized fields, including real estate, vessels, aircraft, the environment, energy,
healthcare and welfare. In financing operations, a major growth driver, the Company
currently holds operating assets of ¥520.0 billion. Our vision of the future is to expand
this balance to ¥840.0 billion over the medium-to-long term.
Specifically, we will pursue growth in the real estate field by strengthening
partnerships with blue-chip companies to build up our portfolio of quality assets. In
the aircraft field, we have taken up an equity interest in the LCC Jetstar Japan Co.,
Ltd. and included GA Telesis, LLC, one of the world’s largest providers of products,
services and solutions to the commercial aerospace industry, in the scope of theCompany’s consolidation as an equity-method affiliate. Through these means, we areworking to expand earnings opportunities across the full gamut of operations in thisparticular field and putting in place an aircraft life cycle management (LCM) platformthat extends from new aircraft leasing and financing through the dismantling of retired
aircraft and sale of components. In the environment and energy field, we will look tofurther promote the widespread use of such renewable energy sources as solar andwind power. We will also pursue financing opportunities in the low-carbon thermalenergy generation facility field, which is steadily growing in importance. In thehealthcare and welfare fields, we are endeavoring to advance a variety of initiatives,
including the provision of factoring services for diagnostic and nursing care fees.
Among a host of activities, we are promoting real estate leasing for nursing carefacilities, medical malls and other related properties while participating in hospital
revitalization and reconstruction projects.
Overview of Jetstar Japan Co., Ltd.
Shareholders

Representative
Business Activities
FoundedQantas Group（33.3%）
Japan Airlines Co., Ltd.
（33.3%）
Mitsubishi Corporation（16.7%）
Century Tokyo Leasing Corporation（16.7%）
Miyuki Suzuki
Airline (Domestic)
2011

Overview of GA Telesis, LLC
Location
Representative

Florida, U.S.A.
Abdol MoaberyBusiness Activities

Provider of products, services and solutions
to the commercial aerospace industry

Founded2002

As our business activities have continued to grow, we havereached the point where the reportable segments of leasing
and installment sales as well as financing do not represent
the full scope of our operations.

Century Tokyo Leasing Corporation

Q5
Please tell us about overseas
business expansion.

7

A

In fiscal 2012, four operating bases were newly opened in China. Century Tokyo
Leasing also entered into a business alliance with Tata Capital Limited of the Tata
Group, a leading conglomerate in India. Steps were also taken to dispatch personnel
to the “Japan Desk,” which was newly established within Tata Capital Financial
Services Limited, one of the Tata Capital Group companies. This brings theCompany’s global network to 19 bases spread across nine countries and regions.
In July 2013, Century Tokyo Factoring China Corporation commenced operations
as the Group’s factoring company in China. As Japanese companies enter the China
market, the steady increase in trade accounts receivable and other factors has
become a pressing issue. With the newly established factoring company working inclose collaboration with our subsidiary Century Tokyo Leasing China Corporation, we
now have in place a structure that is capable of addressing customers’ finance needs
in a comprehensive manner that encompasses leasing, installment sales andfactoring. While there are those who are voicing concerns about a slowdown in therate of economic growth in China, from a global perspective the Chinese market still
offers ample potential for growth. Looking ahead, we will continue to capitalize on thegrowth exhibited in East Asia and the ASEAN region as we work toward
strengthening our business base.
In addition, vendor or sales finance in partnership with such entities as
manufacturers and dealers is also attracting growing expectation overseas. To date,
our results in this field have come mainly from proposals in Japan with major global
scale vendors. Moving forward, we will work to promote similar services throughout
East Asia and the ASEAN region. Moreover, we are drawing on this know-how tostrengthen activities aimed at Japanese vendor finance companies in each of theaforementioned domains.
Furthermore, the overseas automobile financing business will become a growth
driver for our overseas business going forward. While the Group is already engaged in
automobile financing business activities in Singapore, Taiwan and other countries, wewill harness the expertise gained in Japan and overseas to bolster our business inAsian markets, where the motorization of society is rapidly progressing.

More than just a financing company, Century Tokyo Leasing
is aspiring to become a provider of services that offer a highdegree of freedom and flexibility. How far we are able to honethe skills necessary to address the wide-ranging needs ofcustomers will be key to our future growth.

8 Century Tokyo Leasing Corporation

A In addition to leasing, the automobile financing business provides a wide array of

Q6
Please tell us about your efforts
to bolster activities in theautomobile financing business.

Bolster the Automobile Financing
Business• Merger between Tokyo Auto Leasing
Co., Ltd. (TALC) and Nippon Car
Solutions Co., Ltd. (NCS) (October 2013)
TALC

NCS

(100% consolidated
subsidiary)(50% equity-method
affiliate)
MergerSurviving company

New NCS(60% consolidated
subsidiary)• Inclusion of Nippon Rent-A-Car
Service, Inc. (NRS) in the Scope of theCompany’s Consolidation as aConsolidated Subsidiary (June 2013)
NRS(22% equity-method
affiliate)
Additional
acquisition of shares

NRS(58% consolidated
subsidiary)

Q7
What can you tell us about theGroup’s fund procurement
capabilities? What are yourthoughts on future financing
conditions?

services encompassing maintenance and vehicle inspection. Accordingly, it is a corebusiness for the leasing company. Improvements in consolidated earnings can bedirectly linked to successful efforts to bolster the automobile financing business. As
such, initiatives aimed at boosting the Group’s activities in this area are a key portionof the current medium-term management plan. In its automobile financing business,
the Group leases automobiles to corporate and individual customers. Century Tokyo
Leasing also maintains a rental car services company, which enables it to provide alineup that its industry peers are unable to offer. Moving forward, steps are being
taken to reorganize the automobile related business company in order to further
deepen collaboration between Century Tokyo Leasing and its Group companies.
First, we will merge the wholly owned subsidiary Tokyo Auto Leasing Co., Ltd. with
Nippon Car Solutions Co., Ltd., an affiliate accounted for by the equity method inwhich Century Tokyo Leasing holds a 50% equity interest alongside Nippon
Telegraph and Telephone Corporation (NTT), by October 2013. The surviving
company after the merger will be Nippon Car Solutions Co., Ltd. Every effort will bemade to quickly realize any and all benefits to accrue from the merger of the Century
Tokyo Leasing Group’s two automobile leasing business companies under theoverarching policy of expanding earnings.
Second, in June 2013 Century Tokyo Leasing acquired additional shares of
Nippon Rent-A-Car Service, Inc., and included the company in the scope of
consolidation as a subsidiary company. The rental car market offers considerable
promise and is currently expanding at an annual rate of 6%. The Nippon Rent-A-Car
brand has established a robust position in Japan. Coupled with the synergy benefits
to accrue from this high visibility and the Century Tokyo Leasing Group’s corporate
customer platform, we are looking forward to a dramatic leap forward in thisbusiness.
Moreover, Orico Auto Leasing Co., Ltd., which provides automobile leasing
services to individuals, is working in close collaboration with joint-venture partner
Orient Corporation to aggressively promote business amid the shift among individuals
from a focus on automobile ownership to occasional use. These efforts are helping tosubstantially boost performance.
The automobile financing business will take steps to address every possible
customer need through its broad lineup of services and will work in unison with theCentury Tokyo Leasing Group.

A In the period under review, Century Tokyo Leasing diversified its procurement
methods in an effort to address the growing demand for funds both in Japan andoverseas. In Japan, the Company issued straight bonds totaling ¥55.0 billion. Thisbrought the balance of the Company’s corporate bonds to around ¥100.0 billion.
With short-term interest rates forecast to remain stable at relatively low levels, we are
maintaining our short-term financing ratio at above 50%. Century Tokyo Leasing’sbalance of commercial paper also continues to be above ¥600.0 billion. In addition,
external agencies upgraded the Company’s rating by one-notch in February 2013.
This places Century Tokyo Leasing at the top of its industry in terms of stability.
Looking at financing conditions in the future, expectations are high that long-term
interest rates will rise on the back of the “Abenomics” policies introduced by
Japanese prime minister Shinzo Abe after his December 2012 election. Recognizing,
however, that a substantial amount of time will be required before Japan fully breaks

Century Tokyo Leasing Corporation

9

free from its deflationary spiral, we believe that interest rates will remain stable at theircurrent low levels for the foreseeable future. In addition to maintaining its existing
funds procurement policies, the Century Tokyo Leasing Group will work to minimize
its interest expenses.

Q8
How do you see the year ending
March 31, 2014?

Q9
In closing, please tell us about
the Company’s policy with regard
to the return of profits toshareholders and your thoughts
on dividends.
Dividends per Share for the
Fiscal Year under Review
(Yen)

50
40
30
20
10

A In addition to controlling interest expenses and credit costs, we will strive tofurther increase profitability by swiftly carrying out our management strategies in thisfirst fiscal year of the current medium-term management plan.
In fiscal 2013, we believe that efforts to reorganize the automobile financing
business will have a positive effect of around ¥4.0 billion on consolidated ordinary
income. Factors that are expected to have a negative impact on performance include
such funds as that earmarked for the allowance for doubtful accounts, which is
expected to have a negative effect of around ¥2.0 billion on ordinary income.
Accounting for these factors, and on a consolidated basis, revenues are projected toreach ¥770.0 billion, an increase of 11.4% year on year. Operating income is forecast
to climb 4.8% to ¥44.0 billion, ordinary income to improve 3.7% to ¥48.0 billion, andnet income to rise 3.7% to ¥30.0 billion. Thus, results are again expected torepresent historic highs.

A The Century Tokyo Leasing Group believes that continuous efforts to expand its
business and operations while strengthening its corporate standing will help enhance
the Group’s corporate value. We are therefore acutely aware of the need to maintainsufficient internal reserves to achieve these ends. At the same time, the Group
maintains a basic policy of returning profits to its shareholders on a long-term andstable basis. Bearing these equally important issues in mind, we will work toeffectively apply internal reserves, which we consider to be the source of future
growth, toward the purchase of high-quality operating assets.
For fiscal 2012, the Century Tokyo Leasing Group paid an annual dividend for theperiod of ¥48 per share, up ¥4 per share year on year. In fiscal 2013, we will look to
pay an annual dividend of ¥52 per share, a year-on-year increase of ¥4 per share.
This will represent an effective doubling of the dividend compared with that paid
immediately before the merger in April 2009.
Looking ahead, and guided by its second medium-term management plan, theCentury Tokyo Leasing Group will work to further spread its wings as it strives tobecome a robust comprehensive financial services enterprise and to provide higher
returns to its shareholders. To respond to the expectations of our stakeholders, theCompany is committed to increasing its dividend payments in absolute terms and to
improve its payout ratio.

02009 2010 2011 2012 2013
Century Tokyo Leasing Corporation
Former Century Leasing System, Inc.
Former Tokyo Leasing Co., Ltd.

The Century Tokyo Leasing Group has continued to maintainan extremely high level of asset efficiency within in the leasing
industry. As a result, we plan to pay a dividend per share forthe fiscal year ending March 31, 2014, that is approximately
twice that paid at the time of our merger.

10 Century Tokyo Leasing Corporation
Special Feature:

The Second Medium-Term Management Plan
(Fiscal 2013 to Fiscal 2015)

Basic Policy

To become a robust comprehensive financial services
enterprise and realize further innovative changes
as well as sustainable growthManagement Targets Management Strategies (Strengthen the sales base)(Fiscal 2015)

Enhance Competitivenessin the Leasing Business

Consolidated
ordinary income:¥50

billionor moreBolster the Financing Business
Consolidated
operating assets:¥2.6

trillion

Expand Overseas Businesses
Consolidated
shareholders’equity ratio:

Reinforce Activities in the Automobile
Financing Business both in Japan and Overseas

10.0%

Enhance Competitiveness in the Leasing Business
Value of New Contracts in Leasing(Billions of yen)

591.0

600

520.8

507.4
476.2
428.2

services

400

200

0

2009

2010

1. Build up highly profitable prime assets
2. Upgrade and expand high-value-added

2011

2012

2013

*The graph figure for the year ended March 31, 2009, is the simple sumof amounts recorded by the former Century Leasing System, Inc. andTokyo Leasing Co., Ltd.

The Century Tokyo Leasing will work to strengthen the PC reuse andrecycling (refurbishment) business, which places par ticularimportance on asset values, as well as asset management services
that seek to enhance customer convenience. At the same time, theCentury Tokyo Leasing will endeavor to increase the competitivenessof its leasing business.

CenturyTokyo
TokyoLeasing
LeasingCorporation
Corporation
Century

11
11

Bolster the Financing Business
Financing Business Department* Assets Targets* Including lease transactions

1. Taking on the Life-Cycle Management

50.0

of Aircraft
2. Expanding the Environment andEnergy Field

110.0
Assets targets

40.0¥840.0billion

24.1

380.0

260.0

77.2
7.9

As of
March 31, 2013

¥520.0
130.1

280.7

billion■ Real estate ■ Vessels and aircraft ■ Environment and energy■ Structured finance (include business guarantees) ■ Factoring of receivables and others

The Century Tokyo Leasing will expand the scope of its business inaircraft field, where economic growth in newly developing countries
is expected to trigger an upswing in future demand. At the sametime, the Company will push forward initiatives in the energy andenvironment fields, where growth is anticipated on the back of risingsocial demand. In this manner, the Century Tokyo Leasing willbolster its financing business.

Expand Overseas Businesses
Balance of International Operating Assets(Billions of yen)

1. Expanding Overseas Business Domains

250
Global Business Department
East Asia and ASEAN Business Department

208.9

200

186.9
149.4

150

100

102.1

113.9

50

0

2010

2011

2012

2013

2014 (Plan)* Overseas local subsidiary data is the total of the assets of each company
excluding inactive companies* Excluding assets of vessel and aircraft financing

with a Focus on Asia
2. Expanding Our Global Network
In addition to increasing the number of bases in China andcommencing leasing business activities in India, particularemphasis is being placed on upgrading and expanding the Group’s
global network. At the same time, the Century Tokyo Leasing
Group will promote measures aimed at meeting the needs of both
Japanese and non-Japanese companies while expanding its
overseas business.

Reinforce Activities in the Automobile Financing Business both in Japan and Overseas
Business Fields and Vehicles under Management*(Thousands of vehicles)

Corporate Auto Leasing Business Field
Nippon Car Solutions Co., Ltd.

301

Tokyo Auto Leasing Co., Ltd.

102

Auto Leasing Business Field for Retail Market
Orico Auto Leasing, Co., Ltd.
Amount of domestic auto leasing

35
438

Rental Car Services Field for Individual and Corporate Customers
Nippon Rent-A-Car Service, Inc.

37

Overseas Automobile Financing BusinessTaiwan, Singapore, Thailand, Malaysia, U.S.A.

25*As of March 31, 2013 (excluding the figure for Nippon Rent-A-Car Service, Inc. which was asof September 30, 2012)

1. Reorganizing the Corporate Auto
Leasing Business
2. Realizing Synergies with theRental Car Services Business
Every effort will be made to strengthen profitability in theautomobile financing business in Japan and overseas bycombining automobile leasing business activities for bothindividuals and companies with rental car services activities,
thereby expanding the scope of business in Japan, andharnessing the know-how nurtured in Singapore and Taiwan.

Century
Tokyo
Tokyo
Leasing
Leasing
Corporation
Corporation
12
12Century

Bolsterthe Financing Business
個人向けの拡大を図る
オートルース・レンタカー事業

Century Tokyo Leasing Corporation

13

Bolster the Financing Business1. Taking on the Life-Cycle Management of Aircraft

Forecast Trends in the Number of Global
Air Travelers (by Revenue PassengerKilometer)

Buoyed by an increase in the volume of air traffic worldwide and especially throughout
Asia, together with the growing emergence of low-cost carriers (LCCs), the total
number of commercial aircraft in operation is forecasted to surge from 18,590 at theend of 2012 to 34,359 at the end of 2032 on a global basis. Of this total, thepercentage financed using leasing facilities is expected to rise from 35% to between
45% and 50% in 2020. Against this backdrop, the Century Tokyo Leasing Group hasentered the aircraft business in earnest by acquiring an equity interest in the LCC
Jetstar Japan Co., Ltd. and U.S.-based GA Telesis, LLC, one of the world’s largest
providers of products, services and solutions to the commercial aerospace industry, inthe scope of its consolidation as an equity-method affiliate. Through these initiatives,
the Group has established a structure capable of handling the life-cycle managementof aircraft extending from the lease of new aircraft to the scrapping of retired aircraft
and the sale of their parts. Moving forward, we will work to fortify our presence in afield that continues to enjoy growth and development.

(Billions of passenger-kilometers)

2012(Actual)2032(Forecast)

5,407

13,894

Forecast Trends in the Number ofCommercial Aircraft in Operations(Number of aircraft)

As of 2012

As of 2032

18,59034,359Source: Japan Aircraft Development Corporation(JADC)

2. Expanding the Environment and Energy Field

Renewal Energy Introduction Target(Power Generation Capacity) Excluding
Hydraulic Power

Society’s requirements with regard to the environment and energy field continue tomultiply. Favored by the introduction of the feed-in tariff (FIT) system, which calls on
utilities to purchase electricity generated from renewable energy sources at a fixedprice, Japan’s environment and energy field is expected to enjoy substantial growth.
Building on its accumulated expertise in wind power generation facility project finance,
Century Tokyo Leasing is steadily expanding its activities in this field. In addition toaddressing the mega solar power generation facility construction needs of local
government authorities and private-sector operators throughout Japan, the Company
established Kyocera TCL Solar LLC, a joint-venture formed with Kyocera Corporation,
in August 2012, and has entered the electric power sales business in its own right. The
Century Tokyo Leasing Group is looking to expand opportunities to boost earnings
and to contribute to the sustainable development of society by flexibly addressing theneeds of businesses that possess considerable social significance.

(Billions of kWh)

200

190

150

100

80

50

25
0

2010

2020

2030

(Target)(Target)Source: The Energy and Environment Council(September 14, 2012)

(MW)
3,000

EU

Other than the EU

1996

2,500
2,000
1,500
1,000
500

Source: The European Wind Energy Association (EWEA)

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

0

1997

With very few restrictions regarding installation comparedwith on-shore sites, off-shore wind power generation
systems that take advantage of strong winds have attracted
considerable interest in recent years. This interest is
especially robust in Europe. While WTIVs are essential to theconstruction of off-shore wind power generation systems,
there were only eight such vessels in the world as ofDecember 31, 2011. Century Tokyo Leasing is responsible
for a portion of the syndicated loans used to finance three
WTIVs. Drawing on expertise in Europe, which stands at theforefront of the off-shore wind power system industry, we will
harness all available know-how to develop domestic
business opportunities in this field going forward.

Cumulative Off-Shore Wind Capacity

1995

Financing Activities Associated with Off-Shore Wind
Turbine Installation Vessels (WTIVs)

CenturyTokyo
TokyoLeasing
LeasingCorporation
Corporation
14 Century
14

GlobalBusiness Division II(From left)
WeiJie Fan
Nan ChenJidong Qiu

ExpandOverseas Businesses

Century Tokyo Leasing Corporation

15

Expand Overseas Businesses
1. Expanding Overseas Business Domains with

Forecast of Nominal GDP Growth(Billions of U.S. dollars)a Focus on Asia
Amid moderate market growth in Japan, the Century Tokyo Leasing Group isstrengthening overseas business activities, focusing on East Asia and the ASEAN
region in line with a growing trend among Japanese companies to expand in theseareas. In addition to providing lease financing to Japanese companies in a number ofcountries, the Group is pursuing opportunities to provide services that match nonJapanese local companies’ needs, including for automobile leasing and financing insuch countries as Taiwan and Singapore as well as vendor financing targeting global IT
vendors. Looking ahead, we will work to expand our service menu, reinforce
automobile financing business initiatives in each country and pursue growth in Asia.

2012

2018

China ( including Hong Kong) 8,490 15,361

474
277
878
304
366
1,825

TaiwanSingapore
Indonesia
Malaysia
Thailand
India

715
342
1,482
475
612
2,976

Source: IMF World Economic Outlook in April 2013

2. Expanding Our Global Network
The Century Tokyo Leasing Group is steadily taking steps to put in place a platformthat is capable of accelerating the pace of overseas business development in order tomake the most of every new business opportunity. In fiscal 2012, the Groupestablished four new bases in China, expanding its network to eight business sites. In
India, the Century Tokyo Leasing Group entered into an alliance with Tata Capital
Limited and set up an internal “Japan Desk.” Moreover, Century Tokyo Leasing
established a commercial factoring company in Shanghai in June 2013. Amid an
upswing in business scale, this newly established company is charged with the
responsibility of addressing the wide-ranging financial needs of Japanese companies,
which continue to confront a host of operational issues in China. This new company is
the first of its kind to be established by a Japanese company. In overall terms, we now
boast an overseas network of 20 bases in nine countries and regions.
The Century Tokyo Leasing Group is committed to supporting Japanesecompanies that are working to enter overseas markets. Accordingly, particularemphasis is being placed on further expanding the Group’s global operating platform
as well as it overseas network.

The Balance of Japan’s Outward Direct
Investment in Asia
(Billions of U.S. dollars)

300

India
Vietnam
ASEAN-4
Asian NIEs
China

200

159.6

288.9
257.8
212.7

175.6

100

0

2008 2009 2010 2011 2012
Source: The Japan External Trade Organization (JETRO)* Asian NIEs: Hong Kong, Taiwan, South Korea, Singapore* ASEAN-4: Thailand, Indonesia, Malaysia, the Philippines

20 Overseas Bases (Nine Countries and Regions)

EuropeLondon

North America
New YorkSouth Asia
India

ASEAN
Thailand
Malaysia
Singapore
Indonesia

China
Shanghai
DalianWuhan
BeijingChengduQingdao Guangzhou
Suzhou Hong Kong
Factoring Company
ShanghaiTaiwanTaipeiTaichung Kaohsiung(As of August 31, 2013)

CenturyTokyo
TokyoLeasing
LeasingCorporation
Corporation
16
16 Century

Reinforce Activities in the
Automobile Financing BusinessCentury Tokyo Leasing Corporation

17

Reinforce Activities in the Automobile
Financing Business both in Japan and Overseas
1. Reorganizing the Corporate

Market Share (Based on the Number of
Vehicles under Management)

Auto Leasing Business
The Century Tokyo Leasing Group will merge the wholly owned subsidiary Tokyo Auto
Leasing Co., Ltd. with Nippon Car Solutions Co., Ltd., an affiliate accounted for by theequity method in which Century Tokyo Leasing holds a 50% equity interest alongside
Nippon Telegraph and Telephone Corporation (NTT), on October 1, 2013. With thismerger,* the Group will manage a fleet of approximately 440,000 vehicles and rank
third in Japan’s auto leasing industry. With the domestic auto leasing market enteringa period of maturity, it is vital for companies in the industry to promote more compact
vehicles, respond to major companies’ efforts to reduce costs and address theincreasingly sophisticated needs of customers. The Century Tokyo Leasing Group is
working to enhance efficiency by expanding its business scale and to further bolster
its cost competitiveness. Taking full advantage of the merging companies’
management resources, every effort will be made to capture the diverse needs ofcustomers and to secure further growth and development.

13.8%
As of March 31, 2013

3,183
thousands of vehicles*

in Japan■ Century Tokyo Leasing Group* Source: Japan Automotive Leasing Association* Plans are in place for the merger to take effect on October 1, 2013. Tokyo Auto Leasing Co., Ltd. will beabsorbed using the absorption-type merger method with Nippon Car Solutions Co., Ltd. as the surviving
company.

2. Realizing Synergies with

Market Position (Based on the Number ofRental Cars under Management)

the Rental Car Services Business(Thousands of vehicles)

The Century Tokyo Leasing acquired an additional share of Nippon Rent-A-Car
Service, Inc. in June 2013, and this company was then included in the scope of theCompany’s consolidation as a subsidiary. With this initiative, the Century Tokyo
Leasing Group has broadened its automobile financing business activities adding
rental car services to its existing auto leasing services for corporate and individual
customers. Utilizing its customer base, the Group will strive to boost its earnings
capabilities by addressing customer needs from all angles. To this end, energies will
be channeled toward stimulating corporate rental car demand through proposals thatcombine both auto leasing and rental car services in tune with each customer’ssituation and circumstances.

Company T

102

2nd Company O

46

3rd

25

1st

Nippon Rent-A-Car Service Inc.

As of March 31, 2012
Source: Nikkei Inc.

Newly Establishing the Automobile Business Promotion Division
Under its second medium-term management plan,C e ntu r y To k yo Le a s i n g h a s i d e nti f i e d b o l s te r i n g
consolidated management as with a principal goal of the
management strategy of strengthening the Group’s
operating base. Each company in the Group’s automobile
financing business plays a role in its efforts to address key
management challenges. These challenges include theneed to enhance competitiveness by reorganizing
automobile financing business in Japan and to expand
overseas operations with a focus on Asia. Against thisbackdrop, Centur y Tok yo Leasing reorganized theAutomobile Business Promotion Office which had set up in
April 2012 into the Automobile Financing Business
Promotion Division within the Corporate Planning Divisionin April 2013 in order to further enhance the pace ofdecision making. The Automobile Business Promotion
Division is charged with the responsibility of promoting
collaboration between automobile financing businesssubsidiaries in Japan and developing overseas businesses.
Through these means, every effort will be made to boost
consolidated earnings.

18 Century Tokyo Leasing Corporation

SEGMENT INFORMATION

Leasing/Installment Sales BusinessIn fiscal 2012, the value of new contracts executed grew strongly, rising

Business Description

15.0% from the previous fiscal year to ¥689.5 billion. In the Leasing/
Installment Sales business, the value of new contracts executed (including
those of overseas Group affiliates) increased 16.5% to ¥591.0 billion owing
to strong demand for information and communications equipment, an areaof particular strength for the Company, as well as contributions from major
leasing contracts for real estate and aircraft. As a result, the value of newleasing contracts executed in Japan was the highest in the industry.
Moreover, installment sales transactions expanded 6.8% to ¥98.5 billion.
Thanks to strong growth in the value of new contracts executed,
consolidated operating assets grew 7.1% to ¥1,675.4 billion. Of this, thebalance of assets for leasing transactions increased 7.1% to ¥1,473.9 billion
and that of installment sales transactions advanced 7.2% to ¥201.6 billion.
This marks the first time in four years that these figures have grown on a
year-on-year basis.
In fiscal 2011, because the fiscal year-ends of Tokyo Auto Leasing Co., Ltd.
and Orico Auto Leasing Co., Ltd. were changed from December to March,
the results from a 15-month fiscal period for both companies were recorded.
Due in part to this change, total sales in fiscal 2012 declined 3.8% to ¥666.5
billion, with sales revenues falling 8.6% to ¥63.9 billion. Moreover, segment
profit decreased 8.6% to ¥37.6 billion compared with the previous fiscal year.

I n th e L e a s i n g / I n s t a l l m e n t S a l e sbusiness, Century Tokyo Leasing offersa variety of leasing and installment
sales contracts to customers keen toinvest in equipment or machinery ranging
from information and communications
equipment, industrial/machine tools,
construction machinery and medical
equipment to vessels and aircraft as
well as in the fields of environment andenergy, and real estate, three fields that
Century Tokyo Leasing has identified as
potential growth areas. In addition,
through its remarketing business, theLeasing/Installment Sales businesssells used equipment following contract completion or mid-term contract
cancellation.

Reporting Segment Results(Year ended March 31, 2013)

80.8%■ Sales Revenuesof Sales Revenues

Value of New Contracts

Balance ofOperating Assets(Billions of yen)(Billions of yen)(Billions of yen)

80

800

2,000

600

1,500

Segment Profit

60

40

400

20

200

1,000

500

0

0

2011

2012

2013

0

2011

2012

2013

2011 2012 2013

Sales revenues = Total revenues – costs (excluding interest expenses)
Segment profit = Operating income in each segment*Consolidated basis

Fundamental Strategy
In Japan, although a moderate increasein capital investment financed by leasing
is expected, competition is heating up
within the industry, and the businessenvironment for the Century Tokyo Leasing Group is likely to remain challenging,with Japanese companies accelerating
the globalization of their operations.
Under these conditions, Century Tokyo
Leasing plans to reinforce its competitiveness by providing optimal, highvalue-added solutions in the Leasing/
Installment Sales business. Leveraging
its extensive network overseas, Century
Tokyo Leasing aims to expand earnings
by increasing the balance of high-quality
operating assets and accelerating
business development centered onmarketing alliances in Japan and abroad.
In the growing automobile leasing
and rental car services business, Century
Tokyo Leasing plans to reorganize andreinforce operations and then accelerate business development in Japanand overseas by leveraging its broad
lineup of automobile leasing options,along with car rentals, for corporations
and individuals, an area of particularstrength for the Group.

CenturyTokyo
TokyoLeasing
LeasingCorporation
Corporation
Century

Industry Leader in Value of New
Leasing Contracts Executed in JapanThe value of new leasing contracts
executed in Japan (excluding overseas
Group affiliates) climbed 17.6%, far morethan the average industry growth of
8.2%, making it the industry leader. Thisoutstanding growth was attributable toCentury Tokyo Leasing winning a major
aircraft leasing contract, leading to a
49.5% surge in the value of new leasing
contracts executed for transportationequipment, as well as contributions frommajor real estate leasing contracts andsteady trends for the Company’s highvalue-added IT services in the information and communications equipment field.

Overseas Business Development

Globalization of IT Services

During fiscal 2012, although Century
Tokyo Leasing worked to expand thescope of operations in East Asia,
stepping up efforts related to medical
equipment, the value of leasing contracts executed stagnated due to weaker
demand for construction machinery in
China. In ASEAN countries, the value ofleasing contracts executed increased
as a result of deals entered into withJapanese companies in Malaysia,
stronger investment in Thailand ascompanies rebuilt after the 2011 floods
and the signing of major leasing contracts with non-Japanese companies.

Century Tokyo Leasing uses the knowhow it has accumulated in leasing toprovide a variet y of ser vices frominstallation to disposal.
In recent years, overseas Japanesecompanies have been increasingly inneed of services that are readily available in Japan. Century Tokyo Leasing
has been working to ensure that its
high-value-added services are available
around the world, for example, it has
made its ProPlus for C-x, an accounting
module for its C-x asset management
system, compatible with English andChinese so the local staff of Japanesecompanies can use the software. The
Company also has a business alliancewith companies of the TES-AMM Groupto support the wiping of data from used
information and communications equipment and recycling operations in the
Asian region.

Breakdown of the Company’s Value of Leasing Contracts Executed in Japan(Year ended March 31, 2013)17%
Industry
wide
percentage

8％

48％

34％

Century Tokyo
Leasing

Information andcommunications equipment■ Transportation equipment■ Industrial/construction machinery■ Commercial/service equipment■ Other

9％18％

Fujitsu Leasing

68％

32％

(Billions of yen)
Information andTransportation
communications equipment equipment

Japan’s leasing industry*YoY comparison
The Group
YoY comparison*Source: Japan Leasing Association

1,516.1
0.8%
272.5
0.1%

19
19

571.6
24.7%
100.8
49.5%

Total

4,510.6
8.2%
571.1
17.6%

Overseassubsidiaries

Consolidated

―
―

―
―

19.9
-7.9%

591.0
16.5%

ProPlus for C-x in Chinese

20 Century Tokyo Leasing Corporation

Financing BusinessIn fiscal 2012, the total value of new contracts executed grew 3.4% year on
year to ¥489.3 billion, reflecting firm demand in fields related to real estate,
vessels and aircraft. As a result, the balance of operating assets expanded
4.8% to ¥555.9 billion, and, including business guarantees, this figure was¥601.1 billion, an increase of 3.7% from the end of the previous fiscal year.
The Financing business has grown steadily to account for 26.4% ofconsolidated operating assets at the Company.
Accordingly, total sales grew 20.7% to ¥16.9 billion and sales revenuesrose 18.2% to ¥15.2 billion during the fiscal year under review. The Financing
business represented 19.2% of consolidated sales revenues for reportablesegments, an increase from 15.6% in the previous fiscal year. Segment
profit climbed 38.0% to ¥9.2 billion.

Reporting Segment Results(Year ended March 31, 2013)

19.2%■ Sales Revenuesof Sales Revenues

Value of New Contracts

Balance ofOperating Assets(Billions of yen)(Billions of yen)(Billions of yen)

20

500

800

Segment Profit

600

300
10

400
200

200

5
100

0

0

2011 2012201302011 2012

Sales revenues = Total revenues – costs (excluding interest expenses)
Segment profit = Operating income in each segment

2013

In the Financing business, Century
Tokyo Leasing provides a unique typeof solution-oriented financing that
focuses primarily on assets for realestate, vessels and aircraft as well as
the environmental and energy businesses. The Company also provides
financial services to meet fund procurement needs, including the securitizationof receivables and medical and nursing
care fee receivables.

Fundamental Strategy
Century Tokyo Leasing has positioned
the Financing business as a growthdomain. In addition to its existing business fields of real estate, vessels andaircraft, the Company is reinforcing its
financing activities in such areas as theenvironment & energy and medicine &welfare. The Financing business takes
full advantage of Century Tokyo Leasing’s
latitude as a leasing company; unlikebanks, which just offer financing, we
enter into new businesses with ourcustomers, for example, in order to satisfy diverse customer needs. Century
Tokyo Leasing has also been driving
innovation on several fronts that crossleasing/financing business boundaries
in each of its fields.

Real estate:

400

15

Business Description

2011 2012 2013
Includes business guarantees*Consolidated basis

Backed by strong alliances with major
real estate companies and other partners, Century Tokyo Leasing has beenbolstering its efforts in the real estate
field to address diverse financing needs,
ranging from nonrecourse loans to realestate leasing, with a principal focus on
office buildings, logistics facilities andcommercial facilities.
In fiscal 2012, the balance of operating assets in the real estate field of the
Financing business was ¥188.8 billion(¥284.0 billion including leasing), a
year-on-year increase of 10.9% that

Century
CenturyTokyo
TokyoLeasing
LeasingCorporation
Corporation

ref le cts a steady accumulation ofquality operating assets.

Vessels and aircraft:
Century Tokyo Leasing offers financing
for vessels such as bulk carriers,
containerships and car carriers, as well
as for aircraft manufactured by The
Boeing Company and Airbus S.A.S.
In its vessel financing activities, theC o m p a ny f o c u s e s o n d e a l s w i t hprominent vessel owners and chartercompanies while collaborating withmarket-leading partners inside andoutside Japan amid rapidly changing
market conditions.
In financing activities for aircraft, amarket that is expected to expand
The Balance of Operating Assets
in the Financing Business
Figures in parentheses are year-on-year
percentage changes.

worldwide, Century Tokyo Leasing has
deepened its involvement in the aircraftbusiness through financing provided
to Jetstar Japan Co., Ltd., a low-costcarrier, and U.S.-based GA Telesis,
LLC, one of the world’s largest providers of products, services and solutions
to the commercial aerospace industry.
In this way, Century Tokyo Leasing has
been expanding the scope of its operations by building a management structure for the entire life cycle of an aircraft,from leasing new aircraft to disassembling retired aircraft and selling parts.
As a consequence of these initiatives, the balance of operating assets
in the vessels and aircraft field of the
Financing business stood at ¥89.6
billion (¥130.1 billion including leases)
as of March 31, 2013, an increase of
14.7% from a year earlier.

Environment and energy:¥197.4 billion¥188.8 billion(Down 11%)(Up 11%)

33%

31%
As of
March 31, 2013

¥601.1billion(Up 4%)¥10.8 billion 2%(Up 5%)¥114.5 billion(Up 14%)19%

15%¥89.6 billion(Up 15%)■ Real estate ■ Vessels and aircraft ■ Factoring of receivables■ Environment ■ Others (includes business guarantees)

Fo r w i n d, s o l a r a n d oth e r p owe r
generation projects, Century Tokyo
Leasing provides project financing andleasing ser vices that looks to therevenues generated from the power
generation project as the principal
repayment source each month. Amid
growing demand for alternative sourcesof power other than nuclear power
after the Great East Japan Earthquake,21
21

the Company has concentrated onproviding financing for solar power
projects and low-carbon thermal power
generation (gas combined cycle) projects, among others.
During the fiscal year, the introduction of a feed-in tariff (FIT) system forrenewable energy aroused interest in
solar power generation across thenation. Around the same time, Century
To k yo Le a s i n g b e g a n g e n e ratin gelectricity at the Ota Solar Park, thefirst such facility in Japan to operate
under the FIT system. Moreover, theCompany entered the electricity retailbusiness through joint financing with
Kyo c e ra C o r p o rati o n to establish
Kyocera TCL Solar LLC. Through theseand other initiatives, Century Tokyo
Leasing has been accelerating thedevelopment of business, mainly inJapan.
As a result, the balance of operating assets in the environment andenergy field of the Financing businessincreased 4.9% year on year to ¥10.8
billion.

22 Century Tokyo Leasing Corporation

CORPORATE GOVERNANCE
With regard to maximizing its corporate value, Century Tokyo
Leasing Corporation recognizes that the effective functioningof corporate governance is an important management issue.
To this end, we require a sound and highly transparent
management system capable of swift and precise decision
making in response to changes in the business environment,
as well as properly operating and effectively functioning
systems of internal control and risk management. We are
striving to fortify our management system to achieve highlysound and transparent corporate management.
Management System
The management system of the Company—composed
mainly of Directors and Corporate Auditors, who comprise,
respectively, directors and auditors selected at the general
meeting of shareholders—is designed to sufficiently reflect
the intentions of its shareholders. Furthermore, we have an
executive officer system for the purpose of accelerating
resolutions on management strategy and fur therstrengthening the supervisory structure and the structure for
executing operations.

responsibilities, and progress made in the improvement andmanagement of the internal control system.
Independence of Management Oversight Structure
Century Tokyo Leasing does not have specific standards orpolicies it follows with regard to independence when appointing
its external directors and external auditors. That said, we appoint
external directors and auditors that we believe are able toobjectively supervise management, based on their extensive
background in corporate management, specialized knowledge,
and common sense. Our external director has highly advanced
knowledge of finance and economics, and leverages thisexpertise in the management of the Company from a macro
standpoint. At the same time, our external director fulfills the
responsibility of independently monitoring management. Our threeexternal corporate auditors play a role in maintaining the systemthat ensures the objectivity and neutrality of the managementmonitoring function. They rely on their extensive experienceand broad knowledge to check operations from the outside on aregular basis. All external corporate auditors are employed byother companies. Of the Company’s external corporate auditors,
one is an external director as well as a designated independent
officer as stipulated by the Tokyo Stock Exchange.

Board of Directors
The Board of Directors consists of nine Directors, one ofwhom is an external director as specified in Article 2-15 of
the Corporation Law of Japan. The Board of Directors
deliberates on and decides important issues associated withthe management of Century Tokyo Leasing and its Group
companies as well as matters specified by prevailing laws,
regulations, articles of incorporation, and rules governing theBoard of Directors. Moreover, it supervises the execution ofoperations by Directors and Executive Officers.
Board of Corporate Auditors
Century Tokyo Leasing has adopted the organizational
structure of a company with a board of corporate auditors.
The Company maintains a Board of Corporate Auditors thatconsists of four corporate auditors (two of whom are full-time
corporate auditors), three of whom are outside corporate
auditors as defined by Article 2-16 of the Corporation Law ofJapan. The Board of Corporate Auditors strives to fulfill its
responsibility by thoroughly conducting fair audits ofcompliance and the appropriateness of corporate activity,
starting with operations executed by Directors and Executive
Officers, by holding regular meetings and maintaining theindependence of its auditing activities. Corporate Auditors
attend Board of Directors Meetings as well as otherimportant meetings, such as the Management Meeting andmeetings of principal committees, etc. They then executeaudits of D ire ctors and E xe cutive O f f ice rs, their

Management Meeting
We established the Management Meeting, which is chaired by
the President and officers appointed by the President. As ageneral rule, the Management Meeting deliberates onparticularly important matters concerning the execution ofoperations and makes decisions for the entire Group. In
addition, various internal committees deliberate on management
issues specific to their fields of responsibility with the results ofdeliberations reported at the Management Meeting.
Committees
ALM Committee
T h e A L M ( A s s e t L i a b i l i t y M a n a g e m e n t ) C o m m i t te edeliberates on how to manage market, liquidity and otherrisks, and comprehensively manages funds and theirprocurement in order to identify and minimize those risks
that have the potential to negatively impact the Company’s
assets and liabilities, including fluctuations in interest rates
and foreign currency exchange rates.
Internal Control Committee
The Internal Control Committee deliberates on general internal
control matters in order to ensure that the Company’s internal
control structures and measures are functioning effectively.
Deliberations encompass a wide range of matters, including
the effectiveness and scope of evaluation with respect to theinternal control of financial reporting.

Century Tokyo Leasing Corporation

23

Comprehensive Risk Management Committee
In addition to de libe rating on a wide va r iet y of r isk
measurement methods and other important matters related
to the establishment of a risk management structure that is
capable of addressing every possible risk that the Company
may confront, the Comprehensive Risk Management
Committee regularly evaluates the risk conditions of theCompany.

G u i d e d b y t h i s M a n a g e m e n t P h i l o s o p h y, w e h a v eestablished an internal control system that recognizes theimpor tance of ensuring the appropriate execution ofoperations as a vital managerial responsibility of thecorporation.

Credit Risk Management Committee
The Credit Risk Management Committee deliberates onmatters concerning the Group’s credit portfolio as a whole
as well as credit risk management. This is to ensure theproper management of portfolio credit risks.

We recognize that thorough compliance is essential for thecontinued existence of a corporation. Therefore, we aim toestablish a management system that ensures that every
officer and employee operates under the principle of fairness
and with the highest ethical standards to earn the trust ofsociety.
The Chief Compliance Officer takes the lead in promoting
compliance in accordance with compliance programs,
implementing continuous education and training through theuse of e-learning and other initiatives and enhancing
compliance awareness.
In addition, we have established several contacts,
including an external law office, with whom employees canconsult on compliance issues and to whom they can provide
information on fraudulent actions and practices. We also
operate a whistle-blower system that strictly protects thosereporting problems.

ComplianceInternal Control
Basic Policy of Internal Control System
Every officer and employee is expected to refer to thefollowing Management Philosophy as a basic policy for
performing their work.
Management Philosophy
Century Tokyo Leasing Group will grow alongside its
customers and contribute to society as a comprehensive
financial services enterprise that continually challenges itself.

System of Corporate Governance and Internal Control (as of June 20, 2013)
Shareholders’ Meeting
Election/Dismissal

Election/Dismissal

Election/Dismissal

Coordination

Board of Corporate Auditors

Board of Directors

Business Risks
Management Division

Coordination

Audit Division

Coordination

Election/Dismissal/Supervision

Audit

Coordination

Independent Auditors

Company’sCounselAudit

Appointment

President & CEO

Chief Compliance Officer

ReportInternal Audit

Direction/
Supervision

Audit
Evaluation ofInternal Control
Audit

Management
Meeting

ReportCredit Management
Meeting

ALM Committee
Internal Control
Committee

Executive Officer
Election/Dismissal/Supervision

Business Department/Operation Department
Group Companies

Committees

Comprehensive
Risk Management
Committeeetc.

24 Century Tokyo Leasing Corporation

Risk Management
To minimize the risk of loss, we systematically prepare inadvance appropriate preventive measures for various risks
that may affect the Company, according to the potential
scale and probability of their occurrence.
Credit Risks
Credit risks are defined as risks that could cause failure ofcounterparties to pay leasing fees, as well as the principal orinterest on installment sales loans or financing loans.
Concern about the collection of these leasing fees and otheramounts due relates to such factors as the deterioration of
the financial condition of the counterpar t y. We havedeveloped a rating model to provide multidimensional
assessments based on the counterparty’s financial conditionand qualitative information, and precise limitations can beapplied depending on their rating and volume of projects.
The Credit Management Meeting, comprising the President
and officers designated by the President, deliberates anddecides on large projects and transactions requiring
complex risk evaluation.
Market and Liquidity Risks
Market and liquidity risks could impact the Group’s ability to
procure funds. This includes such factors as fluctuations inmarket interest rates and changes in the procurement
environment. The Century Tokyo Leasing Group stringently
manages risks related to the procurement of funds based ona n a l ys e s by th e A L M C o m m i t te e. A s a p a r t of th i smanagement, the Group undertakes the appropriate riskhedge measures as and when required.
System Risk and Information Security Risk
Guided by its basic policy regarding information security,
Century Tokyo Leasing puts in place related rules andregulations, including its Rules regarding the Handling of
Personal Information, acquired ISO/IEC 27001 certification
and under takes appropriate
m e a s u r e s a n d m a n a g e m e n t toprotect the information assets ofcustomers, business partners andthe Company and Group companies.
Comprehensive Risk
In addition to credit, market and liquidity risks, the Business
Risk Management Division identifies, evaluates and reviews
countermeasures with respect to the full range of risks
including business, legal and other operational risks. Basedon our crisis countermeasure rules, this committee is set up
to immediately respond and take charge as a headquarters
in the event of a large disaster or other crisis.

Basic Stance toward Eliminating All Ties with
Antisocial Forces and the Status of Implementation
Century Tokyo Leasing and its Group companies take anunwavering, categorical stance toward maintaining the basic
policy of eliminating any and all ties with antisocial forces. As apart of efforts to put in place a structure that is designed toeliminate all ties with antisocial forces, the Group has
established specific procedures in accordance with its Code of
Conduct and engages in appropriate management throughwide-ranging initiatives that encompass such fields as
education and training. In addition, the General Affairs Division
is charged with the responsibility of overseeing the Group’s
response to antisocial forces. This Division is a member of theTokubouren (a special-interest incorporated association set up
within the Tokyo Metropolitan Police Department to prevent
violence). While collaborating closely with the Association, every
effort is made to sever all ties with antisocial forces and togarner the trust and confidence of society.

Information Disclosure (IR Policy)
T h e C o m p a n y s t r i v e s to b u i l d b o n d s o f t r u s t w i t hshareholders and investors by offering to them an accurate
understanding of the Company through the disclosure ofmanagement strategies, the status of business activities andfinancial conditions in a timely, fair, accurate, proactive andongoing manner.
We disclose information based on various laws,
including the Financial Instruments and Exchange Law ofJapan and rules on timely disclosure stipulated by the Tokyo
Stock Exchange. In addition to this information disclosure,
we disclose other information determined to be appropriate
and useful to promote the investment activities of market
participants and a greater understanding of the Company.
Based on all relevant statutory, regulatory and related
requirements, information shall be disclosed to mass media in
addition to disclosure via the Electronic Disclosure forInvestors’ NETwork (EDINET) (the system for such disclosure
documents as annual securities reports in accordance withJapan’s Financial Instruments and Exchange Act) as well as
via TDnet, the company announcement disclosure service
provided by the Tokyo Stock Exchange. We also disseminate
i n f o r m a t i o n t h r o u g h t h e C o m p a n y ’s w e b s i te a f te r
announcements have been made through media institutions.

Century Tokyo Leasing Corporation

MANAGEMENT(as of June 20, 2013)

Board of Directors

Corporate Auditors

Executive Officers

Chairman & Co-CEO,Representative Director

Standing Corporate Auditors

Senior Managing Executive Officers

Osamu Shibaya

Yuichiro Ikeda

Toshihito Tamba

Futoshi Okada*

Takeshi Honda

President & CEO,
Representative Director

Corporate Auditors

Managing Executive Officers

Syunsuke Wada*

Takashi Muramatsu

Osamu Saito*

Atsuhiko Iwatake*External

Noboru Akatsuka

Shunichi Asada
Deputy Presidents,
Directors and Executive Officers

Yasuo Mori

Makoto Nogami

Kenji Murai

Koichi Nakajima

Yoichiro Nakai
Takashi Ito

Director and Senior Managing
Executive Officer

Yasushi Yoshino

Masao Mizuno

Executive Officers

Koichiro Izutsu
Directors and Managing Executive
Officers

Masuo Suzuki
Masataka Yukiya
Directors

Hideo Kondou
Yoshinori Shimizu**External

Masahiko Shishido
Akira Sugimoto
Yukio Tanaka
Yoshio Nomura
Osamu Miyata
Ryoji Kawaguchi
Yuzuru Asaba
Takashi Kamite
Shogo Ozaki
Koichiro Sato
Osamu Tamano
Akihiro Naruse
Mahoko Hara25

26 Century Tokyo Leasing Corporation

CSR
Basic Stance toward CSR Management
As an industry leader, the Century Tokyo Leasing Group iscommitted to helping realize a sustainable society. With thisin mind, the Group works diligently to not only improve its
operating results and performance, but also to contribute tosociety and help protect the environment through every facetof its business activities. Put another way, the Century Tokyo
Leasing Group endeavors to fulfill its corporate social
responsibility by practicing CSR management that strives tobalance social and environmental concerns.
In addition, the Group is dedicated to ensuring soundand transparent management. To this end, par ticularemphasis is consistently placed on strengthening corporate
governance. Moving forward, the Century Tokyo Leasing
Group aims to earn the trust and fulfill the expectations of allits stakeholders, including customers, vendors,shareholders, investors, local communities and employees.

Social Contribution through Business Activities
Fully aware of the significant role that its various businesses
including leasing play in the formation of a recycling-oriented
society and promotion of environmental activities, theCentury Tokyo Leasing Group works diligently to contributeto society through its business endeavors.
Promoting the formation of a recycling-oriented society
The Century Tokyo Leasing Group is promoting efforts that
help form the basis of a recycling-oriented societ y.
Accordingly, the Group adheres strictly to the 3R policy,
which entails the reduction of resource consumption alongwith the reuse (reconditioning and resale) and/or recycling(of components and materials), as appropriate, of leased

Leasing/Re-leasing
Customers
Return of item

Contributing to a recyclingoriented society

ResaleReuse ofresources

Disposal

items upon their return. In particular, considerable emphasis
is placed on the disposal of items in the information andcommunications device field, an area of particular Group
strength, after leases have expired both in Japan andoverseas.
The subsidiary, TRY, Inc., was established in Japan as a
specialist in this field. After the termination of a lease
contract for an item such as a personal computer, TRY
collects it, wipes any residual data and recycles it for reuse
and resale when possible or disassembles it and recycles its
components and materials. Highly acclaimed for its recycling
know-how, TRY not only helps the Group reuse leased
assets, but it also helps customers with their reuse anddisposal efforts.
Turning to activities outside Japan, the Group’s foreign
bases entered into business alliances with many companies from the TES-AMM Group, a leading electronic waste
recycler with a focus on the IT industry and business operations spanning more than 20 countries worldwide, as a partof efforts to provide recycling services in emerging markets,
including those of East Asia and the ASEAN region. Throughthis alliance, the Century Tokyo Leasing Group is putting inplace a structure that is capable of providing a full range ofrecycling ser vices from the removal of customers’ ITequipment data to reuse. In this manner, definitive steps arebeing taken to ensure proper disposal in accordance withthe regulations of each country.
Contribution through financing
The Century Tokyo Leasing Group believes that it can help
realize a sustainable society by flexibly addressing thefinancial needs of socially significant businesses.
Amid growing interest in such renewable energy sources
as solar, wind, hydraulic and geothermal power generation,
the Japanese government introduced the Feed-in tariff (FIT)
Scheme, facilitating the purchase of renewable energy atfixed prices in July 2012. As a result, renewable energy
power generation projects initiated by government agencies
and private-sector operators are increasing nationwide.
Century Tokyo Leasing is working to contain the initialexpense of facility installation by putting together project
finance and leasing schemes where the income gained
through the sale of energy can be the repayment source. In
this manner, we are supporting initiatives aimed at increasing
the use and awareness of renewable energy by local
government authorities and private-sector companies.

Century Tokyo Leasing Corporation

Environmental Protection Activities
Environmental Management System
The Century Tokyo Leasing Group recognizes that tacklingenvironmental issues is a major social responsibility. To that
end, the Company and five Group companies have obtained
ISO 14001 cer tification, the international standard forenvironmental management systems,
at all of our business offices in Japan.
Moving forward, the Group as a wholeis implementing ongoing activities
aimed at reducing its environmental
load.

27

Tok yo Leasing Group members, without any intent ofc o m m e rc i a l g a in, p re se nt a nd d o n ate u se d PCs toorganizations and groups as a contribution to the public
good. In addition, the Group contributes an amountequivalent to 5% of the total amount of shareholder special
benefits to the Japan Service Dog Association. Service dogs
receive advanced training that enables them to assist people
with disabilities in carrying out a host of daily activities. To
raise awareness of service dogs and their vital role in society,
the Group conducts demonstrations.

Scope of coverage
Century Tokyo Leasing Corporation
Tokyo Auto Leasing Co., Ltd.
TRY, Inc.
TC Agency Corporation
TC Business Service Corporation
TC Business Experts Corporation

Service dog
demonstration(as of August 31, 2013)

Together with All of Our Stakeholders
With Customers and with Vendors
We at Centur y Tok yo Leasing endeavor to enhancecustomer and vendor satisfaction and provide the highest
quality products and services. We work toward this ideal bybuilding into our Sales Force Automation (SFA)* the ability tolisten to our customers in a framework jointly utilized by sales
personnel and relevant divisions. This sharing of customer
requests and complaints throughout the Company enables
us to offer optimum services and develop new products
while securing steady improvements on a daily basis.
* SFA is a system in which information essential to sales operations is
streamlined to help sales divisions work more efficiently.

With Shareholders and with Investors
We disseminate information for stakeholders, starting withshareholders and investors, in a timely, appropriate and fairmanner, thereby enforcing a system that secures thetransparency of our corporate activities. While holding results
briefings and meetings for institutional investors andanalysts, we also conduct corporate briefings for individual
investors to furnish them with overviews and inform them of
the Group’s strengths and management strategies, with theaim of deepening the understanding of the Group.
With Local Communities
As one element of our social contribution activities, Century

With Employees
We at the Group work diligently to create an environmentand organization filled with vitality in which each and every
employee can maximize their abilities. From the perspectiveof employment and recruitment, the Group re-employs
retirees, hires people with disabilities and operates careertransfer systems. At the same time, the Group applies abroad perspective when selecting personnel, offering fairassessments and treatment. Moreover, particular emphasis
is placed on building a workplace environment that enables
employees to balance work and family concerns.

External Evaluation
Companies whose activities extend beyond the mere pursuitof profits to include contribution to the environment andsociety are companies that are attracting interest andexpectations for long-term, sustainable growth. These
compa nie s a re also consid e re d ta rgets for so ciall y
responsible investment (SRI). Century Tokyo Leasing has
been included in the F TSE4Good Index, an objective
measure of the per formance of companies that meetglobally recognized corporate responsibility standard issued
by FTSE, an independent company that originated as awholly owned subsidiary of the London Stock Exchange (asof July 2013).
This inclusion is a clear indication of
the esteem in which the Company’s CSR
activities are held.

28 Century Tokyo Leasing Corporation

CORPORATE HISTORY● Corporate ● Overseas Business Expansion ● Reinforcement of the Automobile Leasing Business ● Strengthening of the Consolidated Management Platform

1964

1969

•The former Tokyo Leasing Co., Ltd. jointly established by
Nippon Kangyo Bank, Ltd. (currently Mizuho Financial
Group, Inc.), Kangin Tochi-Tatemono Co., Ltd. (currently
Nippon Tochi-Tatemono Co., Ltd.), and Nanoh Co., Ltd.
(currently Nissin Tatemono Co., Ltd.)

2008

Orient Corporation for the purpose of entering theautomobile leasing market for small-sized enterprises andindividuals•The former Century Leasing System, Inc. jointly estab-•Entered the market in Thailand through the acquisition ofan equity interest in Mizuho Corporate Leasing (Thailand)Co., Ltd. (operated by TISCO Tokyo Leasing Co., Ltd.)•Entered the market in Hong Kong (operations conducted
through Tokyo Leasing (Hong Kong) Ltd.)

1979•Established Tokyo Auto Leasing Co., Ltd.
•Entered the market in Singapore (operations conducted2009

through Century Tokyo Leasing (Singapore) Pte. Ltd.)1983•Entered the market in the U.K. (operations conducted

1985•Established Century Auto Leasing Co., Ltd.
•Entered the market in the U.S. (operations conducted2010•Launched TC Agency Corporation through the integration of two former companies’ nonlife insurance agency
businesses•Established TC Business Experts Corporation with the aimof ensuring the transparency of internal audits•The former Tokyo Leasing Co., Ltd. listed its shares on the•Acquired a 66.5% equity interest in IHI Finance Support

Corporation, including it in the Company’s scope of consolidation as a consolidated subsidiary•Entered the market in Taiwan (established President Tokyo

Corporation with Uni-President Enterprises Corp., a local
food distribution company)

through the merger of the former Century
Leasing System, Inc. and the former Tokyo
Leasing Co., Ltd.

integration of two former companies’ administrative
subsidiaries

through Tokyo Leasing (UK) Plc)

Second Section of the Tokyo Stock Exchange (thecompany listed its shares on the First Section of the Tokyo
Stock Exchange in September 2002)

1997•Launched Century Tokyo Leasing Corporation•Launched TC Business Service Corporation through thethrough Century Tokyo Leasing (USA) Inc.)1990(currently S.D.L Co., Ltd.), including it in the Company’s
scope of consolidation as a consolidated subsidiary•Jointly established Orico Auto Leasing Co., Ltd. withlished by ITOCHU Corporation, Daiichi Bank, Ltd.
(currently Mizuho Financial Group, Inc.), Nippon Life
Insurance Company, and Asahi Mutual Life Insurance
Company

1972•Acquired a 90% equity interest in Shiseido Lease Co., Ltd.

2011

•Entered the market in Indonesia (operations currently
conducted through PT. Century Tokyo Leasing Indonesia)•Nippon Rent-A-Car Service, Inc. included in the Company’s
2002

•

2003

•The former Century Leasing System, Inc. listed its shares

scope of consolidation as an equity-method affiliate following the acquisition of additional shares, including it in the
Company’s scope of consolidation as a consolidated
company in June 2013 (current share of voting rights held:
58%)

Acquired all shares of Kawasaki Enterprises, Inc.;
company absorbed in October 2002

•Jointly established TCI Finance Corporation with ITOCHU

on the Second Section of the Tokyo Stock Exchange (thecompany listed its shares on the First Section of the Tokyo
Stock Exchange in September 2004)

Corporation for the purpose of expanding ITOCHU Grouprelated finance transactions•Established TC Property Solutions Corporation for the•Acquired a 20% equity interest in Fujitsu Leasing Co.,

purpose of improving real estate business-related
profitability

Ltd., including it in the Company’s scope of consolidation
as a consolidated subsidiary following the acquisition of
additional shares in July 2008 (current shareholding: 80%)

2005

2006

•Launched Nippon Car Solutions Co., Ltd. through anequal merger between Century Auto leasing Co., Ltd. and
NTT Auto Leasing Co., Ltd.

•Entered the market in Shanghai, China (operations
conducted through Century Tokyo Leasing China
Corporation)

2007•Entered the market in Malaysia (operations conducted
through Century Tokyo Capital (Malaysia) Sdn. Bhd.)

2012•Jointly established Kyocera TCL Solar LLC with Kyocera

Corporation for the purpose of engaging in electricity retailbusiness•Entered the market in India (through a business alliancewith Tata Capital Limited); established a Japan Desk within
the Tata Group•Included GA Telesis, LLC in the Company’s scope of

consolidation as an equity-method affiliate following theacquisition of shares

Century Tokyo Leasing Corporation

FINANCIAL SECTION
30

Five-Year Summary

32

Management’s Discussion
and Analysis

38

Consolidated Balance
Sheets40

Consolidated Statements ofIncome41

Consolidated Statements ofComprehensive Income

42

Consolidated Statements of
Changes in Net Assets

43

Consolidated Statements ofCash Flows

44

Notes to Consolidated
Financial Statements

69

Report of Independent
Auditors

29

30

Century Tokyo Leasing Corporation

FIVE-YEAR SUMMARYCENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31

Millions of yen

Operating Results
Revenues
Leasing
Installment sales
Loans
Finance
Other businesses
Costs
Leasing
Installment sales
Loans
Finance
Other businesses
Interest expenses
Gross profit on revenues
Sales revenues (Gross profit on revenues
before deducting interest expenses)
SG&A expenses
Personnel and non-personnel expenses
Allowance for doubtful accounts
Operating income
Ordinary income (Income before
extraordinary items and income taxes)
Extraordinary gains (losses)
Net income
Financial Condition
Total assets
Operating assets, including businessguarantees
Leasing
Installment sales (after deducting
deferred profit on installment sales)
Loans
Finance
Other businesses
Business guarantees
Interest-bearing debt
Net assets
Cash Flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Cash and cash equivalents at end of year

2009

2010

2011

2012

2013

¥ 742,948
613,801
109,755
7,435—
11,957
683,683
548,323
102,195
28—
9,097
24,03959,265¥ 758,674
635,808
105,413—
11,764
5,689
693,569
567,884
98,378
—
2,476
4,830
20,001
65,105¥ 713,182
598,925
94,114—
13,211
6,932
641,589
531,387
88,443
—
1,688
5,585
14,487
71,593¥ 716,342
603,768
88,955—
14,031
9,588
643,684
538,691
84,157
—
1,149
8,130
11,55872,658¥ 691,128
584,637
81,898—16,935
7,658
620,245525,373
77,266
—
1,706
6,036
9,864
70,883

83,30438,36827,654
10,71420,897

85,10634,81029,153
5,657
30,29586,081
30,55929,421
1,139
41,034

84,21630,78030,76812
41,87880,74728,90929,839(929)
41,974

22,275(5,232)
10,02933,414(250)
25,542

44,170(3,465)23,646

46,252(2,171)
26,194

46,293(103)
28,935¥2,423,800¥2,132,892¥2,184,599¥2,260,389¥2,465,817

2,118,180
1,536,504

1,962,008
1,410,109

2,049,804
1,383,696

2,143,217
1,375,761

2,276,575
1,473,866

243,708
261,629—
58,175
18,164
2,053,766
133,222200,539—
327,307—
24,053
1,749,776
158,116

191,836—
448,191—
26,081
1,741,897
178,752

187,986—
530,655—
48,815
1,783,173
201,272

201,559—555,938—
45,211
1,939,219
233,669————¥ 194,308(8,949)(306,146)
50,947¥¥¥48,552
23,192(89,762)
32,794(26,425)(516)
38,28944,531(89,711)(5,593)
135,868
83,123

Century Tokyo Leasing Corporation

31

Yen

Per Share Data
Net income
Former CLS
Former TLC
Net assets
Former CLS
Former TLC
Dividends
Former CLS
Former TLC

2009

2010

2011

2012

2013

94.05
114.2963.50
1,174.11
1,162.07
1,007.79
—
28.00
26.00

¥ 239.57——
1,410.61
—
—
32.00
—
—

¥ 221.80——
1,594.57
—
—
40.00
—
—

¥ 245.82——
1,796.62
—
—
44.00
—
—

¥ 272.32——
2,092.46
—
—
48.00
—
—

¥

Significant Indicators
Return on equity (ROE)
Former CLS
Former TLC
Return on assets (ROA)
Former CLS
Former TLC
Equity ratio
Former CLS
Former TLC
Overhead ratio
Former CLS
Former TLC

8.0%
10.1%
6.1%
1.0%
1.2%
0.9%
5.2%
7.2%
4.1%
46.7%
41.7%
49.4%

18.5%
—
—
1.5%
—
—
7.1%
—
—
44.8%
—
—

Other Data
Employees
Former CLS
Former TLC

1,701
490
1,211

1,732
—
—

14.8%
—
—
2.0%
—
—
7.8%
—
—
41.1%
—
—

14.5%
—
—
2.1%
—
—
8.4%
—
—
42.3%
—
—

14.0%
—
—
2.0%
—
—
9.0%
—
—
42.1%
—
—

Persons

1,715
—
—

1,722
—
—

1,676
—
—

Notes: 1. Figures for the year ended March 31, 2009 are the simple sums of values recorded by the former Century Leasing System, Inc. (CLS)and Tokyo Leasing Co., Ltd. (TLC). The merger ratio has been factored into per share data for the year ended March 31, 2009.
2. 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 held by
the loan and other businesses have been retroactively revised.
3. Revenues do not include internal revenues or transfers between segments.
4. 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

32

Century Tokyo Leasing Corporation

MANAGEMENT’S DISCUSSION AND ANALYSISCENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31

wind turbine installation vessels, a field that offers considerable
potential for growth in Japan. Looking to Asia, and China inparticular, to expand our global business we set up four new
offices in China. We also took steps to establish a “Japan
Desk” in Tata Capital Financial Services Limited in India and tocommence leasing operations in that country. In the UnitedStates, we concluded a business alliance with CSI Leasing,Inc., a major independent leasing company handling mainly IT
equipment, with the aim of strengthening our leasing and IT
services businesses in the Americas.
As a part of efforts to strengthen the Group’s managementbase we have been working to establish a firm position in theauto leasing industry. To this end, we reached an agreementwith Nippon Telegraph And Telephone Corporation (NTT) toproceed with discussions regarding the merger our wholly
owned subsidiary Tokyo Auto Leasing Co., Ltd. and Nippon
Car Solutions Co., Ltd., an equity-method affiliate in which weand NTT each hold a 50% equity interest. (Based on subsequent discussions, the merger will be completed in October
2013.) Also, to enhance the planning functions of our automobile leasing and car rental business in Japan and overseas, wenewly set up the Automobile Business Promotion Office (elevated to the Automobile Business Promotion Division on April
1, 2013). Efforts such as these bolster our comprehensive
prowess by strengthening our management base.
Furthermore, we have been reinforcing our financial base by
diversifying our fund procurement methods, which include thecontinuous issuance of unsecured bonds (with a limited interbond pari passu clause).

Business Environment and the Group’s Approaches
In fiscal 2012, the Japanese economy saw signs of a gradualturnaround in the second half of the fiscal year due to suchfactors as a weakening of the yen and an upward trend instock prices stemming from expectations of improvement due
to financial and monetary policies, including the further quantitative easing. At the same time, the economy was moderately
buoyed by reconstruction demand following the Great East
Japan Earthquake and other factors. Nevertheless, the outlook
for the Japanese economy remained uncertain, owing to such
issues as the prolonged European debt problem and a slowdown in the pace of economic growth in emerging countries.
Under these circumstances, in the final year of the first
medium-term management plan launched in fiscal 2009, theCentury Tokyo Leasing Group strove to strengthen its sales
and management bases.
To strengthen our sales base, we took steps to improve ourexpertise, focusing on business areas where growth is expected and expanding business, mainly in China and Asia.
Specifically, to bolster our aircraft business platform, we madeU.S.-based GA Telesis, LLC, one of the world’s largest providers of products, services and solutions to the commercial
aerospace industry, an equity-method affiliate. This has allowed
us to establish a structure capable of handling the life-cycle
management of aircraft extending from the lease of new aircraft to the scrapping of retired aircraft and the sale of theirparts. In the environment and energy fields where growth isexpected, we set up a joint venture with Kyocera Corporationand started selling electricity generated using solar energy.
Similarly, we have entered the business of financing off-shore

Total Private Capital Investment

Total Capital Investment
Financed by Leasing

Value of New Contracts(Trillions of yen)(Trillions of yen)(Billions of yen)

80

6

1,500
Finance (10/3–12/3)
Loans/Other (09/3)
Installment sales
Leasing

60
4

1,000

2

500

40

20

0

0

0
2009

2010

2011

2012

2013

Source: Private capital investment is based on a survey by the
Cabinet Office. The figure for “13/3” (FY2012) is thepreliminary figure announced on May 16, 2013.

2009

2010

2011

Source: Japan Leasing Association

2012

2013

2009

2010

2011

2012

2013

Graph figures for the year ended March 31, 2009 are thesimple sums of values recorded by the former Century Leasing
System, Inc. and Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation

Operating Income
Selling, general and administrative expenses decreased¥1,871 million, or 6.1%, compared with the previous fiscal yearto ¥28,909 million. In addition to a decline in personnel andnon-personnel expenses of ¥929 million, or 3.0%, this downturn was largely attributable to a decrease of allowance for
doubtful accounts of ¥941 million. Reflecting these changes,
operating income edged up ¥96 million, or 0.2%, comparedwith the previous fiscal year to ¥41,974 million.

Overview of Results
The value of new contracts executed, a clear measure of thesuccess or otherwise of the Group’s operating activities, was¥1,178,781 million, up 9.9% compared with the previous fiscal
year. This was largely attributable to robust leasing trends inthe mainstay information and communication equipment, realestate and aircraft fields in the leasing and installment sales
business as well as growth in the financing business. As aresult, the balance of operating assets increased for the firsttime in four fiscal years in both leasing and installment sales in
the fiscal year under review. Therefore, the balance of operating assets, including business guarantees, rose 6.2% year on
year to ¥2,276,575 million.
In fiscal 2012, total revenues declined 3.5% compared withthe previous fiscal year to ¥691,128 million. In contrast, historic
highs were recorded for operating income, which expanded
0.2% to ¥41,974 million due in part to a decrease in interest
expenses, ordinary income, which edged up 0.1% to ¥46,293
million, and net income, which rose 10.5% to ¥28,935 million.

Ordinary Income
Non-operating income rose ¥1,653 million, or 30.3%, compared with the previous fiscal year, primarily owing to increases
in foreign exchange gains and equity in earnings of affiliates.
While interest expense declined, other non-operating expenses
were up ¥1,708 million, or 157.8%, from fiscal 2011 due to the
upswing in expenses on derivatives other than for trading or
hedging. As a result of these factors, ordinary income edgedup ¥40 million, or 0.1%, compared with the previous fiscal yearto ¥46,293 million.

Revenues, Gross Profit on Revenues
Total revenues declined ¥25,214 million, or 3.5%, comparedwith the previous fiscal year to ¥691,128 million. Gross profit
decreased ¥1,775 million, or 2,4%, year on year to ¥70,883
million.

Interest Expenses

Credit Costs

SG&A Expenses/Overhead Ratio(Billions of yen)(Billions of yen)

25

SG&A Expenses

12

Overhead Ratio(Billions of yen)

20

(%)

50

50

40

40

30

30

20

20

10

10

9

15

6

10

3

5

0

0
2009

2010

2011

2012

2013

The graph figure for the year ended March 31, 2009 is thesimple sum of values recorded by the former Century Leasing
System, Inc. and Tokyo Leasing Co., Ltd.

-3

2009

2010

2011

33

2012

2013

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.
The graph figure for the year ended March 31, 2009 is thesimple sum of values recorded by the former Century Leasing
System, Inc. and Tokyo Leasing Co., Ltd.

0
2009

2010

2011

2012

2013

0

Graph figures for the year ended March 31, 2009 are thesimple sums of values recorded by the former Century Leasing
System, Inc. and Tokyo Leasing Co., Ltd.
Overhead ratio = (Personnel expenses + Non-personnel
expenses) / Gross profit on revenues X 100

34

Century Tokyo Leasing Corporation

Net Income
Extraordinary income declined ¥636, or 84.7% million compared with the previous fiscal year mainly due to the drop in
gain on sale of investments in securities. Extraordinary loss
contracted ¥2,704 million, or 92.5%, year on year largely
owing to the decline in valuation loss on investments in securities. As a result, income before income taxes and minority
interests grew ¥2,108 million, or 4.8%, compared with the previous fiscal year to ¥46,189 million. Income taxes for the period
decreased ¥607 million, or 3.5%, year on year to ¥16,494 million and minority interests in income fell ¥26 million, or 3.3%, to¥761 million.
Taking into account each of the aforementioned factors,
net income amounted to ¥28,935 million, up ¥2,741 million, or
10.5%, compared with the previous fiscal year.
Net income per share improved ¥26.50 year on year to¥272.32. ROE contracted 0.5 of a percentage point to 14.0%
while ROA edged down 0.1 of a percentage point to 2.0%.
Results by Segment
In the leasing and installment sales business, the value of newcontracts executed was ¥689,461 million, up 15.0% compared with the previous fiscal year. The balance of operating
assets stood at ¥1,675,426 million, up ¥111,678 million, or7.1% compared with the end of the previous fiscal year. Total
sales amounted to ¥666,535 million, down 3.8% year on year.
Segment profit came to ¥37,648 million, down 8.6%.

In the financing business, the value of new contracts executed was ¥489,320 million, up 3.4% compared with the previous fiscal year. Operating assets rose ¥25,283 million, or4.8% year on year to 555,938 million. Moreover, operating
assets, including business guarantees, stood at ¥601,149 million as of March 31, 2013. This was ¥21,679 million, or 3.7%
higher than the balance as of the end of the previous fiscal
year. Total sales amounted to ¥16,935 million, up 20.7% year
on year. Segment profit amounted to ¥9,222 million, up 38.0%
compared with the previous fiscal year.
In other businesses excluded from the reporting segments,
sales came to ¥7,658 million, down 20.1% compared with theprevious fiscal year. Segment profit was ¥2,128 million, up
17.7% year on year.

Financial Condition
Total Assets
Total assets as of the end of the fiscal year under review
increased ¥205,428 million, or 9.1%, compared with the endof the previous fiscal year to ¥2,465,817 million, mainly due tothe increase in operating assets.
Liabilities
Total liabilities as of the end of the fiscal year under review
increased ¥173,031 million, or 8.4%, compared with the previous fiscal year-end to ¥2,232,148 million. This was mainly due
to the increase in notes and accounts payable—trade of¥11,186 million and the increase in interest-bearing debt.

Operating Assets by Segment

Condition of Fund Procurement

Finance (10/3–13/3)
Loans/Other (09/3)
Installment sales (after deducting deferred profit on installment sales)
LeasingLong-term borrowings
Short term financing
Short-term borrowings
Direct financing
MTN, corporate bonds, securitized lease assets
CP

Net Assets/Equity Ratio(Billions of yen)(Billions of yen)

(%)

2,000

2,000

60

1,500

1,500

45

1,000

1,000

30

500

500

15

0

0
2009

2010

2011

2012

2013

Graph figures for the year ended March 31, 2009 are thesimple sums of values recorded by the former Century Leasing
System, Inc. and Tokyo Leasing Co., Ltd.
Loans/Other and Finance include business guarantees

0
2009

2010

2011

2012

2013

Graph figures for the year ended March 31, 2009 are the simple
sums of values recorded by the former Century Leasing System, Inc.
and Tokyo Leasing Co., Ltd.

Total Net Assets(Billions of yen)

Equity Ratio
(%)

240

12

180

9

120

6

60

3

0

0
2009

2010

2011

2012

2013

Graph figures for the year ended March 31, 2009 are the simple
sums of values recorded by the former Century Leasing System, Inc.
and Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation

35

Total interest-bearing debt climbed ¥156,046 million, or8.8%, compared with the end of the previous fiscal year to¥1,939,219 million.
A breakdown of interest-bearing debt shows that shortterm borrowings increased ¥99,277 million, or 10.3%, year on
year to ¥1,065,467 million, mainly because of an increase in
the issuance of commercial paper and short-term loans frombanks. Long-term fund procurement also rose, with interestbearing debt growing ¥56,769 million, or 6.9%, compared withthe previous fiscal year-end to ¥873,752 million. The procurement of long-term funds by debt securitization decreased,making the upswing largely attributable to the issuance ofstraight bonds in the amount of ¥60.5 billion.

Indirect and Direct Funding
As of the end of the fiscal year under review, indirect funding
increased ¥61,484 million, or 5.9%, compared with the end of
the previous fiscal year to ¥1,110,891 million, reflecting the
upswing in long-term borrowings. Direct funding climbed¥94,562 million, or 12.9%, year on year to ¥828,328 million
owing to a decrease in the procurement of funds through debt
securitization and the issuance of straight bonds. As a result,the direct financing ratio for the fiscal year ended March 31,
2013 was 42.7%, up 1.6 percentage points compared with theend of the previous fiscal year. In addition, the long-term fundprocurement ratio stood at 45.1%, down 0.7 of a percentage
point year on year.

Net Assets
Total net assets increased ¥32,397 million, or 16.1%, compared with the end of the previous fiscal year to ¥233,669 million. This was ostensibly attributable to a ¥24,047 million, or
15.7%, increase in retained earnings. As a result, the shareholders’ equity ratio improved to 9.0%, up 0.6 of a percentage
point compared with the previous fiscal year-end.

Securing Liquidity
With the aim of securing liquidity, the Century Tokyo Leasing
Group executed overdraft agreements and commitment line
agreements with 80 financial institutions. As of March 31,
2013, the total value of agreements amounted to ¥871,313
million, up ¥124,196 million compared with the end of the previous fiscal year.
The balance of unused facilities under the overdraft andcommitment line agreements as of the end of the fiscal year
under review stood at ¥529,439 million. The Group is confident
that it has secured ample liquidity of funds.

Cash Flows
Cash Flows from Operating Activities
Net cash used in operating activities was ¥89,711 million, up
from net cash used in operating activities of ¥26,425 million in
the previous fiscal year. This was mainly due to cash outflows
related to the increase in operating receivables, particularly inthe financing business compared with the previous fiscal year.
Cash Flows from Investing Activities
Net cash used in investing activities amounted to ¥5,593 million, up from net cash used in investing activities of ¥516 million in the previous fiscal year. This largely reflected theincrease in purchases of investments in securities comparedwith the previous fiscal year.

Dividends per Share(Yen)

TC-Lease
Former Century Leasing System, Inc.
Former Tokyo Leasing Co., Ltd.

50

40

Cash Flows from Financing Activities
Net cash provided by financing activities came to ¥135,868
million, up from net cash provided by financing activities of¥38,289 million in the previous fiscal year. This was mainly due
to the increase in proceeds from direct funding.

30

20

10

0
2009

2010

2011

2012

2013

36

Century Tokyo Leasing Corporation

By type of borrowing, direct funding saw the balance ofcorporate bonds and commercial paper increase while the balance of debt payable covering securitized receivables declined.
Turning to procurement through indirect funding, the balanceof short-term borrowings increased, as a result, proceeds fromdirect funding totaled ¥94,144 million compared with proceeds
amounting to ¥29,747 million in the previous fiscal year.
Proceeds from indirect funding were ¥46,724 million in fiscal
2012 compared with ¥13,476 million in fiscal 2011.
Accounting for each of the aforementioned activities, cash
and cash equivalents at the end of the fiscal year under review
increased ¥38,592 million compared with the previous fiscal
year to ¥83,123 million.

Dividends for the Fiscal Year Ended March 31, 2013
At the beginning of the period, Century Tokyo Leasing forecast
an annual cash dividend for fiscal 2012 of ¥46 per share, comprising an interim cash dividend of ¥23 per share and a periodend cash dividend of ¥23 per share. Taking into account theCompany’s positive performance, which outstripped estimates
made at the start of the fiscal year under review, Century Tokyo
Leasing decided to increase both its interim and period-end
cash dividends by ¥1 per share for an annual cash dividend of¥48 per share (interim cash dividend of ¥24 per share and a
period-end cash dividend of ¥24 per share).

Fiscal 2013 Outlook
A mild recovery trend is forecast for domestic private capital
investment and lease capital investments can be expected toshow the same trend. Nevertheless, the management environment surrounding the Century Tokyo Leasing Group is anticipated to remain harsh as companies in Japan accelerate theirefforts toward globalization and competition becomes increasingly fi erce.
Under these circumstances, Century Tokyo Leasing willcontinuously reduce funding costs and the cost of credit. At
the same time, the Company will strengthen its competitiveness in the leasing and financing businesses, expand its overseas business, and step up initiatives in the automobile
financing business to promote dramatic market growth inJapan and overseas in an effort to improve profitability.
Based on the above, the Century Tokyo Leasing Group isforecasting revenues of ¥770.0 billion for the fiscal year ending
March 31, 2014, up 11.4% compared with the fiscal year
under review. Operating income is projected to increase 4.8%
to ¥44.0 billion, ordinary income to grow 3.7% to ¥48.0 billion,
and net income to climb 3.7% to ¥30.0 billion.

Under a policy of strengthening the automobile financing
business, Century Tokyo Leasing made Nippon Rent-A-Car
Co., Ltd. a consolidated subsidiary in June 2013. Plans remainin place to implement the merger of Tokyo Auto Leasing andNippon Car Solutions in October 2013. Based on certain
assumptions deemed currently reasonable by the Company,
the impact on business performance has been factored into
the results forecast stated above.

Dividends for the Fiscal Year Ending March 31, 2014
The Group maintains a basic policy of returning profits to its
shareholders on a long-term and stable basis. The Group isalso acutely aware of the need to ensure sufficient internal
reserves to promote continuous business and operational
expansion, strengthen its corporate standing and enhance its
corporate value.
For the fiscal year ending March 31, 2014, the Group isplanning an annual cash dividend of ¥52 per share (¥26 pershare for both interim and period-end cash dividends) basedon its policy of returning profits to shareholders in recognitionof the support they provide.

Business and Other Risks
Listed below are risks that may influence the Group’s businessperformance, stock price and financial condition.
(1) Credit Risk
Leasing transactions are those in which credit is provided to acustomer on an unsecured basis, in principle, over a relatively
long term (an average of about five years), and the expected
profit is secured only when the full amount of the leasing fee,etc., is collected from the customer. However, if there is nonpayment by the customer or a similar incident, we collect asmuch as possible through such measures as selling the leased
property in question or leasing it to another customer.
The Group strives to minimize credit risks through cautious
credit management, the assessment of properties, and bycontrolling credit risks in the portfolio of operating assets; however, the Group’s performance may be affected if bad debt
newly arises as a result of deterioration in the credit situationsof companies, depending on future economic trends or any
factors.

Century Tokyo Leasing Corporation

37(2) Impacts of Interest Rate Volatility and Changes in theFund Procurement Environment
In our main business of lease and installment sales transactions, leasing fees are set on the basis of the property purchase price, interest rate level when the contract is signed,
etc., and leasing fees do not vary during the contract period.
On the other hand, the portion of interest expenses (financing
costs) that comprises the cost of lease transactions is affectedby fluctuations in market interest rates because funds are also
raised by obtaining loans with variable interest rates, in addition
to long-term fixed funding. Therefore, if market interest rates
rise, interest expenses may increase.
Fund procurement by the Group, in addition to indirect
funding, includes direct funding by way of commercial paper,
corporate bonds, etc. Depending on changes in the funding
environment, there may be impacts on fund procurement.
As mentioned above, depending on interest rate volatility
and changes in the funding environment, there may be impacts
on the Group’s results. However, the Group strictly controls
these fund procurement related risks on the basis of ALM(Asset Liability Management) analysis and hedges risks as necessary.

(4) Stock Price Volatility Risk
The Group holds securities for the purpose of strengthening its
relationships with partner companies.
The Group periodically reviews stocks held that correspondto individual business relationships; however, depending on
future stock price volatility, there may be impacts on theGroup’s results.

(3) The Impact of Changes in Private Capital Investment
Trends
While there are temporary differences, the values of private
capital investment and capital investment financed by leasing
are interrelated. This trend is expected to continue in the
future.
The change in the value of the Group’s contracts andchanges in the values of private capital investment and capital
investment financed by leasing have not necessarily coincided
in recent years; however, the Group’s performance may beaffected if a large decrease in the value of private capital
investment occurs in the future accompanied by a large
decline in the value of capital investment financed by leasing.

(7) Other Risks
In addition to the above risks, there are information systemrisks, such as failure and errors in such areas as sales management, contact management, asset management and statistical operations; administrative risks due to improper
administrative procedures; residual value risk that the actual
disposal values are below the initial estimated residual valuesof lease properties; and compliance risk of loss of social trust
resulting from noncompliance with laws or regulations or social
norms, etc.

(5) System Change Risk
The Group is developing its business on the basis of current
legal, tax and accounting systems and standards, etc. If thesesystems change considerably in the future, there may be
impacts on the Group’s results.
(6) Risk Attributable to Unpredictable Events
The Group has established measures based on its business
continuity plan (BCP) to ensure preparedness in the event oflarge-scale disasters (including earthquakes, wind and flood
damage, fire and man-made disasters) or the outbreak ofinfectious diseases, such as new-type influenza and SARS.
There may be impacts on the Group’s results if such events
precipitate unpredictable economic damage.

Private Capital Investment and Capital Investment Financed by Leasing

Private capital investment (a)(Billions of yen)

FY2008FY2009FY2010FY2011FY2012¥71,014.7¥60,718.0¥61,863.7¥63,809.0¥62,607.9

YoY comparison

92.4%

85.5%

101.9%

103.1%

98.1%

Capital investment financed by leasing (b)5,444.4

4,405.8

4,116.1

4,168.2

4,510.6

YoY comparison
Ratio of capital investment financed by leasing
to private capital investment (b) ÷ (a)

85.8%

80.9%

93.4%

101.3%

108.2%

7.7%

7.3%

6.7%

6.5%

7.2%

Value of new leasing contracts executed of theGroup
YoY comparison

¥

520.8
111.2%

¥

428.2
82.2%

¥

476.2
111.2%¥

507.4
106.6%¥

591.0
116.5%

Notes: 1. Private capital investment is based on a survey by the Cabinet Office. The figures for FY2012 are preliminary figures announced on May 16, 2013.
2. Capital investment financed by leasing is statistical data released by the Japan Leasing Association.
3. Figures for the year ended March 31, 2009 are the simple aggregates of values recorded by former Century Leasing System, Inc. and former Tokyo Leasing
Co., Ltd.

38

Century Tokyo Leasing Corporation

CONSOLIDATED BALANCE SHEETSCENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESAS OF MARCH 31, 2013 AND 2012

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

2013
ASSETS
Current assets:
Cash on hand and in banks (Notes 8, 12 and 17)
Accounts receivable:
Installment sales (Notes 8, 9 and 17)
Lease receivables and investment assets (Notes 8, 15 and 17)
Loans (Notes 8, 9 and 17)
LeasesOther
Allowance for doubtful accounts (Note 17)
Operational investment securities (Notes 6 and 17)
Other operating assets
Short-term investment securities (Notes 6, 12 and 17)
Inventories (Notes 8 and 9)
Deferred tax assets (Note 13)
Other current assets (Note 8)
Total current assets¥

56,250

2012

¥

2013

43,555$598,471

212,042
1,271,716
450,041
14,685
7,201(4,799)102,316753
18,0001,520
1,285
43,032
2,174,042

198,890
1,247,752
430,903
17,028
6,958(6,767)
95,440
641
2,000
1,164
1,954
18,706
2,058,224

2,256,005
13,530,335
4,788,180
156,237
76,611(51,063)
1,088,585
8,015
191,510
16,175
13,667457,843
23,130,571

Investments and other assets:
Investments in securities (Notes 6, 8 and 17):
Unconsolidated subsidiaries and affiliates
Other securities
Long-term loans and other assets
Claims provable in bankruptcy or rehabilitation (Notes 8 and 17)
Deferred tax assets (Note 13)
Allowance for doubtful accounts (Note 17)
Total investments and other assets

22,08335,373
13,175
5,358
998(2,373)74,614

16,70529,19012,4135,242
3,144(2,217)64,477

234,951
376,353
140,176
57,004
10,621(25,256)
793,849

Property and equipment, at cost less accumulated depreciation:
Leased assets (Notes 7 and 8)
Advances for purchases of property for lease
Own assets in use (Note 7)
Property and equipment, net

201,817
8,197
2,956
212,970

127,666
2,445
2,925
133,036

2,147,212
87,21531,4552,265,882

Intangible assets:
Computer programs leased to customers

Goodwill
Other intangible assets
Total intangible assets
Total assets
The accompanying notes are an integral part of these statements.

334

344

3,552

202

—

2,153

3,655
4,191
¥2,465,817

4,308
4,652
¥2,260,389

38,88044,585$26,234,887

Century Tokyo Leasing Corporation

39

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

2013

2012

2013

LIABILITIES AND NET ASSETS
Current liabilities:
Short-term borrowings (Notes 8, 9, 12 and 17)
Current portion of long-term debt (Note 8)
Notes and accounts payable-trade (Note 17)
Lease obligations (Note 17)
Accrued income taxes (Note 13)
Advances received from customers
Deferred tax liabilities (Note 13)
Deferred profit on installment sales (Note 17)
Other current liabilities
Total current liabilities¥1,044,267
312,876
161,560
6,541
7,059
5,194
773
10,483
27,577
1,576,330¥ 965,591
311,696
150,374
8,238
11,021
4,765
469
10,90426,704
1,489,762$11,110,408
3,328,824
1,718,911
69,58875,10755,2638,225
111,531
293,400
16,771,257

Long-term liabilities:
Long-term debt (Notes 8, 9 and 17)
Lease obligations (Note 17)
Retirement benefits (Note 14)
Guarantee deposits from customers
Deferred tax liabilities (Note 13)
Allowance for automobile inspection costs
Negative goodwill
Other long-term liabilities
Total long-term liabilities
Total liabilities

582,076
9,421
1,067
23,6703,739
37—35,808655,818
2,232,148

505,887
10,701
1,058
21,921
3,306
82
35
26,365569,355
2,059,117

6,192,953
100,229
11,355
251,837
39,784389—
380,980
6,977,527
23,748,784

34,231
5,538
176,866

34,231
5,538
152,818

364,199
58,922
1,881,751(582)
216,053(580)
192,007(6,192)
2,298,680

9,424
138
(3,282)
6,280

2,586
1,808
(5,502)(1,108)100,265
1,466(34,920)
66,811

Contingent liabilities (Note 16)
Net assets (Note 22):
Shareholders’ equity (Notes 18 and 19):
Common stock without par value:
Authorized: 400,000,000 shares
Issued: 106,624,620 shares in 2013 and 2012
Capital surplus
Retained earnings
Treasury stock:370,456 shares in 2013 and 369,662 shares in 2012
Total shareholders’ equity
Accumulated other comprehensive income (loss)
Net unrealized holding gains on securities
Net unrealized gains on derivative instruments
Translation adjustments
Total accumulated other comprehensive income (loss)

Share subscription rights (Note 20)
Minority interests
Total net assets
Total liabilities and net assets

148

—

1,580

11,188233,669¥2,465,817

10,373201,272¥2,260,389

119,032
2,486,103$26,234,887

Century Tokyo Leasing Corporation

40

CONSOLIDATED STATEMENTS OF INCOME
CENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2013 AND 2012

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

2013

2012

2013

¥584,637¥603,768$6,220,202

81,89888,955871,348

Revenues:
LeasesInstallment sales
Other

24,593

23,619261,659

Total revenues

691,128

716,342

7,353,209

Leases525,373

538,691

5,589,666

Installment sales

77,266

84,157822,066

Interest expense

9,864

11,558104,952

Costs:

Other

7,742

9,278

82,371

Total costs

620,245643,6846,599,055

70,88372,658754,154

28,90930,780307,578

41,974

41,878446,576

Gross profit
Selling, general and administrative expenses (Note 10)
Operating income
Other income (expenses):
Interest and dividend income

792

991

8,429

Interest expense

(425)

(512)

(4,518)Equity in earnings of affiliates

2,235

2,010

23,778Gain on amortization of negative goodwill

890

890

9,471

Foreign exchange gains

2,848

1,180

30,306

Expenses on derivatives other than for trading or hedging(2,198)(382)(23,382)

Gain on sale of investments in securities

112

747

1,188

Impairment loss

(31)

—

(336)

Loss on disposal of noncurrent assets

(23)

(12)

(249)

(7)

(1,952)

(73)

(122)

(147)

(1,295)

Loss on devaluation of investments in securities
Office transfer expenses (Note 5)
Other, net
Income before income taxes and minority interests

144

(609)

1,534

46,18944,081

491,429

15,14516,008161,137

Income taxes (Note 13):
Current
DeferredIncome before minority interests
Minority interests
Net income (Note 22)
The accompanying notes are an integral part of these statements.

1,348

1,092

14,347

16,493

17,100175,484

29,69626,981

315,945

761

787

8,093

¥ 28,935¥ 26,194$ 307,852

Century Tokyo Leasing Corporation

41

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
CENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2013 AND 2012

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

2013

2012

2013

¥29,696¥26,981$315,945

Net unrealized holding gains on securities

6,809

847

72,448Net unrealized losses on derivative instruments(1,715)(153)(18,241)

Translation adjustments
Share of other comprehensive income (loss) of affiliates accounted
for using equity method

2,207

(650)

23,477

184

(47)

1,953

—

(276)

—

Income before minority interests
Other comprehensive income (loss) (Note 11)

Loss on change in equity
Total other comprehensive income (loss)
Comprehensive income

7,485

(279)

79,637¥37,181¥26,702$395,582

36,322

26,052

386,446

859

650

9,136

Comprehensive income attributable to:Shareholders of Century Tokyo Leasing Corporation
Minority interests
The accompanying notes are an integral part of these statements.

42

Century Tokyo Leasing Corporation

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSCENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2013 AND 2012

Number of shares
Thousands

Common stock
Balance at beginning of year
Balance at end of year
Capital surplus
Balance at beginning of year

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

2013

2012

2013

2012

2013

106,625
106,625

106,625
106,625¥ 34,231
34,231¥ 34,231
34,231$ 364,199
364,199

5,538

5,538

58,921

0

—

1

5,538

5,538

58,922

152,818
28,935(4,887)——
176,866

131,485
26,194(4,584)(276)(1)
152,818

1,625,902
307,852(52,003)——
1,881,751

(580)
(2)
0
(582)
¥216,053
192,007(2)
28,935(4,887)—0—
216,053

(11)
(569)
0
(580)
¥192,007
171,243(569)
26,194(4,584)(276)
0(1)
192,007(6,178)(17)
3(6,192)$2,298,680
2,042,844(17)
307,852(52,003)—
4—
2,298,680¥¥$

Disposal of treasury stock
Balance at end of year
Retained earnings
Balance at beginning of year
Net income for the year
Cash dividends
Decrease due to change in equity
Other
Balance at end of year
Treasury stock
Balance at beginning of year
(369)
Purchase of treasury stock(0)
Disposal of treasury stock0
Balance at end of year(370)
Total shareholders’ equity
Balance at beginning of year
Purchase of treasury stock
Net income for the year
Cash dividends
Decrease due to change in equity
Disposal of treasury stock
Other
Balance at end of year
Net unrealized holding gains on securities
Balance at beginning of year
Net changes of items other than shareholder’s equity
Balance at end of year
Net unrealized gains on derivative instruments
Balance at beginning of year
Net changes of items other than shareholder’s equity
Balance at end of year
Translation adjustments
Balance at beginning of year
Net changes of items other than shareholder’s equity
Balance at end of year
Total accumulated other comprehensive income (loss)
Balance at beginning of year
Net changes of items other than shareholder’s equity
Balance at end of year
Share subscription rights (Note 20)
Balance at beginning of year
Net changes of items other than shareholder’s equity
Balance at end of year
Minority interests
Balance at beginning of year
Net changes of items other than shareholder’s equity
Balance at end of year
Total net assets
Balance at beginning of year
Purchase of treasury stock
Net income for the year
Cash dividends
Decrease due to change in equity
Disposal of treasury stock
Other
Net changes of items other than shareholder’s equity
Balance at end of year
The accompanying notes are an integral part of these statements.

(12)
(357)
0
(369)

2,586
6,838
9,424

1,727
859
2,586

27,51872,747100,265

1,808(1,670)
138

1,974
(166)
1,808

19,241(17,775)
1,466(5,502)
2,220(3,282)¥ 6,280(1,108)
7,388
6,280

(4,943)(559)(5,502)¥ (1,108)(1,242)134(1,108)$(58,542)
23,622(34,920)
66,811(11,783)
78,594
66,811

¥

—
148
148

¥

$

¥ 10,373
815
11,188¥233,669
201,272(2)
28,935(4,887)—0—
8,351¥233,669

¥

—
—
—

8,751
1,622
10,373¥201,272
178,752(569)
26,194(4,584)
(276)
0
(1)
1,756
¥201,272

—
1,580
1,580

$ 110,358
8,674
119,032$2,486,103
2,141,419(17)
307,852(52,003)—4—
88,848$2,486,103

Century Tokyo Leasing Corporation

43

CONSOLIDATED STATEMENTS OF CASH FLOWSCENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2013 AND 2012

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

Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments to reconcile income before income taxes and minority
interests to net cash used in operating activities:
Depreciation and amortization of leased assets
Decrease in allowance for doubtful accounts
Loss on disposal of leased assets
Loss on devaluation of investments in securities
Foreign exchange gains
Interest and dividend income
Interest expenses
Gain on sale of investments in securities
Decrease(Increase) in installment sales receivable
Increase in lease receivables and investment assets
Increase in loans receivable
Increase in operational investment securities
Purchases of leased assets
Decrease(Increase) in claims provable in bankruptcy or rehabilitation
Increase in trade notes and accounts payable
Other, net
SubtotalInterest and dividend income received
Interest expenses 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
Collection of loans receivable
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Increase 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 in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase due to inclusion in consolidation
Cash and cash equivalents at end of year (Note 12)
The accompanying notes are an integral part of these statements.

2013

2012

2013

¥ 46,189¥ 44,081

27,774(1,860)7,511
7(2,848)(792)
10,289(112)(8,490)(30,778)(16,458)(5,975)(102,140)(78)
11,1106,154(60,497)
1,254(10,392)(20,076)(89,711)28,560(1,504)
7,967
1,952(1,180)(991)
12,070(690)
2,529(5,329)(64,463)(19,439)(30,945)983
16,0106,834(3,555)1,450(12,350)(11,970)(26,425)

295,497(19,793)
79,91073(30,306)(8,429)109,470(1,188)(90,326)(327,465)(175,102)(63,566)(1,086,708)(832)
118,200
65,485(643,651)
13,347(110,565)(213,606)(954,475)(1,601)410(4,871)
1
468(5,593)(1,330)2,062(1,091)
1
(158)
(516)

(17,029)
4,357(51,829)
8
4,988(59,505)

63,482
331,657(334,370)
81,100(1,000)19(4,887)(133)
135,868(1,972)
38,592
44,531—¥ 83,123

7,372
324,018(330,759)
44,092(1,500)802(4,584)(1,152)38,289308
11,65632,79481¥ 44,531

675,4093,528,640(3,557,511)
862,858(10,639)202(52,003)(1,397)
1,445,559(20,978)
410,601
473,780—$ 884,381$

491,429

44

Century Tokyo Leasing Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESMARCH 31, 2013 AND 2012

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 the provisions
set forth in the Corporation Law of Japan (the “Law”), theFinancial Instruments and Exchange Law of Japan 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 havebeen 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 andrearrangements have been made to the consolidated financial
statements issued domestically in order to present them in aformat 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 a matter ofarithmetic computation only, at ¥93.99 = US$1.00, the approximate rate of exchange in effect on March 31, 2013. This translation should not be construed as a representation thatJapanese yen amounts have been, could have been, or couldin 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 accounts of
the Company and its significant subsidiaries over which theCompany exerts control, principally Fujitsu Leasing Co., Ltd.
The Company’s share in the earnings or losses of affiliates
over which it is able to exercise significant influence in terms of
their operating and financial decisions is accounted for by theequity method and included in the consolidated operating
results.
The Company established RIBBONFISH MARINE S.A. and9 other companies during the fiscal year ended March 31,
2013, which have been newly included in the scope of consolidation.
A total of three companies including TLC Bunga Manggar
Ltd. have been excluded from the scope of consolidation due
to the completion of liquidation procedures and other reasons
from the fiscal year ended March 31, 2013.
The Company established GA Telesis, LLC which has been
included as an affiliated company accounted for by the equity
method from the fiscal year ended March 31, 2013.
With respect to affiliated companies accounted for by theequity method whose account closing dates differ from theclosing date of the Company, the Company has used theirfinancial statements as of their respective fiscal year end.

The number of consolidated subsidiaries and affiliatedcompanies for 2013 are as follows:
Consolidated subsidiaries
Affiliated companies

2013
99
8

In preparing the consolidated financial statements as ofMarch 31, 2013, the financial statements of TLC Freesia Co.,
Ltd. and 10 other subsidiaries were consolidated by using theirfinancial statements as of the parent fiscal year end and wereprepared solely for consolidation purposes. Century Tokyo
Leasing (USA) Inc. and 10 other subsidiaries were consolidated using their financial statements as of their respective fiscal
year end, which falls on December 31, 2012 and necessary
adjustments were made to their financial statements to reflect
any significant transactions from January 1 to March 31, 2013.

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
statements 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 the components of
net assets excluding minority interests which are translated attheir 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 as translation 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 and short-term investments with original maturities of three months or less which arereadily convertible into cash and are 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, and leased
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.

Century Tokyo Leasing Corporatione) Allocation of interest expenses
Interest expenses are allocated to cost of sales and otherexpenses based on the balances of the respective operating
assets, which consist principally of lease receivables, lease
investment assets and loans. Interest expenses classified ascost of sales are stated net of interest income.

f) Securities
Securities held by the Companies are classified as availablefor-sale securities. Marketable available-for-sale securities arecarried at fair value with any unrealized gain or loss, net of therelated income taxes, included directly in net assets. Cost of
securities sold is determined principally by the moving averagemethod. Non-marketable available-for-sale securities are stated at cost determined principally by the moving average method.
Hybrid financial instruments, from which an embedded
derivative cannot be separated, are stated at fair value and theresulting gains or losses are recognized in the consolidated
statements of income. Investments in a limited partnership aremeasured using the equity method. As of March 31, 2013 and2012, the Companies did not have any trading securities.

g) Inventories
Inventories held by the Company are stated at cost determinedby specific identification method (of which carrying values arecalculated based on the method of reduction of book value
accompanied with decline in market value).

h) Property and equipment
Property and equipment is stated at cost less accumulated
depreciation. Depreciation of leased assets is computed by thestraight-line method based on the lease term of the respective
assets. Depreciation of assets owned and used by theCompanies is computed primarily by the declining-balancemethod (while the straight-line method is applied to buildings
acquired on and after April 1, 1998) based on the estimateduseful lives of the respective assets which range principallyfrom 3 to 47 years for buildings, and from 3 to 20 years forequipment.

i) Intangible assets
Depreciation of the computer program leased to customers is
computed by the straight-line method based on the lease-termof the respective assets. Costs related to software purchased
for internal use are amortized by the straight-line method overthe estimated useful life (generally 5 years).
Goodwill is amortized by the straight-line method over a periodof five years.

j) Income taxes
Provision is made for the Companies’ liabilities for various
types of income taxes, i.e., corporation, inhabitants and enterprise taxes.

45

Deferred tax assets and liabilities are accounted for under
the asset and liability method. Deferred tax assets and liabilities
are recognized for the future tax consequences attributable todifferences between the financial statement carrying amountsof existing assets and liabilities and their tax bases and operating losses and tax credits carried forward. 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 an amount calculated based on the retirement benefit
obligation and the fair value of the pension plan assets as
adjusted for unrecognized actuarial gain or loss and unrecognized prior service cost. The Company and certain domestic
subsidiaries have defined benefit plans covering substantiallyall employees other than directors and corporate auditors.
Under the terms of these plans, eligible employees are entitledto lump-sum or annuity payments based on their level of compensation at termination and their years of service with theCompany or the subsidiaries. To provide coverage for part ofthe lump-sum 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 andcorporate auditors are provided at an amount to be required at
the year-end according to internal regulations.

l) Derivatives and hedging activities
The Companies enter into interest-rate swap contracts, forward foreign exchange contracts, currency options and loans
from banks in order to hedge interest-rate and foreign currency
exchange rate exposure on certain liabilities and assets, including loans from banks, installment sales receivables 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 andassets hedged and such 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 “Accounting Standard
for Foreign Currency Transactions.” More specifically, interestrate swaps not designated as hedging instruments are recorded
at fair value in the consolidated balance sheet. Interest-rate
swaps which qualify for hedge accounting and meet specificmatching criteria are not measured at fair value, but the differential paid or received under the swap agreements is recognized
and included in interest 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.

46

Century Tokyo Leasing Corporation

For forward foreign exchange contracts, the Companies
follow the accounting method specified in “AccountingStandard for Financial Instruments” (“Allocation method”), if thecontracts qualify for hedge accounting. Under this method, foreign currency transactions and the related monetary assets(installment sales receivables and loans receivables) are to betranslated at the fixed yen amount of such foreign currency
contracts at the settlement dates based on the contracted
rates. The difference between this amount and the amount astranslated at the current rate of exchange on the date of forward contract is allocated over the 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 the hedging instruments
and the hedged forecasted transactions are the same. Hedge
effectiveness is not assessed for the foreign currency
exchange contracts which meet the requirements 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.

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

n) Allowance for doubtful accounts
The allowance for doubtful accounts is recorded on the basisof 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 individuallyreviewing the specific collectibility of certain doubtful accounts.

o) Consumption taxes
Transactions subject to consumption taxes are recorded at
amounts exclusive of consumption taxes.

3. Standards issued but not yet effective
On March 25, 2011, the ASBJ issued “Revised AccountingStandard for Consolidated Financial Statements” (ASBJ
Statements No. 22), “Revised Guidance on Disclosures about
Certain Special Purpose Entities” (ASBJ Guidance No. 15),
“Revised Guidance on Determining a Subsidiary and an
Affiliate” (ASBJ Guidance No. 22) and “Revised Practical
Solution on Application of the Control Criteria and Influence
Criteria to Investment Associations” (ASBJ PITF No. 20). Thesestandards and related implementation guidance and practicalsolution modify existing standards to address the current treatment for consolidation of certain special purpose entities.
These standards and related implementation guidance andpractical solution are effective as of the beginning of fiscal
years beginning on or after April 1, 2013. The Company is currently evaluating what effect these modifications will have on its
consolidated results of operations and financial position.
On May 17, 2012, the ASBJ issued “accounting Standard
for Retirement Benefits” (ASBJ Statement No. 26) and“Guidance on Accounting Standard for Retirement Benefits”(ASBJ Guidance No. 25), which replaced the AccountingStandard for Retirement Benefits that had been issued by theBusiness Accounting Council in 1998 with an effective date ofApril 1, 2000 and the other related practical guidance, being
followed by partial amendments from time to time through2009. The major changes are as follows:(1) Treatment in the balance sheet—Actuarial gains and losses
and prior service cost that have yet to be recognized in profit
or loss shall be recognized within net assets (accumulated
other comprehensive income), after adjusting for tax effects,
and the deficit or surplus shall be recognized as a liability (liability for retirement benefits) or asset (asset for retirement benefits).
(2) Treatment in the statement of income and the statement ofcomprehensive income—Actuarial gains and losses and priorservice cost that arose in the current period and have yet to berecognized in profit or loss shall be included in other comprehensive income and actuarial gains and losses and prior service cost that were recognized in other comprehensive income
in prior periods and then recognized in profit or loss in the current period shall be treated as reclassification adjustments.
This standard and related guidance are effective as of theend of fiscal years beginning on or after April 1, 2013. The
Company is currently evaluating the effect these modifications
will have on its consolidated results of operations and financial
position.

p) Allowance for automobile inspection costs
Under lease and maintenance service contracts, allowance for
automobile inspection costs is recorded on the basis of historical experience.

q) Negative goodwill
Negative goodwill is amortized by straight-line method over a
period of five years.

4. Accounting Changes
In accordance with an amendment to the Corporation Tax Law
effective April 1, 2012, the Company and its domestic consolidated subsidiaries have changed their depreciation method forproperty, plant and equipment acquired on or after April 1,
2012, other than certain buildings, to reflect the methods prescribed in the amended Corporation Tax Law. The previously
applied 250% declining-balance method was changed to the
200% declining-balance method. The change had insignificant
effect on the consolidated statement of income.

Century Tokyo Leasing Corporation

5. Change in Presentation Method(Consolidated Statements of Income)
Office transfer expenses in the amount of ¥147 million and loss
on disposal of noncurrent assets of ¥12 million for the year
ended March 31, 2012, which were included in “Other, net,”were presented as “Office transfer expenses”, “Loss on disposal of noncurrent assets” from the fiscal year ended March 31,
2013 since the amount of these accounts exceeded the materiality for disclosure.
Early extra retirement payments in the amount of ¥730 mil-47

lion for the year ended March 31, 2012, which was presented
as “Early extra retirement payments” was included as “Other,
net,” from the fiscal year ended March 31, 2013 since theamount of the account became insignificant.
(Consolidated Statements of Cash Flows)
Early extra retirement payments in the amount of ¥730 million
for the year ended March 31, 2012, which was presented as“Early extra retirement payments” was included as “Other, net,”from the fiscal year ended March 31, 2013 since the amount of
the account became insignificant.

6. Operational Investment Securities, Short-term Investment Securities and Investments in Securities
Available-for-sale securities included in operational investment securities, short-term investment securities and investments insecurities at March 31, 2013 and 2012 consisted of the following:Thousands of
U.S. dollars

Millions of yen

2013¥ 34,438
11,450109,801¥155,689

Equity securities
Debt securities
Other

2012
¥ 25,397
13,19988,001¥126,597

2013$ 366,402
121,820
1,168,226$1,656,448

The carrying amounts and aggregate fair value of securities with determinable market value at March 31, 2013 and 2012 were as
follows:
Millions of yen

March 31, 2013

Available-for-sale securities:
Equity securities
Debt securities
Other

Cost orbook value

Unrealized gain

Unrealized loss

Fair value¥15,230
11,10429,175¥11,596
48
2,152

¥105
2
124

¥26,721
11,15031,203

Millions of yen

March 31, 2012

Available-for-sale securities:
Equity securities
Debt securities
Other

Cost orbook value

Unrealized gain

Unrealized loss

Fair value¥14,304
12,88924,067¥4,925
52
161

¥889
42
351

¥18,340
12,89923,877

Thousands of U.S. dollars

March 31, 2013

Available-for-sale securities:
Equity securities
Debt securities
Other

Cost orbook value

Unrealized gain

$162,033
118,145
310,403$123,375
511
22,900

Unrealized loss

Fair value$1,11628
1,321$284,292
118,628
331,982

48

Century Tokyo Leasing Corporation

Available-for-sale securities whose fair value was not readily determinable as of March 31, 2013 and 2012 were as follows:
Carrying amountThousands of
U.S. dollars

Millions of yen

Available-for-sale:
Equity securities
Debt securities
Other

2013

2012

2013

¥ 7,718
300
78,599¥ 7,057300
64,123$ 82,111
3,192
836,244

Proceeds from sale of available-for-sale securities and the resulting realized gain or loss for the years ended March 31, 2013 and2012 were summarized as follows:
Carrying amountThousands of
U.S. dollars

Millions of yen

Proceeds
Realized gain
Realized loss

2013
¥10,017
1,826
12

2012
¥2,130
747
57

2013$106,570
19,430128

The impairment loss on Investment Securities recognized for the years ended March 31, 2013 and 2012 were as follows:
Millions of yen

Equity securities
Other

2013
¥ 15
124
¥139

2012
¥1,953350¥2,303Thousands of
U.S. dollars

2013
$ 162
1,321
$1,483

7. Accumulated Depreciation for Property and Equipment
Accumulated depreciation for property and equipment at March 31, 2013 and 2012 was as follows:
Millions of yen

Leased assets
Own assets in use

2013¥111,583
1,984

2012
¥105,421
2,048

Thousands of
U.S. dollars

2013$1,187,183
21,106

Century Tokyo Leasing Corporation

49

8. Short-Term Borrowings, Long-Term Debt and Assets Pledged
Short-term borrowings at March 31, 2013 and 2012 were as follows:

Millions of yen

Short-term loans from banks
Commercial paper
Payables under securitized lease receivables
Total

2013
¥ 340,667
648,900
54,700¥1,044,267

Weightedaverageinterest rate

Thousands of
U.S. dollars

2012¥285,691
631,900
48,000¥965,591

2013$ 3,624,505
6,903,926
581,977$11,110,408

0.59%
0.13%
0.29%

Long-term debt at March 31, 2013 and 2012 consisted of the following:

Millions of yen

Long-term loans, principally from banks
Payables under securitized lease receivables
Bonds payable
Total
Less current portion2013¥ 770,224—
124,728
894,952(312,876)¥ 582,076

2012¥ 763,717
9,656
44,210817,583(311,696)¥ 505,887

Weightedaverageinterest rate

Thousands of
U.S. dollars

2013$ 8,194,742—
1,327,035
9,521,777(3,328,824)$ 6,192,953

0.66%
0.52%

The Companies have entered into overdraft contracts which provided the Companies with the overdraft facilities with 80 and
65 financial institutions as of March 31, 2013 and 2012 amounting to ¥871,313 million ($9,270,277 thousand) and ¥747,117 million, respectively. The unused facilities maintained by the Companies as of March 31, 2013 and 2012 amounted to ¥529,439 million ($5,632,932 thousand) and ¥474,969 million, respectively.
The aggregate annual maturity of long-term debt subsequent to March 31, 2013 is summarized as follows:Year ending March 31,

Millions of yen

Thousands of
U.S. dollars

2014
2015
2016
2017
2018
2019 and thereafter¥312,876
250,661
201,844
67,43038,88523,256¥894,952$3,328,824
2,666,883
2,147,509
717,419
413,713
247,429$9,521,777

The Companies’ assets pledged as collateral, principally for liabilities of ¥99,237 million ($1,055,824 thousand), at March 31, 2013
were as follows:

Cash on hand and in banks
Accounts receivable-installment sales
Accounts receivable-lease receivables and investment assets
Accounts receivable-loans
Inventories
Other current assets
Leased assets
Investments in securities
Claims provable in bankruptcy or rehabilitation

Millions of yen

Thousands of
U.S. dollars

¥

$

3,446
8,533
80,310
109
992
5,210
37,84513489¥136,947

36,666
90,790854,452
1,162
10,55055,436402,646
135
5,202$1,457,039

50

Century Tokyo Leasing Corporation

9. Derivatives
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 with the underlying assets and liabilities hedged, these derivatives function to reduce the overall market risk to which theCompanies 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 basedon 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 approvalin accordance 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.
The following table presents the outstanding derivatives positions that do not qualify for hedge accounting at March 31, 2013:
Millions of yen
Notional amount(over one year)

Currency swap contracts:
Receive/USD; Pay/SGD
Non-deliverable forward
Put/CNY
Total
Interest-rate swap contracts:
Pay/fixed; Receive/floating
Total

¥

1,035
(1,035)

12,611(11,719)¥ 13,646

¥

708
(—)
708

Thousands of U.S. dollars

Fair value

Unrealized
gain (loss)

Notional amount(over one year)

¥

¥

(12)

(2,554)(2,554)¥(2,566)¥(2,566)

(6)

(6)

(12)

¥

(6)

¥

(6)

Fair value

Unrealized
gain (loss)$ 11,007(11,007)$$

134,181(124,683)$ 145,188(27,171)(27,171)$(27,303)$(27,303)

(68)

(68)

$

7,531
(—)
7,531

$

(132)

(68)

$

(132)

(68)

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, 2012:
Millions of yen

Currency swap contracts:
Receive/USD; Pay/SGD
Non-deliverable forward
Put/CNY
Total
Interest-rate swap contracts:
Receive/fixed; Pay/floating

Notional amount(over one year)

Fair value

Unrealized
gain (loss)

¥

¥

¥

(9)

(9)

11,644(11,099)¥ 12,512

(383)

(383)

¥(392)¥(392)¥¥¥

Pay/fixed; Receive/floating
Interest-rate cap contracts
Call
Total

868
(—)

¥

599
(599)
625
(—)
599
(—)
1,823

(9)

(9)

(2)

(2)

0

0

¥ (11)¥ (11)

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

Century Tokyo Leasing Corporation

51

The following table presents the outstanding derivative positions that qualify for hedge accounting at March 31, 2013:
Millions of yen
Hedged items

Allocation method:
Forward exchange contracts :Put
USD

Accounts-receivable-installment sales
Inventories

Call
USD

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

Accounts-receivable-installment sales
Inventories

Fair value¥ 3,426(2,446)433(—)¥(599)

7
(—)
243
(—)

0

(—)

2

Notional amount(over one year)

Fair value$ 36,461(26,025)
4,610(—)$(6,379)

71
(—)
2,588
(—)

(2)

5

21

Currency options :
Call
USD

Inventories

996
(—)

(3)

10,592
(—)

(33)

Put
USD

Inventories

996(—)¥ 6,101(2,446)(1)

10,592(—)$ 64,914(26,025)

(7)

Total

¥(601)$(6,395)

Note: Fair value is primarily based on the prices indicated by corresponding financial institutions.
Millions of yen
Hedged items

Interest rate swap
Deferral hedge accounting:
Pay/fixed; Receive/floating
Short-cut method:
Pay/fixed; Receive/floating
Total

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

Borrowings¥ 14,758(2,363)

Borrowings
Accounts-receivable-loans

76,334(46,847)¥ 91,092(49,210)

Fair value¥

Notional amount(over one year)

Fair value(76)$ 157,021(25,136)$(949)

812,147(498,435)$ 969,168(523,571)(10,103)¥(1,025)

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

(806)$(10,909)

52

Century Tokyo Leasing Corporation

The following table presents the outstanding derivative positions that qualify for hedge accounting at March 31, 2012:
Millions of yen
Notional amount(over one year)

Hedged items

Fair value

Allocation method:
Forward exchange contracts:
Put
USD

Accounts-receivable-installment sales¥3,439(2,120)

¥(90)

Call
USD

Accounts-receivable-installment sales

931
(—)
120
(—)
3
(—)
3
(—)

34

CHF
SGD
AUD

12
0
(0)

Currency options:
Call
USD

Inventories

676
(—)

(2)

Put
USD

Inventories

676
(—)

(0)

Forecasted transaction

1,883
(—)
¥7,731(2,120)(3)

Deferral hedge accounting:
Forward exchange contracts:
Put
USD
Total

¥(49)

Note: Fair value is primarily based on the prices indicated by corresponding financial institutions.
Millions of yen
Hedged items

Notional amount(over one year)

Fair value

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

Borrowings¥ 37,497(14,653)¥ (180)

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

Borrowings

13,255(—)
133,758(75,361)
4,000(—)¥188,510(90,014)120

Pay/fixed; Receive/floating
Receive/floating; Pay/floating
Total

Borrowings
Accounts-receivable-loans
Borrowings(1,080)(1)¥(1,141)

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

Century Tokyo Leasing Corporation

53

10. Selling, General and Administrative Expenses
Major components of selling, general and administrative expenses for the years ended March 31, 2013 and 2012 were as follows:
Thousands of
U.S. dollars

Millions of yen

Employees’ salaries, wages and bonuses
Computer related expenses
Allowance for accrued bonuses for employees
Retirement benefit expenses
Allowance for accrued bonuses for directors
Allowance for retirement benefits for directors
Allowance for doubtful accounts

2013¥12,104
2,806
1,809
893
110
28
(929)

2012
¥12,604
3,028
1,725
1,015
68
29
12

2013
$128,783
29,85819,249
9,505
1,166
294
(9,886)

11. Other Comprehensive Income
The following table presents reclassifications adjustments and tax effects allocated to each component of other comprehensive
income for the year ended March 31, 2013:
Year ended March 31, 2013

Net unrealized holding gains on securities
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Amount before tax effectTax effectNet unrealized holding gains on securities
Net unrealized losses on derivative instruments
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Amount before tax effectTax effectNet unrealized losses on derivative instruments
Translation adjustments
Amount arising during the year
Share of other comprehensive income of affiliates accounted for using equity method
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Share of other comprehensive income of affiliates accounted for using equity method
Total other comprehensive income

Millions of yen

Thousands of
U.S. dollars¥11,809(1,669)10,140(3,331)
6,809$125,638(17,753)
107,885(35,437)
72,448(1,989)(833)(2,822)
1,107(1,715)(21,161)(8,861)(30,022)
11,781(18,241)

2,207

23,477

184—
184¥ 7,485

1,953
—
1,953
$ 79,637

54

Century Tokyo Leasing Corporation

The following table presents reclassifications adjustments and tax effects allocated to each component of other comprehensive
income for the year ended March 31, 2012:
Year ended March 31, 2012

Millions of yen

Net unrealized holding gains on securities
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Amount before tax effectTax effectNet unrealized holding gains on securities
Net unrealized losses on derivative instruments
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Amount before tax effectTax effectNet unrealized losses on derivative instruments
Translation adjustments
Amount arising during the year
Share of other comprehensive loss of affiliates accounted for using equity method
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Share of other comprehensive loss of affiliates accounted for using equity method
Loss on change in equity
Amount arising during the year
Total other comprehensive loss

¥ 989
28
1,017
(170)
847
166
(569)
(403)
250
(153)
(650)
(45)
(2)
(47)
(276)
¥ (279)12. Notes to the Consolidated Statements of Cash Flows
Cash and cash equivalents at March 31, 2013 and 2012 are reconciled to the accounts reported in the consolidated balance
sheet as follows:
Thousands of
U.S. dollars

Millions of yen

Cash on hand and in banks
Time deposits with maturities of more than three months
Cash equivalents included in short-term investment securities
Receivables under resale agreements
Bank overdrafts
Cash and cash equivalents

2013¥56,250(88)
18,0002012¥43,555
(83)
2,000

2013
$598,471(937)
191,510

9,999—

106,385(1,038)¥83,123(941)¥44,531(11,048)$884,381

Century Tokyo Leasing Corporation

55

13. Income Taxes
The significant components of deferred tax assets and liabilities at March 31, 2013 and 2012 were as follows:
Thousands of
U.S. dollars

Millions of yen

2013
Deferred tax assets:
Allowance for doubtful accounts
Tax adjustments for lease transactions
Loss on devaluation of own assets in use
Depreciation
Retirement benefits
Loss on devaluation of investments in securities
Accrued bonuses
Other
SubtotalLess valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Net unrealized holding gain on securities
Other
Total deferred tax liabilities
Net deferred tax assets

2012

2013

¥ 1,190
365
459
1,187
475
1,878
692
3,826
10,072(1,209)
8,863

¥

464
411
563
1,713
881
1,856
652
2,957
9,497
(1,272)8,225$ 12,663
3,887
4,886
12,633
5,050
19,984
7,361
40,693
107,157(12,858)
94,299(4,643)(6,449)(11,092)¥ (2,229)(1,313)(5,589)(6,902)¥ 1,323(49,403)(68,617)(118,020)$ (23,721)

A reconciliation for the year ended March 31, 2013 was as follows.

Statutory tax rate
Non-deductible expenses for income tax purpose
Non-taxable income for income tax purpose
Elimination of intercompany dividend
Equity in earnings of affiliates
Amortization of goodwill and negative goodwill
Other
Effective tax rates

2013
38.0%
0.2

(0.8)
0.6
(1.8)
(0.4)
(0.1)
35.7%

A reconciliation for the year ended March 31, 2012 is not presented because the difference between the statutory tax rate and theeffective tax rates is negligible.

56

Century Tokyo Leasing Corporation

14. Retirement Benefits
1. Overview of Retirement Benefit Plans Implemented by the Company
The Company has implemented an employee 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.
2. The following summarizes the funded status of, and amounts recognized in the consolidated balance sheet at March 31, 2013
and 2012 for the Company’s and the consolidated domestic subsidiaries’ defined benefit plans:
Thousands of
U.S. dollars

Millions of yen

Projected benefit obligation
Fair value of plan assets
Unfunded benefit obligation
Unrecognized actuarial loss
Unrecognized prior service cost
Net recognized retirement benefit obligation
Accrued benefit obligation for employees

2013¥(10,236)
8,388(1,848)278
630¥ (940)¥ (940)2012¥(9,620)
7,588(2,032)561
518¥ (953)¥ (953)2013$(108,907)
89,246(19,661)
2,962
6,703
$ (9,996)$ (9,996)

The following summarizes the components of the net periodic pension cost for employees for the years ended March 31, 2013
and 2012:
Thousands of
U.S. dollars

Millions of yen

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
Contribution to the fundContribution paid to the defined contribution pension plan
Net periodic pension cost
Total

2013
¥ 494
191
(127)
167
(113)
164
113
889
¥ 889

2012
¥ 513
183
(119)
154
(113)
277
120
1,015
¥1,0152013$ 5,257
2,037(1,364)
1,775(1,197)
1,744
1,205
9,457
$ 9,457

The assumptions used in determining the pension benefit obligation are shown below.

Discount rate
Expected rate of return on plan assets
Period for the recognition of actuarial gain or loss
Period for the recognition of prior service cost2013
1.7~2.0%
1.5~3.2%
five or ten years
five years

2012
2.0~2.5%
1.5~3.2%
five or ten years
five years

The following summarizes the most recent funded status of the multi-employer welfare pension fund as of March 31, 2013 and2012.
Millions of yen

Amount of plan assets
Benefit obligations under pension funding programs
Difference2013¥ 65,155(77,804)¥(12,649)

2012¥ 60,609(75,130)¥(14,521)

Thousands of
U.S. dollars

2013$ 693,212(827,790)$(134,578)

Century Tokyo Leasing Corporation

57

The difference at March 31, 2013 above consisted of prior service cost under pension funding programs of ¥12,316 million($131,035 thousand) and a general reserve of ¥333 million ($3,543 thousand).
For the year ended March 31, 2013 corresponding to the year ended March 31, 2012, the ratio of the Company’s contributions against total contributions to the plan was 6.92%.

15. Lease Transactions(Lessors’ accounting)
Finance leases that do not transfer ownership to the lessee are capitalized as lease investment assets. Information relating tofinance leases of the Companies at March 31, 2013 and 2012 is summarized as follows:
Millions of yen

Future lease receivables
Estimated residual value
Future interest income

2013¥1,106,517
36,750(67,235)¥1,076,032

2012¥1,128,573
37,668(75,886)¥1,090,355

Thousands of
U.S. dollars

2013$11,772,713
391,003(715,346)$11,448,370

The aggregate annual maturity of finance lease receivables that transfer ownership to the lessees, subsequent to March 31, 2013
and 2012, is summarized as follows:
Millions of yen

Due within one year
Due after one to two years
Due after two to three years
Due after three to four years
Due after four to five years
Due after five years

2013¥ 70,556
51,16834,022
20,77921,897
8,609¥207,0312012¥ 56,706
44,871
31,08518,034
7,477
6,944¥165,117

Thousands of
U.S. dollars

2013$ 750,673
544,401
361,972
221,075
232,973
91,602$2,202,696

The aggregate annual maturity of finance lease receivables that do not transfer ownership to the lessees, subsequent to March 31,
2013 and 2012, is summarized as follows:
Millions of yen

Due within one year
Due after one to two years
Due after two to three years
Due after three to four years
Due after four to five years
Due after five years

2013¥ 379,272
275,417
202,145
128,704
68,032
52,947¥1,106,517

2012¥ 398,278
286,613
196,140
128,305
66,21953,018¥1,128,573

Thousands of
U.S. dollars

2013$ 4,035,240
2,930,285
2,150,703
1,369,341
723,827
563,317$11,772,713

As for the lease accounting treatment for finance lease transactions that do not transfer ownership to the 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 ¥4,782 million($50,877 thousand) and ¥7,890 million for the years ended March 31, 2013 and 2012, respectively compared with the amountcalculated on the 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 commencement date.

58

Century Tokyo Leasing Corporation

The future minimum lease income subsequent to March 31, 2013 and 2012 under non-cancellable operating leases is summarized as follows:
Thousands of
U.S. dollars

Millions of yen

Due within one year
Due after one years

2013¥ 28,941
81,059¥110,0002012¥25,729
65,788¥91,5172013$ 307,911
862,426$1,170,337

16. Commitments and Contingent Liabilities
The Companies’ contingent liabilities at March 31, 2013 and 2012 were as follows:
Thousands of
U.S. dollars

Millions of yen

As a guarantor of indebtedness of:Loans and others
Asset purchases
Employees housing loans

2013

2012

2013

¥63,0222,850
184¥66,056¥60,575
2,597
250¥63,422$670,524
30,317
1,953$702,794

The Companies, as lenders, have loan commitment agreements as of March 31, 2013 and 2012 amounting to ¥50,538 million($537,691 thousand) and ¥34,093 million, respectively. The loans provided under these credit facilities as of March 31, 2013 and2012 amounted to ¥15,196 million ($161,678 thousand) and ¥7,213 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.

Century Tokyo Leasing Corporation

59

17. Estimated Fair Value of Financial Instruments
The following table presents the carrying value and estimated fair value of financial instruments at March 31, 2013 and 2012. The
following table does not include financial instruments for which it is extremely difficult to determine the fair value.
Millions of yen

As of March 31, 2013
Assets(1) Cash on hand and in banks(2) Accounts receivable-installment sales
Deferred profit on installment sales¥

Allowance for doubtful accounts(*1)(3) Accounts receivable-lease receivables and investment assets
Estimated residual value(*2)
Allowance for doubtful accounts(*1)(4) Accounts receivable-loans
Allowance for doubtful accounts(*1)(5) Operational investment securities(6) Short-term investment securities and investments in securities(7) Claims provable in bankruptcy or rehabilitation
Allowance for doubtful accounts(*1)
Total assets
Liabilities(1) Notes and accounts payable-trade(2) Short-term loans from banks(3) Commercial paper(4) Payables under securitized lease receivables(5) Bonds payable(6) Long-term loans, principally from banks(7) Lease obligations
Total liabilities
Derivatives
Hedge accounting not applied
Hedge accounting applied
Total derivatives

Carrying value

Estimated fair value

56,250212,042(10,483)
201,559(628)
200,931
1,271,716(36,750)
1,234,966(2,294)
1,232,672¥

56,250Difference¥—

202,440

1,509

1,267,280

34,608450,041(1,877)448,164
26,23842,835
5,358(2,373)
2,985¥2,010,075

459,821
26,23842,835

11,657——2,985¥2,057,849—¥ 47,774¥ 161,560
340,667
648,900
54,700124,728770,224
15,961¥2,116,740¥ 161,560
340,667
648,900
54,700123,985
769,061
15,621¥2,114,494

¥

—
—
—
—
743
1,163
340
¥ 2,246

¥

¥

¥

¥

(2,572)(76)(2,648)¥(2,572)(1,627)(4,199)—(1,551)¥ (1,551)

60

Century Tokyo Leasing Corporation

Millions of yen

As of March 31, 2012
Carrying value

Assets(1) Cash on hand and in banks(2) Accounts receivable-installment sales
Deferred profit on installment sales
Allowance for doubtful accounts(*1)(3) Accounts receivable-lease receivables and investment assets
Estimated residual value(*2)
Allowance for doubtful accounts(*1)(4) Accounts receivable-loans
Allowance for doubtful accounts(*1)(5) Operational investment securities(6) Short-term investment securities and investments in securities(7) Claims provable in bankruptcy or rehabilitation
Allowance for doubtful accounts(*1)
Total assets
Liabilities(1) Notes and accounts payable-trade(2) Short-term loans from banks(3) Commercial paper(4) Payables under securitized lease receivables(5) Bonds payable(6) Long-term loans, principally from banks(7) Long-term payables under securitized lease receivables(8) Lease obligations
Total liabilities
Derivatives
Hedge accounting not applied
Hedge accounting applied
Total derivatives¥

43,555
198,890(10,904)
187,986(1,035)
186,951
1,247,752(37,668)
1,210,084(3,285)
1,206,799
430,903(2,447)428,456
34,777
20,3395,242(2,217)
3,025¥1,923,902

Estimated fair value¥

43,555Difference¥—

190,446

3,495

1,248,613

41,814440,369
34,777
20,33911,913——

3,025¥1,981,124—¥ 57,222¥ 150,374
285,691
631,900
48,00044,210763,717
9,656
18,939¥1,952,487¥ 150,374
285,691
631,900
48,00043,613774,227
9,969
18,558¥1,962,332

¥

—
—
—
—
597
(10,510)(313)381¥ (9,845)

¥

¥

¥

¥

(403)
(183)
(586)

¥

(403)
(1,190)(1,593)—(1,007)¥ (1,007)Century Tokyo Leasing Corporation

61

Thousands of U.S. dollars

As of March 31, 2013
Carrying value

Assets(1) Cash on hand and in banks(2) Accounts receivable-installment sales
Deferred profit on installment sales
Allowance for doubtful accounts(*1)(3) Accounts receivable-lease receivables and investment assets
Estimated residual value(*2)
Allowance for doubtful accounts(*1)(4) Accounts receivable-loans
Allowance for doubtful accounts(*1)(5) Operational investment securities(6) Short-term investment securities and investments in securities(7) Claims provable in bankruptcy or rehabilitation
Allowance for doubtful accounts(*1)
Total assets
Liabilities(1) Notes and accounts payable-trade(2) Short-term loans from banks(3) Commercial paper(4) Payables under securitized lease receivables(5) Bonds payable(6) Long-term loans, principally from banks(7) Lease obligations
Total liabilities
Derivatives
Hedge accounting not applied
Hedge accounting applied
Total derivatives$

598,4712,256,005(111,531)
2,144,474(6,680)2,137,794
13,530,335(391,003)
13,139,332(24,417)
13,114,915
4,788,180(19,966)
4,768,214
279,162455,741
57,004(25,257)
31,747$21,386,044

Estimated fair value$

598,471

Difference$—

2,153,847

16,053

13,483,131

368,216

4,892,231
279,162455,741

124,017——

31,747$21,894,330—$508,286$ 1,718,911
3,624,505
6,903,926
581,977
1,327,035
8,194,742
169,817$22,520,913$ 1,718,911
3,624,505
6,903,926
581,977
1,319,131
8,182,366
166,197$22,497,013

$

$

$

$

$

(27,370)(806)(28,176)$(27,370)(17,304)(44,674)

—
—
—
—
7,904
12,376
3,620$ 23,900—(16,498)$ (16,498)

General and specific allowances are deducted from the amounts of accounts receivable-installment sales, lease receivables andinvestment assets, accounts receivable-loans and claims provable in bankruptcy or rehabilitation, respectively.
(*2)
Estimated residual values included in the account of lease receivables and investment assets are deducted.
(*1)(Note 1) Methods to determine the estimated fair value of financial instruments and other matters related to securities 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 value 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.

62

Century Tokyo Leasing Corporation

Liabilities(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.

(Note 2) Financial instruments for which it is extremely difficult to determine the fair value
Thousands of
U.S. dollars

Millions of yen

2013¥ 29,801300
8,321

Unlisted shares
Bonds
Trust beneficiary rights
Preferred equity investment securities
Investments in limited partnerships, etc.
Total

2012
¥23,762
300
4,465

4,089

4,161

66,188¥108,699

55,497¥88,1852013$ 317,061
3,192
88,53243,508704,204$1,156,497

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 the above table.

(Note 3) Redemption schedule for receivables and marketable securities with maturities subsequent to March 31,
2013 and 2012
Millions of yen

As of March 31, 2013
Due after
One Yearthrough
Two Years

Due after
Two Years
throughThree Years

Due afterThree Years
through
Four Years

Due after
Four Years
throughFive Years

Due after
Five Years¥—
50,69357,531¥—
37,32656,558¥—23,86956,712¥—
12,26919,107¥

7,009
10,968

3,054
85

335
103

—
1,648

—
2,949

19
31,530—18,000¥ 386,889——¥ 111,363——¥94,322——¥82,229——¥34,325——¥84,905

Due inOne Yearor Less

Cash on hand and in banks
Accounts receivable-installment sales
Accounts receivable-loans
Operational investment securities:
Available-for-sale securities with maturities(1) Bonds(2) Other
Short-term investment securities and investments insecurities:
Available-for-sale securities with maturities(1) Bonds(2) OtherTotal¥ 56,250
79,081
215,581—8,804
44,552

Century Tokyo Leasing Corporation

63

Millions of yen

As of March 31, 2012
Due after
One Yearthrough
Two Years

Due after
Two Years
throughThree Years

Due afterThree Years
through
Four Years

Due after
Four Years
throughFive Years

Due after
Five Years—
56,11982,272¥—
31,39646,857¥—
21,33739,224¥—
12,61045,792¥—
10,66945,791

2,035
11,263

7,009
3,563

2,787
1,541

335
744

—
2,080

29
19,236—2,000¥ 296,579——¥148,963——¥82,581——¥61,640——¥60,482——¥75,725

Due afterThree Years
through
Four Years

Due after
Four Years
throughFive Years

Due after
Five Years

$

$

$

Due inOne Yearor Less

Cash on hand and in banks
Accounts receivable-installment sales
Accounts receivable-loans
Operational investment securities:
Available-for-sale securities with maturities(1) Bonds(2) Other
Short-term investment securities andinvestments in securities:
Available-for-sale securities with maturities(1) Bonds(2) OtherTotal¥ 43,555
66,759170,967¥

Thousands of U.S. dollars

As of March 31, 2013
Due after
One Yearthrough
Two Years

Due inOne Yearor Less

Cash on hand and in banks
Accounts receivable-installment sales
Accounts receivable-loans
Operational investment securities:
Available-for-sale securities with maturities(1) Bonds(2) Other
Short-term investment securities and investments insecurities:
Available-for-sale securities with maturities(1) Bonds(2) OtherTotal$ 598,471
841,376
2,293,663

74,572
116,683$

Due after
Two Years
throughThree Years— $—539,346
397,127
612,092
601,740

32,491
911

3,560
1,110

—
253,951
603,378—
130,534
203,290—
93,671
474,017—
17,545—31,380204
335,450————
191,510———$4,116,275 $1,184,840 $1,003,537 $874,874——$365,204——$903,342

The redemption schedule for long-term debt and lease receivables and lease investment assets are disclosed in Note 8 andNote 15, respectively.

18. Dividends(1) Dividends paid to shareholders
For the year ended March 31, 2013

(Date of approval)
Resolution approved by(June 21, 2012)
Annual general meeting of shareholders(November 5, 2012)
Board of directors

Type of shares

Common stock
Common stock

AmountAmount per share

Millions of yen
Thousands of
U.S. dollars

Yen
U.S. dollars¥2,337$24,871¥2,550$27,132

¥22.0
$0.23
¥24.0
$0.26

Shareholders’
cut-off date

Effective date

March 31, 2012 June 22, 2012
September 30,
2012

December 10,
2012

64

Century Tokyo Leasing Corporation

For the year ended March 31, 2012
(Date of approval)
Resolution approved by(June 23, 2011)
Annual general meeting of shareholders(October 31, 2011)
Board of directors

AmountAmount per share

Type of shares

Millions of yen

Yen

Shareholders’
cut-off date

Effective dateCommon stock¥2,239¥21.0

March 31, 2011

June 24, 2011

Common stock¥2,345¥22.0

September 30,
2011

December 9,
2011(2) Dividends with a shareholders’ cut-off date during the current fiscal year but an effective date subsequent to the current fiscal year

(Date of approval)
Resolution approved by(June 20, 2013)
Annual general meeting of shareholders

AmountAmount per share
Yen

Type of shares(Paid from)

Millions of yen
Thousands of
U.S. dollars

U.S. dollars

Common stock(Retained earnings)¥2,550$27,132

¥24.0
$0.26

Shareholders’
cut-off date

Effective date

March 31, 2013 June 21, 2013

19. 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.

20. Stock Based Compensation
The Company has stock option plan for certain directors and executive officers. Under the plan, the right to purchase the commonshares of the Company is granted at an exercise price of ¥1 per share. The contractual term of the stock option is 30 years. The
stock option holders may exercise their stock acquisition right during the ten days period starting the day one year after leaving
their position as either director, corporate auditor, or executive officer of the Company.
The stock options outstanding as of March 31, 2013, were as follows:2013 stock option

Persons granted
Type and number of shares to be issued upon the exercise of the share subscription rights
Date of grant
The fair value per stock at the granted date

7 directors 22 executive officers
Common stock 113,700
October 15, 2012
¥1,306 ($13.90)

The total stock-based compensation costs recognized for the year ended March 31, 2013 were ¥148 million ($1,580 thousand) .
The fair value of 2013 stock option is estimated using the Black-Scholes option pricing model with the assumptions noted in
the following table.
2013 stock option

Expected volatility
Expected holding period
Expected dividend
Risk free interest rate

46.43%
4.1 years¥46 per share
0.18%

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 averageterm period and average age as of retirement. The estimated dividends are based on the actual per share dividends of ¥46 ($0.49)
made in the preceding year for the years ended March 31, 2013. The risk free interest rate is based on the yield of government
bonds having a remaining life equal to the option’s estimated remaining outstanding period. The stock option activities for the fiscal
years ended March 31, 2013 were as follows:Century Tokyo Leasing Corporation

65

Number of shares2013 stock option

Stock option activity

Share subscription rights which are not yet vested
Outstanding as of March 31, 2012
GrantedForfeited
VestedOutstanding as of March 31, 2013
Share subscription rights which have already been vested
Outstanding as of March 31, 2012
VestedExercised
Forfeited
Outstanding as of March 31, 2013
Exercise price
Weight average exercise price
Weight average fair value per stock at the grant date—
113,700—
113,700
0—
113,700——
113,700¥1 ($0)¥— ($—)¥1,306 ($13.90)

21. Segment Information
1. Overview of Reportable Segments
The reportable segments of the Company are constituent units for which separate financial information can be obtained and regularly examined by the board of directors to determine the allocation of management resources and evaluate business performance.
The Company is primarily engaged in the leasing and installment sales businesses. The Company also provides financial services that are related to these businesses. The reportable segments are therefore divided into “Leasing and Installment Sales
Business” and “Financing Business.”
The “Leasing and Installment Sales Business” involves the leasing of information and office equipment, industrial machineryand equipment, etc., for commercial and service purposes (including sales of items resulting from the maturation of leasing agreements and mid-term cancellations) and installment sales. The “Financing Business” involves the extension of monetary loans andinvestment operations, etc., related to capital investments in securities for investment purposes and anonymous associations.
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 Segment
Millions of yen

Year ended March 31, 2013
Reportable segment
Leasing andinstallment sales

Revenues, profit and assets
by reportable segments
Revenue from customers
Intersegment revenue
Total sales
Segment profit
Segment assets
Other items
Depreciation
Increase in property and equipment
and intangible assets

Finance

Subtotal

Other

Total

666,535—
666,535¥ 37,649¥1,767,085¥ 16,935—
16,935¥ 9,222¥573,296¥ 683,470—
683,470¥ 46,871¥2,340,381¥7,658809
8,467¥2,127¥7,061¥ 691,128
809
691,937¥ 48,998¥2,347,442

¥

¥

¥

¥

¥

¥

27,774102,140——

27,774102,140——

27,774102,140

66

Century Tokyo Leasing Corporation

Millions of yen

Year ended March 31, 2012
Reportable segment
Leasing andinstallment sales

Revenues, profit and assets
by reportable segments
Revenue from customers
Intersegment evenue r
Total sales
Segment profit
Segment assets
Other items
Depreciation
Increase in property and equipment
and intangible assets

Finance

Subtotal

Other

Total

692,723—
692,723¥ 41,212¥1,626,356¥ 14,031—
14,031¥ 6,685¥541,320¥ 706,754—
706,754¥ 47,897¥2,167,676¥ 9,588794
10,382¥ 1,807¥ 6,806¥ 716,342
794
717,136¥ 49,704¥2,174,482

¥

¥

¥

¥

¥

¥

28,56030,945——28,560—30,945—28,56030,945

Thousands of U.S. dollars

Year ended March 31, 2013
Reportable segment

Revenues, profit and assets
by reportable segments
Revenue from customers
Intersegment revenue
Total sales
Segment profit
Segment assets
Other items
Depreciation
Increase in property and equipment
and intangible assets

Leasing andinstallment sales

Finance

Subtotal

Other

Total

$ 7,091,550—
7,091,550$
400,558$18,800,785$ 180,177—
180,177$ 98,117$6,099,537$ 7,271,727—
7,271,727$ 498,675$24,900,322$81,482
8,607
90,089$22,636$75,122$ 7,353,209
8,607
7,361,816$ 521,311$24,975,444

$

$

$

$

$

295,497
1,086,708——

295,497
1,086,708——

295,497
1,086,708

4. Difference between the total of reporting segment and the amounts on the consolidated financial statements and details fordifference (The matter for the reconciliation of the difference)
Millions of yen

Revenues
Reportable segment total
Revenues attributable to other segment
Intersegment eliminations
Revenues on consolidated statement of income

2013¥683,470
8,467
(809)
¥691,1282012¥706,754
10,382(794)¥716,342

Millions of yen

ProfitReportable segment total
Profit attributable to other segment
Intersegment eliminations
General and administrative expenses not attributable to reporting segment
Operating income on consolidated statement of income

2013¥46,871
2,127(809)(6,215)¥41,974

2012¥47,897
1,807(794)(7,032)¥41,878

Thousands of
U.S. dollars

2013$7,271,727
90,089(8,607)$7,353,209
Thousands of
U.S. dollars

2013$498,675
22,636(8,607)(66,128)$446,576

Century Tokyo Leasing Corporation

Thousands of
U.S. dollars

Millions of yen

AssetsReportable segment total
Assets attributable to other segment
Assets not attribute to reporting segment
Total assets on consolidated balance sheet

2013¥2,340,381
7,061
118,375¥2,465,817

67

2012
¥2,167,676
6,806
85,907¥2,260,389

2013$24,900,322
75,122
1,259,443$26,234,887

Millions of yen
Reportable segment
total

2013
Other items
Depreciation
Increase in property and equipment
and intangible assets

Other

Adjustments

Consolidated

2012

2013

2012

2013

2012

¥ 27,774 ¥28,560¥—¥—¥2,519¥2,990¥ 30,293 ¥31,550

102,140

—

—

1,650

1,379

103,790

30,9452013

2012

32,324

Thousands of U.S. dollars
Reportable segment
total

Other

Adjustments

Consolidated

2013
Other items
Depreciation
Increase in property and equipment
and intangible assets$ 295,497$—$26,807$ 322,304

1,086,708—

17,561

1,104,269

Information by products and services
Millions of yen

March 31, 2013

Revenue from customers

Finance
lease

Operatinglease

Installment
sales

Finance

Other

Total

¥518,200¥66,437¥81,898¥16,935¥7,658¥691,128

Millions of yen

March 31, 2012

Revenue from customers

Finance
lease

Operatinglease

Installment
sales

Finance

Other

Total

¥535,779¥67,989¥88,955¥14,031¥9,588¥716,342

Thousands of U.S. dollars

March 31, 2013

Revenue from customers

Finance
lease

Operatinglease

Installment
sales

Finance

Other

Total

$5,513,350$706,852$871,348$180,177$81,482$7,353,209

Geographical information(a) Sales
Information by geographic segment is not disclosed since sales to third parties located in Japan for the years ended March 31,
2013 and 2012 represented more than 90% of the consolidated sales for the respective years.
(b) Property and equipment
Information by geographic segment is not disclosed since the amount of property and equipment located in Japan for the years
ended March 31, 2013 and 2012 represented more than 90% of the consolidated property and equipment for the respective
years.

68

Century Tokyo Leasing Corporation

Information by main customer
Information by main customer for the years ended March 31, 2013 and 2012 is not disclosed due to no third party customer towhich sales volume consisted 10% or more of the consolidated sales.

22. Amounts Per ShareYen

Net assets
Net income:
Basic
DilutedU.S. dollars

2013¥2,092.46

2012¥1,796.62

2013$22.26272.32272.18245.82
—

2.90
2.90

Under Statement No. 2, the “Accounting Standard for Earnings Per Share” issued by the Accounting Standards Board ofJapan, 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. The weighted-average numberof shares of common stock used in the computation for the years ended March 31, 2013 and 2012 was 106,254 and 106,558
thousand shares, respectively.
Diluted net income per share of common stock has not been presented because there were no potentially dilutive shares outstanding.
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.

23. Subsequent Events
The Company issued the fifth and the sixth unsecured bond (with inter-bond pari passu clause) on April 19, 2013. The details are
as follows:

Total amount issued
Issuance priceInterest rate
Redemption price
Redemption date
Payment date
CollateralApplication of the fund

The fifth
The sixth¥20,000 million¥10,000 million($212,789 thousand)($106,394 thousand)¥100 ($1.06) per ¥100 ($1.06) of face value
0.337% per annum
0.439% per annum¥100 ($1.06) per ¥100 ($1.06) of face value
April 19, 2016
April 19, 2018
April 19, 2013This bond is without any collateral or guaranty and there are no assets
reserved for this debenture.
For the purchase of leased property

Century Tokyo Leasing Corporation

REPORT OF INDEPENDENT AUDITORS

69

70

Century Tokyo Leasing Corporation

MAIN SUBSIDIARIES AND AFFILIATES (as of August 31, 2013)
Consolidated Subsidiaries (Domestic)
TOKYO AUTO LEASING CO., LTD.
Nittochi Okachimachi Bldg., 2-27-5 Taito, Taito-ku, Tokyo
110-0016
Telephone: +81-3-6357-5566
Date Founded: March 1979
Paid-in Capital: ¥200 million
Voting Shares: 100%
Main Business Operations: Automobile and automobilerelated equipment leasing*Absorption-type merger with Nippon Car Solutions Co., Ltd. as thesurviving company scheduled to take place on October 1, 2013

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

NIPPON RENT-A-CAR SERVICE, INC.
NR Bldg., 5-5 Kamiyama-cho, Shibuya-ku, Tokyo
150-8515
Telephone: +81-3-3468-7111
Date Founded: March 1969
Paid-in Capital: ¥720 million
Voting Shares: 58%
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

S.D.L CO., LTD.
Shimbashi Kikuei Bldg., 5-13-1 Shimbashi, Minato-ku,
Tokyo 105-0004

TCI FINANCE CORPORATIONFUJISOFT Bldg., 3 Kanda-neribeicho, Chiyoda-ku, Tokyo
101-0022
Telephone: +81-3-5209-6025
Date Founded: July 2011
Paid-in Capital: ¥100 million
Voting Shares: 60%
Main Business Operations: Finance business for ITOCHU GroupTC 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

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

TRY, INC.
World Trade Center Bldg., 2-4-1 Hamamatsu-cho, Minatoku, Tokyo 105-6110
Telephone: +81-3-3435-4481
Date Founded: May 2004
Paid-in Capital: ¥21 million
Voting Shares: 100%
Main Business Operations: Refurbishment (reuse and recycling) of
PCs

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

Date Founded: January 1991
Paid-in Capital: ¥100 million
Voting Shares: 90%
Main Business Operations: Automobile leasing and general leasing

TC BUSlNESS SERVICE CORPORATION
Nittochi Okachimachi Bldg., 2-27-5 Taito, Taito-ku, Tokyo
110-0016
Telephone: +81-3-5818-8076

IHI FINANCE SUPPORT CORPORATION
Yaesu First Financial Building, 1-3-7 Yaesu, Chuo-ku,
Tokyo 103-0028
Telephone: +81-3-3275-3721

Date Founded: June 2004
Paid-in Capital: ¥20 million
Voting Shares: 100%
Main Business Operations: Business processing services for theGroup

Date Founded: December 1991
Paid-in Capital: ¥200 million
Voting Shares: 67%
Main Business Operations: Finance and general 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 theGroupCentury Tokyo Leasing Corporation

Consolidated Subsidiaries (Overseas)
CENTURY TOKYO LEASING CHINA CORPORATION
Unit B1, B2, B3, 28F V-Capital Building, No.333 Xianxia
Road, Changning District, Shanghai 200336, P.R.C.
Telephone: +86-21-6237-0066
Date Founded: July 2006
Paid-in Capital US$47,500 thousand
Voting Shares: 80%
Main Business Operations: General leasing

CENTURY TOKYO FACTORING CHINA CORPORATION
Unit B-02, 18F Taiping Finance Tower, No.488 Middle
Yincheng Road, Pudong New District, Shanghai 200336,
P.R.C.
Telephone: +86-21-3131-7099
Date Founded: June 2013
Paid-in Capital: 150 million yuan
Voting Shares: 100%
Main Business Operations: Factoring services

CENTURY TOKYO LEASING (SINGAPORE) PTE. LTD.
8 Cross Street, #09-04/05 PWC Building, 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 22.02, Level 22, Menara Citibank, No. 165, Jalan
Ampang, 50450 Kuala Lumpur, Malaysia
Telephone: +60-3-2162-9633
Date Founded: June 2007
Paid-in Capital: RM26,523 thousand
Voting Shares: 100%
Main Business Operations: General leasing

PT. CENTURY TOKYO LEASING INDONESIA
Wisma Keiai 11th Floor, Jl.Jend. Sudirman Kav.3 Jakarta
10220, Indonesia
Telephone: +62-21-572-3411
Date Founded: February 2011
Paid-in Capital: Rp100,000 million
Voting Shares: 85%
Main Business Operations: General leasing

TOKYO LEASING (HONG KONG) LTD.
Room 301, 3rd Floor, Sun Hung Kai Centre,
30 Harbour Road, Wan Chai, Hong Kong, P.R.C.
Date Founded: October 1972
Paid-in Capital: HK$13 million
Voting Shares: 100%
Main Business Operations: General leasing

71

CENTURY TOKYO LEASING (USA) INC.
Suite 202, 3020 Westchester Avenue, 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

TOKYO LEASING (UK) PLC
1st Floor, Kingsbridge House, Pinner,
Middlesex HA5 5LX, U.K.
Telephone: +44-20-8429-1963
Date Founded: May 1983
Paid-in Capital: STG£6,655 thousand
Voting Shares: 100%
Main Business Operations: General leasing

Equity-Method Affiliates
NIPPON CAR SOLUTIONS CO., LTD.
Seavans North Bldg., 1-2-1 Shibaura, Minato-Ku, Tokyo
105-0023
Telephone: +81-3-6436-1190
Date Founded: February 1987
Paid-in Capital: ¥981 million
Voting Shares: 50%
Main Business Operations: Automobile leasing*Tokyo Auto Leasing Co., Ltd. will undergo an absorption-type merger
on October 1, 2013, and be included in the scope of the Company’s
consolidation as a consolidated subsidiary.

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$200 million
Voting Shares: 49%
Main Business Operations: Automobile leasing and general leasing

TISCO TOKYO LEASING CO., LTD.
19th Floor, TISCO Tower, 48/44 North Sathorn Road, Silom,
Bangrak, Bangkok 10500, Thailand
Telephone: +66-2-638-0900
Date Founded: April 1993
Paid-in Capital: THB60 million
Voting Shares: 49%
Main Business Operations: General 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 andsolutions to the commercial aerospace industry

72

Century Tokyo Leasing Corporation

STOCK INFORMATION/BOND RATINGSAS OF MARCH 31, 2013

Transfer Agent: Mizuho Trust & Banking Co., Ltd.

Number of Common Stock Authorized: 400,000,000 shares

Stock Listing: Tokyo Stock Exchange, First Section

Number of Common Stock Issued: 106,624,620 shares

Securities Code: 8439

Number of Shareholders: 12,278

Trading Lot Size: 100 shares

Breakdown of Shareholders
Foreign investors: 11.1%
11,850,642 shares

Financial institutions: 23.2%
24,742,375 shares

Individuals and other: 6.6%
7,071,127 shares

Securities companies: 0.6%
579,356 shares

Treasury stock: 0.3％
369,394 shares
Other domestic institutions: 58.2%
62,011,726 shares

Major Shareholders
Shareholders

ITOCHU Corporation
Nippon Tochi-Tatemono Co., Ltd.
KSO Co., Ltd.
Mizuho Corporate Bank, Ltd. (currently Mizuho Bank, Ltd.)
Nissin Tatemono Co., Ltd.
Japan Trustee Services Bank, Ltd. (Trust accounts)
Seiwa Sogo Tatemono Co., Ltd.
The Master Trust Bank of Japan, Ltd. (Trust accounts)
Nippon Life Insurance Company
Mizuho Trust & Banking Co., Ltd. (Retirement Allowance Trust,
Orient Corporation Account)

Number of shares held
(thousands)

Percentage of shares
outstanding (%)

26,656
11,831
9,963
4,649
3,537
3,146
2,972
2,764
2,228

25.0
11.1
9.3
4.4
3.3
3.0
2.8
2.6
2.1

1,900

1.8

Bond Ratings (As of September 6, 2013)
Century Tokyo Leasing Corporation’s ratings assigned by Japan Credit Rating Agency, Ltd. and Rating and Investment Information, Inc.
Credit Rating Agency Japan Credit Rating Agency, Ltd. (JCR)

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

Long-term(Long-Term Senior Debt)
Rating: A+
Outlook: Stable(Issuer Rating)Rating: A
Outlook: Stable(Preliminary Rating for Bonds Registered for Issuance)*
Rating: A+
Expected Issue Amount: ¥150 billion
Issue Period: Two Years Beginning February 14, 2012

(Preliminary Rating for Bonds Registered for Issuance)*
Rating: A
Expected Issue Amount: ¥150 billion
Issue Period: Two Years Beginning February 14, 2012

(Euro Medium-Term Note Program)(Euro Medium-Term Note Program)
Rating: A+
Rating: A
Maximum Outstanding Amount: Equivalent of US$2 billion Maximum Outstanding Amount: Equivalent of US$2 billion
Short-term(Commercial Paper)(Commercial Paper)
Rating: J-1
Rating: a-1
Maximum Outstanding Amount: ¥650 billion
Maximum Outstanding Amount: ¥650 billion*Each receivable will be rated by each rating company upon issuance.

Century Tokyo Leasing Corporation

Management Philosophy

CORPORATE INFORMATION

Century Tokyo Leasing Group will grow alongside its
customers and contribute to society as a comprehensive
financial services enterprise that continually challenges itself.

Create New Business with LEASING
I n addition to pursuing its mainstay leasing business, Century Tokyo Leasing

Corporation provides a wealth of high-value-added services as well as financing.
We strongly believe that the role of a leasing company is to contribute to customers’
businesses through the provision of financing. As an integral member within theservice industry, we are making the most of our flexibility and high degree of freedom
to pursue further expansion as a comprehensive financial services enterprise.

Company Name
Century Tokyo Leasing Corporation (Abbreviation: TC-Lease)
Head Office
FUJISOFT Bldg., 3 Kanda-neribeicho, Chiyoda-ku, Tokyo 101-0022, JapanFoundedJuly 1, 1969
Paid-in Capital¥34,231 million
Company Representative
President & CEO Shunichi Asada
Number of Employees
1,676 (1,028 on a non-consolidated basis) (as of March 31, 2013)
Closing of Accounts
March 31
Major Banks
Mizuho Corporate Bank, Ltd. (currently Mizuho Bank, Ltd.); Sumitomo Mitsui Trust Bank, Limited; The Norinchukin Bank;
Mitsubishi UFJ Trust and Banking Corporation; Nippon Life Insurance Company
Independent Auditor
Ernst & Young ShinNihon LLC
Network
Domestic;
Head Office, Sapporo, Sendai, Tsukuba, Saitama, Tachikawa, Yokohama, Shizuoka, Nagoya, Kanazawa, Kyoto, Osaka,
Kobe, Okayama, Hiroshima, Fukuoka
Overseas;
China (Shanghai [2], Beijing, Dalian, Qingdao, Suzhou, Wuhan, Chengdu, Guangzhou, Hong Kong), Taiwan (Taipei,
Taichung, Kaohsiung), Thailand, Malaysia, Singapore, Indonesia, India, U.S.A., U.K.

For Further Information
Forward-Looking Statements
Statements in this annual report with respect to Century Tokyo Leasing Group’s plans, forecasts, strategies, presumptions and other statements that are not historical facts are forwardlooking statements and are based on management’s assumptions and beliefs grounded on information that was available when this report was written. The actual performance of theCompany may differ considerably from that discussed in the forward-looking

Investor Relations OfficeTelephone: +81-3-5209-6710

73

Century Tokyo Leasing Corporation Annual Report 2013

FUJISOFT Bldg.,
3 Kanda-neribeicho, Chiyoda-ku,
Tokyo 101-0022, Japanwww.ctl.co.jp/english

Aiming for a Comprehensive Financial Services Enterprise

Annual Report 2013
Printed in Japan