T ok yo C en tu ry C orp ora ti on
I n teg ra ted R ep ort 2019

Management Philosophy

Solutions to your Pursuits
Creating new values from
Finance × Services × Business ExpertiseTokyo Century

Contents
02

To Our Stakeholders

38

MATERIALITY

04

OUR STRENGTHS

40

Identifying Materiality (Key Issues)

08

OUR VALUE CREATION42

FEATURE

10

Tokyo Century’s Trajectory of Growth

12Core Assets That Generate Our Competitive Advantage

Overview of the Fourth Medium-Term Management Plan

Tokyo Century Group will work alongside customers in pursuit

14

A Message from the President & CEOof their growth as a highly specialized and unique financial

22

Equipment Leasing

26

Mobility & Fleet Management

30

Specialty Financing

34International Businessservices company and will contribute to the creation of anenvironmentally sound, sustainable economy and society.

Tokyo Century Group’s Contributions
to the Creation of a Sustainable Society

Tokyo Century’s Value Creation Business Model

OUR STRATEGY

Promoting Sustainability Management

60

Message from the External Directors

62

Corporate Governance

68

Risk Management and Compliance

74

Management Organization76

Sustainability Highlights

79

External Evaluation

80

Performance Highlights

82

Financial Summary

84

Main Subsidiaries, Affiliates and Other

86

Corporate Information / Management

87

Stock Information / Bond Ratings

Tokyo Century Corporation

Integrated Report 201901

To Our Stakeholders

We will accelerate our growth
as a company with financial
capabilities for the next 10 years.
In April 2019, Tokyo Century celebrated the 10th anniversary of its establishment through a merger.
Over the past 10 years, we have been able to leverage a free management environment andcreativity to establish a dominant presence focused on financial services that raise the added valueof assets above traditional leasing. I believe we have significantly expanded into new business areasand created a multitude of new financial services, particularly through viable businesses incooperation with our partners.
Over the next 10 years, along with steadily benefitting from our up-front investments,
we intend to achieve and maintain sustainable growth by balancing risk and return.
I also believe we have successfully created an internationally unique business model asa company with financial capabilities. We intend to fulfill our social responsibilities by contributing
to society through our main operations and doing our best to deepen the bonds of trust with all our
stakeholders. We look forward to your continued support and patronage.

Shunichi Asada
President & CEO,
Representative Director

02Tokyo Century Corporation

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Tokyo Century Corporation

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OUR STRENGTHSCore Assets That Generate Our Competitive Advantage

Our commitment runs throughour corporate DNA to assist
partner companies in developing
business and pursuit of growth
We envision a sustainable future by seeking mutual, medium- to long-term growth with ourpartner companies.
True to this conviction, our highly specialized personnel take on the challenges posed by new
businesses that transcend the boundaries of finance. Our business scope has expanded worldwide
to 37 countries and regions, and Tokyo Century Group has established a unique position by
integrating its businesses with a formidable network of partner companies.

Major Partner Companies

Equipment
LeasingSpecialty
Financing

04

Tokyo Century Corporation

Fujitsu
IHI
Orient Corporation
Kawasaki Heavy Industries
Tsukishima Kikai
BplatsAMADA HOLDINGS
Yaskawa Electric

KyoceraNippon Tochi-Tatemono
Aviation Capital GroupGA Telesis
Kobe Steel

Integrated Report 2019

1
OUR STRENGTHSCreating Diverse
Businesses That Match
the Current Trend in a
Management Environment
Free of Regulatory
Constraints
Tokyo Century is characterized by its capacity to explore new
businesses in a management environment free of regulatory
constraints. We are expanding our business scope beyond therealms of finance into new areas such as subscriptions, car rental,
aviation, renewable energy (including power generation from solar
power and biomass fuel sources) and FinTech. We are creating avariety of new businesses that match the current trend based on
creative ideas unrestricted by preconceived concepts and ourexperience in fusing know-how accrued in the three spheres of“Finance × Services × Business Expertise.”Nippon Telegraph and Telephone
Orient Corporation
ANA Holdings

Mobility &FleetManagement

International
Business

TISCO Financial Group
Uni-President Enterprises Group
Dalian Bingshan GroupBank of the Philippine Islands
Hitachi Construction
Machinery Group
Lippo Group
Grab
China UnionPay Merchant Services

Tokyo Century Corporation

Integrated Report 201905

2

OUR STRENGTHS3OUR STRENGTHS

Global Business in
37 Countries and Regions
through Alliances with
Partner Companies

Backed by relationships of trust with about 25,000 customers,
Tokyo Century Group is promoting collaborative ventures,

Highly Specialized
Professionals and an
Organizational Culture
That Embraces Challenge

Our strengths are personnel capable of structuring new business
schemes from a global viewpoint and an organizational culture that

expanding its network to 37 countries and regions worldwide.

embraces challenge.

By utilizing know-how accrued and advancing its alliances with

To be the ideal partner for supporting customers in their pursuits

partner companies in and outside of Japan, we take on therequires global thinking and professionalism to enable us to assist

challenge of transforming into a new financial services businessand aid the business development of partner companies. We arethat opens new domains.

focused on creating an organization that is free of an excessive
devotion to conventional notions and previous successes, andbrimming with the spirit of taking on challenges to pioneer new
business domains.

06

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Tokyo Century Corporation

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OUR VALUE CREATIONTokyo Century’s Value Creation Business Model
SDGs

Tokyo Century’s Value Creation

Business
opportunities andrisk/social issues

Core assets that generate
our competitive advantage

Materiality and Related SDGs
Materiality(Key Issues)

Business domains

A company with financial capabilities
that is adaptable to change

12
Global business in 37 countries
and regions through allianceswith partner companies

3
Highly specialized professionals
and an organizational culturethat embraces challenge

Corporate
governanceValue creation foundations

08

Tokyo Century Corporation

Integrated Report 2019

Relevant SDGs

Contribution
to low-carbon
society

Equipment
Leasing

Creating diverse businesses thatmatch the current trend in a
management environment freeof regulatory constraints

Human resources
development andworkstyle reform

OutcomeCreation of
new businessdriven bytechnical
innovation

Mobility & Fleet
Management

Providing new
financial services
in cooperation
with our partners
Specialty
Financing

International
Business

Risk management

Higher corporate
value based on
the establishmentof new financial
services businessContribution
to social
infrastructuredevelopment

Contributing
to the solutionof social issues

Sustainable
resource use

Mutual growthwith partnercompanies
Enhanced work
environment,
leading tostrengtheningof human
resources

Utilize diverse partnerships
to create new value

Shared platforms

Contributing to thecreation of anenvironmentally sound,sustainable economy
and society

Tokyo Century Corporation

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Tokyo Century’s Trajectory of Growth¥3,597.9
billion3,330.2

Tokyo Century, as a company with financial capabilities, has promoted collaboration with
its partner companies in Japan and overseas, and has greatly expanded its business domain.

3,240.9¥86.3
billionDuring the Medium-Term Management Plans, which began in fiscal 2010,
we have recorded steady results from the first to the third plan,and have achieved a record-high ordinary income for 10 consecutive periods.
2,895.6

14%
Specialty
Financing

79.0

3,020.8

International
Business

31%

73.5
68.0

2,605.0
Segment Assets(Billions of yen)International
Business

4%

60.7

2,253.3

55.2

2,110.9

2,100.0

2,038.1

Specialty
Financing

Mobility &FleetManagement

1,950.2

12%

46.3

44.2

46.3

16%

Mobility &FleetManagement
Equipment
Leasing3%

33.4

Equipment
Leasing

39%

81%
Ordinary Income

22.3(Billions of yen)First Medium-Term Management Plan (FY2010 to FY2012)

Second Medium-Term   Management Plan (FY2013 to FY2015)

Third Medium-Term Management Plan (FY2016 to FY2018)

Evolution scenario for maximizing merger synergies
and moving to the next stage of growth

To become a robust compreh ensive financial services company
and realize further innovative changes as well as sustainable growth

Promote the shift to a high-revenue business model with a focus on asset efficiency inorder to lay the foundations for sustainable growthPlan¥35.0 billion

Consolidated
operating assets
Consolidated
shareholders’equity ratio

2009*

Plan

Results (FY2015)¥46.3 billion (+¥11.3 billion

Consolidated
ordinary income¥50.0billionor more¥68.0 billion (+¥18.0 billion¥2.0 trillion¥2.2 trillion (+¥231.4 billion

Consolidated
operating assets¥2.6

trillion¥2.9 trillion (+¥391.1 billion

8.5 %

9.0 %

Consolidated
shareholders’equity ratio

10.0

%

9.6 %

or moreor moreor more

2010

Plan

Results (FY2012)

Consolidated
ordinary income

compared to plan)compared to plan)

2011(+0.5 pointcompared to plan)

2012

2013

2014

Consolidated
ordinary income

compared to plan)

Consolidated ROA(Ordinary income/Operating assets)compared to plan)

Consolidated shareholders’equity ratio(-0.4 pointcompared to plan)

2015

2016

2017

Results (FY2018)¥ 80.0 billion
or more¥ 86.3 billion(+¥6.3 billion
compared to plan)

2.3 %or more

2.6 %(+0.3 pointcompared to plan)

11.0 %

10.4 %(-0.6 pointcompared to plan)

20182019 (Fiscal year ended March 31)* Data for fiscal 2008, the year immediately prior to the merger, is a simple aggregation of data for the former Century Leasing System, Inc. and the former Tokyo Leasing Co., Ltd.

10

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Tokyo Century Corporation

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OUR STRATEGY

Positioning of Fourth Medium-Term Management Plan

Overview of the Fourth Medium-Term Management PlanPRESENT

sustainable growth with an eye on the next 10 years, while continuing to promote management

PAST

focused on raising asset efficiency.

20092018

In our Fourth Medium-Term Management Plan, we aim to become a company that can realize

Fourth Medium-Term
Management Plan

Management Components to Create Stable and Sustainable Growth

Ordinary income¥100 billion or more

Ordinary income¥86.3 billion

Governance

Build platform
for growthBusinessstrategy

Businessmodel

Businessstrategy

Take advantage of a management environment
free from regulatory constraints to provide highly
specialized and unique financial services withpartner companies as a company with financial
capabilities

Encourage autonomous management offour operating segments
Tirelessly strive to develop viable and othernew businesses
Pursue deeper alliance strategy· Expand business domains· Accelerate pace of business transformation(business incubation)

Financialstrategy

Humanresources
strategy

Riskmanagement

Build personnel policies giving employees
a sense of fulfillment
Recruit and develop personnel who will create
new values
Promote active participation of women andother diversity initiatives
Promote career design to support employee
career paths and enhance expertise

Develop risk management systems in response
to diversification of risk profile
Strengthen capability to develop viable andnew businesses
Continually optimize risk measurement
Enhance cybersecurity

GovernanceDiversify procurement methods
Improve external credit ratings
Strengthen asset and liability management (ALM)
Enhance shareholder returns

12

Human
resources
strategy

Tokyo Century Corporation

Integrated Report 2019

Strengthen Group governanceInstill compliance policy
Engage with stakeholders

Next 10 years

Further raise asset efficiency,
steadily make progress
toward sustainable growth

Contribute toresolution ofsocial issues
Be a company
capable of achieving
stable andsustainable growth

Numerical targets¥100 billion or more

ROA:

2.7% or more

Shareholders’equity ratio:

12.0% or more

ROE:

12.0% or more(ordinary income/segment assets*)

Risk
management

Creation ofa sustainableeconomy andsociety

Financialstrategy

Prepare for
new stage
Continue to growOrdinary
income:Management
Philosophy
Management Policy

2022203120192021

First to Third Medium-Term
Management Plans

Business
model

FUTURE* Segment asset composition as per the assets
attributable to each segment (including
investments in equity-method affiliates andgoodwill) under the operating asset balance
disclosed in the fiscal 2018 financial statements.

Corporate Philosophy and Basic Policy
Basic Policy
Management
Philosophy

1

Tokyo Century Group will work alongside customers
in pursuit of their growth as a highly specialized
and unique financial services company and willcontribute to the creation of an environmentallysound, sustainable economy and society.

Corporate
Philosophy
Management
PolicyAs a company with financial capabilities,
establish a global platform for stable business,
including viable businesses
with partner companies

2
Tirelessly create new financial services
in response to changes in the businessenvironment and build a solid, high-quality
business portfolio

3

Corporate
SloganBuild the management base supporting
improved corporate value over the medium
to long term

Tokyo Century Corporation

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A Message from the President & CEO

A Message from the President & CEO

Strongly contributing to the realization ofan environmentally sound, sustainable economy
and society as a company withfinancial capabilities

Looking Back on the Past 10 Years
and Tokyo Century’s Strengths

Tokyo Century is a financial services company formed in April 2009 from the merger of Century Leasing
System and Tokyo Leasing initially known as Century Tokyo Leasing. This year, we celebrated our 10th
anniversary. At the time of the merger, business conditions for the leasing industry were expected to be
severe due to such factors as the revisions to leasing accounting standards and the global financial crisis
triggered by the Lehman Brothers’ bankruptcy. We ourselves saw few prospects for major growth in abusiness format centered on conventional leasing, and we have therefore sought to expand our operations
by creating a new financial services business model.
Our main strengths are our extensive client base and the capability to provide customers with a full rangeof support, from financial assistance to services and viable businesses in a largely unrestricted management
environment free of regulatory constraints. The scope of our business has, in fact, expanded by entering intosuch innovative fields as subscriptions, rent-a-car operations, a power generation business centered on
renewable energy, and a FinTech business. To reflect the shift in our business model away from conventional
leasing, we even removed the word “leasing” from our company name in 2016 to become known simply as
Tokyo Century. This decision was taken to signal our determination to be a company with financial
capabilities that can flexibly respond to the needs of society and to the true needs of our customers.
In terms of earnings, we have posted record-high ordinary income in each of the last 10 years stretchingback to the period directly before the merger, and we plan to further increase shareholder dividends that we
consistently raised every year since our founding. This steady growth has also contributed to increasing ourmarket capitalization. I am extremely pleased to report that we have also received a degree of recognition
from investors over the last 10 years for our innovative business model and management strategy.
Throughout this period, I have been deeply impressed by the efforts of each and every one of ouremployees to apply their accumulated experience to adapt the business to change and to work every day
with a positive mindset. Tokyo Century is transforming itself from a conventional leasing company byexpanding financial services and viable businesses, and I believe that the change in thinking and proactive
stance toward work by employees are proving to be key elements in the company’s current growth. I am

Shunichi Asada
President & CEO,
Representative Director

convinced that everyone is now deeply engaged in establishing financial services and viable businesses
with creativity and confidence.
We have worked hard to grow our business base, including expanding segment assets to more than
¥3.5 trillion, and we now occupy a unique international position as a company able to freely develop ina liberal regulatory environment. Over the next 10 years, we intend to steadily reap the benefits fromour up-front investments while continuing to create a multitude of new businesses that answer the needsof society.

14

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Tokyo Century Corporation

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A Message from the President & CEO

Review of the Third Medium-Term Management Plan

The main theme of the three-year Third Medium-Term Management Plan which began in fiscal 2016 was thesame as the first and second plans, to build a basis for future growth. We made strong progress on pursuingbusiness focused on asset efficiency and expanding viable businesses that take full advantage of the high degreeof management freedom we enjoy. The management targets of the plan called for ordinary income of at least¥80 billion, an ROA of at least 2.3%, and a shareholders’ equity ratio of 11.0%, and we concluded the plan in
fiscal 2018 by booking ordinary income of ¥86.3 billion, an ROA of 2.6%, and a shareholders’ equity ratio of 10.4%.
Ordinary income grew by ¥18.3 billion compared to fiscal 2015, due to our strategy of expanding
comparatively high-ROA viable businesses such as aviation, solar power generation, and mobility services.
We were also able to significantly outperform our target for the compound annual growth rate (CAGR),
achieving an actual rate of more than 8%. Our ROA rose by 0.3 percentage point over the fiscal 2015 figure
to 2.6% on the contribution from viable businesses. The final shareholders’ equity ratio fell just short ofthe plan target, in part because of a decision to prioritize M&As and other strategic growth investments,
although we were able to maintain robust financial stability.
During the period of the Third Medium-Term Management Plan, we worked to strengthen our sales andAchievement of Management Targets

management bases, and the results of the practical measures undertaken in each operating segment wereas follows. In Equipment Leasing, we expanded into new domains beyond leasing, including converting Bplats,
which provides subscription platforms, to an equity-method affiliate, and launching robot rental business inThird Medium-Term Management Plan Targets

partnerships with major robotics manufacturers. In Mobility & Fleet Management, with a view to boosting
profitability by accumulating high-quality assets, Nippon Car Solutions acquired Tokyo Gas Auto Service asa consolidated subsidiary, and Nippon Rent-A-Car Service reviewed its franchise system and completed its
transition to direct management. Our focus in Specialty Financing was building aviation and real estatebusiness value chains, which involved converting Aviation Capital Group, a leading U.S.-based commercial
aircraft lessor, to an equity-method affiliate, as well as converting Shinko Real Estate to a consolidated

Ordinary income¥80 billion

ROA

Fiscal 2018 Results¥86.3 billion

Targetachieved

2.3 % or more

2.6 %Targetachieved

11.0 %

10.4 %

Targetnot achievedor more(ordinary income / operating assets)

Shareholders’ equity ratio

subsidiary and Nittochi Asset Management to an equity-method affiliate. In International Business, we
completed the conversion of CSI Leasing, a major independent U.S. leasing company, to a wholly owned
subsidiary, and invested in Grab, the largest ride-hailing services company in Southeast Asia, followed byconverting Grab Rentals into joint ventures and other business forms. We also invested in an electronic money
and point services company operated under the OVO brand by Lippo Group, a leading Indonesian conglomerate.
To further strengthen our management base, we shifted to full-scale measurement of risk on a consolidated

Ordinary income (left scale)   ROA (ordinary income / operating assets) (right scale)(Billions of yen)

(%)

100

3.5

basis and refined measurement logic for factors including asset risk and foreign-currency-denominatedinvestment or liquidity. We also endeavored to strengthen internal management control worldwide, including
the creation of an internal reporting system and establishing crisis management measures such as business
and, as a result, our credit rating from Japan Credit Rating Agency, Ltd. was upgraded from A+ to AA- in
January 2019, and our rating outlook by Rating and Investment Information, Inc. was revised from A Flat

60.7

55.2

continuity planning. Through these efforts, we were able to build capacity and reinforce risk control systems,50

2.3

the company added to stock market indices. We are now a constituent of the MSCI Japan Index used as a

86.3
3.0

2.6

2.5

2.4

2.3

2.2

“stable” to “positive” in March 2019. Another outcome of the Third Medium-Term Management Plan was having

73.5

68.0

75

79.0

2.5

25

2.0

benchmark for institutional investors, the FTSE Blossom Japan Index, and the MSCI Japan ESG Select Leaders
Index, comprised of companies selected for demonstrating strong ESG practices.
0

14/3

15/3

16/3

17/3

18/3

19/3

1.5

Third Medium-Term
Management Plan

16

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Tokyo Century Corporation

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A Message from the President & CEO

Overview and Management Targets of
the Fourth Medium-Term Management Plan

With an eye on the next 10 years, we embarked on the Fourth Medium-Term Management Plan starting

Fourth Medium-Term Management Plan Targets
Fiscal 2015

Fiscal 2018

Fiscal 2021 Targets¥68.0 billion¥86.3 billion¥100 billion

ROA (ordinary income / segment assets)

2.3 %

2.5 %

2.7 %or more

Shareholders’ equity ratio

9.6 %

10.4 %

12.0 %or more

13.1 %

12.7 %

12.0 %or more

Ordinary income

or morein fiscal 2019, which is intended to prepare for a new stage and achieve sustainable growth. In the 10 years
since the merger, we have focused on transforming ourselves from a finance-focused company andpromoting viable businesses that can be operated jointly with our partners and by expanding into new
business areas. The goal of the Fourth Medium-Term Management Plan is to build on the achievementsof the previous plan, further expanding viable businesses and raising asset efficiency to push our ROA evenhigher and make steady progress on sustainable growth.
The Fourth Medium-Term Management Plan includes targets for ordinary income, ROA, theROEshareholders’ equity ratio, and ROE, and it calls for achieving an ordinary income of at least ¥100 billion in
fiscal 2021, the final year of the plan. Accomplishing the ordinary income target will require even greater
development and expansion of our innovative business model in cooperation with our partners. Throughfiscal 2018, we calculated our ROA based on total operating assets, but beginning from fiscal 2019, wechanged the denominator for this calculation to segment assets in order to reflect factors such as the

Dividend and Dividend Payout Ratio

investments made in equity-method affiliates. Final ROA for fiscal 2018 using the balance of segment
assets as the denominator was 2.5%, and the target within the Fourth Medium-Term Management Plan is
to grow ROA by at least 0.2 percentage point over the three years, to 2.7% or more. An ROA of 2.7% or more

Improve payout ratio based on stable long-term return ofis an industry-leading goal, and meeting the target will depend on providing high-value-added financial

profits while ensuring balance with investment in future growthservices. In order to become an industry-leading financial services company in both name and fact, we willcontinue to focus on expanding our innovative business model built on cooperation with partners in Japanand overseas. We target a shareholders’ equity ratio of at least 12.0% to increase resilience to risk thatmatches the expansion in business scope. This target of ROE of at least 12.0% is a new goal, appearing firstin this medium-term plan. In addition to achieving our targets for ordinary income, ROA, and shareholders’equity ratio, we believe having an ROE that exceeds the cost of shareholders’ equity will help link an
increase in profits to a rise in corporate value.
Our capital policies are intended to steadily expand earnings through the practice of strong financial
discipline while we remain mindful of shareholder returns and, at the same time, continue to invest in

Fiscal 2021 Payout Ratio
Aiming for around 30%

Annual dividend (left scale)   Dividend payout ratio (right scale)
(Yen)

(%)

200

30

promising businesses to generate sustainable growth. We intend to raise the dividend payout ratio to

25.1

around 30% by the final year of the Fourth Medium-Term Management Plan while maintaining a balance

24.2

with growth investment.

21.1
20.1
100

0

18

Tokyo Century Corporation

Integrated Report 2019

18.0

17.9

17.6

16.7

32
40
13.4

44

48

52

10/3

12/3

13/3

14/3

11/3

23.5
114

124

100
20

80
65

15/3

16/3

17/3

18/3

19/3

20/3

Tokyo Century Corporation

21/3

22/3

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Integrated Report 201919

A Message from the President & CEO

Over the Next 10 Years

Achieving sustainable growth over the next 10 years will require that we expand viable businesses incooperation with our partners and enter a phase for achieving profitability from our up-front investments.
In addition, we must focus on creating new businesses tailored to resolving social issues. In practical terms,
while deeply mining growth businesses such as aviation, mobility, real estate, and renewable energy, wemust expand operations closely related to the SDGs.
We anticipate that the future business environment will necessitate new services grounded intechnological advances, as illustrated by key concepts such as digital, mobility, and subscriptions, and webelieve this will increase opportunities for delivering financial services as a company attuned to prevailingdemands. Given that our earnings currently derive from four operating segments with stable businessbases, we will need to develop a fifth pillar to drive future growth.

Strengthening the Management Base during
the Fourth Medium-Term Management Plan

Facing Organizational Reform as a Company
with Financial Capabilities

In the Fourth Medium-Term Management Plan, we also intend to continue pushing forward to put into placea management base for supporting a medium- and long-term increase in corporate value. We believe that ourhuman resources strategy is a key management focus in this respect. I would not be surprised if the pace ofAmid this era of major change, we will continue creating new financial services as a company withchange in the operating environment further accelerated over the next 10 years to a point where changes were

financial capabilities. As part of this effort, we intend to play a role in realizing an environmentally sound,occurring every few years.

sustainable economy and society as a key corporate mission declared in our Management Philosophy for

To respond to the evolving business environment and rapid expansion of our business areas, Tokyo Century
has accelerated the promotion of diversity for its employees. Since our viable businesses require a high degree

the next 10 years.
Starting in fiscal 2019, we have identified five materiality issues related to the SDGs. For “Contributionof expertise, we have been hiring individuals in the middle of their careers in addition to new graduates. As a

to a low carbon society,” we will expand our reusable energy business, including the dissemination ofconsequence, we have added personnel with diverse abilities in a variety of fields, including foreign nationals,

solar power generation as a clean energy source. For “Creation of new business driven by technicaland I feel this has energized the entire corporate climate. In addition, half of the new graduates hired areinnovation,” we will leverage our originality to contribute to the digital economy in areas such as

women, recognizing their essential role for our company’s growth.

subscriptions and FinTech. For “Contribution to social infrastructure development,” we will provide

Amid societal progress in reforming working styles, Tokyo Century is planning to support the health andmobility services centered on Nippon Rent-A-Car Service and contribute to regional revitalization throughwell-being of employees by offering options such as flexible working hours and working at home. Moreover,

the ANA InterContinental Beppu Resort & Spa, scheduled to open in August 2019. For “Sustainable

we believe that accelerating diversity and providing training that both increase employee fulfillment and create

resource use,” we are considering entry into the development of a circular economy focused on thea sense of personal growth will bolster the development of cutting-edge businesses which depend on creativity.

value of assets, for example, through CSI Leasing operations in IT equipment leasing, aviation, andRisk management is also a key factor in enabling sustainable growth through a further increase inautomobiles. By adding “Enhanced work environment, leading to strengthening of human resources”

asset efficiency, and one of the goals of the Fourth Medium-Term Management Plan is to create a moreto these issues, the shared platforms for the five materiality issues is to “Utilize diverse partnerships

sophisticated risk management structure. We must also strengthen our responses to information security,

to create new value,” and we believe this will assist us in contributing to the achievement of the SDGs

crisis management, and product quality control to facilitate more flexible risk taking.

by expanding our core business operations.

In corporate governance, we added a new external director in June 2019, with the result that external

A strong track record tends to make any organization fearful of upsetting the status quo. Tokyo

directors now comprise more than one-third of all board members, and we expect this will further enliven

Century, however, believes that adapting to changing conditions is an essential aspect of corporate

discussions at the Board of Directors meetings.

management and consequently places high priority on organizational reform. By combining the

The Board of Directors has implemented free discussion to allow for open debate on how to achieve

capabilities of the entire Group, we will provide the best products and services around the world to assist

sustainable growth, and I believe this will represent a valuable forum for also considering future management

customers and corporate partners in pursuing their own growth. We look forward to the continued

strategy. I think that lively discussions at Board of Directors meetings and the implementation of checks

support and patronage of our stakeholders.

and balances driven by external directors will give the company the basis it needs to strive for further growth,and I remain fully committed to strengthening corporate governance going forward.
20

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Tokyo Century Corporation

Integrated Report 201921

Private Capital Investment and Capital Investment Financed by Leasing

Balance of Segment Assets/
Ordinary Income(Billions of yen)(Trillions of yen)

45

1,800

1,403.0

Equipment Leasing

1,200

24.4

1,412.9
23.5

30

80

18/3

19/3

Balance of segment assets (left scale)
Ordinary income (right scale)

68.1

70.4

71.9

77.5

81.1

82.8

81.7

86.1

89.9

10

8

5.4

15

600

0

78.8
67.5

60

We cater to a variety of customer needs by providing financial services centeredon leasing and installment sales for all types of equipment and machinery,
including information and communications equipment, factory equipment,
medical equipment, construction machinery, and commercial equipment.

(Trillions of yen)

100

4.4

4.1

4.2

4.5

4.8

6

4.7

4.4

4.7

4.6

4.7

40

4

20

2

0

0

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Source: Japan Leasing Association (as of June 10, 2019)
Private capital investment (left scale)   Capital investment financed by leasing (right scale)

2018
(FY)

0

Business Alliance System for Equipment Leasing
Joint Ventures with Partner Companies

Tokyo
Century

Fujitsu
IHI
ITOCHU Corporation
Orient Corporation
Tsukishima Kikai
AMADA HOLDINGS
Investment

Major Joint
Ventures

Fujitsu Leasing
IHI Finance Support
Nanatsujima Biomass Power
ITOCHU TC Construction Machinery
Orico Business Leasing
TC Tsukishima Energy Solution
Amada Lease

New Viable Businesses Based on Robotics,
Power Generation and IoT
Robot rental business
Kawasaki Heavy Industries
Yaskawa ElectricPartnershipTokyo Century

mitsuiwa/BYNASPower generation from digestion gas (biogas)
Tsukishima Kikai

PartnershipTokyo Century

PartnershipTokyo Century

Subscription business
BplatsTOPIC

Increasing value in the leasing
business and responding
to digital solutions backed bya robust customer base
22

Tokyo Century Corporation

Integrated Report 2019

Acquired shares in ITOCHU Construction Machinery (renamed ITOCHUTC Construction Machinery) to provide comprehensive next-generation
solutions as a one-stop response to construction industry needs
Tokyo Century acquired a 50% stake in ITOCHU Construction Machinery, which sells and rents large construction
machinery and a variety of other construction equipment and materials in Japan and overseas. The name of the company
was changed to ITOCHU TC Construction Machinery, and it became an equity-method affiliate of Tokyo Century. By
combining our IT solutions and subscriptions platforms (see P46-49) with the customer base of ITOCHU Construction
Machinery, we will provide cutting-edge services to address user issues and needs for construction machinery. In realterms, the business involves not just the sale and rental of construction machinery but also the provision of nextgeneration comprehensive solutions as a one-stop response to the diverse needs of the construction industry throughservices that contribute to increased construction site productivity. This includes the installation of ICT machinery atconstruction sites and greater efficiency in project management through the use of IT tools.

Tokyo Century Corporation

Integrated Report 201923

Equipment Leasing

Rapidly Accelerating Creative Venturesthat Transcend the Boundaries of Leasing

Boosting Value of Leasing
Business and Accelerating Business
Co-Creation

Expanding and Strengthening
Businesses that Contribute toan Environmentally Sound,
Sustainable Economy and Society

The currently severe business environment surrounding
leasing business, exemplified by prolonged ultra-low

We believe that environmental contributions are keys

interest rates and the start of reviewing accounting

for a leasing company with a large volume of assets.

standards on leasing, makes it difficult to continue

Contributing to an environmentally sound, sustainable

growing through traditional leasing operations alone.

economy and society has long been one of our top

While striving to increase the value of its leasing business

management goals as well as a materiality issue related

by expanding core solutions and service functions, Tokyo

to the SDGs. In addition to our current focus on promoting

Century is working on generating dynamic, sustained

the reuse and appropriate disposal of properties at the end

growth through broader creative ventures that leverageof their leases, we have redoubled our efforts in areas suchits strengths and those of its prime business partners.

as rental and reuse businesses toward creating a circular
economy. In cooperation with our business partners, we arealso striving to expand sustainable ecological operations,

Creating New Business Domains in
Response to Digital Transformation
Osamu Tamano
Director and Managing Executive Officer
President, Equipment Leasing Business
Development Unit

Review of the Third Medium-Term
Management Plan

Fourth Medium-Term Management Plan

Key Theme

Key Theme

Expanded into new domains
beyond leasing business

Boost value of leasing business and adapt
to digital transformation

Against a backdrop of reform in digital technology powered

Main Initiatives

Further Increasing Asset Efficiency

by IT, businesses focusing on IoT, Big Data, AI, andsubscriptions have emerged in many industrial sectors.

In addition to ongoing efforts to improve asset efficiency,

We believe these areas will emerge as new business

we intend to intensify our efforts to establish a leaner

domains for Tokyo Century, and we see our role as utilizing

corporate structure. As well as boosting the profitability

the unique strengths of a leasing company to respond toof asset businesses by switching to high-margin assets

the sea change represented by this digital transformation.

that utilize methods like receivables securitization,

In March 2019, we began an IoT subscriptions

we are also working to expand our non-asset operations,marketplace business through an alliance with SORACOM

which have high profitability.

and Bplats, and we intend to accelerate efforts using
digital technology as we seek to establish a leading
position in this area.
Our leading-edge approach has been highly regarded,

Achievements

such as our renewable energy generation business.

and Tokyo Century was selected as a “2019 Competitive IT

Optimizing Organization and
Improving Operational Efficiency
to Suit Changes in Business Style

Strategy Company” under a selection program jointly
conducted by the Ministry of Economy, Trade and Industry

Since the merger, Tokyo Century’s business has

and the Tokyo Stock Exchange for five consecutive years.

transformed from its original focus on leasing to delivering

 onverted Bplats, which provides subscriptionC
platforms, to an equity-method affiliate

1 Boost value of leasing business and accelerate aunched robot rental business in partnerships
Lwith major robotics manufacturers

2 Create new business domains in response

 et up joint biogas power generation businessSwith Tsukishima Kikai

3 Optimize organization and improve operational

to fit this change in business style. Moreover, we review

efficiency to suit changes in business styleoperational processes established to serve traditional

Converted Amada Lease to a consolidated subsidiarybusiness co-creation
to digital transformation

solutions for issues and creating value. We believe that wemust make greater strides in reshaping our organizationleasing business and seek greater efficiency through theutilization of IT tools and other instruments.

24

Tokyo Century Corporation

Integrated Report 2019

Tokyo Century Corporation

Integrated Report 201925

Data Related to Automobile Business in Japan

Balance of Segment Assets/
Ordinary Income(Billions of yen)

800

Mobility & Fleet Management
We boast one of the largest services in Japan, with Nippon Car Solutions
Co., Ltd., Nippon Rent-A-Car Service, Inc. and Orico Auto Leasing Co., Ltd.,
serving both corporate customers and individuals by providing optimal
services for the needs of users.

600

30.0

515.8
18.6

585.9
19.8

400

22.5

Total Number of Vehicles and Total Number of Leased Vehicles(Million units)

79.6

80

15.0

19% average annual increase
from March 31, 2015 to March 31, 2019

308,013(Units)4.5

300,000

152,85778.5

150,000

78

200

Number of Leased Vehicles for Individuals

Number of leased vehicles rose by an annual average of 4%
from March 31, 2015 to March 31, 2019

3.7

7.5

4.0
0

15/3

16/3

17/3

18/3

19/3

Source: Japan Automotive Leasing Association (as of June 2019)

0

18/3

19/3

0

76

3.5

3.2

Balance of segment assets (left scale)
Ordinary income (right scale)

Fleet Registrations of Cars in Rental Service
7% average annual increase
from March 31, 2014 to March 31, 2018

3.0

74

698,943(Units)700,000
72

534,1212.5
350,000

70

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

2.0

0

14/3

15/3

16/3

17/3

18/3

Source: All Japan Rent-A-Car Association (as of June 2019)

Source: Japan Automotive Leasing Association (as of June 2019)
Total number of vehicles (left scale)
Total number of leased vehicles (right scale)

Performance of Mobility & Fleet Management Companies
Ordinary Income (Billions of yen)
Main businessNippon Car Solutions
Nippon Rent-A-Car Service
Orico Auto Leasing
Total*

Segment Assets (Billions of yen)March 31, March 31, March 31,
2017
2018
2019

Averageannualincrease

8.1%

FY2016FY2017FY2018Averageannualincrease

Corporate
automobile leasing

10.0

11.0

11.8

8.9%

311.6 334.1 364.2

Car rental

4.5

4.6

4.8

3.5%

31.4

Individualautomobile leasing

1.6

2.1

2.5 24.9%

122.4 153.3 189.7 24.5%

16.0

17.7

19.1

465.4 523.2 595.5 13.1%

9.1%

35.8

41.5 14.9%* Simple sum of the three companies

TOPIC

Expanding business baseand creating added value
through fleet services thatmeet diversifying needs
26

Tokyo Century Corporation

Integrated Report 2019

Selected as a “2019 Competitive IT Strategy Company” for achieving
greater efficiency and labor savings in fleet maintenance through AI
Nippon Car Solutions provides maintenance services such as inspection and repair for around 100,000 vehicles
a month and plays a key role in our automobile leasing business. Traditionally, the manual compilation of maintenanceand billing information created issues in administrative speed and accuracy. By partially automating these operations
through construction of an AI-based maintenance billing checking system, fewer employees are now needed to checkthe large volume of maintenance billing data promptly and accurately. This has contributed to quick payments to car
maintenance shops and greater efficiency and labor savings in operations.
Our efforts to raise operational efficiency through AI have been recognized for promoting strategic IT deployment,
and Tokyo Century was selected as a “2019 Competitive IT Strategy Company” under a selection program jointly
conducted by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange.

Tokyo Century Corporation

Integrated Report 201927

Mobility & Fleet Management

Creating Innovative Services by Maximizing
Synergies among Consolidated Subsidiaries

Mobility & Fleet Management provides a full range ofof handling more than 650,000 vehicles. It tailors thisautomotive services, from auto leasing for corporate

expertise to respond to specific customer attributes

customers and individuals to car rental and car sharing.

and markets as it differentiates itself from competitors

The core Group companies in the segment are Nippon Car

and further develops its business.

Solutions (NCS), Orico Auto Leasing (OAL), and Nippon
Rent-A-Car Service (NRS).
This broad range of services represents a major

Our policy is to continue building up a pool ofhigh-quality assets in the area of automobile leasing
for individuals, a business that has recently attracted

advantage in the current climate, which has been dubbed

significant attention. This is mostly handled by OAL,

a “once-in-a-century transformation.” During the Fourth

which pioneered the development of this market in

Medium-Term Management Plan, which began in fiscal

collaboration with our partner Orient Corporation.

2019, we will be executing four key strategies under the

Tokyo Century Group will continue to implement

theme of “grasping changing times as an opportunity tostrategies that leverage its strengths and align withpursue mobility services that go a step further.”market characteristics and customer needs as it strives
to expand its business base.

Enhancing Customer Valueand Brand Power with
Unrivalled Quality of Service
Makoto Nogami
Deputy President, Director and Executive Officer
President, Fleet Services Business
Development Unit

Review of the Third Medium-Term
Management Plan

Fourth Medium-Term Management Plan

Key Theme

Key Theme

Boosted profitability by accumulating
high-quality assets

Grasp changing times as an opportunity to
pursue mobility services that go a step further

Mobility & Fleet Management offers a variety of car-related

We anticipate that many new car-related services will

services. NCS supplies “Drive Doctor,” one of the industry’s

emerge in the future from the significant evolution

leading telematics services, which not only promotes safe

currently underway in the business environment for

driving by customers but also supports improved

automobiles. By taking advantage of the Group’s broad

compliance and working style reform.

range of operations, maximizing the synergies among

NRS constantly strives to increase the value and quality ofthe three core companies, and forging closer alliances

its services, including the introduction of distinctive productswith our partners, including the NTT Group and ITOCHU

such as women-only vehicles and premium imported cars

Corporation, we will offer innovative fleet services to meet

and the formation of an alliance with the U.S. firm Enterprise

diversifying customer needs and requirements.

Holdings, the world’s largest car rental provider.
Constantly improving service quality to win customer
support is a basic principle for any service provider,and it remains very important to us.

Achievements
 ippon Car Solutions, our consolidated subsidiary,Nacquired Tokyo Gas Auto Service as a consolidated
subsidiary ippon Rent-A-Car Service, our consolidatedN
subsidiary, reviewed its franchise system andcompleted the transition to direct management

Main Initiatives
1 Enhance customer value and brand powerwith unrivalled quality of service
2 Pursue channel and segment strategies aimed

4 Strengthen Group management systems

to support business expansion

28

Tokyo Century Corporation

Integrated Report 2019

Pursuing Channel and Segment
Strategies Aimed at Expanding
Business BaseStrengthening GroupManagement Systems to
Support Business Expansion
Recognizing the necessity of a robust management foundation
for pursuing these three strategies, we will strengthen our
foundation and establish the Group management structure
capable of driving further growth through renewed efforts to

at expanding business base
3 Take innovative initiatives for a new era

Taking Innovative Initiatives
for a New Era

One of Tokyo Century’s strengths is the diversity of its
customer base and business partners.
NCS possesses broad knowledge of vehicle
maintenance and management, drawn from its experienceenhance governance and intra-Group ties.
Mobility & Fleet Management will implement thesestrategies to create fleet services that “go a step further ”
for sustainable growth in an era of change.

Tokyo Century Corporation

Integrated Report 201929

Overview of Business Segments in Specialty Financing

Balance of Segment Assets/
Ordinary Income(Billions of yen)

1,250

Specialty Financing
We seek to develop a variety of specialized products to create promising
new business areas beyond financial services, such as leasing andfinancing, and with a particular focus on shipping, aviation, the environment
and energy, and real estate.

1,000
750

1,114.0
975.6
34.9

40
30

25.0

500

20

250

10

0

18/3

19/3

Shipping

Aviation

Focusing on highly profitable shipping finance andship ownership operations through cooperative ties
with core partners

Expanding the aviation business by taking an
additional interest (investment ratio of 24.5%) in major
U.S. aircraft lessor Aviation Capital Group (ACG)

Environment and Energy

Real Estate

Expanding solar power operations, centered on ties
with Kyocera, additional focus on new energy business

Expanding the real estate business by turning Shinko
Real Estate, a comprehensive real estate company,
into a consolidated subsidiary50

0Balance of segment assets (left scale)
Ordinary income (right scale)

Growth Drivers of Specialty Financing
Aviation

Solar Power Generation

Real Estate

Backlog Delivery Schedule

The scope of ACG’s businessis expected to expand basedon a backlog of orders for new
aircraft. We are considering
additional investment toaccelerate ACG’s growth.

(as of the end of March 2019)
Owned andmanagedCommitted

aircraftaircraft

311

Our solar power facilities boast
industry-leading scale, mostly
through our collaborative businesswith Kyocera. We expect to further
scale up through the operation oflarge solar power plants.

172

Total

483

aircraft

2019/32022/3297 MW400
or moreMW

In addition to providing financial support to Shinko Real Estate, we seek toexpand high-value-added investment opportunities through alliances with
its shareholders Kobe Steel and with Nippon Tochi-Tatemono. In addition
to strengthening our operations, we plan to develop new business areas.

TOPIC

Pursuing professionalism
and leaping beyond
expectations toward greaterbusiness sophistication
30

Tokyo Century Corporation

Integrated Report 2019

Targeting further growth with aviation-related businesses
by acquiring an additional interest in GA Telesis, a U.S. providerof aircraft parts and services
The number of passenger jets in operation is forecast to grow by 1.7 times over the next 20 years, from 23,904 in 2018
to 40,301* in 2038. In order to grow our aviation-related businesses, such as areas with strong demand prospects likeaircraft engine leasing and financial services for aircraft parts, Tokyo Century acquired in October 2018 an additional
29.2% interest in GA Telesis, a U.S. provider of aircraft parts and services. This brought our total stake to 49.2%,
positioning us as the largest shareholder. In addition, we established an engine leasing joint venture with GA Telesisand All Nippon Airways Trading. We intend to accelerate cooperation with our outstanding partners to expand ouraviation-related businesses.
* Source: “Worldwide Market Forecast 2019-2038,” Japan Aircraft Development Corporation

Tokyo Century Corporation

Integrated Report 201931

Specialty Financing

Driving Growth under a Business Model ofFinance × Services × Business Expertise throughCreative Ventures with Our Excellent Partners

Maximizing the Value Chainin Collaboration with Partners

Developing New Businesses
in Response to Changes
in the Operating Environment

In order to further expand the business foundation ofSpecialty Financing, the company’s growth driver, we

In addition to expanding cooperative frameworks, we will

established during the Third Medium-Term Management

work to develop new spheres of business during thePlan numerous cooperation frameworks with leading

Fourth Medium-Term Management Plan.

companies in each field as strategic partners. During the

We aim to swiftly seize on business opportunities

Fourth Medium-Term Management Plan, we intend toarising from the various changes underway in the

maximize the value chain for each asset class within thesebusiness environment, including growing investment

frameworks while also establishing new frameworks fordemand in renewable energy and infrastructure and shifts

potential strategic partners based on successful models.

in working styles, and tie this into our business expansion.

In the aviation business, we intend to capitalize on

In addition, we believe that we can drive further

business opportunities in the expanding aircraft operating

growth in this operating segment by contributing tolease market through Aviation Capital Group, a leading U.S.

the achievement of the sustainable development

aircraft lessor which has turned into an equity-method

goals (SDGs) through support for socially meaningful

affiliate. At the same time, we plan to promote aircraft life

operations and businesses.

cycle management by working with GA Telesis, a solutions

Mahoko Hara
Managing Executive Officer
President, Specialty Finance Business Development Unit

provider to the aircraft after-market. In 2018, in addition toestablishing an engine leasing joint venture with GA Telesisand All Nippon Airways Trading, we also bolstered ourcapabilities in solutions. In the real estate business, too,

Building Organizational Platform
and Infrastructure in Accordancewith the Global Standards

we laid the foundations to become a one-stop provider ofReview of the Third Medium-Term
Management Plan

Fourth Medium-Term Management Plan

Key Theme

Key Theme

Built aviation and real estatebusiness value chains

Further refine businesses withexpertise and creativity

real estate life cycle services by turning Shinko Real Estate,

As we focus on achieving the goals of our Fourth Medium-a comprehensive real estate company, into a consolidated

Term Management Plan and subsequent sustainablesubsidiary. In the environment and energy business, which

growth, it will be essential to forge new businesses fromis focused on Kyocera TCL Solar, we advanced our solar

creative ideas that are not bound by existing frameworks.

power business in part by forming joint ventures with

We believe that innovative ideas will spring from human

Ciel & Terre, which possesses strengths in floating solar

resources representing diverse backgrounds and skills

solutions. Going forward, we intend to achieve progress

being able to apply their various strengths to influencein overseas projects.

and encourage each other.

We plan to further refine our businesses together

Main Initiatives

Achievements onverted Aviation Capital Group, a leadingC
U.S.-based commercial aircraft lessor,
to an equity-method affiliate

with partners

 ade additional investment in GA Telesis, a major
M
U.S. aircraft parts and services provider

2 Develop new businesses in response to changes

Converted
Shinko Real Estate, a comprehensive
real estate company, to a consolidated subsidiary

3 Build organizational platform and infrastructure

 onverted Nittochi Asset Management,Ca real estate asset management company,
to an equity-method affiliate

32

1 Maximize the value chain in collaboration

Tokyo Century Corporation

Integrated Report 2019

in the operating environmentin accordance with the global standards

To attract diverse workers and provide an environment

with our expert partners in search of even greater growthin which they can perform at their highest level, it isand maturity.

particularly important to equip Specialty Financing, which
conducts highly specialized operations on a global basis,
with an internationally standard organizational base andflexible hiring structure while ensuring it has the requisite
infrastructure.
Facilitating personnel growth, raising motivation, andincreasing operational efficiency to ensure that more time
is available for creative thinking are all factors we believe
will translate into greater growth in our business.

Tokyo Century Corporation

Integrated Report 201933

Business Model for International Business

Balance of Segment Assets/
Ordinary Income(Billions of yen)

15

600

International BusinessWe provide specialized services that address uniquelocal needs by partnering with leading local companies
and financial institutions overseas.

435.7
400

8.1

485.0
8.8

0

Investment

18/3

19/3

Local partnercompanies

Japanesecompanies

Joint ventures

10

5

200

Expertise,knowledge

Tokyo Century

Credit analysis
skills,local customer
base
Investment

Combining our
know-how withthe business basesof our partners

Provisionof services

Non-Japanesecompanies

0

Balance of segment assets (left scale)
Ordinary income (right scale)

Expanding Non-Japanese Businesses through Strategic Alliances

Bolstering businessfoundations through viablebusinesses tailored to achanging business environmentand strategic alliances
34

Tokyo Century Corporation

Integrated Report 2019

U.S.A.

Indonesia

ThailandWorld-class IT solutions based on
the expertise and global networkof CSI Leasing, which has strengths
in IT equipment

Joint vendor financing venture with
Hitachi Construction Machinery Group
Strategic partnership agreement on
FinTech and other businesses with
Lippo Group, a major conglomerate

Leasing business with TISCO
Financial Group, a leading local
banking group
Joint vendor financing venture with
Hitachi Construction Machinery Group

Philippines

MyanmarIndia

Leasing business with Bank of thePhilippine Islands, a leading bankAcquired shares in major auto leasing
company Yoma Fleet

Leasing business with TATA Capital

China

TaiwanSingapore

Joint leasing company with Dalian
Bingshan Group, the largest
refrigeration and air-conditioning
equipment manufacturer
Investment in a government-affiliatedleasing company in Suzhou City
Strategic business agreement with
China UnionPay Merchant Services,
the largest card payment service
operator

Leasing business with Uni-President
Enterprises Group, the largest foodand distribution company group

Capital investment in Grab Rentals,
which provides vehicle rental services
to Grab drivers
Strategic partnership with Grab, thelargest ride-hailing platform providing
services across eight countries inSoutheast Asia (Singapore, Malaysia,
Philippines, Indonesia, Thailand,
Vietnam, Myanmar, and Cambodia),
to promote the expanding fleet
financing business

TOPIC

Acquiring shares in the auto leasing company Yoma Fleet,for further growth in the promising Myanmar automotive market
Tokyo Century has acquired 20% of the shares in Yoma Fleet, an auto leasing and car sharing services provider in
Myanmar, and turned the company into an equity-method affiliate. Yoma Fleet is the industry leader in Myanmar auto
leasing and car sharing, and is also active in providing financing for construction machinery.
The automotive market in Myanmar is rapidly expanding, with the highest growth rate for new car sales in theentire ASEAN region in 2018, with potential to become a large automotive market. By combining Tokyo Century’s
financial expertise and strong reputation in the Japanese market with Yoma Fleet’s existing customer base and credit
analysis capabilities, we will work to grow Yoma Fleet’s current services as well as explore opportunities to expand
into further business lines.

Tokyo Century Corporation

Integrated Report 201935

International Business

Providing Optimal Solutions
for the Digital Mobility Revolution

Responding to Expansionof the Digital Economy andthe Mobility Revolution

rental services to Grab drivers in Singapore to operate
as a joint venture. We believe that provision of Tokyo
Century’s financial expertise accumulated over many
years in automobile financing, leasing, and rentals toDuring the period of the Third Medium-Term Management

Grab will generate major synergies. Grab is beginningPlan, International Business demonstrated robust growth

to transform from being simply a ride-hailing platform

as a result of turning U.S. firm CSI Leasing into a

into one of Southeast Asia’s major mobile application

consolidated subsidiary and forging alliance operations withplatforms, providing a one-stop option for services such

local business partners in various Asian countries. We haveas e-money and food deliveries. We are also pursuing

been able to utilize our financial services expertise tobusiness alliances across a number of fields.

expand across a wide range of business areas, including
IT solutions services, fleet services, vendor financing incooperation with partners, and digital-related businesses.
We anticipate the evolution of the business environment

Expanding and Deepening
Our Business Foundations

to accelerate during the Fourth Medium-Term Management

Yasushi Yoshino
Senior Managing Executive Officer
President, International Business
Development Unit

Plan, which started in April 2019. In response, the main

We are further extending business in IT solutions and fleet

theme for the segment is “responding to expansion of theservices, our core competences, particularly in the United

digital economy and the mobility revolution.” AdvancesStates. In addition to expanding FMV (fair market value)in digital technology are driving destructive change toleasing other than IT equipment to tap into significant needs

industrial structures, and we intend to seize upon thein North America, Central and South America, and Europe,business opportunities created by this upheaval.

we are seizing the initiative to open up Asian markets.
In line with our efforts to contribute to an
environmentally sound, sustainable economy andAlliance Business with
Platform Providers
Review of the Third Medium-Term
Management Plan

Key Theme

Formed strategic partnerships with overseas
companies and accelerated globalization

Respond to expansion of the digital economy
and the mobility revolution

Achievements

Main Initiatives

Invested in Grab, the largest ride-hailing services
company in Southeast Asia, and collaborated onconversion of Grab Rentals into joint ventures, etc.

1 Pursue broader and deeper business relatedInvested in an electronic money and point services
company operated under the OVO brand by Lippo
Group, a leading Indonesian conglomerate

to FinTech and mobility
2 Collaborate with leading companies throughalliance strategies

International Business. Six projects (as of July 2019) inwhich we are the representative participant have been

Fourth Medium-Term Management Plan

Key Theme

society, Tokyo Century is actively pursuing measures in

We established an electronic money and point service,selected for JCM (Joint Crediting Mechanism, a bilateral

OVO, in Indonesia as a joint venture with Lippo Group.

mechanism) model projects offered by the Japanese

The OVO brand has continued to grow with the steady

Ministry of the Environment, and we are engaged in

integration of payment services of Grab and Tokopedia,

reducing CO2 emissions in the Philippines, Thailand, andIndonesia’s largest e-commerce company, and has now

Indonesia. We are also involved in BEMS*1 and ESCO*2

become one of the most powerful payment platforms inoperations for developing energy consumption proposals.

Indonesia. In addition to OVO, we are expanding alliances

We will continue to focus on translating these initiatives

with Lippo Group in a wide range of other areas.
Our alliance business with Grab is steadily developing.
Tokyo Century made an investment in Grab, the largest
ride-hailing platform in Southeast Asia, at the same timeas entering into a strategic partnership in 2016. In January
2019, we invested in the company which provides vehicle

in the ASEAN countries into new alliances withenvironmentally aware blue-chip companies.
*1 BEMS (building energy management system):a system for optimizing energy management by controlling the lighting,air-conditioning, and other facilities of commercial buildings using IT.
*2 ESCO (energy service company):a business that covers overall costs (construction, interest, and ESCO
operator expenses) by implementing energy-saving improvements tolower lighting, heating, and water utility costs.

 onverted CSI Leasing, a major independent U.S.
C
leasing company, to a wholly owned subsidiary36

Tokyo Century Corporation

Integrated Report 2019

Tokyo Century Corporation

Integrated Report 201937

MATERIALITY
Promoting Sustainability Management

Achieve
Sustainable
GrowthContribute to the creation of an environmentally sound,sustainable economy and society through our business activities
Finance x Services x Business Expertise
Global network
Solid customer baseLeading partners
High degree of expertise

ia

Ident
i

fy

c
so

sues
l is

en

nt
er
na
lb

th
ng
Stre

Director and Senior Managing Executive Officer
President, Corporate Planning Unit
President, Accounting Unit
Chairman, Sustainability CommitteeE
our fo xerc
ur o ise
to r pera s
es
ol

ase

Koichi Babaeng

The Fourth Medium-Term Management Plan lays out the image of
how the Company sees itself in 10 years’ time, and we have worked
backwards from that to draw up our plans. Ten years from now puts

Increase
Corporate
Valueinths ents
ng egmtre g sstin issuevekeyPursuing an ideal image of a company
that contributes to the solutionof social issues

Identify materiality (key issues)
based on extent of impact on society
and on our company

ag
e

me
nt

Stre

t
ng

n
he

i

us at 2030, which overlaps exactly with the final year set forachievement of the SDGs. Making a contribution to the solution ofsocial issues is the key framework of the Fourth Medium-Term
Management Plan.

Enhance disclosureof nonfinancial information
Strengthen stakeholder engagement

Improve systems for promoting sustainability
Risk management
Human resources infrastructure (diversity, workstyle reform, etc.)
Corporate governance, etc.

The Sustainability Committee has now been up and running fora year, and as well as continually debating issues specifically related
to materiality, we have tried to significantly increase employees’ anddirectors’ awareness by focusing on advocating sustainability through

Structure for promoting
sustainability management

Board of Directors

internal magazines and the internal portal site, and I truly feel we have

President

succeeded in this. I believe ongoing issues are solidifying promotion

Management Meetingas Tokyo Century Group as a whole and increasing engagement withall types of stakeholders. While utilizing in management the analyticalresults of the “employee awareness survey” conducted in February
2019, we will continue to promote sustainable corporate management
by stepping up pursuit of the creation of a corporate culture in which

Discusses the report of deliberation at Sustainability
Committee and Management Meeting

Discusses the status report of sustainability
initiatives

Committees, etc.
Comprehensive Risk Management Committee(Chairman: President, Risk Management Unit)
Various other committees

Coordination

Sustainability Committee(Chairman: President, Corporate Planning Unit)

Plans, promotes and coordinates all-company
sustainability efforts
Matters related to important issues (materiality)(Secretariat: Sustainability Management Office)a diverse range of personnel can play an active role.
Tokyo Century and Group companies

38

Tokyo Century Corporation

Integrated Report 2019

Implement sustainability initiatives

Tokyo Century Corporation

Integrated Report 201939

Identifying Materiality (Key Issues)
Our Materiality (key issues)

Materiality (Key Issues) for Tokyo Century Group

Contribution to
low-carbon
society

Priority Materiality Initiatives

SDGs Targets

Contribute to widespread use of clean energy throughclimate change and environmental efforts

Based on the United Nations’ SDGs, Tokyo Century has created a “materiality map” that considers
the degree of priority favored by our stakeholders (vertical axis) as well as the degree of priority for

Our effort

the company itself (horizontal axis), including the development of diverse businesses (such as

P42-45

Renewable energy business, including solar power generation

aviation and solar power generation, etc.) that takes advantage of our highly flexible businessenvironment and business characteristics grounded in the value of our “assets."
We then used this materiality map to identify five materiality issues, prioritizing items with a highdegree of importance in terms of both nonfinancial social outcomes and business outcomes,
following discussion by the Sustainability Committee and the Board of Directors. We will update

Creation of new
business driven
by technicalinnovationthese key issues as required based on progress with materiality initiatives and changes in the

Our efforts

P46-49business environment.

Contribution tosocialinfrastructuredevelopment

Identifying “Materiality” Using Materiality Map

P50-52

Sustainable
resource use

HighCreate new business by integrating new technologies
into financial services, and contribute to the digital
economySubscriptions, FinTech

Respond to advances in global mobility services
and cooperate with local communities to contributeto social infrastructure development
Our efforts

Mobility services, centered on Nippon Rent-A-Car Service
Regional revitalization through ANA InterContinental
Beppu Resort & Spa

Contribute to development of a circular economy
focused on the value of assets
Our efforts

Importance for stakeholders (vertical axis)

Materiality

P53-55(key issues)

Enhanced work
environment,
leading tostrengthening of
human resources

Importance for Tokyo Century (horizontal axis)

Tokyo Century Corporation

Promote human resources development, diversity,and workstyle reform that improve job satisfaction
and foster a sense of personal growthP56-59High40

IT equipment leasing and refurbishing
Aircraft life cycle management
Automobile leasing

Integrated Report 2019

SharedPlatforms

Utilize diverse partnerships to create new value

Tokyo Century Corporation

Integrated Report 201941

CASE 01

Floating Mega Solar System

FEATURE Tokyo Century Group’s Contributions to the Creation of a Sustainable Society
OUR MATERIALITY

Contribution to
Low-Carbon Society

Project development structure
Tokyo Century
Project management,
leasing solar power generation facility

CASE 01

Floating Mega Solar System

Power Generation Business
Effectively Uses Idle Land in Japan
Kyocera TCL Solar, established by Tokyo Century as a joint venturewith Kyocera Corporation (Kyocera), now operates a nationwide
solar power generation business providing environmentally soundrenewable energy. It works on an inclusive basis, handlingeverything from leasing the site to facility installation andoperation. Kyocera TCL Solar significantly contributes to the
supply of clean energy in Japan, including its operation ofgenerating facilities in more than 70 locations across Japan.

KyoceraCiel Terre Japan

Manufacture and supply of solar panels and EPC(Engineering, Procurement, Construction)

Manufacture and supply of floating PV (Photovoltaic)
system for floating solar power generation

The harvested electric power is boosted to
154,000 V at an extra-high-voltage substationand transmitted to TEPCO’s Power Grid.
Site acquisition

Mega solar
construction

Powergeneration

Sales ofelectricity

Powertransmission anddistribution

Power
consumption

Facility disassemblyand site return

The power generated from approximately
50,000 floating solar panels is converted to
AC (Alternating Current) at three substations.

Contributing to the creation ofan environmentally sound, sustainable economy
and society by effectively using water surfaces
Floating mega solar power generation is a promising renewable energy
business in land-scarce Japan and should significantly advance creation of anenvironmentally sound, sustainable economy and society. Installing floating solar
panels on the surface of water eliminates the need for large-scale constructionof ground-mounted facilities, with the additional advantage of not disturbing thesurrounding environment. Moreover, revenue from leasing reservoirs eases thefinancial burden of the aging population and depopulation in agricultural areas.
Amid a lack of suitable land for domestic solar
power plants, there are hopes that this businesscan be expanded given the many water
reservoirs currently not in use.

Floating mega solar power plantin Yamakura, Chiba Prefecture

Hiroaki Ogino
Executive Officer
Deputy President,
Specialty Finance Business Unit II

42

Tokyo Century Corporation

Integrated Report 2019

Location: Ichihara City, Chiba Prefecture
Start of operation: March 5, 2018
Implementation period: 20 years
Site owner: Chiba Prefectural Waterworks Bureau
Operator: Kyocera TCL Solar LLC
Size of leased area (water surface): Approx. 180,000 m2
Maximum output: Approx. 13.7 MW
Annual power generation: 16.17 million kWh (expected)

Tokyo Century Corporation

Integrated Report 201943

CASE 01

Floating Mega Solar System

Mega Solar Construction

Power Generation and Sales of Electricity

Facility Disassembly and Site Return

Efficient power generation system for maximum reduction of environmental load

Supplying enough electricity topower around 5,000 households

Minimizing environmental impact
even when the site is returned

Implementation period set
at 20 years

Floating modules are easily
dismantled and removed

Construction method suited
to dam reservoir conditions

Floating panels offer more
efficient power generation
than ground-mounted panels

Chiba Prefecture has been pushing ahead with natural

Approximately 50,000 solar panels were installed on the

Another advantage of the floating mega solar power plant

energy to diversifying and securing its energy sources after

The Yamakura Dam utilizes the Hydrelio floating PV system of

Yamakura Dam, with a maximum power output of 13.7 MW

is its low environmental load in addition to no need toits experience of suffering power shortages after the Great

French company Ciel & Terre, which combines two high-density

and total transmittable power from the three land-based

reclaim land, restoring the site to its previous condition is

East Japan Earthquake. It is focusing on floating solar power

polyethylene floats. The main float is attached to 60 cell solar

substations of 11.5 MW. The maximum output is higher than

generation, an area of remarkable technological progress,

the transmittable power since solar power generation iseasily accomplished at the end of the lease.

panels. Construction of the solar power facility on the waterand has begun generating power at a mega solar powersurface is comparatively simple, as wires are used to connect

structured to allow for highly efficient power conversion andplant at the Yamakura Dam.

the panels to anchors fixed at the bottom of the reservoir.

transmission even when not operating at peak levels. Annual©

The solar panels cover 18 hectares, equivalent to 30%

Ground-mounted solar power facilities tend to decline inpower generation at the plant, one of Japan’s largest floatingof the dam’s reservoir area, and have the major benefit ofoutput during the summer, when the temperature of the panelmega solar power plants, is estimated at 16.17 million kWh,protecting the natural environment. Floating the panels

surfaces rises. Floating mega solar panels, however, can use

enough to handle annual energy consumption of aroundon the water constrains the growth of algae triggered by

the cooling effect of the water to control the rise in panel

5,000 households.

photosynthesis, and field tests show improved water quality,

temperature and thus offer the major benefit of stable output.

The implementation period has been set at 20 years,

which can become increasingly alkaline from the impact ofAfter taking into consideration the shadows cast by the panelswith the purchasing period regulated under the feed-inalgae. Moreover, the solar panels provide a new resting place

and the impact of the wind from below, the panels at the

tariff system. Given that solar panels do not demonstrate

for water fowl that reside at or visit the reservoir. Floating

Yamakura Dam were installed at an inclination of 12 degrees

a significant drop in generating efficiency even after 30 years,

mega solar power plants do not generate concerns about

for the most efficient power generation.

we continue operations even after this period is over,

deforestation or soil and water pollution and are attracting

The floating PV system is currently adapted for freshwaterproviding that we acquire leasing permission from the Chiba

attention from across Japan as an environmentally soundlakes, with even greater potential for adoption if technologicalPrefectural Waterworks Bureau. We see considerable meritform of power generation.

advances allowed the panels to be

in being able to supply low-priced

installed at sea.

natural energy sufficient to power

Kyocera-manufactured solar panels used at the plant
have a track record of little decline in generating efficiency,
even after 30 years or more. Pending the permission of thesite owner, we believe that it will be possible to continue
operations after the end of the lease period, enabling us tocontribute to the diversification of Japan’s energy structure
and promotion of local production for local consumption.
Kyocera TCL Solar plans to move the solar panels toanother location for reuse after the power generation
business is finished or sell them on the used market in
Japan or overseas. Such operations, therefore, produce as
little waste as possible that might impact the naturalenvironment.

around 5,000 households over thelong term in Chiba Prefecture.

Installation of solar panels

Ciel & Terre’s floating PV system
for floating solar power generation
Hydrelio©

Kyocera’s solar panels are capable ofmaintaining generating efficiency evenafter 30 years of operation.
Photo provided by Ciel Terre Japan

Creating the future through a strong partnership
Kyocera’s solar cells are in operation today, 34 years after they started generating power, andhave demonstrated strong technological prowess and long reliability, including a drop in power
output of only 13%. Through this project, we have been able to combine our strong technicalcapabilities with Tokyo Century’s expertise in financing and leasing to form a strong partnershipfor developing the power generation business.
Given the current focus on effectively utilizing water surfaces, we intend to expand thiseffectiveness to other lakes and sea locations. By leveraging the knowledge and power plant
construction techniques cultivated from this joint venture, we will further promote the diffusionof renewable energy.

44

Floating solar power generation promotes local electricity
production for local consumption
Ciel Terre Japan has established a reputation for the floating PV system and the detailed design ofanchoring solutions that a safely secure power generating facility, and we believe our highly sophisticatedtechnological capabilities that ensure resistance to even strong winds, led to the adoption of our system at
the Yamakura Dam.
As the company that started the world’s first floating solar power generation business in Japan, our joint
business with Tokyo Century has created strong bonds of trust in societal and technological terms. The
floating solar power generation business holds significant potential as an environmentally sound form of
renewable energy, and we intend to develop power generation businesses on other large bodies of water,
including the sea, lakes, and dams, towards promoting local electricity production for local consumption.

Toshihide Koyano

Hajime Mori

Deputy General Manager of Corporate Solar Energy Group
Kyocera Corporation

President & Representative Director
Ciel Terre Japan Co., Ltd.

Tokyo Century Corporation

Integrated Report 2019

Tokyo Century Corporation

Integrated Report 201945

CASE 02

OUR MATERIALITY

IoT Subscriptions

Creation of New Business Driven by Technical Innovation

CASE 02

IoT Subscriptions

Groundbreaking Subscription Platform BusinessTokyo Century has begun offering an innovative subscription business in cooperation with Bplats, Inc.,a developer and provider of subscription integrated platforms. Bplats President Kenji Fujita and Tokyo
Century Director and Managing Executive Officer Akihiro Naruse talked about the present and futureof subscription services.

Eyeing the True Potentialof Subscriptions
Naruse: Tokyo Century entered the subscription businessin earnest in October 2017 with the signing of apartnership agreement with Bplats.
As the era of IoT becomes a reality, the leasing andrental sector has seen an increase in demand for pay-peruse (subscription) services based on units of usage andtime in addition to fixed-rate leasing. Bplats was an early
developer of a B-to-B subscription platform. We have grown
our business based on leasing and providing services, andgiven this major shift from products to services, we believe
Bplats can provide the expertise we need.

involves packaging communications and application
services with devices. It has attracted significant attention

Fujita: Having experienced the difficulties of popularizing

as a low-cost and rapid PoC*2, and we feel that it issubscription platforms as a venture company, we too

beginning to constructively overturn the establishedbelieve that partnering with Tokyo Century was aconcept of subscriptions.

breakthrough in dynamically growing our business.
The reason is customers interested in using a

Fujita: While the subscription business has been undersubscription platform also have needs in such areas as

the spotlight since last year, I feel it has generally been

offsetting assets and financial services. We are aware thisviewed as a mechanism for fixed monthly payments, suchhas represented a vulnerability for us. Tokyo Century is

as for software and music content. But the true nature oftherefore an ideal partner because of its strength in

the subscription business is quite different. It has two key

finance and its business advantages from leasing tofeatures: first, contracts can be concluded online via aproviding services.

smartphone or computer, so no paperwork or face-to-facemeetings are required, and this opens up a wide range of

Naruse: We opened the “IoT SELECTION connected withcustomer engagement opportunities. Second, customer

SORACOM” e-commerce marketplace in March 2019 asrelationships and continuity are strengthened over thea platform for aggressively advancing a subscription

course of ongoing service delivery, allowing for thebusiness. This service, provided jointly by Tokyo Century,

addition of high-quality services tailored to new

Bplats, and SORACOM, Inc. (SORACOM) , primarily

information gained about the customer.

*1

In other words, the subscription business is broadening
the definition of customer relations. I think this could
certainly be identified as the fourth industrial revolution. I
want people to understand that our subscription platforms
are not merely about fixed monthly payments; they also
represent a means for continuing to provide additional
products and services customers need.
*1 A communications services provider that offers the SORACOM IoT
telecoms platform.
*2 Proof of Concept is an initial step for validating a new concept, theory,
principle, or idea, and it takes place prior to trial production.

46

Akihiro Naruse

Kenji Fujita

Director and Managing Executive Officer
President, IT Equipment Business Unit

CEO & President
Bplats, Inc.

Tokyo Century Corporation

Integrated Report 2019

Tokyo Century Corporation

Integrated Report 201947

CASE 02

High-Quality Unified Package Made
Possible through the Partnershipof Three Companies

by a pricing mechanism that is also adaptable to the pay-

a one-stop shop for all the required elements, and this canmaximize ease of use and convenience. For example, in

per-use model. With the current focus on dynamic pricing*3

contribute to all kinds of subscription businesses.

supporting service operations like the renting of meetingand given the administrative processes involved in therooms, there is an opportunity to offer a service linking

pricing of products and services, we can no longer offer only

Fujita: That’s absolutely right, while the most obvious

those who want to rent the room with those who lend it.

Naruse: To take a closer look at IoT subscriptions, IoT

one pricing format. Our strategy will make it easier tobenefits are the ability to offer pay-per-use services that

Moreover, although this may be an idealistic scenario,

can acquire and process transmitted data for businessanalyze customer trends and prices accordingly. I hope

apply IoT and to use them as part of a system throughthe ability to offer subscriptions to integrate a variety

applications. So, the key is the volume of data that can be

people will try it out.

which fees can be charged and paid. This, by all means,of services, such as providing the requisite copiers,

would be the ideal description for our subscriptions, but it’s

computers, and cleaning services, would significantly

only a small part.

improve convenience.

secured. That is the true significance of the alliance of ourNaruse: It’s important that people actually use thethree firms.
SORACOM is a communications company capable ofsubscription platform and directly experience its great

wirelessly connecting all types of things. Its technology

features. It’s just like you’re still being surprised by theand sales partners as well as end users. The key is toexperience in financial services in combination withfor transforming communications at the application level

convenience of services like car sharing and musicconnect all of these elements. As you said, the strength

Bplats’s innovative subscription platforms will enable us

is top class, and its partnerships with more than 500

streaming the first time you actually use them, even if youof our subscription platform is more than one-to-one

to quickly provide support to Japanese companies

companies attest to the quality of the technology. In

had already understood the concept. Subscriptions provide

connections. It has the capability of continually connecting

competing on the global stage.

addition, the Bplats’s platform and Tokyo Century’s

exactly the same experience, and that’s the key. With that insuppliers and sales partners through the same system.

financial services enable us to cover almost every IoT need

mind, our platform offers easy access to trial subscriptions,

The emergence of the sharing economy confirms a

Fujita: I agree this represents an extremely importantof customers, including all-round services for device use,

and I think this is a really good approach as a gateway tocurrent megatrend signaling a fundamental change inmeans for supporting Japanese companies. Japan’sbilling, and transaction management.

ongoing adoption.

business structures. Even though societal needs may shiftstrength is undoubtedly in manufacturing, which has*3 A method for leveling demand by adjusting prices to changing market conditions.

to areas like MaaS , these changes cannot come about

been recognized as a driving force enabling Japanese

instantly. I think a new functionality needs to be adopted

companies to emerge collectively as global leaders evengradually across the entire supply chain so that service

in the midst of the trend toward services. I believe ourquality can be taken to the next level.

subscription platforms can provide the infrastructure for

Fujita: With the introduction of IoT, data will be steadily
accumulated, eventually yielding Big Data. The crucial
challenge is to reinvest based on the new value extracted

Growth Strategy to Promote
Japanese Craftsmanship

The actual businesses encompass multiple suppliers*4from that Big Data, and this presents a new business48

IoT Subscriptions

I think the provision of Tokyo Century’s accumulated

Japanese manufacturing as the key to victory in Asia asopportunity. Our subscription platform provides solutions

Naruse: Let’s turn our attention to the future. Naturally,

Naruse: Given Japan’s declining birthrate, the greying ofwell as across the rest of the world. I am confident thatto problems as well as future business expansion, and ourour current focus is achieving the success of the “IoT

its society, and depopulation, it will be important to offer

our contribution to society will be in transforming

flexible development capability is one of the most

SELECTION connected with SORACOM” business, with highusers highly efficient financial services that have adapted

Japanese culture as we continue to expand the scalability

attractive sales points.

hopes for the limitless possibilities ahead. As I said, a key

to the shift from products to services. I think the mostof our platforms.

Aside from ease of use, I think people will be impressedadvantage of cooperation with Bplats is the ability to become

crucial element for introducing subscriptions is to*4 Mobility as a Service refers to the provision of automobiles and otherforms of transportation as a fee-paying service only used as necessary.

Cooperation has changed
the scale of projects andshape of demandCommitment to a swift
response that addresses
societal needs

Getting businesson track as fast
as possible

Fully supporting
customers moving into
a subscription business

I am in charge of planning for the optional
platform functions that meet customer
requirements. Since the alliance began,
I have been able to develop proposals at
an earlier stage. Going forward, I will
be supporting products that utilizefinance as a service, eventuallyoffering a Big Data platform forentire businesses, as my way ofcontributing to the growth of thebusiness and the company.

I recommend operating and installation
methods to customers considering
subscriptions, and working with Tokyo
Century has increased the number oflarge corporations seeking consultation.
Our platforms provide the environment
for new business connections andfor new initiatives and simplified
processes, which I believe canhelp transform the Japanesebusiness style.

I identify new partners and encourage
usage to increase the attractiveness of
our IoT subscription marketplace. As
this is a newly established business,
I focus on raising the level ofcustomer awareness, and I believe
the key to success is increasing
the number of partners. As
many of the staff are young, I
hope to grow with them throughthe business’s success.

I plan new services and activities to share
information and knowledge acrossbusiness divisions and to promote thesubscription business throughout thecompany. This extends beyond finance, as
the platform business can further deepen
customer relations. I want to encourage
this business as a joint venture withcustomers who are seeking to reformtheir businesses by shifting fromproducts to services.

Ryosuke Senoo

Takahiro Furukawa

Yuichi Fujiki

Chihiro Wakugawa

Manager, Sales Operations Division
Bplats, Inc.

Manager, Sales Operations Division
Bplats, Inc.

Manager, Digital Business Group,
IT Equipment Business Division II

Digital Business Group,
IT Equipment Business Division II

Tokyo Century Corporation

Integrated Report 2019

Tokyo Century Corporation

Integrated Report 201949

CASE 03

OUR MATERIALITY

Nippon Rent-A-Car

Contribution to Social Infrastructure Development

Nippon Rent-A-Car

Business Strategies Adapted to the
Rapid Change in the Mobility Sphere

Agilely Developing New Businesses across JapanThe mobility sphere has begun to reflect the impact of the

CASE 03

Having shifted all sales companies to a direct management system, Nippon Rent-A-Car Service, Inc. is marking
its 50th anniversary in 2019 by strategically developing businesses based on its strengths to seize the new
growth opportunities presented by the dramatic evolution of the mobility business landscape. President
Yoshimitsu Arahata talked about the company’s efforts to provide services that respond to diversifying customer
needs and its initiatives for raising profitability.

major sea change represented by CASE*1. We see this as abusiness opportunity and intend to advance our businessstrategically.
Car-related services are diversifying amid the shift insocietal needs from ownership to use. With the rapidly
declining significance of owning a car, particularly among
those in their 20s and 30s, we expect the markets for short-

Direct Management Has Accelerated
New Business Development

Since the shift to direct management, NRS has alreadyembarked on several new initiatives. For example, webegan the full-scale nationwide development of our own

Nippon Rent-A-Car Service, Inc. (NRS) shifted all its sales

car sharing business and also limited all family vehicles tocompanies to a direct management system in January

non-smoking while abolishing 24-hour operations as a2018. The company celebrated its 50th anniversary in Marchworkstyle reform. In addition, we concluded an operating

2019, and I believe our growth over this half century has

tie-up with akippa Inc., which has developed an app thatbeen driven by providing a variety of vehicle makes andmatches drivers with available parking spaces, and in April

models, including imported vehicles, without being affiliated2019 we agreed to a partnership with Enterprise Holdings

with any specific automaker, by our nationwide network of

Inc. (Enterprise), the world’s largest car rental company.

well-located branches, and above all by supplying high-We achieved these through the ability to make quick

quality rental cars that are safe, trusted, and clean.

decisions that are only possible under direct management.

Establishing a service structure
for meeting diversifying customer
needs in line with our new
Management Philosophy
and Action Guidelines under
direct management
Yoshimitsu Arahata
Representative Director and President
Nippon Rent-A-Car Service, Inc.

term car sharing and long-term car rental to expand,increasing the importance of our role in continuing toprovide high-quality car rental and car sharing services.

Enterprise, we plan to expand services for overseas nationals

those for specific corporate clients, in which we station

through such additional features as multilingual reservation

vehicles in parking spaces owned or leased by the client forchannels and car navigation systems.

use by their employees, and services through our branches,

Tokyo Century Corporation

Integrated Report 2019

In response to the lowering of barriers separating thewhich are primarily in large cities and near airports andareas of mobility service, we intend to focus future CASE

shinkansen stations. Our major point of differentiation frominitiatives on using IoT to improve the accuracy of vehicle

other companies that emerged is NRS’s reputation for

management, boost marketing efficiency based onproviding safe, trusted, and clean vehicles.

customer information, and strengthen parking lot sharing

The rising number of foreign visitors to Japan has been

services through our tie-up with akippa. In addition, we

accompanied by a dramatic

recognize the importance of introducing revenue

increase in the number ofmanagement*2 for more flexibility in price setting in line

overseas customers in thewith customer needs and expanding app functionality. We

car rental sector. NRS

will continue to raise the quality of our services in order tobelieves that it can further

better respond to diverse customer needs for vehicles.

accelerate car rental usage*1 Connected, Autonomous, Shared, and Electric is a trend under the spotlight aspart of a social and technological sea change in the mobility sphere.
*2 A sales management method for maximizing revenue based on demand
forecasts. It is gradually gaining ground across a variety of sectors, including theairline industry, that face fierce competition and dramatic fluctuations in demand.

by foreign visitors to Japanthrough its alliance with

TOPIC

Accelerating Mutual Customer Referrals in Partnershipwith the World’s Largest Car Rental Company

In April 2019, Nippon Rent-A-Car
Service, Inc. concluded a partnershipagreement with Enterprise Holdings
Inc., the world’s largest car rental
company. The agreement enables
foreigners visiting Japan for tourism
or business to use the websites ofEnterprise Rent-A-Car, National Car

50

Enterprise. As well as sharing operating know-how with

We currently offer two types of car sharing services:

Rental, and Alamo Rent A Car to book
Nippon Rent-A-Car vehicles during theirstay. In addition, Japanese nationals
going overseas can use Nippon Rent-ACar’s website to reserve vehicles at morethan 10,000 locations in 95 countries.
Within Nippon Rent-A-Car’s
domestic network, participants in themembership programs of each
respective company can benefit fromdiscount rental services at around 80
locations close to airports and major
railway stations. This partnership is set
to expand car rental services and further
accelerate mutual customer referrals.

Tokyo Century Corporation

Integrated Report 201951

CASE 03

Nippon Rent-A-Car

CASE 04

OUR MATERIALITY

Increasing Brand Value andGuidelines for the Futureterms, including airline, railway, and bus companies. Going

Sustainable Resource Use

CASE 04

CSI Leasing

forward, we will continue strengthening ties with Tokyo
Century Group and expanding the scope of our operations

In light of receiving theto contribute to Group consolidated earnings.

“Brand of the Year” award,a first for the industry, NRS
would like to express its
New Management Philosophy

gratitude to all
stakeholders—customers,

Nippon Rent-A-Car Group shall provide advanced andshareholders, andattractive services in regard to vehicle usage and shall

employees—who havemake the value of usage higher permanently. In suchsupported its journey up to the present.

way, we will contribute to the society as indispensable

We recognize that the next key task is to maintain andProviding Leasing Services with High Added Valuearound the WorldCSI Leasing, Inc. (CSI) is a company headquartered in St. Louis, Missouri. Its Chairman and Chief Executive Officer
Steve Hamilton and its Vice Chairman Toshio Kitamura, who is also Managing Executive Officer of Tokyo Century,
spoke about new challenges using synergies with Tokyo Century.

of wholly owned subsidiary EPC, Inc. (EPC), which provides databusiness entity in the field of transportation.

security, remarketing, and recycling services. These attributes

enhance our highly regarded brand power. To this end,

have earned it high praise from the multinational, global

NRS has once again reviewed its Management Philosophy
and Action Guidelines to ensure that all Group employees
are working toward the same objectives.

New Action Guidelines

1. Try to offer safe, trusted, clean and comfortable vehicle

satisfaction is another key factor for improving brandas well as upmost satisfactory and best services to ourclients to obtain best confident to us from them.

deliver optimal services that fully satisfy customers. In

2. Challenge always to introduce innovative and uniqueaddition, as part of our goal to generate sustainable

services to offer convenient and economical vehicle

growth, we will pursue advanced and attractive services

usage services.
3. Commit to respect humanistic and help each other, andunder our new Management Philosophy.
In concrete terms, NRS intends to utilize ICT to establish
a highly convenient, seamless business model for mobility

companies that constitute its customer base.
* FMV leasing is a form of highly flexible leasing that offers customers options suchas returning the asset, purchasing the asset or extending the lease at the end of
the original lease period based on fair market value (FMV) derived from theassessed residual value of the asset. As customers are not required to make acommitment at the time the lease is signed, they can make an optimal decision inaccordance with the condition of the asset at the end of the lease and the scope
and financial situation of their business. This form of leasing is a particularly
efficient method of procuring assets in fields of rapid technological advance.

We will be united to do followings:

Moreover, we are aware that increasing employee
power. We believe that highly motivated employees can

CSI Leasing

make employee friendly workplace where everyone
finds worth for working and rearises growth by oneself.

by partnering with other industries with whom it is on good

Providing comprehensive
customer-focused services on a global
basis for everything from leasing todisposal of IT equipment
Steve Hamilton
Chairman and Chief Executive Officer
CSI Leasing, Inc.

Providing Complete Support
through Synergies
CSI became a wholly owned subsidiary of Tokyo Century in June
2016, and its strong leveraging of synergies in the past few years
has created expectations for abundant growth going forward. The
geographic complementarity of CSI’s strength in the Americas
and Europe and Tokyo Century’s significant presence in Asia
enable the Group to provide services in 37 countries and regions.

Developing a Worldwide Businesssince the 1970s
T OP ICCSI is a major global independent leasing company

Century’s customer base in their efforts to expand into newheadquartered in the United States. Leveraging theoverseas markets.

independence provided by its lack of ties with any
particular manufacturer in a business environment free of
regulatory constraints, it has built bonds of trust with its

Nippon Rent-A-Car Service, Inc.
became the first company in theJapanese car rental sector to receive
the “Brand of the Year” award of the2018 World Branding Awards, as
determined by public online voting
and consumer market research. The
2018 awards recognized 351 brands
as “Brand of the Year” from more than
4,500 in 57 countries.

Tokyo Century Corporationthat CSI has developed via its worldwide operations are
already assisting Japanese companies from within Tokyo

Receipt of “Brand of the Year” Award, a Firstfor the Japanese Car Rental Sector

52

In addition, the platforms and regional market expertise

Integrated Report 2019

NRS implements a variety ofmeasures to ensure customers areprovided with safe and trusted
vehicles. In 2018, it changed its rental
vehicles to non-smoking, formed
alliances with various partners, andworked to improve the workplaceenvironment and quality of customer
support by abolishing 24-hour
operations as a workstyle reform.

We believe that this award is theresult of these efforts being wellreceived by consumers.

CSI’s Growth Strategy Is Rooted
in its Experiencecustomers over a long period through consulting sales
that provide solutions precisely customized to customer

CSI is aiming to bolster its profitability under three mainneeds, and has developed a broad-ranging business thatgrowth strategies.

goes beyond the boundaries of the United States to reach
into Central and South America and Europe.
CSI offers unmatchable high-value-added services andFirst, it will enhance existing direct sales business for IT
equipment, continuing to promote consulting sales in which it
provides direct leasing services in line with the needs of end

original know-how built up through around 50 years ofusers. Second, it will expand vendor business by utilizing CSI’s

operations in such areas as fair market value (FMV) leasing*,

accumulated knowledge, high-value-added services, and bases

and the comprehensive life cycle management (LCM) services

in global markets to provide finance services when vendors

Tokyo Century Corporation

Integrated Report 201953

CASE 04

provide equipment to end users. Third, it will diversify into

CSI Leasing

Synergies with Tokyo Century

non-IT business areas, beginning to apply the know-how built
up via IT equipment leasing to such challenging new fields as

CSI’s relationship with Tokyo Century began in 2003

aircraft ground support equipment, cell phones and otherthrough a collaboration to provide leasing services tomobile devices, and medical analytical equipment and high-Japanese companies in Mexico. This resulted in deep

tech surgical implements. This business diversification started

bonds of trust and mutual understanding, culminating inin earnest in 2018, and has already begun to deliver results.

the signing of a comprehensive partnership agreement in2012. The two parties subsequently concluded a capitaltie-up, and CSI became a wholly owned subsidiary ofTokyo Century in 2016.
CSI’s dealings with Japanese companies have rapidly
accelerated due to the capital participation of Tokyo
Century. It has developed two transaction formats:leasing to Japanese companies expanding theiroperations overseas and offering finance services when
Japanese manufacturers sell their products overseas.
The track record and trust between CSI and Tokyo
Century have enabled rapid expansion in services toJapanese companies.

The long journey from initial cooperation
to 100% capital ties.
Combining the knowledge andtrack record of both companies to provide
financing and services that contribute to thecreation of an environmentally sound,sustainable economy and society

As well as in Europe and North America, we have also
been accelerating cooperation in Asia. With leveraging themutual cooperation in China, Singapore, and Malaysia,
where both companies have bases, we have also begun
developing joint operations in Thailand, the Philippines,
and Taiwan, where CSI does not have its own bases. We
provide highly-standardized services that meet global

Toshio Kitamura

requirements and look forward to reporting on futureManaging Executive Officer andPresident, International Business Unit II
Vice Chairman, CSI Leasing, Inc.

cooperation between Tokyo Century and CSI.

TOPICITAD Business in North America: EPC, Inc.

through video footage, and are issued
with a disposal verification certificate.
There are currently 11 specialized
trucks, and they are offered as a freeservice to CSI customers.
IT equipment returned from
customers at the end of a lease isinspected and then purged of data,
after which its operating condition is
confirmed before being made available
for reuse. Those items that cannot bereused are fed into a giant shredding
machine, and the resulting debris iscombed for materials that can be

At the same time as CSI’s switch to full subsidiary status,
a new management team was installed headed by Stevereused, such as copper, aluminum,
steel, and plastics.
The United States is the world’s
largest IT equipment leasing market,
and because ITAD service that complies
with compliance requirements isextremely important, this is an area ofgrowing needs. EPC intends to continue
expanding its global bases and services
to contribute to the achievement of anenvironmentally sound, sustainableeconomy and society.

Tokyo Century Corporation

Integrated Report 2019

marketing capabilities for FMV leases, CSI is pursuing a
differentiation strategy by tackling a diverse range of businesses.

Rounding Out its Supply Chainwith an ITAD Business

management team came together to share their vision for

The core pillars of CSI’s differentiation strategy in its LCM

the company, and made a start on implementing businessservices for IT equipment are its data security countermeasures,

strategies of standardization and differentiation.

which include data erasing. The company’s subsidiary, EPC,

CSI’s strengths are its consulting capabilities andoperates an ITAD* business in 17 locations in seven countries

partnerships with financial institutions. Its prowess inin which it provides data erasing and disposal services

consulting owes primarily to the fact that its finely tuned

for IT equipment. It also provides its services in more thanconsultations allow it to deliver services that customers

70 countries worldwide, using alliances with local partners

really need rather than just being a provider of funding.

in countries where it does not have any of its own bases.

For example, when assisting companies that have multiple

As IT equipment returned at the end of a lease contains

offices across the United States to lease PCs that require

extensive sensitive customer data, the equipment is either

upgrades every three years, CSI arranges everything fromsanitized of information to prevent retrieval or the hard drives

organization of the vendors to coordination of equipment

are destroyed, in line with the wishes of the customer.
EPC owns specialized trucks that are dispatched to customer

equipment simultaneously for each of several tens ofcompanies to destroy hard disks on-site. Amid growing needs

thousands of employees and differences between regions

for data security, it receives a large number of requests toin vendors and timing. Data security is another issue when

dispose of IT equipment not leased out by CSI, resulting in someleases of IT equipment end, and there are major needs forcases of the conclusion of new leasing businesses.

services like data erasing and hard disk disposal. CSIThe ITAD business of EPC helps round out CSI’s supply

offers LCM services that meet these customer needs

chain, and reduction in waste contributes to the achievement

through its wholly owned subsidiary EPC.

of the 3Rs (reduce, reuse and recycle). Going forward, the aim

CSI is the largest independent provider of FMV leases

is to make EPC’s business the global standard, offering thein the United States, and its extensive staff of top-classsame high-quality services in every region. This would likely

personnel is another of its strengths. As well as in consulting,give the company’s business model a global scale that could

it has collected a group of highly talented professionals in

not easily be emulated by other companies, and the plan is toback-office areas such as pricing and legal affairs. Policies

aggressively move in this direction as locations are added.

put in place by the new management team have also further* ITAD (IT Asset Disposition): Disposing of IT assets through safe and appropriate
methods in accordance with compliance regulations for information
management and environmental protection

improved performance from the company’s global workforce of

54

around 1,000 employees. In addition to continuing to strengthen

Hamilton as CEO. Under his strong leadership, thechanges to overcome such difficulties as changing

Offering Proper Recycling that Conforms
to Compliance Requirements
With its headquarters in St. Louis, EPC
is one of the leading ITAD companies
in the United States. It operates 11
locations in North America, including
recently opened offices in Atlanta andVancouver, Canada, and offers life cycle
management services including data
erasing for IT equipment.
Its unique features include selfdeveloped specialized trucks which
can be dispatched to customer
locations to perform equipment
disposal on-site. Customers canconfirm progress of the disposal

Reservoir of Talents, Turning
Expertise and Consulting Capabilities
into Competitive Advantages

Tokyo Century Corporation

Integrated Report 201955

CASE 05

OUR MATERIALITY

Human Resources Strategy Interview

Enhanced Work Environment, Leading to Strengthening of Human Resources

CASE 05

Human Resources Strategy Interview

Securing and Developing Human Resources
to Support the Group’s Sustainable Growth
While expanding the scope of its business, Tokyo Century Group strives to develop a diverse and open corporate
culture by actively hiring mid-career workers. Managing Executive Officer Yoshio Nomura talked about initiatives
to further enhance opportunities for highly specialized personnel to position them as a driving force behind theGroup’s sustainable growth.

Developing Diverse
Human Resources

The development of personnel cannot be achieved by measuresof the Personnel Unit alone, and on-site experience and training
have major roles to play. In view of globalization, we haveContinually striving to secure and develop exceptional humanestablished a trainee system to provide overseas working

resources is a key part of the Medium-Term Management

experience even to first-year employees. What is necessary is toPlan. Our personnel policy is based on interacting with

entrust the job to the individual while providing continued guidance

employees, and we have considered a variety of initiatives,and education. We see strengthening a cohort of mid-level workers

including the creation of comfortable working environments

who can offer such guidance as another key responsibility. Suchand the introduction of personnel affairs measures that alignaccumulated training promotes growth by giving each employeewith employee lifestyles.

a sense of accomplishment and self-reliance.

Specifically, we have looked at introducing teleworking, etc.

Human Resources Positioning and
Securing of Diverse Personnel
The scope of Tokyo Century Group’s business has significantly
expanded over the past 10 years. While immediately after themerger, Equipment Leasing accounted for 80% of thecompany’s total segment assets, the business’s ratio has fallen
to 40% owing to major growth in Mobility & Fleet Management,
Specialty Financing, and International Business. The adoptionof methods combining leasing and services that transcend theconcept of traditional leasing and working in new businessfields with our partners have led to the creation of new services
as a company with financial capabilities.
Amid this significant growth in Mobility & Fleet
Management, Specialty Financing, and International Businessin addition to Equipment Leasing, we have been hiring more
mid-career workers with a high level of expertise. I believethat workers with differing backgrounds can stimulate eachother to come up with new ideas and turn them into new56

Yoshio Nomura

businesses, helping develop a diverse and open corporate

Managing Executive Officer
President, Personnel Unit
President, General Affairs Unit

culture. For these reasons, we can truly say that Tokyo

Tokyo Century Corporation

Century’s advantage lies in its human assets.

as part of our workstyle reforms while promoting employee
health and hiring more persons with disabilities. We have also

Career Design and Personnel System
Attuned to Business Characteristics

established a Career Design Office that considers personnel
matters from the perspective of employees. The role of the

The personnel system needs platforms suited to each operating

Career Design Office is to embrace employees’ concerns

segment. The review of working hours is one aspect. For example,

about work-life balance.

we must allow some divisions to align their working hours with

I think being a company that supports employees in finding

overseas time zones. We have installed thin client computers intheir work fulfilling and taking on new challenges helps create

Specialty Financing for work that is not bound by location or time.

new businesses and feeds into the growth of the company.

In addition, we are modifying office layouts to encourage employee

Securing and Developing
Global Human Resources

creativity. Our intention is to introduce various working styles andto reflect them in the design of the overall personnel system.
We are aware of the urgent need to establish an environment
in which people can work with a sense of fulfillment. In April 2019,

At the time of the merger 10 years ago, there were 1,700

we introduced a system of staggered work hours, moving up andemployees. Today, there are more than 7,000, following thedown of starting and finishing times of work by up to two hours,

expansion of Specialty Financing and International Business,

and we are also considering the implementation of options suchand the number of employees working overseas has

as teleworking, etc.

significantly increased from 80 to 1,500.

We want employees to be able to continue to be valuable

Our efforts to globalize our workforce have included thehuman resources over a long period. The career development

hiring of foreigners and new graduates who have studied

depends not only on specific achievements in certain posts

overseas, as well as an increase in the hiring of mid-career

but also on aiming to be a professional. The newly establishedworkers with experience of working overseas. I’m certain

Career Design Office intends to provide a full range of support

this changed the perception of the company.

for employee career consultation.

I strive each day to contribute to theoverseas business expansion of Tokyo Century

I hope the introduction of a work-from-homesystem enables more flexible workstyles

I have been seconded to a local Indonesian corporation, investee of Tokyo Century. The company provides
electronic money services in Indonesia under the OVO brand, and my job is to support developing financial
products for consumers, promote links with Group companies, and report regularly to Tokyo Century’shead office. SNS is used more than email in Indonesia, and I was surprised at the essential role ofsmartphone-based operations.
I want to use the experience I am gaining at this company to build closer links with overseas partnercompanies, and I hope to contribute to growth in the overseas business by promoting Tokyo Century’s
alliance strategy.

I have been utilizing the shortened work hours system while I’m raising my children, two years old and third
grade in elementary school. As Specialty Financing I work for has grown, the business has become morediversified, and we have needed to deliver the best possible results as a team within standard working hours.
Team members constantly share tasks and information just in case I have to unexpectedly take time off,
for example, to care for a child with a fever.
I think the work-from-home system provides major benefits, certainly for working parents when children
become sick or during school breaks, but also for eliminating the need for other employees to spend timecommuting. I am very hopeful that the work-from-home system will improve productivity and support ahealthy work-life balance.

Sun Changyan

Kyoko Asami

Currently seconded to PT. VISIONET INTERNATIONAL

Planning Group, Specialty Finance Strategic Planning Division

Integrated Report 2019

Tokyo Century Corporation

Integrated Report 201957

CASE 05

Human Resources Strategy Interview

Diverse Workstyles and Human Resources Development
Tokyo Century Group believes that personnel are a company’s most valuable asset and a driving force for sustainable growth.

Human Resources Data—Targets and Results

In order to encourage each and every employee to demonstrate their abilities and individuality, we support self-directed career
Results

and ability development through various Group-wide initiatives. Tokyo Century will foster a corporate culture in which diverse,
globally aware professionals can flourish, and create a workplace that raises operational efficiency based on flexible workstyles.

Percentage of women in new hires

New hires in April 2019

Percentage of women in managerial positions

As of March 31, 2019

Percentage of childcare leave taken by men

FY2018Percentage of annual leave taken

FY2018and we formulated the “Workstyle Reform Action Plan” in

Average monthly overtime work

FY2018

Tokyo Century Group pursues various initiatives under its

March 2018. Then in April 2019, we rolled out a system ofstaggered work hours, moving up and down of starting andNumber of employees leaving work
to care for family members

FY2018

Basic Diversity Policy. We strive to create a workspace inwhich all our employees can demonstrate their individual

finishing times of work by up to two hours to enable

strengths by hiring, cultivating, and appointing diverse

employees experiencing needs such as raising children,

personnel regardless of race, religion, gender, age, sexual

caring for family members, or visiting the hospital, to selectorientation, disability, or nationality. In March 2016, wefrom a variety of flexible styles of working.

Diverse Workstyles

employees to take leave from work in one-hour increments,

50 %
7.2 %
100 %
77.3 %
8.3 hours
2 employees

30 % or more
10 % or more
100 %70 % or more
Less than

10 hours

None

Human Resources Development
Tokyo Century Group offers a diverse range of educational

formulated the Action Plan for the Promotion of Women’s

We are also considering other options, including a

Active Participation and have set quantitative targets to be

telework system, to offer diverse, flexible working styles

In April 2019, we established a Career Design Office toprograms to correspond with years of employment andthat more closely align with the varying lifestyles of ourassist employees in shaping their careers. The office helps

employee career plans.

employees and to support them in balancing work andemployees take the initiative in forging their own career

private life.

paths rather than entrusting this to the company. By

assessment of their aptitude and skills that would most likely

providing training and interviews at major career turning

be useful in the future, and then, with the support of theirpoints, for example at three years and 10 years after

managers, select skills and abilities they would like to improve.

joining the company, the office fulfills its mission to

As a result, these programs encourage self-development alongsupport employees in realizing their aspirations afterwith a sense of engaging in meaningful work

achieved by March 31, 2020.
To concretely support new working styles, we introduced
the hourly paid leave program in April 2017 to allow

Enhancing Support for Balancing Work and Private Life

Employees choose their own plans after an objective

We promote the creation of a workplace environment where employees can balance their work and private life by actively

reflecting on their own working style and considering their

In order to support every employee to conceptualize,

supporting those who bear children and engage in childcare and nursing.

strengths and weaknesses, as well as maintaining a work-

design, and realize lifelong career paths, we have also

life balance amid constantly evolving business conditions.

established a Career Design Office within the Personnel

The Career Design Office also provides a consultation

Unit. This office offers staff who are available forportal through which employees can talk with office staff

consultation upon request as well as training and interviewsand external consultants on a wide range of issues, such

relevant to each career stage and focuses on assisting

as career development and specific job concerns.

employees in shaping their professional development.

Childbirth and Childcare
PregnancyChildbirthChild atone yearoldChild attwo years
old

NursingPre-elementary
schoolPre-childbirth leave
Six weeks prior tochildbirthChildcare leave
Until the age of two years and six months

Family care leave

Up to a total of one year
(number of applications is not limited)

Up to five days per year,
leave should be taken either per day orhalf a day

Shortened work hours

Special leave to visit a hospital,such as for physical examinations
Until one year after pregnancy and childbirth (days required)Three years from the start date(up to two hours, but the number ofapplications is not limited)

Special leave for childbirth by a spouse
From one month prior to childbirth until two
weeks after childbirth (five days in total)
Nursing leave
Until the child starts elementary school(five days per year, leave should be taken either per day or half a day)
Shortened work hours
Until the third year of elementary school (up to 75-minute reduction)
Moving up the work start/end time
Until the third year of elementary school (up to two hours)
Moving down the work start/end time
Until the third year of elementary school (up to two hours)
Exemption from overtime work
Until the third year of elementary school

Tokyo Century Corporation

Until third gradeof elementary
schoolNursing Leave

Post-childbirth leave
Eight weeks afterchildbirth58

Establishment ofa Career Design OfficeTargets (March 31, 2020)

Integrated Report 2019

We believe that assisting employees to fulfill their own

We also support employees in pursuing education throughdreams will, in turn, facilitate the sustainable growth ofother channels, including programs for subsidizing educational

the company as a whole.

costs and incentive payments to aid personal growth and plansfor developing a workforce with a global mindset.

Moving up the work start/end timeThree years from the start date(up to two hours, but the number ofapplications is not limited)Moving down the work start/end timeThree years from the start date(up to two hours, but the number ofapplications is not limited)

Exemption from overtime work

Until care for the family member is nolonger required

Tokyo Century Corporation

Integrated Report 201959

Corporate Governance

Message from the External Directors

Being a respected large company requires
the ability to effectively respond and steely
determination, within a corporate culturethat can flexibly adapt to changes intechnology and the business environment.

Steady improvement incorporate governance functions
through a more active debate
and risk management progress.

Yoshinori Shimizu

Akio Nakamura

External Director

External Director

Preparing for the Next “Moonshot”

shape the future of the company and of global finance,

More Active Debate at Board Meetings

an opportunity that is worth the lifelong dedication of ourI believe that the expansion in the scale of assets andyounger employees. As a consequence, communication

After having stepped down as an external director of Tokyoearnings over the past few years has made Tokyo Century

that unites employees and directors is vital.

Century in June 2017, I was reappointed a year later, andRisk management is another important key for strengthening

upon returning I was struck by the livelier debate at Board

corporate governance. As the risk-return patterns areof Directors’ meetings. I think this is largely attributable todifferent for each business, risk evaluation items must be

the addition of two external directors, Masao Yoshida andconstantly reassessed, and we have implemented measures

Yukito Higaki. Mr. Yoshida previously demonstrated his

to create more sophisticated risk management in line withmanagement expertise at Furukawa Electric, while Mr.

the expansion in our business operations.

seem more like a large company. To reinforce this impression,
we must begin thinking like a large business as well.
For example, given the growth in the number of overseas
subsidiaries and our total workforce, strengthening global

More Rapidly Increasing Diversity
on the Board of Directors andthroughout the Entire Organization

governance and risk management structures has emerged asa key issue for the Board of Directors. On the risk front, we are

The fresh perspective provided by newly appointed external

Higaki is still involved in management at Imabaristeadily improving in such areas as assessment and valuation

directors who possess deep insight has enlivened the board’s

Shipbuilding. The viewpoints and mind-sets of two people

acceptable level of risk is the central role of corporate

methods, although it is also crucial to consider unifying thedebates. Moreover, the introduction of free discussion has

with experience in managing large companies have provengovernance. Because there is no profit without taking somemanagement of risk and earnings from a global perspective.

enabled open deliberations on sustainable growth, and I

invaluable, and they have been sources of major inspiration

degree of risk, a crucial task is to closely examine specificbelieve this has contributed to a more dynamic organizationin their roles as external directors.

risks to determine whether they can be managed and if theMoreover, from the perspective of achieving sustainablebusiness operations, we intend to do our part to addressand stronger governance capabilities.
At the same time, I feel that more rapidly increasing

Factoring in differing external perspectives is a key

Moreover, I have long believed that determining thelevel of risk is worth the potential return.

element in corporate governance, and the diversity of our

As Tokyo Century’s operations change, I envision

maintain a strong resolve to create a service-based businessdiversity, including the Board of Directors, is a pressing issue

directors is undoubtedly an excellent way to increase thean even greater need for business expertise in every

model to present an alternative to traditional financial

for a company like ours that is becoming a major force througheffectiveness of governance. In addition, as part of efforts

segment. I would not be surprised if in the near future we

institutions. Employee abilities and motivation are the mosta growing global presence. Expansion in global businessto strengthen governance beyond regular discussion items,

reached the limits of unified management under a single

important assets for us as a financial services company. Asmeans we must change ourselves by taking on board thethe Board of Directors has introduced free discussion

structure. In the context of ensuring the sustained growth

we grow in scale, I believe that one of our key missions will

differing histories, business practices, and relationships ofsessions to debate such matters as changes in the externalof the company, I see the need for more deeply discussing

be to create a corporate image worthy of everyone’s support.

each region. As a global company growing and responding

business environment and the future shape of the company.

our organizational structure and human resources strategy,

If the company’s “moonshot” to this point has been toto change, we are naturally diversifying our workforce andsocial issues, including the SDGs. To that end, we must

create an organization that surpasses banks, then I think wepromoting the inclusion of a wide range of thinking.

Coincidentally, when we formulated the Fourth Medium-

Adaptability to change is the key to corporate growth.

turn our attention to further growth, we may need to defineTokyo Century intends to hone its responsiveness to change,

and what kind of businesses the company should enter.

our next great leap forward by setting a new target ofcultivate talented personnel, and encourage innovative andThese meaningful exchanges allowed each director toestablishing this business model as the global standard;

flexible ideas to turn difficulties into opportunities and build

share his views on objectives and issues, and I believe this

this is an absolute goal that will not be affected by changes

a structure that allows for a rapid response. We see theis testament to the improvement in corporate governancein the business environment.

further increase in diversity and internal debate as litmus

brought about by free discussion.

We absolutely must hold fast to this awareness andTokyo Century Corporation

Integrated Report 2019

including employee treatment.

Term Management Plan, we had lively debates on the major

have basically achieved that goal in terms of earnings. As weshared dream for we have in our hands the ability to

60

Toward a Structure Suited to Growthand Changing Business Operations

assumptions of the plan, such as how the world will change

tests for corporate development and intend to translate thesefactors into higher corporate value.

Tokyo Century Corporation

Integrated Report 201961

Corporate GovernanceCorporate Governance
Recognizing that effective corporate governance is a key concern for maximizing corporate
value, Tokyo Century endeavors to create a sound and highly transparent management structurethat swiftly responds to changes in the business environment and makes accurate decisions.

History of Strengthening the Corporate Governance System
Details
2011
2015
2016
2017

Election of one external director

2018

Additional external director (from three to four)

2019

Additional external director (from four to five) (external directors now represent at least one-third of all directors)

Seiichi Mizuno, Director and Managing Executive Officer

Tokyo Century has established the Board Effectiveness Review

Akihiro Naruse, Director and Executive Officer Ko

Council, which primarily consists of independent external

Nakagawa, and Executive Officer Takashi Yonetsu. It meets

directors and corporate auditors to advise the Board ofonce a week in principle to deliberate on particularly

Directors. The council conducts an analysis and review of theimportant matters concerning the execution of operations

Board of Directors at least once a year on aspects such as theand makes decisions for the entire Group.

effectiveness of its supervisory functions, status of deliberations,

Koichi Baba, Director and Managing Executive Officer

Compliance with the Corporate Governance Code

Additional external director (from one to two)

Board Effectiveness Review Council is held

Establishment of the Nomination and Compensation Committee

Transaction Evaluation Meeting omination and Compensation Committee is separated into two entities:
N
Nomination Committee and Compensation Committee

The Transaction Evaluation Meeting consists of theconsults with the council to analyze and evaluate its own

president and officers appointed by the president. The

effectiveness and discloses a summary of the results.

Additional external director (from two to three)

Tokyo Century’s management structure centers on the Boardof Directors and Board of Corporate Auditors. Our executive

structure, and operating method, taking into account the selfevaluations submitted by each director. The Board of Directors

meeting, chaired by Director and Executive Officer Ko

In fiscal 2018, the Board of Directors was deemed to be

Nakagawa, consists of nine members: Chairman & Co-CEO

adequately and appropriately fulfilling its roles and duties,

and Representative Director Toshihito Tamba, President &which are: (1) providing overall direction by setting corporate

CEO, and Representative Director Shunichi Asada, Deputy

strategies, (2) creating an environment conducive to

President, Director and Executive Officer Makoto Nogami,

appropriate risk taking by top management, and (3) exercising

Deputy President, Director and Executive Officer Masataka

highly effective oversight of top management and directors

performance of duties by directors and executive officers.

Yukiya, Deputy President, Director and Executive Officer

from an independent and objective standpoint.

The Board of Corporate Auditors met 10 times in fiscal 2018.

Akihiko Okada, Deputy President and Executive Officer

Management StructureWith regard to the composition of the Board of Directors, as

Koichi Nakajima, Director and Senior Managing Executive

a result of further diversifying the composition in addition to the

Officer Koichi Baba, and Executive Officer Takashi Yonetsu.

increased number of external directors, the balance of the

It meets once a week in principle to discuss and makeboard’s knowledge, experience, and ability was improved, and it

Tokyo Century applies the standards for independent external

decisions about major business transactions being

was deemed to be appropriate and adequate in its diversity anddirectors and external corporate auditors under the Tokyo

considered by Tokyo Century and its Group companies as

scope. Going forward, it will continue to deliberate on diversity,

The Board of Directors, chaired by President & CEO andStock Exchange Guidelines concerning Listed Company

well as transactions that warrant complex risk analysis.

including considerations on gender and internationality.

Representative Director Shunichi Asada, consists of 15

Compliance, etc., when appointing its external directors anddirectors, of which 5 are external directors as defined byexternal corporate auditors. Furthermore, Tokyo Century

Article 2-15 of the Companies Act of Japan. The Board of

appoints external directors and external corporate auditors who

Directors deliberates on and makes decisions about theit believes are able to objectively supervise management after

policies, strategies, business plans, and other key

considering their extensive backgrounds in corporate

management issues of Tokyo Century and its Group companies

management, specialized knowledge, and common sense. Thisas well as matters specified by prevailing laws, regulations,ensures the objectivity of the independent external directors.

and strengthens supervision and execution. Among the 32
executive officers are one female and one foreign national.

Board of Directors

articles of incorporation, and rules governing the board. It

Independence of Management
Oversight Structure

No conflicts of interest exist between the Company and its

also supervises the execution of operations by directors andexternal directors or external corporate auditors. The fiveexecutive officers. The Board of Directors met 13 times in fiscal

external directors and two external corporate auditors also

2018. Tokyo Century Corporation’s Articles of Incorporation

hold positions at other companies and organizations, as listed

limit the number of directors to a maximum of 18.

on pages 66 and 67.

Board of Corporate Auditors

Management Meeting

Tokyo Century has adopted the organizational structure of a

The Management Meeting consists of the president andcompany with a board of corporate auditors. The Board of

officers appointed by the president. The meeting, chaired by

Corporate Auditors, chaired by Standing Corporate Auditor

President & CEO and Representative Director Shunichi Asada,(External Corporate Auditor) Futoshi Okada, consists of four

consists of 12 members: Chairman & Co-CEO andcorporate auditors, of which two are external corporate

Representative Director Toshihito Tamba, Deputy President,

auditors as defined by Article 2-16 of the Companies Act ofand Director and Executive Officer Makoto Nogami, Deputy

Japan. The Board of Corporate Auditors meets regularly andPresident, and Director and Executive Officer Masataka

executes independent and fair audits of compliance andYukiya, Deputy President, and Director and Executive Officer

the appropriateness of corporate activities including theAkihiko Okada, Deputy President and Executive Officer Koichi

Tokyo Century Corporation

Integrated Report 2019

System of Corporate Governance and Internal Control (as of June 24, 2019)
Shareholders’ Meeting
Election/Dismissal

Election/Dismissal
Coordination

Board of Corporate
Auditors

Audit

Board of Directors

Audit

ReportInternal Audit
Evaluation ofInternal Control

Audit

ReportNomination Committee
Compensation Committee

Election/Dismissal/
Supervision

Coordination

Business Risks Management Division

Coordination

Audit Division

Company Counsel

Election/Dismissal

Audit

Coordination

Independent Auditor

officer system accelerates management strategy decisions

62

Osamu Tamano, Director and Managing Executive Officer

System for Ensuring the Effectivenessof the Board of Directors andBoard of Corporate Auditors

Nakajima, Director and Senior Managing Executive Officer

Appointment

Chief Compliance Officer

President & CEO
Direction/
Supervision

Management Meeting
Transaction
Evaluation Meeting

Executive Officers
Operation Headquarters/
Business Headquarters

Election/Dismissal/
Supervision

ReportCommittees
ALM Committee
Internal Control Committee
Comprehensive Risk
Management Committee, etc.

Group Companies

Tokyo Century Corporation

Integrated Report 201963

Corporate Governance

The operational review of the Board of Directors foundFollowing the review’s recommendation, Tokyo Century

that during fiscal 2018 full-fledged efforts were being madesought to enhance the board’s effectiveness by revising theto formulate the Fourth Medium-Term Management Plan,

criteria for its agenda in fiscal 2018 with due consideration to thewhich would start in fiscal 2019, and the board wascurrent business scope and risks. Independent external directors

accurately evaluating changes in the business environment,

were found to be appropriately fulfilling their roles and duties ofwith each director actively participating in the deliberations.

providing management oversight by actively expressing opinions

External and internal directors were well integrated into thebased on their individual knowledge from an independent andprocess of discussing issues from diverse perspectives.

objective standpoint during meetings of the Board of Directors,

Going forward, the board will continue to expand andNomination Committee, Compensation Committee, Board

enhance our framework of oversight, including theEffectiveness Review Council, and other bodies. Tokyo Century

monitoring of viable businesses.

will continue to improve the functions of the Board of Directors byreferring to the results of the effectiveness review.

Committees
PurposeNumber of meetingsin fiscal 2018

Primarily consists of independent directors, advises the Board of Directors, deliberates on the nominationof candidates for director and corporate auditor positions, and reports to the Board of Directors.

2

Name

Nomination Committee

Primarily consists of independent directors, advises the Board of Directors, discusses matters such ascompensation systems and policies, and reports to the Board of Directors.

1

Asset Liability Management Discusses matters relevant to managing market, liquidity, and other risks in order to identify andminimize the exposure of assets and liabilities to risks, including fluctuations in interest and foreign(ALM) Committee
currency exchange rates, and reports to the Management Meeting.
Comprehensive Risk
Management Committee

Discusses matters such as construction of the risk management system and approaches to measuringrisk. It also periodically assesses Tokyo Century’s risk exposure and reports to the Management Meeting.

Internal Control Committee

Discusses general internal control matters, including evaluation of the effectiveness of the financial
reporting system and scope of evaluation to ensure the internal control system functions effectively
and reports to the Management Meeting.

4

Credit Risk Management
Committee

Discusses matters including the Group’s credit portfolio as a whole and credit risk management andreports to the Management Meeting.

2

IT and Administration
Strategy Management
Committee

Discusses matters including IT strategy of the Company and the Group, IT investment plans, andadministrative system plans and reports to the Management Meeting.

2

Sustainability Committee

Plans, promotes, and oversees the Group's sustainability activities, discusses important issues related
to sustainability, and reports to the Management Meeting.

2Compensation Committee

Officer Compensation
Policy and Method to Determine
Compensation of Officers

compensation distributed according to profits, the amountsof which are determined based on consolidated net income.

Regarding officer compensation, the Company intends toGiven that consolidated net income represents the final

maintain a framework linked to sound incentives toward its

profit or loss for the period generated through the activities

sustainable growth and the medium- to long-termof a fiscal year and is directly linked to the improvement

development of its businesses. It has established an officerof corporate value during the period, the Company hascompensation system to align the interests of the officers

decided it is an appropriate indicator for determining thewith those of the shareholders, raise the awareness ofcompensation of directors, who are responsible for

officers regarding enhancing shareholder value, attract

improving the corporate value of the entire Group andoutstanding talent, and secure and develop humanmaximizing shareholder profits, and it has therefore adopted

resources who can drive the improvement of the Company’sthat as an indicator for performance-based compensation.
During the fiscal year under review, the Company

corporate value.

targeted a consolidated net income of ¥51.5 billion, and

The Compensation Committee, primarily consisting ofachieved an actual consolidated net income of ¥52.2 billion.

independent external directors, has been established, andThe payment ratio of performance-based to non-matters such as the policy, systems, and levels of officer
compensation are referred to this committee. Theirperformance-based compensation is set at approximately

4compensation is ultimately determined by the Board of

1:0.4 to 1.0, which is determined by comprehensively taking

Directors, based on the recommendations of the committee

into account achievements and performance based on each4

and advice of outside experts, with reference to third-party

officer’s expected duties.

survey data on compensation levels. The compensation of

In regard to performance-based compensation, stock

corporate auditors is determined through deliberations by

options as stock-based compensation have been designed

the corporate auditors within the prescribed limits.

to raise the awareness of officers regarding enhancing
shareholder value by sharing the effects of fluctuating stock

Officer compensation comprises basic compensation,

prices with the shareholders.

officer bonuses, and stock options as stock-based

The compensation of external directors and corporate

compensation. Basic compensation, which is fixedcompensation, is determined through a comprehensive

auditors, who are in a position independent from businessconsideration of the duties, roles, and responsibilities andexecution, consists entirely of basic compensation based onothers of each officer. Their bonuses and stock options as

their roles.

stock-based compensation are performance-based

Composition of Each Committee (Directors)
Position

Chairman & Co-CEO,Representative Director
President & CEO,
Representative Director

64

Name

Nomination
Committee

Compensation
Committee

Chairperson
Comprehensive
ALM Committee Risk Management
Committee

Internal Control
Committee

Credit Risk
Management
Committee

IT and Administration
Strategy Management
Committee

MemberSustainability
Committee

Compensation and Eligible Officers

Toshihito Tamba
Total compensation, by type (millions of yen)

Total compensation(millions of yen)Fixed compensation

Performance-based
compensation

Retirement benefits

Number of eligible
officers

Directors(excluding external directors)

744

259

484

—

10

Makoto Nogami

Corporate auditors(excluding external corporate auditors)

41

41

—

—

2

Masataka Yukiya

External officers

98

98

—

—

7

Akihiko Okada(Notes) 1. The above compensation amounts include ¥205 million in provisions for director bonuses, which has been recorded under expenses in the fiscal year under review.
2. Although the total number of directors and corporate auditors in office as of March 31, 2019 was 13 and 4, respectively, the above compensation amounts also include
payments to one director and one corporate auditor who retired at the conclusion of the 49th Annual General Meeting of Shareholders held on June 25, 2018.
3. Maximum compensation for directors, as resolved by the general meeting of shareholders, is ¥1,000 million per year (including ¥100 million per year for external
directors). Furthermore, the maximum fair value of stock options that may be granted to directors (excluding external directors), within the said maximum, is¥400 million per year (by resolution of the Annual General Meeting of Shareholders held on June 24, 2016).
4. The maximum compensation for corporate auditors, as resolved by the general meeting of shareholders, is ¥150 million per year (by resolution of the Extraordinary
General Meeting of Shareholders held on February 25, 2009).

Shunichi Asada

External Director

Yoshinori Shimizu

External Director

Masao Yoshida

External Director
Deputy President, Directorand Executive Officer
Deputy President, Directorand Executive Officer
Deputy President, Directorand Executive Officer
Director and Senior
Managing Executive Officer
Director and Managing
Executive Officer
Director and Managing
Executive Officer
Director and Executive
Officer

Akio Nakamura

Tokyo Century Corporation

Integrated Report 2019

Koichi Baba
Osamu Tamano
Seiichi Mizuno

Officer category

Ko Nakagawa

Tokyo Century Corporation

Integrated Report 201965

Corporate GovernanceIndependence of External Directors and External Corporate Auditors and Reasons for Appointment(as of June 24, 2019)

External Directors
Independent
officer

Reasons for appointment○

Mr. Shimizu possesses highly advanced
knowledge as a monetary economics
research professional. He applies thisexpertise in the management of theCompany from a macro standpoint andmonitors management from an
independent perspective as an external
director of the Company since June 2011.
His appointment will contribute toachieving sustainable growth andenhancing the corporate value of Tokyo
Century over the medium to long term.

Yoshinori Shimizu
 xternal Director, Nisshinbo Holdings Inc.
E
Professor Emeritus, Hitotsubashi University

Masao Yoshida xternal Director, Furukawa Co., Ltd.
E
E xternal Director, JFE Holdings, Inc.

Yukito Higaki
 resident, Imabari Shipbuilding Co., Ltd.
P
President, Shoei Kisen Kaisha, Ltd.

○○

Akio Nakamura pecial Partner, Tanabe & Partners
S
Director, President and CEO, Japan
Securities Depository Center, Incorporated
President and CEO, JASDEC DVP Clearing
Corporation○

Toshio Asano utside Director of the Board, Maruho
OCo., Ltd.
External Director, Medipal Holdings
Corporation
External Director, Daicel Corporation○

Mr. Yoshida brings a wealth of experienceand broad knowledge on managementfrom his lengthy involvement in corporate
management at a major electricmanufacturing company. He applies thisexperience in the management of theCompany and monitors managementfrom an independent perspective as anexternal director of the Company sinceJune 2017. His appointment willcontribute to achieving sustainablegrowth and enhancing the corporate
value of Tokyo Century over the medium
to long term.
Mr. Higaki brings a wealth of experienceand broad knowledge on managementfrom his lengthy involvement in corporate
management at a major shipbuilding
company. He applies this experience inthe management of the Company andmonitors management from an
independent perspective as an external
director of the Company since June 2017.
His appointment will contribute toachieving sustainable growth andenhancing the corporate value of Tokyo
Century over the medium to long term.
Mr. Nakamura has served as Tokyo
Century’s external director from June2015 to June 2017 and again since June
2018, bringing ample experience andbroad insight to areas such as financial
policy and tax affairs in order to offer
advice on management issues in general,and to monitor management from an
independent and objective standpoint.
His appointment will contribute toachieving sustainable growth andenhancing the corporate value of Tokyo
Century over the medium to long term.

Mr. Asano has led a major diversified
chemicals company and possesses
abundant experience and broad
knowledge of corporate management.
His appointment will contribute toapplying his deep understanding andoutstanding insight to the managementof the Company as well as offering advice
from a broad, external, and objective
perspective.

External Corporate Auditors
Shares held
(thousands)

Years
servedAttendance at meetings ofBoard of Directors

Attendance atAttendance atmeetings of the meetings of theBoard ofBoard ofDirectors
Corporate Auditors

Independent
officer

Reasons for appointment

Shares held
(thousands)

Years
served—Mr. Okada applies his extensive
experience in business management offinancial institutions as well as broad
knowledge and experience of business
operations and overseas business. As
an external corporate auditor of theCompany, he has been contributing tomonitoring management to ensure theappropriateness and adequacy ofcorporate activities since June 2012.

1

7

13 of 13

11 of 11○

As a tax accountant, Mr. Fujieda
possesses expertise and experience inthe areas of tax and accounting. As an
external corporate auditor of theCompany, he has been contributing tomonitoring management to ensure theappropriateness and adequacy ofcorporate activities from an independentand objective standpoint since June 2018.

—1

11 of 11*

7 of 7*

Futoshi Okada
3

0

8

2

13 of 13

12 of 13

 uditor, Nippon Car Solutions Co., Ltd.
A
Auditor, Nippon Rent-A-Car Service, Inc.
Auditor, IHI Finance Support Corporation
Auditor, TRY Corporation
Auditor, TC Property Solutions Corporation
Auditor, TC Business Experts Corporation
Auditor, Shinko Real Estate Co., Ltd.
Auditor, Tokyo Century Leasing China
Corporation
Auditor, Tokyo Century Factoring China
Corporation

Masao Fujieda
 epresentative, Fujieda Masao Tax
R
Accounting Office
Auditor, Nip Corporation* Attendance since being appointed in June 2018.

—

0

2

1

13 of 13

11 of 11*

Holding Policy for Cross-Shareholdings
Cross-shareholdings by Tokyo Century (equity securities

the status of profit or loss, and verifying at the Board ofheld for purposes other than pure investment) consist of

Directors the reasons for these holdings and that theshares issued by important stakeholders of Tokyo Century

benefits of holding these shares exceed the capital costs.

Group, such as its major business partners, shareholders,

In cases where the rationality of such holdings is notand creditors. The shares held are necessary to promoterecognized, a proposal regarding the reduction of said

Tokyo Century’s business over the medium to long term.

shares is made. In fiscal 2018, Tokyo Century reviewed

In addition, Tokyo Century considers whether or not these

all of the shares held as of December 2018, and a partial

cross-shareholdings should be continued by periodicallyreduction was determined. In fiscal 2019, Tokyo Century

reviewing the corresponding business relationships andplans to continue to review all of the shares held.

Roles of Corporate Pension Funds as Asset Owners—

New
appointment—

Tokyo Century does not save or manage corporate pension

Employees are offered ongoing education on managing

funds as an asset owner. However, it has introduced athe plan, and the employee union discusses and selects

defined contribution corporate pension plan for the purpose

investment products.

of stable asset formation for its employees.

66

Tokyo Century Corporation

Integrated Report 2019

Tokyo Century Corporation

Integrated Report 2019

67

Risk Management and Compliance

Risk Management and Compliance

As a group seeking to primarily create value
from businesses and services that transcend theboundaries of conventional leasing, we recognize
active risk management that addresses emerging
risks is a crucial strategy for raising corporate
value and supporting sustainable growth.

As a company with financial capabilities, Tokyo Century

through significant future investment while increasing ourGroup has carried out its mission to solve client issues byshareholders’ equity ratio. Moreover, amid a rapid global

providing pioneering value-added services. To that end,

expansion in businesses that transcend the boundaries ofour company culture constantly takes on new risks. In

conventional leasing, we are aware that we must become

order to utilize our true capabilities, assessing andincreasingly sophisticated in our risk management operations.

appropriately controlling emerging risks are crucial,rather than simply reacting.
In real terms, this means developing our business

Attaining Increasingly SophisticatedRisk Management

based on management guidelines for capital usage rates,

Risk Management and Compliance as
Key Elements in Supporting Sustainable
Corporate Value
Stakeholders and markets not only examine financial
profitability but also closely examine the prospects forsustainable growth and a company’s social continuity andmeasuring consolidated VAR (value at risk: maximum

In our Fourth Medium-Term Management Plan, we set out

potential loss) using statistical methods for each risk

three core policies under the crucial theme of our risk

category, and monitoring to ensure that the total volume ofmanagement approach: 1) to strengthen risk management, 2)

risk stays within the boundaries defined as our risk buffer

to build a risk control framework aimed at efficient allocation

derived by deducting a certain level of margin fromof management resources, and 3) to respond to society’s

consolidated economic capital. Equity capital has hither

demands in areas such as information security, diverse crisis

to increased steadily, and we have expanded risk assets

management, and product quality control.
As our business expands, it is vital that risk management

development. We therefore believe that risk management

be viewed also on a consolidated basis, and this requires

and compliance are key elements in supporting sustainableappropriate assessment of risks for each individual risk profile,

corporate value.

including those we have not yet envisaged. As well as
estimating future capital based on sensible expectations forprofit accumulation, we intend to measure both the level andKo Nakagawa

direction of our risk-taking activities.

Director and Executive Officer
President, Credit Supervision Unit
Chief Compliance Officer (CCO)
President, Risk Management Unit
President, Legal Unit

As for risk management, while continuing to ensuresustainability based on a degree of discipline, we intend tocreate approaches to evolve Tokyo Century Group’s businessmodel and verify compatibility with society’s changing demands.

Risk Management
Comprehensive Risk Management

We also monitor the state of concentrated risk for eachIssues and Improvements for
Raising Risk Management Effectivenessand VAR Measurement

individual project openly assessed by several management

Tokyo Century conducts companywide risk management by

type of portfolio where statistical VAR may not necessarily

assessing risk from diverse perspectives centered on theprovide a sufficiently detailed picture. In the last few years,

quarterly meetings of its Comprehensive Risk Management

society has been also increasingly emphasizing “management

In order to make risk management function effectively as

measurement of risk through VAR is effective for disciplined

Committee and by reporting and discussing the results atof non-financial risk,” which had not been suitable fora plan, do, check, and act (PDCA) cycle, it is important to

ERM, it does not cover all types of concentrated risk andthe Management Meeting and Board of Directors.

quantification, and we have, therefore, created a structure

ensure a suitable match between the perception formed bystress risk. In such cases, the Credit Risk Management

for continuous monitoring of around 20 checkpoints.

members with extensive knowledge of companywide ERM.
In addition, while the continuous statisticalmonitoring of consolidated risk measurement and capitalCommittee continually monitors rises in credit risk, tail risk,

measurement of the main risks related in our consolidated

usage rates and companywide enterprise risk management

compliance with credit guidelines to one counterparty, andbusiness as a potential future VAR (maximum potential(ERM) on the one hand, and the policies adopted forcountry exposure for the top ten nations for stress cases

loss), and monitoring of total risk tolerance in comparison

individual projects on the other. For large projects above athat are based on multiple scenarios rather than justwith our risk buffer derived by deducting a certain margin

certain amount, as credit transactions are considered byquantitative measures. It reports to the Managementfrom consolidated economic capital.

the Transaction Evaluation Meeting, investment projects

Meeting and Board of Directors.

Our approach to ascertain risk volume involves continual

can be deliberated at the Management Meeting and each

68

Tokyo Century Corporation

Integrated Report 2019

Tokyo Century Corporation

Integrated Report 2019

69

Risk Management and Compliance

Risk Management and Compliance

Risks and Management Approaches
Risk category

Credit risk

Risk definition
Risk of losses resulting from deterioration in
the credit standing of borrowers. Includes
project finance and country risk

Management approach
Credit Risk Management Committee (credit risk measurement,
analysis), Transaction Evaluation Meeting (review of large
projects and new scheme projects, etc.). Introduction of internalrating system, country exposure management, etc.

Market risks
Interest rate risk

Foreignexchange risk

Liquidity risk

Risk of losses resulting from interest rate
fluctuation
Risk of losses resulting from foreign
currency-denominated assets and liabilities
owing to fluctuation in foreign exchange rates
Risk of losses resulting from difficulty inprocuring funds or increase in fundprocurement costs owing to company-specificfactors. Systemic risk of losses resulting
from difficulty in procuring financing owing
to overall uncertainty in capital markets

Equities
investment risk

Business
investment risk

Risk of losses resulting from investment
activities in specific businesses

Asset risk

Risk of losses resulting from fluctuationin the value of real estate, aircraft, ships,
automobiles and other assets. Includes riskof holding and investing in nonrecourse loans,investment assets, etc.

Group companies several times for training purposes

We view information security as a crucial issue affecting

during fiscal 2018, and they have proved an effective tool

corporate management, rather than just being afor improving the information security awareness of

responsibility of the IT department. Information security

officers and employees.

countermeasures are essential to protect the information

We endeavor to refine our information security

resources of the company and its customers from cybercountermeasures by receiving regular third-party

terror such as targeted attack emails, ransomware, andassessments of our measures and by actively sharing

business email fraud. We implement a diverse range ofknowledge with external partners through membershipcountermeasures, mainly by our Information Securityof the Nippon CSIRT Association.

Committee, including maintaining regulations and rules

Asset Liability Management (ALM) Committee (market risks
such as fluctuations in interest rate and foreign exchange
rate, and liquidity risk related to fund procurement).
Introduction of hedge ratio, maturity ladders, gap analysis,
GPS (Grid Point Sensitivity), VAR management, etc.

Investment risks
Risk of losses resulting from factors such as
decline in prices or poor performance of listed/unlisted equities, funds, venture investments,
REIT investments, etc.

Information Security Countermeasures

Management Meeting and Board of Directors (policy for andcondition of investment in equities, etc.). Comprehensive Risk
Management Committee (investment risk measurement)

Comprehensive Risk Management Committee(risk measurement and management of status of risks)regarding information management, conducting

Business Continuation Plan (BCP)

information security training, practicing email attacks

Tokyo Century enacts measures to ensure the continuity

simulation, conducting surveys to evaluate effectiveness,of key business functions in times of crisis by regularly

and monitoring security in the IT unit.

compiling and updating its BCP manual.

We also recognize the importance of each and every

Specifically, we continuously conduct BCP training

employee not neglecting daily basic tasks and necessary

sessions in which a hypothetical emergency headquarters

countermeasures in addition to ensuring that hardware

is established on the assumption of a large-scaleand software system security is upgraded. We haveearthquake. Issues which arise during the training

established the CSIRT Office within our IT unit to handle

exercises are dealt with via the PDCA cycle, including

countermeasures for information security incidents, and its

updates to the BCP manual. In addition, the risk

activities include conducting regular drills for officers andmanagement liaison committee (described later) for Group

employees that simulate a suspicious email attack without

companies invites outside experts to speak at events onprior notice. Such emails in Japanese, English, and Chinesecrisis management regarding responses to the assumption

were sent to Tokyo Century and to domestic and overseas

of a major terrorist incident.

Business Email Fraud
Tokyo Century Group has not sustained any actual damage as a result of a cyberattack. However, a new cyber terror threat

Operational risks

has recently emerged in the form of business mail fraud, such as mails purporting to be from our business partners orSpecific management to the following nine categories
of non-financial risks
Administration risk
Fraud risk
System risk
Information security risk
Legal risk
Employment management risk
Disaster risk
Regulatory and system change risk

Administration risk and system risk:
IT and Administration Strategy Management Committee(preparation and operation of IT strategy, IT investment,
administrative system, etc.)
Information security risk:
Information Security Committee, management based on ISO
27001 regulations, establishment and operation of CSIRT
Office in the IT Promotion Division
Large-scale natural disasters and other crises:
Establishment of “Crisis Management Rules,” “BusinessContinuation Plan Rules,” etc. Preparation and operation of
BCP manual, safety confirmation system, etc.
Other operational risks:Comprehensive Risk Management Committee (analysis andmeasurement of risk and consideration of countermeasures, etc.)

Reputation risk

company executives. We have been not only sending repeated warnings about such attacks, but also taking preventative
steps including reviewing and ensuring thorough usage of confirmation procedures for information related to fund transfersand business dealings.

Cybersecurity Measures
As part of Tokyo Century’s cybersecurity measures, we have added TC-CSIRT
to our corporate organization and established a security framework including
compiling manuals to deal with security incidents for contingency preparedness.
To respond to the increasing complexity and sophistication of cyberattacks,
we hold regular drills that simulate an attack to strengthen capabilities forresponding to such incidents. Through such drills, we endeavor to validate
our capabilities and also to enhance the framework by continuously identifying
areas for improvement and investigating new measures.

70

Tokyo Century Corporation

Integrated Report 2019

Tokyo Century Corporation

Integrated Report 2019

71

Risk Management and Compliance

Risk Management and Compliance

Compliance
Compliance Structure Composedof Compliance Officers

consolidated business management. This meeting,

Recognizing the essential role of rigorous compliancehas already been held 12 times and has proved to be afor maintaining business continuity, we strive to establish

valuable forum for internal communication, including thea management structure that ensures all officers andsharing of important compliance issues.

attended by compliance managers of the Group companies,

Amid rapid global expansion in our business scope,

employees demonstrate fairness and a strong sense

it has become essential to ensure that compliance systemsof ethics to earn the trust of society at large.
Under the supervision of the chief compliance officer

at our overseas Group companies are in line with the(CCO) appointed by the president, who is the chiefcompliance structure of the Group. For example, the U.S.

compliance executive officer, the Compliance Officefirm CSI Leasing, Inc., which was consolidated as part ofpromotes compliance measures across the entire Tokyo

the Group in 2017, implemented a rapid initiative that

Century Group. Moreover, the heads of each divisionenabled completion of a compliance portal system withand branch office act as compliance officers (COs) andmultiple-language capabilities (English, German, French,presidents of each Group company as heads of compliance,

Spanish, and Portuguese).

with the responsibility for ensuring accordance with all

The person responsible for the Business Risks

relevant laws and ordinances and that business activities

Management Division visits overseas Group companies

are in keeping with the social norm.

to conduct compliance training and review adherence
to local laws and regulations and the development of

Rigorous Compliance atConsolidated Group Companies

business continuity plans while also raising awarenessof the availability of the internal reporting system.

The risk management liaison committee for GroupInternal Reporting System

protection afforded to those making reports at both theTokyo Century Group strives to detect and resolve risks

external law firm and the Compliance Office has also

at an early stage, enhance its self-correcting mechanism,

increased confidence in the system and encouraged

and bolster compliance management by operating thesustained usage.

“Consultation/Whistle-Blowing System,” which is an internalreporting system that allows officers and employees to

Anti-Corruption Initiatives

bypass their immediate superiors and directly report

Tokyo Century Group engages in fair, equitable, andcompliance violations.

transparent transactions across all its business activities

We have established three shared reporting channels
for domestic and overseas Group companies: our internalmeans of offering entertainment, cash, or any other benefits

Compliance Office, an external law firm of corporate lawyers,

to domestic or overseas public officials for the purpose ofand standing corporate auditors who ensure independence.

eliciting favors, offering rewards for favors received, or

We monitor the number of reports received as a yardstick ofobtaining unfair business advantages, either directly or

its self-correcting mechanism, and data are reported to theindirectly through agents, consultants, or any other third

Management Meeting and Board of Directors.

party. Our “Guidelines on Offering Entertainment to Public

Utilization of the Internal Reporting System
There has been no major change in the overall number ofreports received, although the proportion of reports from

Compliance Structure of Tokyo Century Groupidentification before concluding agreements with business

staff at overseas Group companies, has led to a rise inpartners to prevent money laundering and financing ofsystem knowledge and usage, rather than indicating thatterrorism, which foster organized crime, and to sever ties

there has been growth in the number of compliancewith antisocial organizations.

Compliance Handbooks

19

Management Meeting

17
16
15

Compliance Officers (COs)
Heads of divisions and branch offices
Strict compliance observanceCompliance education

Employees of Tokyo Century

72

Tokyo Century Corporation

Integrated Report 2019

Internal route: Compliance Office
External route: Corporate lawyer (law firm)

Heads of Compliance
Presidents of Group companies

Internal route: Standing Corporate Auditors[Independent from management]

Employees of Group companies

13

Internal reporting system(Consultation/
Whistle-Blowing System)

Compliance-related report, etc.

Report/consult about compliance issues[Normal reporting]

We also seek to ensure public safety and promoteincrease awareness of the system, including among local

Appointments

Compliance-related promotion,
instruction, etc.

staff at Tokyo Century’s overseas subsidiaries.
sound economic activity by setting and practicing rules for

20

Chief Compliance Officer (CCO)
President, Risk Management Unit
(Secretariat: Compliance Office)ensure awareness among all employees including national

affiliates has increased. We observed that the drive toTokyo Century Group
Number of Reports Received
via Internal Reporting System

Board of Directors

Appointments

Officials” are available in Japanese, English, and Chinese toincidents within the Group. At the same time, the complete

companies meets twice a year to work on strengthening

Chief Compliance Executive Officer of Tokyo Century Group
President & CEO

and strives to prevent corruption. We prohibit bribery by

13

Tokyo Century Group distributes its Compliance Handbook to all
officers and employees and provides it on its corporate portal foraccess at all times. The handbook includes information on internal
regulations such as our Management Philosophy, scope of corporate
activities, and compliance management regulations as well as
information on matters such as prohibitions against respect forhuman rights and harassment. We have also created English andChinese editions of the handbook for our overseas Group companies
in an effort to improve the compliance mind-set of employees.

105Reporting ofcompliance violations
0

2014

2015

2016

2017

2018
(FY)

Tokyo Century Corporation

Integrated Report 201973

Management Organization(As of July 1, 2019)

1 Chairman & Co-CEO,Representative Director

Toshihito Tamba
2 President & CEO,

Representative Director

Shunichi Asada
3 Director(External Director) *1, *2

Yoshinori Shimizu
4 Director(External Director) *1, *2

Masao Yoshida
5 Director
15

14

12

10

8

9

11

13

(External Director) *1, *2

Yukito Higaki
6 Director(External Director) *1, *2

Akio Nakamura
7 Director(External Director) *1, *2

Toshio Asano
8 Deputy President,

Director and Executive Officer

Makoto Nogami
9 Deputy President,

Director and Executive Officer

Masataka Yukiya
10 Deputy President,

Director and Executive Officer

Akihiko Okada
11 Director and Senior Managing

Executive Officer

Koichi Baba
12 Director and Managing

Executive Officer

Osamu Tamano
13 Director and Managing

Executive Officer

Seiichi Mizuno
14 Director and Managing

Executive Officer

Akihiro Naruse
15 Director andExecutive Officer

7

5

3

1

2

4

6

Ko Nakagawa*1 External director as stipulated by Article
2-15 of the Companies Act of Japan*2 Designated independent officer as
stipulated by the Tokyo Stock Exchange

74

Tokyo Century Corporation

Integrated Report 2019

Tokyo Century Corporation

Integrated Report 201975

Sustainability Highlights

Sustainability Highlights
Tokyo Century pursues highly significant social initiatives through its business activities,
including those to prevent global warming through its social infrastructure improvement,
disseminate clean energy, and contribute to regional revitalization through its hotel business.

Preventing Global Warming by Advancing the Joint Crediting Mechanism
Summary of the Joint Crediting Mechanism
The Paris Agreement on climate change, enacted in
November 2016, set a target of constraining the rise in the
average global temperature to less than 2°C above preindustrial levels as a means of pursuing efforts to limit thetemperature increase even further to 1.5°C. For Japan, theagreement stipulates that greenhouse gas emissions mustbe cut by 26%, compared to fiscal 2013, by fiscal 2030.
Use of Japan’s unique Joint Crediting Mechanism (JCM)
is growing as an effective way to achieve these targets. The
JCM facilitates the diffusion of Japan’s superior low carbon
technologies to partner countries with support in the formof subsidies for part of the installation cost towards
contributing to the establishment of a sustainable social
infrastructure and reduced greenhouse gas emissions inthese partner countries. At the same time, the systemenables crediting some of the reduction in greenhousegases under Japan’s emissions. Through the JCM and other

Concept of the Introduction of Low Carbon
Technology Utilizing the JCM

Initialinvestment
cost

Conventional
equipment

Tokyo Century is the only Japanese financial services
company that serves as a representative participant of theJCM model project. We actively participate in projects,
utilizing our extensive overseas network and high-valueadded financial service capabilities. Our strengths as arepresentative participant are our superior planning andproposal capabilities for environmental equipment
through alliances with partner companies and our ability
to supply subsidies as well as operating funds through our
local overseas subsidiaries. We believe that the JCM
represents an opportunity for us to utilize the know-how
and strengths gained through our business activities.

Scheme of Tokyo Century Group’s JCM

Countedunder Japan’s
reduction

Credits

GHG
emissionsvolumeJCM Initiatives of Tokyo Century GroupInternational consortium

Japanese government/
companies

Partner country

GHG
emission
reductions

initiatives, Japan estimates it can reduce and absorb an
accumulated total ranging from 50 million to 100 million
tonnes in greenhouse gas emissions by fiscal 2030.

GHG
emissionsvolumeFinancialsupportFinancial support

InitialGHG
investment
emissionscost
volumeSuperior low carbon
technology

Subsidy
Representative
participant
Tokyo Century

Subsidy

CreditMinistry of theEnvironment

Deputy Manager, International Solutions Support Division

76

Tokyo Century Corporation

Integrated Report 2019

(Implementation of power
generation system, etc.)

Tokyo Century’s
overseassubsidiaries

Products with superior low
carbon technology, etc.

As part of our efforts to realize energy creation businessthat utilizes public infrastructure (e.g., wastewater treatment
plants) and regional resources, we intend to work with
Tsukishima Kikai to develop power generation business
utilizing digestion gas (biogas) generated at wastewater
treatment plants. Digestion gas is flammable and primarily
comprised of methane, generated in the process of sewage
treatment. This previously untapped resource of renewableenergy is expected to be used effectively in preventing
global warming.

the local government earns revenue from the land used forconstruction and supply of digestion gas.
By combining Tokyo Century’s expertise gained in the
renewable energy business and financial services along withthe energy creation business in the wastewater treatment field
which Tsukishima Kikai excels, we are committed to creating
an environmentally sound, sustainable economy and society
through operation of stable power generation business.

This business system is structured with private
enterprises constructing power generation facilities using
their own funds and know-how. We have undertaken
the power generation business for 20 years by utilizing
digestion gas purchased from municipalities and sell
the electricity generated to power companies. While notneeding to provide any business funds or own property,

Rendering of the completed Nakagawa Mizu Junkan
Center digestion gas power generation plant

Initiatives for Regional Revitalization through the Hotel BusinessTokyo Century believes that revitalization through tourism isa key countermeasure to the social issue of the depopulationof regional areas. As part of our efforts to address thischallenge, we have been involved in developing the ANAInterContinental Beppu Resort & Spa, a spa resort by aninternational five-star hotel brand. Scheduled to open in
August 2019, the hotel will appeal to tourists from aroundthe world seeking a luxury experience and is expected toJapanese major
manufacturers, etc.

make Beppu City, already one of Japan’s most famous hot
spring areas, a global tourist destination.

ANA InterContinental Beppu Resort & Spa*L ocal subsidiaries of Japanese enterprises and local enterprises in that region

Our achievement in the JCM business already extends to six projects in three countries as of July
2019. In addition to supporting efforts to mitigate global warming and more broadly disseminate
the outstanding low carbon technology of Japanese manufacturers, the JCM business represents
significant social value by contributing to the economic development of partner countries. It is closelyaligned with efforts to achieve the SDGs and can be viewed as a business that contributes on a global
scale to the creation of an environmentally sound, sustainable economy and society. Because of its
position in a management environment free of regulatory constraints, Tokyo Century has been able
to provide many financial services required by customers in Japan and overseas. Going forward, we
intend to continue actively promoting and expanding JCM business in partnership with Japanesecompanies by leveraging the provision of our high-value-added financial services.

Takashi Aoki

Leasing, etc.
Overseas partners*

Effective Use of Resources toward Creating a Sustainable,
Environmentally Sound Future

Reducing Environmental Impact through Stable Energy Transportation
Demand has recently been increasing for LNG as a clean formof energy due to the lower emissions of CO2 and nitrogenoxides when combusted compared to other fossil fuels suchas coal and petroleum. In this context, Tokyo Century has
become the first leasing company to participate in anownership of a newly built LNG carrier as part of its efforts tocontribute to the stable transportation of energy. The adoptionof cutting-edge environmental technologies, such as
improvements in propulsion performance from an optimized
hull shape to achieve 25% higher fuel efficiency than that ofconventional carriers, means our jointly owned LNG carrieralso reduces environmental impact during navigation.

LNG tanker Enshu MaruTokyo Century Corporation

Integrated Report 201977

Sustainability Highlights

External Evaluation

Strengthening the Singapore Car Rental Business through an Alliance with Grab

Human Resources
Received the Platinum Kurumin Certification from the Ministry of Health, Labour and Welfare

The Singapore government controls the number of registeredvehicles on its roads in order to ease traffic congestion andprotect the environment. When buying a car, purchasers
must pay taxes and miscellaneous expenses in addition to
the vehicle price, and this means car ownership is limited toa small, wealthy segment of society.
In 2016, Tokyo Century entered a strategic partnershipwith Grab. Grab is active in eight Southeast Asian nations
with operations including a ride-hailing service thatmatches drivers with customers through a mobile app.
Since then, we have made the capital investment in Grab
Rentals, which provides vehicle rental services andsolutions to Grab driver-partners in Singapore. Goingforward, we intend to strengthen initiatives for increasing
safety and convenience for both drivers and passengers
while also contributing to the improvement of Singapore’stransportation infrastructure through Grab Rentals.

The Kurumin system is sponsored by the Ministry of Health, Labour and Welfare under the Act on
Advancement of Measures to Support Raising Next-Generation Children. The ministry recognizes companies
that have achieved the objectives of their General Employer Action Plans, such as helping employees balance
their work and private life. Tokyo Century was granted the Platinum Kurumin certification as a company
pursuing a higher level of initiatives.

Selected as a FY2016 Nadeshiko Brand
Tokyo Century was selected as a FY2016 Nadeshiko Brand under a scheme inaugurated in FY2012 as a joint
initiative between the Ministry of Economy, Trade and Industry (METI) and the Tokyo Stock Exchange (TSE)to recognize companies for excellence in empowering women. The initiative annually recognizes companies
for excellence in empowering women. Tokyo Century was selected for promoting diversity as part of its
management policy and actively engaging in and disclosing information on initiatives for empowering womenin the workplace.

Selected as a FY2018 Semi-Nadeshiko Brand

Providing Customers with Safe and Trusted Rent-a-Cars
In January 2017, Nippon Rent-A-Car Service, Inc. began
introducing vehicles fitted with ASV* to prevent customer
traffic accidents and offer safe, trusted vehicles. As of May
2019, ASV-equipped vehicles accounted for approximately
85% (around 32,000 vehicles) of its total fleet.
Prior to the introduction of ASV, roughly 18% of all
customer accidents were attributed to carelessness
associated with such factors as a failure to check the roadahead properly. Some of these accidents, such as lowspeed collisions in traffic jams and crossing the center line,
could have been prevented by ASV.
In addition, the company has decided to install drive
recorders as standard equipment in all new cars introduced
starting in July 2019. We will continue offering safe, trusted,

and comfortable rent-a-cars, and implement measures
to reduce traffic accidents and the social concerns overhazardous driving.
*A dvanced Safety Vehicle: A vehicle with an onboard system that supports
safe driving through equipment such as an advanced emergency breaking
system, adaptive cruise control, a lane keeping assistant, and electronic
vehicle stability control.

Tokyo Century raised ¥10 billion through the issuance ofgreen bonds (unsecured bonds)* by public offering in
October 2018. The funds were allocated for leasing solar
power generation facilities for our consolidated subsidiary
Kyocera TCL Solar. Since its establishment in August 2012,
Kyocera TCL Solar has operated and managed solar power
plants in more than 70 locations across Japan. We remaincommitted to promoting renewable energy as well as
contributing to environmental protection.

78

Tokyo Century Corporation

Integrated Report 2019

Society
FTSE4Good Index

FTSE Blossom Japan Index*

Tokyo Century has been selected as aconstituent of the FTSE4Good Index, amajor global index for socially
responsible investment.

The FTSE Blossom Japan Index isdesigned as a tool to measure theperformance of Japanese companies
that demonstrate strong environmental,social and governance (ESG) practices.
Tokyo Century has been a constituent of
the index since 2017.
* The Government Pension Investment Fund (GPIF) of Japan has selected
the index as a benchmark for passive ESG investments.

Promoting Solar Power Generation Business throughthe Issuance of Green Bonds* These bonds are issued to raise funds for green projects that aim toresolve environmental issues.

From fiscal 2018, METI joined forces with the TSE to begin designating listed companies that have at least one
female director, auditor or executive officer and that excel in promoting female workplace empowerment as“Semi-Nadeshiko Brands.” Tokyo Century was selected under this system for its appointment of a female
executive officer along with its range of initiatives for empowering women in the workplace.

MSCI Japan ESG Select Leaders Index*
The MSCI Japan ESG Select Leaders Index is based on the MSCIJapan IMI Top 500 Index and is composed of companies that havedemonstrated outstanding ESG performance. Tokyo Century has beena constituent of theindex since 2017.

THE INCLUSION OF Tokyo Century Corporation. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS,
TRADEMARKS, SERVICE MARKS OR INDEX NAMES HERIN, DO NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF Tokyo Century Corporation. BY MSCI OR ANY OF ITS
AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCIINDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

* The Government Pension Investment Fund (GPIF) of Japan has selected theindex as a benchmark for passive ESG investments.

Mega Solar Power Plant, operated by Kyocera TCL
Solar in Kurokawa District, Miyagi Prefecture2019 Competitive
IT Strategy Company
Competitive IT Strategy Companies arerecognized for their strategic utilizationof IT to achieve business innovation andstrengthen competitiveness. Companies
from the roughly 3,600 listed in Japanare selected for each industry sector.
Tokyo Century has been selected forfive consecutive years, since fiscal 2015.

JPX-Nikkei Index 400
This stock index is composed ofcompanies that are highly appealing forinvestors and meet the requirements ofglobal investment standards, including
ROE, an indicator of capital efficiency.
Tokyo Century has been selected to theindex since its launch in 2014.

Tokyo Century Corporation

Integrated Report 201979

Performance Highlights

Financial Information

Non-Financial Information

Net Income Attributable to
Owners of Parent

Ordinary Income

Total Assets

Number of female
employees:

7.2%¥86.3 billion¥52.3 billion¥4,086.5 billion(+¥7.3 billion YoY)(+¥1.0 billion YoY)(+¥331.4 billion YoY)(+0.5 point YoY)

(Billions of yen)(Billions of yen)

(Persons)(Billions of yen)

86.3

90
73.5

75

60

79.0

51.3
50

68.0
60.7

40

45

(%)

4,086.5
3,151.9

34.1

3,317.9

3,579.9

27

3,000

30

18

20
2,000

30

20

15

10

0 15/30 15/3

16/3 17/3 18/3 19/3

10

0 15/3

16/3 17/3 18/3 19/3

77.3%(+2.6 points YoY)

(Persons)

(%)

50

100

40

22

30

5.5
5.0

2.5

16/3 17/3 18/3 19/3

80

60

19

73.6

74.7

77.3

17/3

18/3

19/3

55.3

10
20

Number of Female Managers (Left Scale)
Percentage of Female Managers (Right Scale)

40

18

13

13
9

10

0

0 16/3

17/3

18/3

20

0 16/3

19/3

Number of Male Employees
Number of Female Employees

Reduction in CO2 Emissions
from Electricity Consumption

Reduction of CO2
by Solar Power Generation*2of Kyocera TCL Solar LLC

Operating Assets and ROA*1

Net Income per Share and ROE

Interest-Bearing Debt

Pre-Owned
Personal Computers Sold

¥3,456.5 billion/2.6%¥494.93/12.7%¥3,041.2 billion

459,341 units

825 metric tons

90,541 metric tons(+¥225.9 billion YoY)  (+0.1 point YoY)(+¥8.84 YoY) (+¥230.6 billion YoY)(+168,338 units YoY)(-250 tons YoY)(+43,466 tons YoY)

(Billions of yen)

(Yen)

(Billions of yen)

(Units)

(%)

4,000

3,000

3,456.5

2,865.6

2,991.1

3.5

3,216.0 3,230.6

2.2

2.3

(%)

600
486.093.0

2.4(-1.0 point YoY)

500

2.5

379.34

400

2.6
2,000

494.9330

3,041.2

413.513,000
2,419.920

2,551.5

2,733.0 2,810.7

13.1

12.9

13.7

12.7

200

1.5

Operating Assets (Left Scale)
ROA (Right Scale)*1. Ratio of ordinary income to operating assets

Tokyo Century Corporation

Integrated Report 2019

1,087

250,016

272,925

1,029

1,096

825

Net Income per Share (Left Scale)ROE (Right Scale)

90,000149,681600

60,000150,000
111,487
100,00010

16/3 17/3 18/3 19/3

90,541

250,000
200,000

291,003

233,162(Tons)

287,888 120,000

300,000

1,075

200,000
1,000

0 15/3

(MWh)

1,200

900

2,000

2.0

16/3 17/3 18/3 19/3

400,000

300,000300

00 15/3300

100,000100
0 15/3(Tons)

459,341

500,000

4,000

322.84
2.5

12.5

1,000

80

22

Ratio of Eligible Employees Who
Have Taken Paid Annual Leave27

7.2 7.5

2.4

0 15/3

16/3 17/3 18/3 19/3

6.7

10.0

3.7

11
1,000

34

32

3,755.1
30

Number of male
employees:

13

40

4,000

43.7

40.0

60

5,000

52.3

Eligible Employees
Who Have Taken Childcare Leave(Non-Consolidated, by Gender)

Ratio of Female Managers(Non-Consolidated)

16/3 17/3 18/3 19/3

0 15/350,00016/3 17/3 18/3 19/3

0 15/3

16/3 17/3 18/3 19/3

47,07535,06367,011

30,00021,075

0 16/3

17/3

18/3

19/3

0

Electricity Generated Annually through Solar
Power Generation (Left Scale)
CO2 Reduction (Right Scale)*2. Compared with conventional thermal
power generation

Tokyo Century Corporation

Integrated Report 201981

Financial Summary

2010/03

2011/032012/032013/03

2014/03

2015/03

2016/032017/032018/03

2019/03

758.7
693.6
65.1
85.1
34.8
29.2
5.7
30.3
33.4
(0.2)
25.5

713.2
641.6
71.6
86.1
30.6
29.4
1.1
41.0
44.2
(3.5)
23.6

716.3
643.7
72.7
84.2
30.8
30.8
0.0
41.9
46.3
(2.2)
26.2

691.1
620.2
70.9
80.7
28.9
29.8
(0.9)
42.0
46.3
(0.1)
28.9

828.6
731.2
97.3
106.5
45.9
46.0
(0.1)
51.4
55.2
(0.1)
33.1

883.0
759.3
123.7
134.1
65.2
66.3
(1.1)
58.4
60.7
(1.0)
34.1

940.5
803.6
136.8
150.2
70.9
69.7
1.2
65.9
68.0
0.5
40.0

976.1
823.3
152.8
170.3
80.8
79.6
1.2
72.0
73.5
0.2
43.7

1,012.2
849.0
163.2
184.8
89.5
89.8
(0.3)
73.7
79.0
0.4
51.3

1,067.6
885.9
181.7
208.0
104.0
103.8
0.3
77.7
86.3
0.1
52.3

2,132.9
1,938.0
1,410.1
200.5
327.3
—
1,950.2
1,502.8
86.3
275.3
85.8
1,749.8
158.1

2,184.6
2,023.7
1,383.7
191.8
448.2
—
2,038.1
1,515.9
97.7
332.8
91.7
1,741.9178.8

2,260.4
2,094.4
1,375.8
188.0
530.7
—
2,110.9
1,492.2
115.5
397.7
105.5
1,783.2
201.3

2,465.8
2,231.4
1,473.9
201.6
555.9
—
2,253.3
1,496.3
130.5
491.8
134.6
1,939.2233.7

2,884.8
2,597.5
1,783.9
213.7
593.1
6.8
2,605.0
1,532.9
358.1
542.1
172.0
2,211.7285.5

3,151.9
2,865.6
1,915.0
239.4
699.2
12.0
2,895.6
1,535.4
380.5
711.9
267.9
2,419.9336.5

3,317.9
2,991.1
2,026.9
214.4
724.4
25.4
3,020.8
1,492.0
410.5
845.9
272.4
2,551.5
374.9

3,579.9
3,216.0
2,237.7
201.5
750.0
26.8
3,240.9
1,450.6
459.2
897.0
434.1
2,733.0404.8

3,755.1
3,230.6
2,182.4
194.3
785.1
68.9
3,330.2
1,403.0
515.8
975.6
435.7
2,810.7456.0

4,086.5
3,456.5
2,339.9
179.9
847.3
89.4
3,597.9
1,412.9585.9
1,114.0485.0
3,041.2
524.4

194.3
(8.9)
(306.1)
50.9

48.6
23.2
(89.8)
32.8(26.4)
(0.5)
38.3
44.5

(89.7)
(5.6)
135.9
83.1

(28.3)
10.0
54.5
115.8

(171.0)(18.7)
156.9
71.9(136.6)
(3.1)
155.8
91.8

(0.7)
(30.1)
27.5
85.7

26.4
(107.9)81.6
86.4(59.2)(123.9)189.0
89.7

239.571,410.61
32.00

221.801,594.57
40.00

245.82
1,796.62
44.00

272.32
2,092.46
48.00

311.64
2,386.02
52.00

322.84
2,776.37
65.00

379.34
3,033.61
80.00

413.51
3,360.27
100.00486.093,750.35
114.00494.93
4,039.68
124.00

18.5
1.5
7.1
44.8

14.8
2.0
7.8
41.1

14.5
2.1
8.4
42.3

14.0
2.0
9.0
42.1

13.9
2.1
8.8
47.2

12.5
2.0
9.3
53.6

13.1
2.1
9.6
50.9

12.9
2.1
9.9
52.1

13.7
2.2
10.5
55.0

12.7
2.2
10.4
57.1

1,732

1,715

1,722

1,676

3,309

4,113

4,124

5,430

6,035

7,016

Operating Results (Billions of yen)
Revenues
Costs
Gross profit
Sales revenues (gross profit before deducting funding cost)
SG&A expenses
Personnel and non-personnel expenses
Credit costs
Operating income
Ordinary income
Extraordinary income and losses
Net income attributable to owners of parent

Financial Condition (Billions of yen)
Total assets
Operating assets
Leasing
Installment sales
Finance
Other
Segment assets*2
Equipment Leasing
Mobility & Fleet Management
Specialty Financing
International Business
Interest-bearing debt
Net assets

Cash Flows (Billions of yen)
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Cash and cash equivalents at end of year

Per Share Data (Yen)
Net income
Net assets
Dividends

Significant Indicators (%)
Return on equity (ROE)*3
Return on assets (ROA)*4
Shareholders’ equity ratio
Overhead ratio (OHR)*5

Other Data (Persons)
Employees (Consolidated)

Notes: *1. Data are rounded down to the nearest unit.
*2. Balance of segment assets = Operating assets stated in the Consolidated Financial Results (Kessan Tanshin) + Investment amount in equity-method affiliates.
*3. ROE = Net income attributable to owners of parent / Equity (simple average of beginning and end of term balance sheet figures) × 100*4. ROA = Ordinary income / Total assets (simple average of beginning and end of term balance sheet figures) × 100*5. OHR = (Personnel expenses + Non-personnel expenses) / Gross profit × 100

82

Tokyo Century Corporation

Integrated Report 2019

Tokyo Century Corporation

Integrated Report 201983

Main Subsidiaries, Affiliates and Other

Japan

Asia
Company

Location

Main Business

VotingShares*Consolidated Subsidiaries

Company

Location

Main Business

VotingShares*Consolidated Subsidiaries

Nippon Car Solutions Co., Ltd.

Japan

Automobile leasing

60%

Nippon Rent-A-Car Service, Inc.

Japan

Automobile rental and leasing89%

Orico Auto Leasing Co., Ltd.

Japan

Automobile leasing for individuals

50%

Fujitsu Leasing Co., Ltd.

Japan

IT-related equipment leasing

80%

IHI Finance Support Corporation

Japan

General leasing and finance67%

Orico Business Leasing Co., Ltd.

Japan

General leasing

50%

ITEC Leasing Co., Ltd.

Japan

General leasing

85%

S.D.L. Co., Ltd.

Japan

General leasing

100%

TRY Corporation

Japan

Refurbishment of PCs

80%

TC Tsukishima Energy Solution LLC

Japan

Sales of electricity generated using biogas

90%

Amada Lease Co., Ltd.

Japan

General leasing

60%

Shinko Real Estate Co., Ltd.

Japan

Real estate business70%

TC Property Solutions Corporation

Japan

Property management

100%

Kyocera TCL Solar LLC

Japan

Sales of electricity generated using solar power

81%

TCLA Godo Kaisha

Japan

General leasing and installment sales

100%

Shunan Power Corporation

Japan

Power generation

60%

Tong-Sheng Finance Leasing Co., Ltd.

Tokyo Century Leasing China Corporation

China

General leasing

80%

Tokyo Century Factoring China Corporation

China

Factoring services

100%

TC Leasing Co., Ltd.

China

Leasing and finance through alliance with China
UnionPay Merchant Services

100%

Tokyo Leasing (Hong Kong) Ltd.

Hong Kong

General leasing

100%

Tokyo Century Leasing (Singapore) Pte. Ltd.

Singapore

General leasing

100%

Tokyo Century Asia Pte. Ltd.

Singapore

Investment/shareholding and ancillary business

100%

Tokyo Century Capital (Malaysia) Sdn. Bhd.

Malaysia

General leasing

100%

TISCO Tokyo Leasing Co., Ltd.

Thailand

General leasing

49%

HTC Leasing Co., Ltd.

ThailandConstruction equipment finance70%

TC Advanced Solutions Co., Ltd.

Thailand

Reverse factoring and other services

59%

TC Car Solutions (Thailand) Co., Ltd.

ThailandFinancing and services related to automobiles

99%

PT. Century Tokyo Leasing Indonesia

Indonesia

General leasing

85%

PT. TCT Indonesia

Indonesia

General trading company

100%

China

Automobile and equipment leasing

49%

China

Finance and general leasing

40%

Equity-Method Affiliates

TC Agency Corporation

Japan

Casualty insurance

100%

Dalian Bingshan Group Hua Hui Da Financial
Leasing Co., Ltd.

TC Business Service Corporation

Japan

Business processing services

100%

Suzhou New District Furui Leasing Co., Ltd.

China

Finance and general leasing

20%

TC Business Experts Corporation

Japan

Business inspection services

100%

President Tokyo Corporation

TaiwanAutomobile leasing and general leasing

49%

PT. Hexa Finance Indonesia

Indonesia

Construction equipment finance20%

PT. Big Ecommerce Bersama

Indonesia

B-to-G and B-to-B e-commerce operation

20%

BPI Century Tokyo Lease & Finance Corporation Philippines

General leasing

49%

Yoma Fleet Ltd.

Automobile leasing and car sharing

20%

Equity-Method Affiliates
ITOCHU TC Construction Machinery Co., Ltd.

Japan

Sales and rental services for construction andother equipment

50%

Bplats, Inc.

Japan

Subscription-based business

33%

Nanatsujima Biomass Power LLC

Japan

Sales of electricity generated using biomass power

25%

Nittochi Asset Management Co., Ltd.

Japan

Management and formation of real estate investment funds

30%

MyanmarOther
TATA Capital Financial Services Limited

U.S.A.

India

Finance and general leasing—

EuropeCompany

Location

Main Business

VotingShares*Consolidated Subsidiaries

Company

Location

Main Business

VotingShares*Consolidated Subsidiaries

TC Skyward Aviation U.S., Inc.

U.S.A.

Aviation leasing and finance100%

TC Skyward Aviation Ireland Ltd.

Ireland

Aviation leasing and finance

100%

TC Realty Investments Inc.

U.S.A.

Real estate investment

100%

TC Aviation Capital Ireland Ltd.

Ireland

Aviation leasing and finance100%

CSI Leasing, Inc.

U.S.A.

IT equipment leasing

100%

Tokyo Leasing (UK) Plc

U.K.

General leasing

100%

U.S.A.

General leasing

100%

Aviation Capital Group LLC

U.S.A.

Aviation leasing and finance25%

GA Telesis, LLC

U.S.A.

Provider of products, services and solutions tothe commercial aerospace industry

49%

Gateway Engine Leasing, LLC

U.S.A.

Aircraft engine leasing

20%

Tokyo Century (USA) Inc.

Equity-Method Affiliates

84

Tokyo Century Corporation

Integrated Report 2019

* Voting share percentages are rounded to the nearest whole number.

Tokyo Century Corporation

Integrated Report 201985

Corporate Information / Management (As of July 1, 2019)

Stock Information (As of March 31, 2019) / Bond Ratings (As of March 31, 2019)

Company NameTokyo Century Corporation

Transfer Agent

Mizuho Trust & Banking Co., Ltd.

Head Office

FUJISOFT Bldg., 3 Kanda-neribeicho, Chiyoda-ku, Tokyo 101-0022, Japan

Stock Listing

Tokyo Stock Exchange, First Section

FoundedJuly 1, 1969

Securities CodePaid-in Capital¥34,231 million

Trading Lot Size

Company Representatives

Chairman & Co-CEO Toshihito Tamba
President & CEO Shunichi Asada

Number of Shares ofCommon Stock Authorized

400,000,000 shares

8439

Number of Shares ofCommon Stock Issued

106,624,620 shares

100 shares

Number of Shareholders

9,802

Major Shareholders

Number of Employees

7,016 (989 on a non-consolidated basis as of March 31, 2019)

Closing of Accounts

March 31

Main Banks

Mizuho Bank, Ltd.; MUFG Bank, Ltd.; Sumitomo Mitsui Trust Bank, Limited;
The Norinchukin Bank; Sumitomo Mitsui Banking Corporation

Independent Auditor

Ernst & Young ShinNihon LLC

Network

Domestic:
Head office, Sapporo, Sendai, Saitama, Yokohama, Shizuoka, Nagoya, Kanazawa, Kyoto, Osaka,
Kobe, Okayama, Hiroshima, Fukuoka

Breakdown of Shareholders

Shareholders

ITOCHU Corporation

Overseas:
We operate in 37 countries and regions in Asia, North America, Central and South America,
Europe, and elsewhere.

Nippon Tochi-Tatemono Co., Ltd.
KSO Co., Ltd.
Japan Trustee Services Bank, Ltd.
(Trust accounts)
Mizuho Bank, Ltd.
The Master Trust Bank of Japan, Ltd.
(Trust accounts)
Seiwa Sogo Tatemono Co., Ltd.

Number of
Shares Held(Thousands)

Shareholding
ratio*(%)

26,656
15,712
10,306

25.24
14.88
9.76

6,478

6.13

4,688

4.44

2,610

2.47

2,286
2,228

2.17
2.11

1,900

1.80

1,716

1.62

Nippon Life Insurance Company
Mizuho Trust & Banking Co., Ltd.
(Retirement Allowance Trust,
Orient Corporation AccountTrust & Custody Services Bank, Ltd.
re-entrusted)
Yushu Tatemono Co., Ltd.

Foreign investors
11.5%

Financial
institutions
25.9%

Individuals
and other
4.6%

Securities
companies
0.8%
Other domestic
institutions
56.2%

Treasury stock
1.0%* The shareholding ratio is calculated by excluding the treasury stock (1,008,592 shares).

Management

Bond Ratings	Board of Directors

Credit Rating Agency

Chairman & Co-CEO,Representative Director

Director(External Director) *1, *3

Deputy President, Directorand Executive Officer

Director and Managing
Executive Officer

Director and Executive
Officer

Toshihito Tamba

Yoshinori Shimizu

Makoto Nogami

Osamu Tamano

Ko Nakagawa

Masao Yoshida

Masataka Yukiya

Seiichi Mizuno

Yukito Higaki

Akihiko Okada

Akihiro NarusePresident & CEO,
Representative Director

Shunichi Asada

Akio Nakamura
Toshio Asano

Long-term

Director and Senior
Managing Executive Officer

Koichi Baba

Corporate Auditors

Short-termStanding Corporate Auditor(External Corporate Auditor) *2

Standing Corporate
AuditorCorporate Auditor(External Corporate Auditor) *2, *3*1. E
 xternal director as stipulated by Article 2-15 of
the Companies Act of Japan

Futoshi Okada

Yuichiro Ikeda

Masao Fujieda*2. E
 xternal corporate auditor as stipulated by
Article 2-16 of the Companies Act of Japan

Katsuya Amamoto

Deputy President,
Executive Officer

Managing Executive Officer

Executive Officer

Koichi Nakajima

Kenji Murai

Tomoyuki Akamatsu

Kimio Kozuka

Minoru Kuwahara

Takashi Kamite

Hiroaki Ogino

Junji Tsutsui

Masahiro Oohata

Yoshio Nomura

Foo Siang Seng

Yoshihiro Ueda

Toshiyuki Otobe

Yasushi Yoshino

Mahoko Hara

Tatsuya Hirasaki

Toshihiko Tamura

Shintaro Yamazaki

Yoichiro Nakai

Shuji Ozawa

Takashi Yonetsu

Masami Nagata

Masato Osugi

Toshio Kitamura

86

Tokyo Century Corporation

Integrated Report 2019Japan Credit Rating Agency, Ltd. (JCR)

Rating and Investment Information, Inc. (R&I)[Long-term Issuer Rating]Rating: AA–
Outlook: Stable[Issuer Rating]Rating: A
Outlook: Positive[Preliminary Rating for Bonds Registered for Issuance]*
Rating: AA–
Expected Issue Amount: ¥200 billion
Issue Period:
Two Years Beginning February 14, 2018

[Preliminary Rating for Bonds Registered for Issuance]*
Rating: A
Expected Issue Amount: ¥200 billion
Issue Period:
Two Years Beginning February 14, 2018[Euro Medium-Term Note Program]
Rating: AA–
Maximum Outstanding Amount:
Equivalent of US$2 billion[Euro Medium-Term Note Program]
Rating: A
Maximum Outstanding Amount:
Equivalent of US$2 billion[Commercial Paper]
Rating: J-1+
Maximum Outstanding Amount: ¥800 billion[Commercial Paper]
Rating: a-1
Maximum Outstanding Amount: ¥800 billion* Each bond will be rated by each rating agency upon issuance.

*3. D esignated independent officer as stipulated by
the Tokyo Stock Exchange

Executive Officers

Senior Managing Executive
OfficerIssuer Tokyo Century Corporation (Securities Code: 8439)

Editorial Policy

Guidance for Collaborative Value Creation

The integrated report provides a brief
explanation to shareholders, investors
and other stakeholders of financial
information, including management
direction, strategies and a review ofoperations as well as non-financial
information on its initiatives withrespect to the environmental, socialand governance (ESG).

The integrated report refers to “Guidance forCollaborative Value Creation,” which is a common
language among investors. As a company with financial
capabilities, Tokyo Century focuses on creating
businesses that are useful to society by cooperating with
its partners. Our aim is to help our stakeholders
understand our efforts to “contribute to the creation of anenvironmentally sound, sustainable economy andsociety,” which is part of our Management Philosophy.

Tokyo Century Corporation

Integrated Report 201987

Tokyo Century Corporation
FUJISOFT Bldg., 3 Kanda-neribeicho, Chiyoda-ku,
Tokyo 101-0022, Japan
www.tokyocentury.co.jp/en/