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Printed in Japan

Century Tokyo Leasing Corporation Annual Report 2009

Century Tokyo Leasing Corporation
World Trade Center Building,

Make New Business with Leasing

Annual Report 2009

[Merger Report]

Century Tokyo Leasing Corporation Annual Report 2009

Century Tokyo Leasing Corporation was launched on April 1, 2009,
through the merger of Century Leasing System, Inc., a leasing
venture with the combined strengths of a trading company anda financial institution, and Tokyo Leasing Co., Ltd., Japan’s pioneering leasing company. This new company will take advantage
of its diverse range of major shareholders, including Mizuho
Financial Group, ITOCHU Corporation, Nippon Life Insurance
Company and Asahi Mutual Life Insurance Company, to rebuild
a globally competitive business. At the same time, we will
enhance corporate value and maximize shareholder value by capitalizing on our flexible yet dynamic services that are available toa nonbank free from financial regulations.
[Management Philosophy]

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

We will strive to raise customer satisfaction and earn customer
trust by collaborating with business partners and uniting the Group’s
overall strengths to provide the best products and services.
We will increase corporate value and achieve sustainablegrowth through sound and highly transparent management.
We will develop a culture that nurtures human resources andself-improvement, and build a company where all officers andemployees can experience growth and a sense of pride.
As a corporation, we will always be mindful of our social
responsibility and conduct business with sincerity.

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

[Logo design concept]
The shape reaching out to the top right-hand corner represents the future of Century Tokyo
Leasing Corporation, a company that grows with its clients, with ideas and creativity that surpass their expectations. The bright and brilliant blue of our corporate color represents Century
Century Tokyo Leasing Corporation Annual Report 2009

Tokyo Leasing Corporation as a pioneering and flexible company: a market leader that adapts
to change to generate new business.

Century Tokyo Leasing Corporation Annual Report 2009 Contents

Financial Highlights

To Our Stakeholders

Interview with the President

2

3

4

At a Glance

Segment Information

CSR

12

14

18

Corporate GovernanceManagement

Financial Section

20

22

23

Main Subsidiaries and Affiliates

Stock Information/Bond Rating

Corporate Information

72

74

75
1

Financial Highlights
Century Tokyo Leasing Corporation and Consolidated Subsidiaries
Years ended March 31

Millions of yen(Note1)

2008

2009

2009

CLS

TLC

CLS

TLC

TC-Lease

TC-Lease¥ 307,177
19,683
10,848¥ 435,277
32,037
19,375¥ 266,730
21,17812,667¥ 476,217
38,08725,701¥ 742,947
59,26538,368$ 7,581,099
604,747
391,513

1,779
8,835
1,380

2,037
12,662
(517)

3,836
8,511
1,360

6,877
12,38618

10,713
20,896
1,378

109,325
213,233
14,065

(182)

(83)

(70)

(290)

(360)

(3,679)10,215(87)
6,532

12,144
(907)
6,717

9,871
(895)
5,958

12,404(4,337)
4,071

22,275(5,232)
10,029227,299(53,391)
102,339

Financial Condition
Total assets
Operating assets
Interest-bearing debt
Equity800,925
730,616
661,971
57,467

1,289,481
1,150,965
1,130,439
69,353845,950
727,087
690,653
60,573

1,577,849
1,372,929
1,363,113
64,6142,423,800
2,100,016
2,053,765
125,187

24,732,653
21,428,735
20,956,795
1,277,419

Per Share Data
Net income
Net assets
Dividends (non-consolidated)

125.3
1,102.5
26.0

104.8
1,081.7
24.0

114.3
1,162.1
28.0

63.5
1,007.8
26.0

486

1,090

490

1,211

Operating Results
Revenues
Gross profit on revenues
SG&A expenses
Bad debt expenses[included in SG&A expenses]
Operating income
Nonoperating income (expenses)
Net interest income (expenses)[included in nonoperating
income (expenses)]
Ordinary income(Income before extraordinary
items and income taxes)
Extraordinary gains (losses)
Net income

Century Tokyo Leasing Corporation Annual Report 2009

Thousands of
U.S. dollars (Note2)

Other data
Employees (persons)

Yen

1,701

CLS Formerly Century Leasing System, Inc.
TLC Formerly TOKYO LEASING CO., LTD.
Note 1: The numerical values of TC-Lease are the simple composite figures of 2 companies.
Note 2: Converted at 98 yen per dollar, the rate as of March 31, 2009.

Revenues

Ordinary income

Millions of yen

Total assets
Millions of yen

Millions of yen

800,000

40,000600,000

30,000400,000

20,0002,500,000

2,000,000

1,500,000

1,000,000
200,000

10,0000

005/3 06/3 07/3 08/3 09/3
CLS

2

500,000TLC

0

05/3 06/3 07/3 08/3 09/3
CLS

TLC

05/3 06/3 07/3 08/3 09/3
CLS

TLC

To Our Stakeholders

On April 1, 2009, Century Leasing System, Inc. and Tokyo Leasing Co., Ltd. merged to take a new
step forward as Century Tokyo Leasing Corporation.
The Century Tokyo Leasing Group has an operating assets balance of 2.1 trillion yen, occupying a position as one of the major players in the industry. We have diverse major shareholders,
including the Mizuho Financial Group, ITOCHU Corporation, Nippon Life Insurance Company
and Asahi Mutual Life Insurance Company. In addition, we have expanded our customer foundation through the acquisition of one of the leasing companies of Kawasaki Steel (today’s JFEGroup) and that of Fujitsu Group.
By working closely with these major shareholders and manufacturing companies that we havea close relationship with, we will quickly achieve integration synergy on the basis of our expanded customer base, human resources, product line, and information resources which we havegained from the merger. Furthermore, we will aim to become a comprehensive, solution-oriented, finance services company that stands on customer viewpoint by maximizing our flexibility
that is available to a nonbank free from financial regulations. At the same time, we will rebuild aglobally competitive business. Through these measures, we will enhance corporate value andCentury Tokyo Leasing Corporation Annual Report 2009

maximize shareholder value.
Our priorities in the first business year of the merger are to (1) establish ourselves as the top
3 company in the leasing and installment business sector; (2) cut credit cost, fund procurement cost,and operation cost, and achieve lean business structure; and (3) Develop the organization thatcan quickly reap benefits of the integration. We are setting out on a voyage in a harsh business environment amidst the economic stagnation and capital investment cuts. However, by making solid
progress in these priority initiatives, we are aiming in the year ending March 2010 for operating
income of ¥24.5 billion, ordinary income of ¥27 billion, and net income of ¥15 billion. As the merger synergies become more prominent, we also look forward to new growth, and will push forward
as a solidly united group.

We deeply appreciate the continued understanding and support of our shareholders andinvestors for Century Tokyo Leasing Group.

Chairman & Co-CEO

Takao Arai

President & CEO

Shunichi Asada

3

Interview with the President

The merger has made Century Tokyo Leasing a company that ranks alongside other leading
leasing companies. We will establish ourselves in the top 3 of the industry and expand ourbusiness domains with leasing and installment as our foundation. We are seeking opportunities for business development with a vision to manage business companies, and we will

Century Tokyo Leasing Corporation Annual Report 2009

demonstrate new ways for an evolving leasing company.

Q

How do you view your results for the fiscal year ended March 2009?

A

Earnings were below our initial expectations, but I think we are putting up a goodfight in this harsh business environment, and we produced firm results comparedto other companies in our industry.

Our consolidated results for the fiscal year ended

While leased capital investment in the entire indus-

March 2009 for the two merged companies were as

try was ¥5.44 trillion (down 14.2% year on year),follows: operating income of ¥20.9 billion (downand Century Tokyo Leasing had ¥520 billion (up¥600 million year on year), ordinary income of ¥22.2¥52.5 billion year on year), which constitutes anbillion (down ¥80 million year on year), net income

almost 10% market share. Looking at our figuresof ¥10 billion (down ¥3.2 billion year on year), andsuch as those of the operating assets balance andconsolidated operating assets base of ¥2.1 trillion

newly executed contracts, I feel we are in a posi-(¥1.78 trillion of this in lease and installment assets).

tion to lead the industry as a major player.

Operating income

Net income

Millions of yen

Operating assets

Millions of yen

30,000Millions of yen

20,0002,500,000

15,0002,000,000

10,0001,500,000

5,000

1,000,0000

500,000

20,00010,000-5,000005/3 06/3 07/3 08/3 09/3
CLS

4

TLC

0

05/3 06/3 07/3 08/3 09/3
CLS

TLC

05/3 06/3 07/3 08/3 09/3
CLS

TLC

How do you view the leasing industry overall?

A

I believe the leasing industry to be in a relatively favorable position given the severebusiness environment surrounding the finance industry.

At the moment, the finance industry in Japan is far-I can say that the one industry that has remaineding very poorly. For the megabanks and regional

relatively unscathed by the economic calamity isbanks, there is no magic wand for an easy recov-

the leasing industry, which maintains stamina

ery. Furthermore, the earnings structure forthrough sound management and makes use of its

securities companies are damaged, and they areadvantage in its possession of tangible assets.

unable to earn the high-margin profits that were

From now on, financial regulations (especiallyonce a given for investment banks. Insurance com-for banks) are expected to become more dracon-

panies also cannot foresee any substantial growth

ian on a global scale. Although the leasing industry

in the future amidst a declining population trend.

holds a position in this industry, it is relatively free

The situation for the consumer finance sector isfrom its regulations. In this sense, among the exist-

even more grim; the amendments to the Moneying finance sector, I believe the leasing industry’s

Lending Business Act and others have made theirbusiness domain will expand in response to publicbusiness environment very severe. Amidst all this,demand replacing the traditional role of a bank.

Q

How did the business environment change?

A

Lease capital investment in the fiscal year ended March 2009 decreased 14.2% year on
year to ¥5.4 trillion. The leasing market has been shrinking over the past two years,
since June 2007, showing a year-on-year decrease on a monthly basis each year.

Especially in the fiscal year ended March 2009, inthe number of bankruptcies reported for domestic

addition to stagnant capital investment due to thecompanies grew 16.8% year on year to 13,200,

economic recession, I think the changes in lease

increasing for the third consecutive year.

accounting standards had an impact.

Century Tokyo Leasing Corporation Annual Report 2009Q

In this way, the leasing industry found itself to

To elaborate further on the financial environ-

be in a very harsh business environment due toment, since the bankruptcy of the major U.S.

stagnant capital investment, interest rate trends,

investment bank Lehman Brothers last September,the rapidly deteriorating financial environment since

financial markets have not functioned properly, lead-last autumn, and an increasing number of company

ing to high funding costs such as a temporary spikebankruptcies.

in the issue rates for commercial paper. Moreover,5

Interview with the President

Q

Century Tokyo Leasing Corporation Annual Report 2009A

Was this merger a response to these changes in the business environment?
Also, what are the most noticeable benefits from the merger?
We thought the next three or four years would be an uphill battle, so we decided on
the merger last September. The shift in the economic environment was more abrupt
than expected, but we were able to complete the merger in time. There are defensive
and offensive aspects that were borne from the merger.

First comes our defensive measures. We firstas increase our employees’ morale. The combined,thought of boosting our capital strength and earn-

new lease contracts generated from the two

ings power to help us endure the unforgiving

merged companies amounted to roughly 10% of

economic conditions. In short, this means building

market share in fiscal 2008. This is almost the sameon our business strengths, and the merger makes

scale as the industry’s top company. We believe

it relatively easy to achieve this.

the successful merger has created an environment

Next comes our offensive measures. By becom-in which we can compete alongside other leading

ing one of the top three in the industry, we wanted

companies. On top of that, there is an added merit

to demonstrate our presence as a leading company

of increased productivity, since our operating assets

and raise our profile among our customers as wellexceeds ¥2 trillion.

Newly Executed Lease Contracts

Market Share of Domestic Lease

Billions of yen

10,000

A

14.5%
8,000

B

10.8%

6,000

Others

47.5%
4,000

C

10.3%
Century Tokyo Leasing

9.6%

2,000

D

0

07/3
First half

6

08/3

7.3%

09/3
Second half*Compiled from the IR materials of the top five listed leasing companies

Q

Please describe the cost synergies.

A

By integrating information systems and other benefits due to the merger, we are
expecting several billion yen of annual cost reductions in the future.

The information system of the former Tokyo

costs, but we think the combined expenses of both

Leasing had to be replaced by the new system incompanies will save about ¥1 billion to ¥1.5 billion

2009, but we are instead using the information sys-

per year in the future. We also see several billion yen

tem of the former Century Leasing System. It is aof merger benefits if we maintain a lean structure bygood example of the cost synergy achieved by the

integrating overlapping areas and management

merger. System integration will incur one-time

departments.

Q

What position is Century Tokyo Leasing aiming for in terms of quality and volume?

A

First and foremost, our aim is to establish our position in the top three of the industry. We believe that if we are a good third with services that speak for themselves,
we will be valued by stakeholders.

A top leasing company must act as a leader in theinterest rate is between two to three trillion yen.

leasing industry and must also have the strength

Therefore, from the aspect of asset efficiency, I

to start new businesses. To reach the position

think our current size puts us in the optimal posi-

where we can discharge these responsibilities istion that serves us and our shareholders best.

what I mean by establishing ourselves in the top

Furthermore, we will aim for stable profit growth

three of the industry. We believe the amount ofthat is appropriate for our business size, and we willfunds a leasing company can raise with a proper

earn the trust of our stakeholders.

Market Position of Century Tokyo Leasing
Results

Balance of Operating Assets

By order of ordinary income

By order of balance of Leasing and Installment Sales BusinessA

A

CenturyTokyo
Leasing

CenturyTokyo
Leasing* Operating revenues

B

Tokyo
LeasingTokyo
LeasingC

D

D

Century
Leasing
SystemCentury
Leasing
System

F

F

G

G
0

200

400

600

Revenues: Billions of yen
Ordinary income: 100 Millions of yen*The top seven listed leasing companies excluding ORIX Corporation* Balance ofreceivables,
and including
installments
in others

B

C

800

1,000

Century Tokyo Leasing Corporation Annual Report 2009

Billions of yen

0

10,00020,00030,00040,000

Leasing, Installment sales
Loans, Other businesses*The top seven listed leasing companies excluding ORIX Corporation

7

Interview with the President

Q

Century Tokyo Leasing Corporation Annual Report 2009

A

What is the basic strategy being pursued by Century Tokyo Leasing?
We will strengthen our relationship with our primary business partners to expand
our business domains and become an essential partner for manufacturers. We also
would like to change our ways of doing business, such as remarketing end-of-leaseassets globally. We are seeking opportunities with a vision to manage business companies in the future.

ITOCHU Corporation is our largest shareholder withby getting actively involved in their sales policies.

about 20% of our shares. Starting with China, thisFor example, discovering business needs overseas

trading company has business operations through-and expanding those sales channels are some ofout the world. We also have major shareholders

the crucial business agendas that lie ahead of us.

that are diverse in range, including leaders in the

Moreover, since reuse and recycling of tangi-

financial industry, such as Mizuho Financial Group,

ble assets are specialties of leasing companies, we

Nippon Life Insurance Company, and Asahi Mutual

believe we should also be the one to take chargeLife Insurance Company, and in real estate we havein matters related to the business of trading com-

Nippon Tochi-Tatemono Co., Ltd. We would like topanies. One of the strengths of leasing companies

utilize each of our primary business relationships

is its ability to accurately appraise the resale value

and expand our business domains. We will pushof tangible assets. I don’t think we can grow unlessforward with multifaceted sales activities covering

we can develop a specialty that is unique to a busi-

a broad customer base ranging from large compa-

ness involving tangible assets. For instance, we cannies to medium and small companies, and refine

create a global secondary market for end-of-lease

our abilities to focus on increasingly diverse cus-

products if need be.

tomer needs, while further strengthening our
relations with shareholding companies.
Financial intermediation with a focus on tangi-

the world of finance. And it is important to be aware

ble assets is a sector that will continue to grow. Asof this. Our business type happens to be positioned

the business of leasing companies revolves aroundexactly between that of finance and an ordinary

tangible assets, it is important to decide on theoperating company. We are able to operate in the

direction of its operations by working closely withworld of finance and by going beyond that, we arestrong manufacturers. We must build even stronger

also able to conduct operations as an ordinary busi-ties with closely related manufacturers such asness company. For example, we could create andFujitsu Group and JFE Group, and work to findoperate our own company related to the environ-untapped markets. We also could have substantial

ment and our daily lives.

influence over manufacturers’ sales policies, andwe feel that we can become an essential partner

8

In terms of our dreams, we aspire to become acompany that will not settle only in the confines ofWhat are some of the pressing issues in the first fiscal year of the merger?

A

For the first couple of years, we will work on cost cutting and reorganization to quickly achieve benefits from integration.

During that period, building a solid foundation will

rect funding base by building good relationships with

be our highest priority.

financial institutions. Third, we will cut operation

For that purpose, we aim to enhance company

costs such as personnel costs and property costs.

earnings power through controlling the following

We recognize that improved cost efficiency is anthree costs. First, we will enhance our screening

important business issue when upgrading compet-

capabilities and structure such that they are con-itive strength in the current business environment.

ducive to the changing economic environment andWe will continue to pursue a low cost operation withwill bolster our credit risk management structure tocost effectiveness at the forefront.

minimize credit costs. Second, since we raise large

We will strengthen our business foundation andamounts of funds, we must focus on holding downbusiness efficiency by quickly integrating our core

the cost of funds by further improving our ALM func-

information systems, organizations, business loca-

tions through the control of market risks such as

tions, group companies, etc., along with efficientinterest rate risks and liquidity risks. At the same

allocation of human resources by suitable staff allo-

time, we are working hard to maintain a stable indi-

cation, etc.

Q
A

Century Tokyo Leasing Corporation Annual Report 2009

Q

What are the strengths of Century Tokyo Leasing?
We have a broad business foundation backed by close relationships with diverse
major shareholders and manufacturers. Among other things, the information equipment leasing business, which holds the top position in the industry and our auto
leasing business, which comes in third, are our major strong points. While further
boosting our strengths, we are also expanding in other business fields.

Out of the fiscal 2008 domestic lease capital invest-

equipment and office equipment in fiscal 2008. The

ment of ¥5.4 trillion, about ¥2.3 trillion was madecombined newly executed contract amount of theup of information and communication equipment

two companies came to ¥292.2 billion, comprisingand office equipment, comprising over 40% of the

56% of our entire leasing business. Our close rela-total investment. Particularly for information andtion with Fujitsu Group is a great strength, andcommunication equipment, we can always expect

especially amidst a 12% year-on-year averagea certain level of demand, regardless of the ups anddecline in our industry for information and com-

downs of the economy. Furthermore, it is the mostmunication equipment leasing, we held our decline

leased asset as it serves to be a measure against

to 3% (on a non-consolidated basis). Under theobsolescence risk and because equipment requires

stronger and broader customer base resulting fromcomplex management.

the merger, we will take advantage of our ties with

By taking measures such as the establishment

Fujitsu Group, and continue to focus on informa-of a sales department that specializes in informa-tion and communication equipment leasing as one

tion equipment and through the acquisition ofof our stronger fields.

Fujitsu Leasing Co., Ltd., we became the industry’s

We are also expanding our auto leasing busi-

top company in information and communicationness, centered on Nippon Car Solutions Co., Ltd.,

9

Interview with the President

and Tokyo Auto Leasing Co., Ltd. Through the merg-

tomer base by meeting the diversified needs of cus-

er, Century Tokyo Leasing Group’s auto leasing

tomers.

business solidified the 3rd position in the industry.

We are working to strengthen our group sales

While the auto leasing market for large fleet users

foundation and consolidated earnings power(contracts of 10 or more vehicles) is entering athrough the synergy created from the collaborative

mature period, it is thought that the non-fleet mar-structure between our top-rated, auto leasing busi-

ket (contracts of 9 or fewer vehicles) and individual

ness and our other leasing businesses.

market will expand, and we will expand our cus-Market Share of Information andCommunication/Office Equipment

Number of Vehicles Managed

Century Tokyo Leasing

Century Tokyo Leasing Group

12.9%

12.6%

¥292 billion
NCS Group

9.3%
283,322
TALC Group

3.3%
Century Tokyo Leasing Corporation Annual Report 2009

99,507

10¥2,270billion*3,045,591**According to a survey by Japan Leasing Association.

Q
A*According to a survey by Japan Automotive Leasing Association.

Please describe your goals and targets in advancing
your overseas business focused on Asia.
We perceive the leasing business in Asia to be our strategic area. First, we will growour business even more in Asia by focusing on Japanese companies that have alreadyestablished operational bases in the region. For example, for leasing business in
China, we are aiming to be the top company over the mid- and long-term by working closely with ITOCHU Corporation, etc.

Our business in Asia is growing very fast by focus-

there are 5,000 to 6,000 Japanese companies alone.

ing on existing Japanese companies in the region.

In that sense, Asia can be considered an extension

I think the trend—static domestic market over-of the domestic market. ITOCHU Corporation is ashadowed by the growing markets in Asia—will

trading company that has devoted the most effort

continue for a long time. We want to focus our over-

to expanding its business in China. Business inseas business resources in Asia. We are developing

China is also growing quickly for the major cos-

our global sales strategy with an eye to the future

metics manufacturer with which we have a history

with a focus on Southeast Asia, where we seeof close business relations such as making its group

growth potential by leveraging the overseas net-

leasing company into a subsidiary, and for the major

works of our major shareholders.

Taiwanese company that owns part of our joint ven-In the China market, for the moment we haveture company. We are striving to become the top

been focusing only on those Japanese companies

leasing business in China by cooperating closelywith an existing business base. However, we arewith ITOCHU Corporation and these companies

already finding it difficult to cover their needs, aswith which we have close ties.

Q

What are your thoughts on profit distributions to shareholders?

A

First of all, we are striving for stable dividends with a 20% payout ratio. In fiscal 2009,
it will be 28 yen/share.

Before the merger, both companies were aiming

past 11 years. Both companies before the merger

for a 20% dividend payout ratio, and Century Tokyo

continued to increase their dividends until the prior

Leasing also wants to continue paying the same

fiscal year. However, in fiscal 2009, taking the cur-level of stable dividends. The former Century

rent economic conditions and industry environment

Leasing System managed to increase its consoli-

into consideration, we are basically considering pay-

dated dividends from the time of its listing in

ing the same amount as in fiscal 2008, at 28 yen

September 2003 to the previous year. The former

per share.

Q

Please give your message to all shareholders and investors.

A

Especially in this harsh business environment with a shrinking lease market, wemust change our ways of doing business, and Century Tokyo Leasing is in a position where we can do that.

I think 40% of business management is about being

into something new. Furthermore, we have theprepared when the unexpected occurs, but thehuman resources, fund-procurement capacity, andremaining 60% should be dedicated to the genera-

customer base that enables us to do these things.

tion of ingenious ideas of how to pioneer the next

Leasing companies are maintaining their strength

business era. Among the Japanese financial sector,

and are relatively free from financial regulations. I

our company is placed in a very favorable position,

hope all stakeholders will understand that we are aand we can be very hopeful for our future. New lease

company that possess sufficient business resources

accounting standards are having an impact, and theand we are able to flexibly adapt to the coming age

entire industry has slowly shrunk over the past two

full of changes and I would like to ask for your con-years. But exactly because we are living in this age,tinued support.

Century Tokyo Leasing Corporation Annual Report 2009

Tokyo Leasing has increased its dividends for the

we must have the energy to transform ourselves11At a Glance

Leasing Business
Breakdown of Sales
Revenues by Business Domain

78.6%

Revenues
Millions of yen

80,000600,000

60,000400,000

40,000200,000

20,000005/3 06/3 07/3 08/3 09/3

CLS

Century Tokyo Leasing Corporation Annual Report 2009

Millions of yen

800,000

0

Sales Revenues = Revenues - Costs(excluding cost of funds)

Sales Revenues/Operating Income

05/3 06/3 07/3 08/3 09/3

Sales Revenues
Operating Income

TLC

Revenues do not include inter-segment transaction.

CLS

TLC

Figures include inter-segment transactions
and operating costs.

Business Description and Basic Strategy

Major Products and Services

The Leasing Business provides various lease transactions, rental transactions, and transactions to sell assets for which the contract expired, for facilities and equipment
customers use in their business activities, such as information and office equipment,
industrial machinery and machine tools, and construction machinery. We have focusedon information and communication equipment leasing, including through the transformation of Fujitsu Leasing Co., Ltd., into a consolidated subsidiary on July 2008. In recent
years, we have strengthened our operating leases business, for which there is a growing need, and are working to build up solid operating assets.

• Finance leases• Operating leases• Real-estate leases• Auto leases• Carbon offset leases• Rental• Sale of end-of-lease assets orrental assets for which thecontract expired

Installment Sales Business
Breakdown of Sales
Revenues by Business Domain

9.1%

Revenues

Sales Revenues/Operating Income
Millions of yen

Millions of yen

150,000

10,0007,500

100,000
5,000
50,0002,500
0CLSSales Revenues = Revenues - Costs(excluding cost of funds)

12

05/3 06/3 07/3 08/3 09/3
TLC

Revenues do not include inter-segment transaction.

0

05/3 06/3 07/3 08/3 09/3

Sales Revenues
Operating Income

CLS

TLC

Figures include inter-segment transactions
and operating costs.

Business Description and Basic Strategy

Major Products and Services

The Installment Sales Business provides installment sales transactions by purchasing
facilities and equipment that the customer selects, and sells those assets back to thecustomer via long-term installment payments. Unlike lease transactions, this businessmeets the needs of customers who wish to own assets, with a focus on construction
machinery, commercial facilities, and building accessory equipment.

• Installment sales

Loan Business

8.9%

Revenues

Millions of yen

Millions of yen

8,000

8,000

6,000

6,000

4,000

4,000

2,000

2,000

0

0

05/3 06/3 07/3 08/3 09/3

CLS

Sales Revenues = Revenues - Costs(excluding cost of funds)

Sales Revenues/Operating Income

05/3 06/3 07/3 08/3 09/3

Sales Revenues
Operating Income

TLC

Revenues do not include inter-segment transaction.

CLS

TLC

Figures include inter-segment transactions
and operating costs.

Business Description and Basic Strategy

Major Products and Services

The Loan Business provides customers with financing for capital investment funds andoperating funds, and undertakes the factoring of receivables. Through a specializedorganization focused on finance, we are building up high quality assets based on prudent risk assessment while we accurately grasp finance needs, which have become
increasingly diverse over the years.

• Business loans• Real-estate financing• Ship financing• Project financing• Factoring• Guarantee services for receivables• Speedy liquidation of medical
treatment fees receivables

Other Businesses
Breakdown of Sales
Revenues by Business Domain

3.4%

Revenues

Sales Revenues/Operating Income
Millions of yen

Millions of yen

20,000Century Tokyo Leasing Corporation Annual Report 2009

Breakdown of Sales
Revenues by Business Domain

5,000
4,000

15,0003,000
10,000
2,000
5,000
0
CLS

Sales Revenues = Revenues - Costs(excluding cost of funds)

1,000

05/3 06/3 07/3 08/3 09/3
TLC

Revenues do not include inter-segment transaction.

0

05/3 06/3 07/3 08/3 09/3

Sales Revenues
Operating Income

CLS

TLC

Figures include inter-segment transactions
and operating costs.

Business Description and Basic Strategy

Major Products and Services

We are diversifying our revenue sources through Other Businesses, which include investment in various securitized products backed by real estate and other assets, and guarantee
services covering loans and movable assets. The Other Businesses also include commission transactions, such as entrusted management of movable assets focused on
vehicles, sales of investment products (e.g., aircraft operating leases) and the life insurance agency business. In the guarantee business, we are striving to expand business
opportunities by maximizing the utilization of our know-how regarding the handling of“tangible assets,” which we have cultivated in its leasing business.

• Commercial investment activities
such as equity participation in
partnerships• Guarantee business• Entrusted management service formovable assets• Origination and sale of investment
products (e.g., aircraft operatingleases)• Insurance agency

13

Segment Information

Business Environment:dle of the fiscal year. Furthermore, the temporary

In the first half of fiscal 2008, the Japanese econ-

spike in the issuance rate of commercial paper

omy experienced continued pressure on corporate

added to the downward spiral. Thus, from a fund-profits due to high oil and raw materials prices, anding perspective, costs rose, and from an investment

since the second half, corporate earnings further

perspective, leasing rates declined.

plummeted, causing the onset of grave recession,

The number of domestic company bankruptcies

as a result of the debacle taking place in the global

increased 16.8% year on year to 13,200 for the third

financial markets, and large fluctuations in stock

consecutive fiscal year in a row, and their total lia-

and foreign exchange markets due to the credit

bilities grew 147.1% year on year to ¥13.67 trillion.
In this way, the leasing industry faced a very

crunch triggered by the subprime loan crisis.
In the leasing industry, an increasing number ofharsh business environment, with stagnant capitalcompanies started to curtail their capital investment

investment, interest rate trends, a rapidly deterio-along with the deteriorating economic sentiment, andrating financial environment since autumn last year,

the new Accounting Standard for Lease Transactions

and an increase in company bankruptcies.

Century Tokyo Leasing Corporation Annual Report 2009that had taken effect led to a decrease in leasing capital investment by 14.2% year on year to ¥5.44 trillion.

Under these conditions, we are rebuilding our

The industry’s business environment is severe, shown

business to be competitive on a global basis andby the consecutive year-on-year decrease in leasing

advancing our business size expansion to strength-

capital investment since June 2007.

en our sales base for greater earnings foundation,

For interest rate trends, short term interest rates

which leads to improved corporate value and max-

were flat until the end of last year. Meanwhile, long

imization of shareholder value. Taking these factors

term interest rates, which are indices for invest-

into consideration, Century Leasing System, Inc.

ment returns over our business, rose at the start of(CLS) and Tokyo Leasing Co., Ltd. (TLC) signed a

the fiscal year, but declined thereafter. The earn-merger agreement on January 23, 2009, andings environment has been seriously damaged frommerged on April 1, 2009.

the malfunctioning financial markets since the mid-

Lease Capital Investment & Interest Rate Trends
Lease Capital Investment
Trillions of yen

Company Bankruptcies

Interest Rate Trends

Number of Bankruptcies

%

%

10

10

8

8

Bankruptcies

1.5

15,00012,000
1.2

6

6

4

4

2

2

9,000
0.9

6,000

3,000
0.6

0

0

04

05

06

07

08 FY

Lease Capital Investment［left axis］
Lease Ratio(Lease Capital Investment/Private
Capital Investment)［right axis］
Source: Japan Leasing Association

14

0

08/3

08/6

08/9 08/12 09/3

5-year Amortizing Swap
3-month TIBOR

Source: Japan Leasing Association

0

06

07

08

FY

Number of Bankruptcies with Liabilities ≧ ¥10billion
Number of Bankruptcies with Liabilities ≧ ¥100million < ¥10billion
Number of Bankruptcies with Liabilities < ¥100million
Source: Teikoku DatabankFormerly CLSof operating assets was ¥727 billion, down 0.5%

Review of Fiscal 2008 results:

compared with the end of the previous accounting

Fiscal 2008 was the last year of the three-year medi-

period. Regarding profit and loss, total revenues

um-term plan, NC-Plan III, and we continued to work

declined 13.2% year on year to ¥266.7 billion, oper-

vigorously on the three reforms of reforming mar-ating income declined 3.7% year on year to ¥8.5

keting competency, transforming the financial

billion, and net income declined 8.8% to ¥5.9 bil-

structure, and revitalizing the management system.

lion. Information on segments is as follows.

our basic policy: expand business from our core busi-

Leasing Business:

ness, innovate, and advance strategic allocations.

In the leasing business, the value of new contracts

In our endeavors in reforming marketing com-

executed declined 3.4% year on year to ¥208.1 bil-petency, we concentrated our efforts on our corelion, while the balance of leased assets was ¥545

business of leasing and installment sales.

billion, down 0.2% compared with the end of theSpecifically, we worked to expand our operating

previous accounting period. Total revenues declined

lease transactions, as there were increasing cus-

12.0% year on year to ¥222.1 billion, impacted bytomer needs due to the new Accounting Standard

the sale of securitized lease receivables, but oper-

for Lease Transactions. Moreover, for overseas

ating income grew 1.8% year on year to ¥11.5

business, which is one of the advance strategic allo-

billion, partly due to recording earnings by the inter-cations earmarked as the pillar of our future

est method owing to the application of the new

earnings, we were able to greatly expand the trans-

Accounting Standard for Lease Transactions.

action volume as a result of working closely withthe domestic sales divisions in addition to the

Installment Sales Business:enhanced information gathering and sales capabil-

In the installment sales business, the value of newities in our subsidiary in China.

contracts executed declined 50.8% year on year toRegarding the second item for reform, the trans-¥22.9 billion. The balance of installment sales receiv-

formation of the financial structure, since theables was ¥87.9 billion, down 15.8% compared withbankruptcy of a major U.S. financial institution last

the end of the previous accounting period. This result-autumn, the ensuing dramatic shift in the Japanese

ed in a 21.3% year-on-year decrease in total revenues

economic environment due to the credit crunch

to ¥40.6 billion, and operating income decreased

made it difficult to raise funds. In particular, the cor-

79.8% year on year to ¥0.1 billion.

Century Tokyo Leasing Corporation Annual Report 2009

These are highlighted by the three key themes ofporate bond and commercial paper markets
temporarily stopped functioning effectively, andLoan Business:interest rates to raise short term funds surged.

In the loan business, the value of new contracts

Under these conditions, we are executing ALM

executed increased 9.2% year on year to ¥77.9 bil-(Asset Liability Management) flexibly and are forti-

lion, while the balance of loans outstanding stood atfying our financial base and holding down costs of¥88.3 billion, up 14.0% compared with the end offunding to properly manage fund procurement andthe previous accounting period. This resulted in a

investment activities.

15.8% year-on-year rise in total revenues to ¥2.2

To revitalize the management system, we imple-

billion, but operating income declined 18.3% year

mented effective and efficient operation of the internal

on year to ¥0.2 billion, partly due to higher selling,

control system, established the Risk Management

general and administrative expenses.

Department and the Risk Management Committee,
and built a system to understand, measure and con-

Other Businesses:

trol risk company-wide, thereby bolstering our

The value of new contracts executed in other busi-

management foundation.

nesses leapt to ¥3.9 billion year on year, and the

The value of new contracts executed declined

balance of assets grew to ¥5.6 billion, up 128.9%

6.2% year on year to ¥312.9 billion, and the balancecompared with the end of the previous accounting

15

Segment Information

period. Total revenues grew 35.5% year on year toFormerly TLC¥1.7 billion, due to increase in sales transactions ofReview of Fiscal 2008 Results:

products, but operating income decreased 17.4%

Tokyo Leasing Group is striving to rapidly respondyear on year to ¥0.2 billion.

to changes in the business environment and establish a strong business foundation.

Century Tokyo Leasing Corporation Annual Report 2009

Business Topics:

In the leasing and installment businesses, we“Refurbishing Business of Used PCs, etc.”

are utilizing diverse sales channels to establish an

We focus on asset value, which is the basis for aearnings base. We acquired the shares of Fujitsu

leasing company. We are striving to expand our

Leasing Co., Ltd. from all its shareholders except

refurbishment business which deletes data andFujitsu Limited, raising our equity stake fromresells end-of-lease used PCs, etc. This business

27.5% to 77.5% (currently 80%), and changed its

is undertaken by our wholly owned subsidiary, C-

status from affiliated company accounted for by

TRY Inc., which has obtained the ISO 27001

the equity-method to a consolidated subsidiary.

(Information Security Management System) andThis further reinforced our cooperative relationshipISO 14001 (Environmental Management System)with Fujitsu Group, creating a stronger businesscertifications. Our refurbishment business has

foundation in the information equipment leasing

earned strong support from customers for imple-

field, and a more robust organization for greater

menting countermeasures against data leakage andconsolidated earnings.

also for its contribution to environmental conser-

Furthermore, our wholly owned subsidiary,

vation, selling 73,000 units in the fiscal year ended

Tokyo Auto Leasing Co., Ltd. was instrumental in

March 2009.

building our environmentally friendly business andproduct development through the auto leasing business. This includes the launch of Carbon Offset Auto
Leasing Scheme, which takes advantage of CO2
emissions amount that have already been reduced.
In the finance operations, we exercised risk
judgment corresponding to the financial environment, and worked to raise our minimum earnings byseeking highly profitable, high-quality projects.
In overseas business, we expanded our network with a focus on Asia through taking suchinitiatives, for example, we increased our equity
stake in subsidiary in Thailand and opened a branchthrough our subsidiary in China, etc.
As a result, the value of new contracts executed grew 2.3% year on year to ¥519.8 billion, andthe balance of operating assets was ¥1,372.9 billion, up 19.3% compared with the end of theprevious accounting period. In profit and loss, total
revenues rose 9.4% year on year to ¥476.2 billion,
operating income declined 2.2% year on year to¥12.3 billion, and net income declined 39.4% year
on year to ¥4.0 billion. Information on segments is
as follows.

16

Leasing Business:

Other Businesses:

In the leasing business, partly as a result of con-

The value of new contracts executed in other busi-

verting Fujitsu Leasing Co., Ltd. into a consolidated

nesses grew 84.8% year on year to ¥25.9 billion,

subsidiary, the value of new contracts executedand the balance of assets grew to ¥52.4 billion, up

grew 23.6% year on year to ¥312.6 billion, while the

40.6% compared with the end of the previous

balance of leased assets was ¥991.4 billion, up

accounting period. Total revenues also rose 4.5%

25.4% compared with the end of the previous

year on year to ¥10.2 billion, but operating income

accounting period. Total revenues also rose 14.1%

decreased 50.2% year on year to ¥0.8 billion, on

year on year to ¥391.6 billion, and operating income

worsening investment business results.

grew 9.0% year on year to ¥13.6 billion, due to theeffects of transforming Fujitsu Leasing Co., Ltd.,Business Topics:

into a consolidated subsidiary, and the switch to the“Branch Opened in Guangzhou City,

interest method to record earnings owing to the

Guangdong Province, China”

new Accounting Standard for Lease Transactions.

As part of our global business expansion which isInstallment Sales Business:

owned subsidiary TOZUI CORPORATION estab-In the installment sales business, the value of newlished a branch in Guangzhou City, Guangdong

contracts executed declined 38.1% year on year to

Province, China in March 2009. This further broad-¥55.7 billion, partly due to change in business clas-ens our network of overseas business focused onsification for ownership-transfer finance lease

the Asian region and it meets diverse finance needs

transactions from installment sales business to leas-of customers, which include building their overseas

ing business. The balance of installment sales

business strategies and constructing overseas pro-

receivables was ¥155.7 billion, down 4.7% com-duction sites, enabling us to provide a wider range

pared with the end of the previous accountingof services.

period. Total revenues decreased 10.4% year on
year to ¥69.1 billion, but operating income grew203.2% year on year to ¥1.6 billion, partly due to adecrease in the allowance for doubtful accounts.

Century Tokyo Leasing Corporation Annual Report 2009

one of our areas of strategic concentration, our fully

Loan Business:
In the loan business, the value of new contracts
executed decreased 16.9% year on year to ¥125.4
billion, while the balance of loans outstanding was¥173.2 billion, up 8.5% compared with the end of
the previous accounting period, partly due to growth
in loans for ship and real estate related financing.
Total revenues also rose 1.5% year on year to ¥5.1
billion, due to an increase in interest revenue on theback of growth in operating assets and operating
income declined 75.8% year on year to ¥0.5 billion,
partly due to a higher allowance for doubtful
accounts.

17

CSR

Basic Policy for CSR Management

to further strengthen our environmental business,

Century Tokyo Leasing Group aims to fulfill thewe obtained an emissions allowance and examined

expectations and earn the trust of all its stakehold-the possibilities of providing environmentally friend-

ers, including customers, shareholders, employees,

ly services to our customers. In addition, weand the local community. In order to fulfill our social

launched the carbon offset auto leasing scheme inresponsibilities as a company, we will continually

July 2008 by using the emissions allowance.

pursue sustainable growth by implementing CSR man-This scheme helps to mitigate the CO2 emis-

agement focused on environmental preservation

sions discharged by our customers through theactivities, social contribution activities, and risk man-utilization of our emissions allowance against theagement.

leased vehicles. As our first business deal, we
signed a carbon offset auto leasing contract with aEfforts in CSR Activities

major pharmaceutical company that will offset up

Environmental Initiatives

to 30,000 metric tons of CO2 over a period of about

Carbon Offset* Auto Leasing Scheme

5 years. This will be our first ever large-scale, car-

We aim to contribute to the global environmental

bon offset contract at the 10,000 metric ton level.

protection by advancing various schemes regard-*Carbon offset:
A mechanism utilizing emissions volume reduced in other areas
to offset CO2 (carbon dioxide) emissions that which cannot be
cut down by direct measures in business activities.

ing environmental businesses such as providing
project finance to wind-power generation busiCentury Tokyo Leasing Corporation Annual Report 2009nesses and promoting a switch to fuel efficient or
low-emission vehicles in auto leases. In an effort

The Mechanism of Carbon Offset Auto Leasing Scheme[1] Carbon Offset Auto Leasing Contract

Tokyo Auto
Leasing Co., Ltd.

[2] Payment of Leasing Fee

Customer

Payment CO2 Emissions Fee[6] Completion of CO2
Emissions Offset[5] Issue “CO2 Emissions Offset Report”[3] Calculation and Report of
CO2 Emissions

Century Tokyo
Leasing
Corporation

Century Tokyo
Leasing
Corporation
CO2 Equivalent Quota
Management
Account(Equivalent to 150,000 metric tons of CO2)

18

Japanese
Government[4] Offset CO2 Emissions
against CTL CO2 Equivalent Quota

CO2 Equivalent Quota
Management
Account

Project Finance for Wind-Power Generation

Initiatives for the Next-Generation

Businesses

Support Program

Since 2002, the Group has been ahead of other

Concerning the topic of work-life balance, which

companies in project finance for wind-power gen-has become a source of social concern in recent

eration businesses. This is a non-recourse loan

years, we have been promoting a work environ-

finance scheme, with revenues from electricity

ment that achieves a balance between work andsales in the wind-power generation project as thehome life. So far, we have implemented measures

only source for repayments. As of the end of March

to improve our childcare leave system and intro-

2009, we have financed 13 business locations, withduced a new registration system for retirees

a loan balance of about 6 billion yen, the largest inseeking reemployment.

our industry. The new energies environmental sec-

In 2007, based on the Act on Advancement of

tor is expected to see further growth. Therefore,

Measures to Support Raising Next-Generation

based on the know-how cultivated through our richChildren, we also obtained certification as a com-experience, we may begin initiatives in solar ener-

pany that is active in the next-generation support

gy power generation projects and natural energy

program. This certification is obtained by meeting

projects.

certain standards stipulated in that law. For example, factors concerning the set up of an employment
environment that is conducive to work-life balancesidered as criteria for approval. In
order to support employees giving
birth and raising children, we areworking to further improve thechildcare leave system.

Mechanism of Project Finance for Wind-Power Generation Businesses

Project Finance(Loan)

CustomerSale of Electricity

Revenues

ElectricPower
Company
etc.

Repayment

Next-Generation
Certification Logo
(Kurumin)Century Tokyo Leasing Corporation Annual Report 2009

and the acquisition rate of childcare leave are con-

Century Tokyo
Leasing
Corporation

Dividends

Sponsors etc.

19Corporate GovernanceCentury Tokyo Leasing Corporation Annual Report 2009

Corporate Governance

The Inspection Office, which directly reports tocorporate value, it recognizes that effective func-

the President, is in charge of internal audits. The

tioning of corporate governance is an important

Inspection Office consists of a total of nine persons,management issue. To this end, we are working tothe office head and eight members of the office. It

achieve a sound and highly transparent manage-

performs internal audits based on the audit plan

ment system that enables speedy and precise

approved at the Management Meeting. If there arecorporate decision making in response to changes

problem items, it provides guidance and correctionin the business environment. Furthermore, in order

recommendations to the audited department, work-

to improve management transparency, we areing to effectively implement internal audits. It also

working to provide timely and proper information

reports audit results to the President (at thedisclosure to all stakeholders.

Management Meeting) and the Board of Directors.

Board of Directors and Executive Officers

Management Meeting

The Board of Directors consists of eight directors

We established the Management Meeting, whichand supervises the execution of operations by

is attended by the President and officers appoint-

Directors and Executive Officers. Moreover, it delib-

ed by the President, who chairs the meeting. It

erates on and decides management policy,

deliberates on particularly important matters con-management strategies, business plans, and othercerning the execution of operations and makes

important issues associated with the management

decisions for the entire Group.

of Century Tokyo Leasing and its Group companies
as well as matters specified by prevailing laws, reg-Internal Control Systemulations, articles of incorporation, and rules governing

We have established the following Management

the Board of Directors. Furthermore, with the aim

Philosophy. Every manager and employee is expect-of making faster resolutions on management strat-

ed to refer to this philosophy as a basic policy for

egy and of further strengthening the supervisory

executing operations.

structure and the structure for executing operations,
we introduced an executive officer system.

Management Philosophy“Century Tokyo Leasing Group will grow alongside

Supervisory Structure

its customers and contribute to society as a com-

Century Tokyo Leasing has adopted the organiza-

prehensive financial services enterprise thattional structure of a Company with Auditors. It

continually challenges itself.”maintains a Board of Corporate Auditors that con-

We have an internal control system guided bysists of seven corporate auditors (two of themthis Management Philosophy, recognizing that the

full-time corporate auditors), six of whom are out-

establishment and operation of a system for ensur-

side corporate auditors. The Board of Corporate

ing the appropriate execution of operations is a vital

Auditors strives to fulfill its responsibility by thor-

managerial responsibility of the corporation.

oughly conducting fair audits of compliance and theWe also established the Internal Control

appropriateness of corporate activity, starting with

Committee for the effective functioning of the inter-

operations executed by Directors and Executive

nal control system. This committee is chaired by

Officers by holding regular meetings and main-

the officer in charge of the Internal Control Office.

taining the independence of its auditing activities.

It deliberates on the overall internal control system,

Corporate Auditors attend the Board of Directors

including evaluation of the effectiveness and scope

Meeting as well as other important meetings, suchof evaluation for financial reporting internal controls,

as the Management Meeting and meetings of prin-

and then reports to the Management Meeting.

cipal committees, etc. They also execute audits of
Directors and Executive Officers, their responsibilities, and the progress made in improvements and20

management of the internal control system.

In order for Century Tokyo Leasing to maximize its

various risks, according to the potential scale andWe recognize that thorough compliance is essen-

probability of their occurrence.

tial for the continued existence of a corporation.

For credit risks, we established the Credit Risk

Therefore, we aim to establish a management sys-

Management Committee. Moreover, we determine

tem that ensures that every employee andbasic policy as well as measures and controls for

manager operates under the principle of fairness

credit risk based on the committee’s rules. Further,and with the highest ethical standards to earn thewe established the Project Examination Meeting

trust of society.

for large projects and matters requiring complex

The chief compliance officer and the Compliancejudgment, such as projects with new schemes, andOffice of the Business Risks Management Division

the project is examined and approved based on that

promote compliance activities, including education

meeting’s rules. For liquidity risks related to fundand training based on the Compliance Program. All

procurement and market risks such as interest rate

employees and managers understand the spirit ofchanges, we established the ALM Committee,

compliance from the Compliance Manual as ourwhich exercises comprehensive management forcode of business conduct to maintain and enhanceinvestment and the raising of funds, based on thata fair and transparent corporate culture. In addition,committee’s rules. Information systems security

we established several contacts including an exter-and information security risks are managed based

nal law office, with whom employees can consult

on our Information Security Basic Policy, Handlingon compliance issues and to whom they can pro-of Personal Information Rules, ISO 27001, etc. For

vide information on fraudulent actions and practices.

operational risks such as clerical risks and legal risks,

Consequently, we operate a whistle-blowing sys-

the Comprehensive Risk Management Department

tem that strictly protects informers. We aredetects and quantifies risks and reviews response

fundamentally prepared to act in a systematic andmeasures. In addition, the Comprehensive Risk

resolute way against any improper demands madeManagement Committee comprehensively exam-

by antisocial forces, and we will sever any relations

ines the overall control of the company’s risks andwith antisocial forces.

our system, policy, and measures concerning risk
management, based on that committee’s rules. This

Risk Management

committee is also set up to immediately respond in

To minimize risks of loss, we systematicallythe event of a large disaster or other crisis.

Century Tokyo Leasing Corporation Annual Report 2009

Complianceimplement appropriate preventive measures for

System of corporate governance and internal control June 17, 2009
Shareholders’ Meeting

Election/Dismissal

Election/Dismissal

Election/Dismissal
Auditors(Board of Auditors)

Coordination

Audit

Coordination

Board of Directors

Company’sCounsel

Audit
Election/Dismissal/Supervision

Audit

Coordination

Coordination
執行機関

Independent
Auditor

Audit
Division

ReportAppointment
President & CEO
ReportAudit
Internal
Audit

Business Risks Management Division
Chief Compliance Officer

Executive Committee
Direction/
Supervision
Executive Officers
Sales Divisions/Operation Divisions
Group Companies

Project Screening Committee
Election/Dismissal/Supervision
Evaluation
Internal Control
Division

Committees
ALM Committee, Comprehensive
Risk Management Committee Etc.
Internal Control Committee21

Management
As of June 17, 2009

BOARD OF DIRECTORSCORPORATE AUDITORS

Chairman & Co-CEO, Representative Director

Standing Corporate Auditors

Takao Arai

Yukio Sekiguchi

President & CEO, Representative Director

Shunichi Asada
Deputy President, Representative Directors

Mikio Nishimura*
Corporate Auditors

Shigekazu Matsui*

Masahiro Nakagawa

Masahiko Sumida*

Koichi Nakajima

Syunsuke Wada*
Tetsurou Ito*

Director and Managing Executive Officers

Osamu Saito*

Hideo Kondou*External

Akihiko Nishimura
Tsuneichiro Masaki
Director

Century Tokyo Leasing Corporation Annual Report 2009

Makoto Nogami

EXECUTIVE OFFICERS
Deputy President, Executive Officer

Executive Officers

Koei Yamashiro

Mikio Hoshino

Senior Managing Executive Officers

Tadashi Kawashima

Mitsutaka Ohshima

Takashi Asakura

Eiji Hara
Koichiro Izutsu

Managing Executive Officers

Michio Ito
Yoshitaka Takemura
Yoshiyuki Toyoda
You Oohinata
Takeshi Honda
Yuichiro Ikeda
Toshiharu Akaishi
Osamu Oike
Hiroshi Fukushima
Masao Mizuno
Kazuaki Takada

22

Masuo Suzuki

Yoshihiko Morimoto
Masami Tsuboi
Shuichi Sato
Atsuhiko Iwatake
Shinichi Douzoe
Takashi Muramatsu
Hidenori Fujimori
Hidenori Yamada
Masahiko Shishido
Yasuo Mori
Masatatsu Shimazu
Kenji Murai

Financial Section

TLC

CLS/TLC

Formerly Century Leasing System

Formerly Tokyo Leasing Co., Ltd.

Five-Year Summary

Five-Year Summary

24

25Management’s Discussion andAnalysis

Management’s Discussion andAnalysis

Fiscal 2009 Outlook
Business and Other Risks

26

29

32

Consolidated Balance Sheets

Consolidated Balance Sheets

34

54

Consolidated Statements of Income

Consolidated Statements ofOperations

36

Formerly Century Leasing System
Formerly Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation Annual Report 2009

CLS

56

Consolidated Statements of
Changes in Net Assets

Consolidated Statements of
Changes in Net Assets

37

57

Consolidated Statements ofCash Flows

Consolidated Statements ofCash Flows

38

58

Notes to Consolidated Financial
Statements

Notes to Consolidated Financial
Statements

39

59

Report of Independent Auditors

Report of Independent Auditors

53

71
23

CLS

Five-Year Summary
Formerly Century Leasing System, Inc. and Consolidated Subsidiaries
Years ended March 31

Formerly Century Leasing System, Inc.

Century Tokyo Leasing Corporation Annual Report 2009

Millions of yen

Operating Results
Revenues
Leasing
Installment sales
Other businesses
Costs
Leasing
Installment sales
Other businesses
Cost of funds
Gross profit on revenues
Sales revenues (Gross profit on revenues
before deducting cost of funds)
SG&A expenses
Personnel and non-personnel expenses (Note 1)
Bad debt expenses
Operating income
Ordinary income (Income before
extraordinary items and income taxes)
Extraordinary gains (losses)
Net income (loss)
Financial Condition
Total assets
Operating assets
Leasing
Installment sales (after deducting
deferred profit on installment sales)
Other businesses
Uncollectible receivables (bad debts after
allowance for doubtful accounts)
Interest-bearing debt
EquityCash FlowsNet cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Cash and cash equivalents at end of year
Per Share Data
Net income (loss)
Net assets
Dividends (non-consolidated)
Major Ratios
Return on equity (ROE)
Return on assets (ROA)
Equity ratio
Overhead ratio

2005

2006

2007

2008

2009

¥ 333,830
269,676
62,114
2,040
311,547
245,80358,842995
5,907
22,283¥ 307,057
255,124
49,2382,695
285,839
233,501
46,282
1,480
4,576
21,218¥ 302,850
251,792
48,0383,020
282,886
231,336
45,026
1,290
5,234
19,964¥ 307,177
252,359
51,596
3,222
287,494
232,200
47,880842
6,572
19,683¥ 266,730
222,129
40,621
3,980
245,552
199,31437,4901,282
7,466
21,17828,19011,723
11,723—
10,55925,794
10,554
10,53915
10,66325,198
9,857
9,377
480
10,107

26,255
10,848
9,068
1,779
8,835

28,644
12,667
8,831
3,836
8,510

10,256352
6,158

11,524(15)
7,202

11,713392
7,586

10,215
(87)
6,532

9,871
(895)
5,958

¥ 745,934
691,874
567,445¥ 750,125694,338
541,863¥ 791,640
729,310556,160¥ 800,925
730,616
546,143¥ 845,950
727,086
545,067

94,657
29,771

93,89758,576

106,052
67,097

104,461
80,00987,99394,025

667
625,752
42,197410
631,162
50,308307
657,346
54,812

1,385
661,971
57,467

4,714
690,653
60,573¥

11,648612(13,911)
7,751¥(57,094)
18,56936,687
5,563¥(25,357)(116)
26,1616,251

1,641(3,473)
3,429
7,849

¥

(5,544)(2,282)
67,497
67,387
Yen

¥

117.4
808.7
17.5

15.6%
1.4%
5.7%
52.6%

¥

137.2
964.2
20.0

15.6%
1.5%
6.7%
49.7%

¥

145.5
1,051.5
22.0

14.4%
1.5%
6.9%
47.0%

Revenues do not include internal revenues or transfers between segments.
ROE = Net income / Equity (simple average of beginning and end of term balance sheet figures) X 100
ROA = Ordinary income / Total assets (simple average of beginning and end of term balance sheet figures) X 100
Overhead ratio = (Personnel expenses+Non-personnel expenses (Note 2)) / Gross profit on revenues X 100
Note 1: Non-personnel expenses include amortization of goodwill.
Note 2: The figures of the loan business after the fiscal year ended March 2008 are combined with the figures of other businesses.

24

¥

¥

125.3
1,102.5
26.0

11.6%
1.3%
7.2%
46.1%

¥

114.3
1,162.1
28.0

10.1%
1.2%
7.2%
41.7%

TLC

Five-Year Summary
Formerly Tokyo Leasing Co., Ltd. and Consolidated Subsidiaries
Years ended March 31

Financial Condition
Total assets
Operating assets
Leasing
Installment sales (after deducting
deferred profit on installment sales)
Loans
Other businesses
Uncollectible receivables (bad debts after
allowance for doubtful accounts)
Interest-bearing debt
EquityCash FlowsNet cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Cash and cash equivalents at end of year

2005

2006

2007

2008

2009

¥ 395,437
294,888
83,257
3,211
14,080365,816
268,262
78,09057
11,6807,725
29,620¥ 398,052
310,664
74,3633,384
9,638
367,089283,745
69,514
8
7,468
6,353
30,962¥ 451,122359,62978,072
4,078
9,342
415,794
325,067
73,01330
6,394
11,28835,327¥ 435,277
343,191
77,196
5,092
9,796
403,239
310,630
71,42023
6,552
14,61332,037¥ 476,217
391,672
69,133
5,170
10,241
438,130
349,00964,70528
7,813
16,57338,08737,346
16,60715,024
1,583
13,01337,315
15,95815,738219
15,004

46,616
17,346
16,886459
17,981

46,65019,375
17,337
2,037
12,662

54,66125,701
18,823
6,877
12,386

13,383(9,352)
2,912

15,676
4,462
12,847

18,419(14,133)(3,801)

12,144(907)
6,717

12,404(4,337)4,071¥ 1,025,765
921,060
678,244¥ 1,137,472
1,022,711
737,218¥ 1,339,637
1,156,399
823,037¥ 1,289,481
1,150,965
790,563¥ 1,577,849
1,372,929
991,436

152,761
80,6829,371

149,083
117,108
19,300158,170
151,899
23,291

163,398
159,674
37,329155,715
173,277
52,4991,268
885,685
60,014

848
958,810
74,224794
1,177,103
64,8471,073
1,130,439
69,353

4,924
1,363,113
64,614

¥

8,612
1,787
(13,499)
11,514¥(77,926)
4,760
66,001
4,377¥(87,409)(898)
171,267
87,645¥

7,115(10,993)(52,319)
31,477¥

Formerly Tokyo Leasing Co., Ltd.

Operating Results
Revenues
Leasing
Installment sales
Loans
Other businesses
Costs
Leasing
Installment sales
Loans
Other businesses
Cost of funds
Gross profit on revenues
Sales revenues (Gross profit on revenues
before deducting cost of funds)
SG&A expenses
Personnel and non-personnel expenses (Note 1)
Bad debt expenses
Operating income
Ordinary income (Income before
extraordinary items and income taxes)
Extraordinary gains (losses)
Net income (loss)

Century Tokyo Leasing Corporation Annual Report 2009

Millions of yen

42,552(20,794)
49,331
104,293

Per Share Data
Net income (loss)
Net assets
Dividends (non-consolidated)

45.3
935.7
12.0

200.2
1,157.4
18.0(59.3)
1,011.4
22.0

104.8
1,081.7
24.0

63.5
1,007.8
26.0

Major Ratios
Return on equity (ROE)
Return on assets (ROA)
Equity ratio
Overhead ratio

4.9%
1.3%
5.9%
50.7%

19.1%
1.4%
6.5%
50.8%

(5.5%)
1.5%
4.8%
47.8%

10.0%
0.9%
5.4%
54.1%

6.1%
0.9%
4.1%
49.4%

Yen

Revenues do not include internal revenues or transfers between segments.
ROE = Net income / Equity (simple average of beginning and end of term balance sheet figures) X 100
ROA = Ordinary income / Total assets (simple average of beginning and end of term balance sheet figures) X 100
Overhead ratio = (Personnel expenses+Non-personnel expenses (Note 2)) / Gross profit on revenues X 100
Note 1: Non-personnel expenses include amortization of goodwill.

25

CLS

Management’s Discussion and Analysis
Formerly Century Leasing System, Inc. and Consolidated Subsidiaries
Years ended March 31

Gross Profit, Operating Income, Ordinary Income
Gross profit grew ¥1,495 million year on year (7.6%) to¥21,178 million. This was because the application of
the new Accounting Standard for Lease Transactions
resulted in changing the previous method of recording
lease contract related allowance for doubtful accounts
as cost of sales to recording them as selling, generaland administrative expenses, and because the application of the new Accounting Standard for Lease
Transactions resulted in changing the method for recording earnings from the previous lease period straight-line
method to the interest method.
Selling, general and administrative expenses grew
¥1,819 million year on year (16.8%) to ¥12,667 million,
partly due to recording lease contract related allowancefor doubtful accounts. This resulted in the operating
income decreasing by ¥324 million year on year (3.7%)
to ¥8,511 million. Ordinary income also decreased by¥344 million year on year (3.4%) to ¥9,870 million.

Formerly Century Leasing System, Inc.

Century Tokyo Leasing Corporation Annual Report 2009

Overview of Results
The value of new contracts executed in the fiscal year
ended March 2009 was ¥312,957 million (down 6.2%
year on year), and the balance of operating assets was¥727,086 million (down 0.5% as compared with theend of the previous accounting period).
In profit and loss, the total revenues were ¥266,730
million (down 13.2% year on year), partly due to changes
in accounting procedures. Ordinary income was ¥9,870
million (down 3.4% year on year), partly owing toincrease in allowance for doubtful accounts, despite
recording earnings by the interest method with the application of the new Accounting Standard for Lease
Transactions. Net income was ¥5,958 million (down
8.8% year on year), partly due to recording extraordinary losses including valuation loss on investments insecurities.
Results of Operations
Revenues
Total revenues decreased by ¥40,447 million year on
year (down 13.2%) to ¥266,730 million. Viewing by eachsegment, revenues from the leasing business declined¥30,230 million (12.0%) and revenues from the installment sales business declined ¥10,975 million (21.3%).
Revenues from the loan business grew ¥309 million(15.8%), and revenues from other businesses grew
¥449 million (35.5%).
The main causes of these results were the changein accounting treatment of securitization transactions
for lease receivables from loans to sales, and the lackof revenues generated due to mid-contract cancellationand expiration of large-lot accounts that existed during
the previous accounting period.

Net Income
Extraordinary income grew ¥666 million, partly due to gainon sale of receivables resulting from the sales transactions of securitized lease receivables. Extraordinary losses
increased by ¥1,474 million due to increase in valuation
loss on investments in securities, merger related costs,
etc. As a result, income before income taxes and minority interests declined by ¥1,152 million year on year
(11.4%) to ¥8,976 million. Net income declined by ¥574
million year on year (8.8%) to ¥5,958 million.
As a result, ROE declined 1.5 points to 10.1% and
ROA declined by 0.1 points to 1.2%.

Main factors of increase and decrease in net income (consolidated)
Billions of yen

Main income
increase factors
Total ¥1.06 billion

Costs
Sales
revenues

0.24

Main income
decrease factors
Total ¥1.39 billion
Funding
costs

0.89

0.82
Net
incomeCost ofsales
Total
revenues(41.27)(40.45)* Change in allowance for doubtful accounts accrued

26

Allowance Nonfor
operatingdoubtfulincomeaccounts*

0.48(0.02)

Ordinary
income(0.34)

Extraordinary
loss(0.81)(0.57)
Incometax,
etc.

(0.58)

Cost of sales declined, partly due to applicationof new accounting standards, resulting in sales
revenues growing by ¥0.82 billion. Personnel
costs also declined, mainly due to retirement
pension system changes, resulting in costs fallingby ¥0.24 billion. These positive factors combined
to increase income by ¥1.06 billion.
On the other hand, negative factors combined
to reduce income by ¥1.39 billion, due to cost offunds rising by ¥0.89 billion, allowance for doubtful accounts rising by ¥0.48 billion, etc.
As a result, there was a ¥0.34 billion yearon-year decline at the ordinary income level;
extraordinary loss increased by ¥0.81 billion, andnet income decreased by ¥0.57 billion.

CLSod, to ¥727,086 million.
In particular, leased assets decreased by ¥39,253
million due to moving securitized receivables assets off
the balance sheet. On the other hand, they increasedby ¥19,784 million due to reclassifications such asrecording in assets of other companies’ shares in syndicated leases, and increased by ¥18,394 million partly
due to operating activities. As a result, the balance ofleased assets decreased by ¥1,075 million as comparedwith the end of the previous accounting period, to¥545,067 million.

Financial Condition
Total Assets
Total assets grew by ¥45,025 million (5.6%) as compared with the end of the previous accounting period, to¥845,950 million. The main factors for the increase were
the growth in cash and deposits, decrease due to reclassification by the application of the new AccountingStandard for Lease Transactions, and growth in operating assets due to operating activities.
Operating Assets
Value of New Contracts
The value of new contracts executed for the leasing
business declined by ¥7,284 million year on year (3.4%),
and for the installment sales business, they declined by¥23,618 million (50.8%) as compared with the previous
accounting period. On the other hand, the value of newcontracts executed for the loan business grew by¥6,561 million (9.2%), and for other businesses, they
grew by ¥3,791 million. As a result, the total value of
new contracts executed declined by ¥20,549 million
year on year (6.2%) to ¥312,957 million.
Balance of Operating Assets
The balance of operating assets for leased assets
decreased by ¥1,075 million (0.2%), and the balance of
the installment sales receivables decreased by ¥16,468
million (15.8%), as compared with the end of the previous accounting period. The balance of loans outstanding
for the loan business grew by ¥10,819 million (14.0%),
and the balance of assets for other businesses grew by¥3,196 million (128.9%). As a result, the balance of operating assets decreased by ¥3,529 million (0.5%) ascompared with the end of the previous accounting peri-

Total revenues

Balance of operating assets (consolidated)

Millions of yen

Billions of yen

400,000

1,000

300,000

800

729.3
64.4

200,000

600

100,000

400

2.7

730.6
77.5

106.1

104.5

556.2

546.1

Main factors in changesof leased assets

2.5

Securitizedreceivable
assetsmoved offbalance sheet

39.3

Operatingactivities, etc.

18.4

727.1

Formerly Century Leasing System, Inc.

Liabilities
Total liabilities increased by ¥41,953 million (5.6%) ascompared with the end of the previous accounting period, to ¥785,180 million. Of these, end of periodinterest-bearing debt (excluding lease debt) increasedby ¥28,681 million (4.3%) as compared with the end of
the previous accounting period, to ¥690,652 million.
For indirect funding, long-term debt decreased by¥2,060 million (0.7%), while short-term borrowings
increased by ¥6,253 million (5.3%), resulting in total
indirect borrowings increasing by ¥4,193 million (1.0%)
as compared with the end of the previous accounting
period, to ¥417,185 million. In direct funding, commercial papers decreased by ¥15,000 million (7.7%) andCentury Tokyo Leasing Corporation Annual Report 2009

Condition of Bad Debts
In the fiscal year ended March 2009, recessionary typebad debts increased, impacted by the weak economy.
Viewing by each industry, many bad debts arose in thereal estate and construction industries, which were
impacted by the financial crisis, comprising nearly 30%
of bad debts.

5.7

88.4
88.0

19.8
Reclassification
due to changed
accounting
standards

545.1

0

0

07/3

05/3 06/3 07/3 08/3 09/3
Leasing
Loans

Installment sales
Other businesses

Leasing
Loans

08/3

09/3

Installment sales
Other businesses

27

CLS
corporate bonds decreased by ¥4,000 million (27.6%),
while debt payable accompanying securitized receivables increased by ¥43,487 million (109.3%). This
resulted in total direct debt increasing by ¥24,487 million(9.8%) as compared with the end of the previous
accounting period, to ¥273,466 million. As a result, thedirect funding ratio was 39.6%, up 2.0 points as compared with the end of the previous accounting period.

Formerly Century Leasing System, Inc.

Century Tokyo Leasing Corporation Annual Report 2009

Securing Liquidity
In order to secure liquidity, the former Century Leasing
System Group has signed account overdraft agreements
and commitment line agreements with major financial
institutions. We secured sufficient liquidity of funds asof the end of this period, with ¥129,000 million (nonconsolidated basis) of unborrowed balances underaccount overdraft agreements and commitment line
agreements.
Net Assets
Net assets grew by ¥3,072 million (5.3%) as comparedwith the end of the previous accounting period, to¥60,770 million. The main factors in the change werean increase in retained earnings of ¥4,498 million(11.5%), and a decrease in net unrealized gain on available-for-sale securities of ¥1,063 million (96.3%). As aresult, the shareholders’ equity ratio was 7.2%,
unchanged from the end of the previous consolidated
accounting period.

Cash Flow
The end of the period balance of cash and cash equivalents increased by ¥59,538 million as compared withthe end of the previous accounting period, to ¥67,387
million. In cash flows from operating activities, outflow
due to increases and decreases related to lease transactions exceeded the inflow due to decrease ininstallment receivables balance. etc., resulting in ¥5,544
million net cash used. Net cash used in investing activities was ¥2,282 million, partly due to sales andredemptions of investments in securities. We considerably increased fund procurement in order to securesufficient liquidity of funds, resulting in ¥67,497 million
net cash provided by financing activities.
Dividends in Fiscal Year Ended March 2009
Considering that efforts for continual business expansion and stronger corporate foundations lead to greater
corporate value, we are working to enhance internal
reserves to achieve these goals, and our basic policy
toward our shareholders is to return profits on a longterm and stable basis. We will effectively utilize internal
reserve funds, such as allocating funds to purchasegood quality operating assets.
Dividends were raised ¥2 above the previous fiscal
year to ¥28 per share, for five consecutive fiscal yearsof dividend growth since our stock’s listing in 2003.

Total assets andshareholder’s equity ratio

Condition of bad debt (consolidated)
New Bad Debts Composition

Millions of yen

Dividends per share
Yen%

1,000,000

10

800,000

8

600,000

6

Real estate andconstruction

26%

30
25
20

20%

80%

Small and medium
receivables(<¥30 million)

Large receivables(>_¥30 million)

54%

15400,000

4
10

Other
businesses

200,0002

0

0

05/3 06/3 07/3 08/3 09/3
Total assets［left axis］
Shareholder’s equity ratio［right axis］

28

5
0

05/3 06/3 07/3 08/3 09/3
Interim dividend
Fiscal year-end dividend

TLCManagement’s Discussion and Analysis
Formerly Tokyo Leasing Co., Ltd. and Consolidated Subsidiaries

Results of Operations
Revenues
Total revenues increased by ¥40,940 million year on
year (9.4%) to ¥476,217 million, partly as a result of converting Fujitsu Leasing Co., Ltd. into a consolidated
subsidiary. Viewing by each segment, revenues fromthe leasing business grew ¥48,481 (14.1%), but revenues from the installment sales business declined¥8,063 (10.4%). Revenues from the loan business grew
¥78 million (1.5%) and other businesses grew ¥445 million (4.5%).

Formerly Tokyo Leasing Co., Ltd.

Net Income
Extraordinary income decreased by ¥790 million, partly due to lower gain on sale of investments in securities.
Extraordinary losses grew ¥2,641 million, due to recording a ¥2,242 million valuation loss on investments insecurities, the application of the new AccountingStandard for Lease Transactions resulting in the recording of ¥1,300 million provision of allowance for doubtful
accounts against lease investment assets at the beginning of the period, and recording merger related costs,
etc. As a result, income before income taxes and minority interests declined by ¥3,170 million year on year
(28.2%) to ¥8,067 million. Net income declined by

Century Tokyo Leasing Corporation Annual Report 2009

Gross Profit, Operating Income, Ordinary Income
Gross profit grew ¥6,049 million year on year (18.9%) to¥38,087 million. Selling, general and administrative
expenses increased by ¥6,326 year on year (32.6%) to¥25,701 million. Expenses (personnel expenses andnon-personnel expenses) increased by ¥1,485 million(8.6%) to ¥18,823 million, partly as a result of converting Fujitsu Leasing Co., Ltd. into a consolidated
subsidiary. Provision of allowance for doubtful accounts
increased by ¥4,840 million (237.5%) to ¥6,877 million.
This resulted in operating income decreasing by ¥276
million year on year (2.2%) to ¥12,386 million. Ordinary
income increased by ¥260 million year on year (2.1%) to¥12,404 million, partly due to recording foreignexchange gain in non-operating income.

Overview of Results
The value of new contracts executed in the fiscal year
ended March 2009 was ¥519,873 million (up 2.3% year
on year), and the balance of operating assets was¥1,372,929 million (up 19.3% as compared with theend of the previous accounting period).
In profit and loss, the total revenues were ¥476,217
million (up 9.4% year on year). Despite increase inallowance for doubtful accounts, ordinary income was¥12,404 million (up 2.1% year on year), due to higher
profits owing to the application of the new AccountingStandard for Lease Transactions, contribution to earnings by Fujitsu Leasing Co., Ltd., and improved
non-operating income. However, net income was¥4,071 million (down 39.4% year on year) due to a valuation loss on investments in securities, provision ofallowance for doubtful accounts, etc.

Main factors of increase and decrease in net income (consolidated)
Billions of yen
Cost of
sales

34.48

Main income
increase factors
Total ¥7.00 billion
Nonoperating
incomeTotalrevenues

40.94

Sales
revenues

6.46

0.54

Main income
decrease factors
Total ¥6.74 billion
Allowancefordoubtfulaccounts*

Funding
costs

1.96

3.29
Expenses

1.49

Ordinary
income0.26* Change in allowance for doubtful accounts accrued

Extraordinaryloss(3.43)

Incometax,
etc.

(0.53)Net
income(2.65)

Converting Fujitsu Leasing Co., Ltd. into a consolidated subsidiary and other factors increased
sales revenues by ¥6.46 billion. Further, nonoperating income improved by ¥0.54 billion,
partly due to recording foreign exchange gains.
These positive factors combined to increase
income by ¥7 billion.
On the other hand, a combination of negative factors reduced income by ¥6.74 billion, due
to cost of funds rising by ¥1.96 billion, allowancefor doubtful accounts rising by ¥3.29 billion, etc.
As a result, there was a ¥0.26 billion yearon-year increase at the ordinary income level;
extraordinary loss increased by ¥3.43 billion,
and net income decreased by ¥2.65 billion.

29

TLC
(8.5%), partly due to ship and real estate related financing, and the balance of assets for other businesses grewby ¥15,170 million (40.6%). As a result, the balance of
operating assets grew by ¥221,963 million (19.3%) ascompared with the end of the previous accounting period, to ¥1,372,929 million.
In particular, leased assets decreased by ¥56,662
million due to moving securitized receivable assets off
the balance sheet. On the other hand, they increased by¥54,570 million due to changes in accounting standards,
and increased by ¥202,965 million due to converting
Fujitsu Leasing Co., Ltd. into a consolidated subsidiary,etc. As a result, the balance of leased operating assets
grew by ¥200,873 million as compared with the end of
the previous accounting period, to ¥991,436 million.

¥2,646 million year on year (39.4%) to ¥4,071 million.
As a result, ROE declined 3.9 points to 6.1% and
ROA remained the same as the previous fiscal year, at
0.9%.

Formerly Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation Annual Report 2009

Financial Condition
Total Assets
Total assets grew by ¥288,367 million (22.4%) as compared with the end of the previous accounting period, to¥1,577,849 million. The main factors for the increase
were converting Fujitsu Leasing Co., Ltd. into a consolidated subsidiary, in addition to growth in cash anddeposits resulting from efforts to secure the liquidity offunds in response to the recent financial conditions.
Operating Assets
Value of New Contracts
The value of new contracts executed for the leasing
business grew by ¥59,757 million year on year (23.6%).
On the other hand, the value of new contracts executed for the installment sales business declined by¥34,412 million (38.1%), and for the loan business, by¥25,544 million (16.9%). In other businesses, the valueof new contracts executed grew by ¥11,896 million(84.8%). As a result, the total value of new contracts
executed grew by ¥11,697 million year on year (2.3%)
to ¥519,873 million.

Condition of Bad Debts
The real estate and construction industries comprise
40% of all bad debts. Bad debts of real estate finance for
new developers were especially prominent.
Liabilities
Total liabilities increased by ¥285,618 million (23.4%) ascompared with the end of the previous accounting period, to ¥1,505,398 million. Of these, the end of periodinterest-bearing debt (excluding lease debt) increased by¥232,674 million (20.6%) as compared with the end of
the previous accounting period, to ¥1,363,113 million.
For indirect funding, partly due to converting Fujitsu
Leasing Co., Ltd. into a consolidated subsidiary, longterm debt increased by ¥288,402 million (58.4%), andshort-term borrowings increased by ¥21,886 million(10.4%), resulting in the total indirect borrowings
increasing by ¥310,289 million (44.0%) as comparedwith the end of the previous accounting period, toBalance of Operating Assets
The balance of operating assets for leased assets grewby ¥200,873 million (25.4%), but the balance of installment sales receivables decreased by ¥7,683 million(4.7%), as compared with the end of the previous
accounting period. The balance of loans outstanding forthe loan business assets grew by ¥13,603 million

Total revenues

Balance of operating assets (consolidated)

Millions of yen

Billions of yen

1,500

500,000

1,372.9400,000

1,200

1,156.4
23.3

1,151.0
37.3

151.9

159.7

900

158.2

163.4

600

823.0

300,000

Main factors in changesof lease assets
Consolidationof Fujitsu
Leasing, etc.

Securitizedreceivable
assetsmoved offbalance sheet

200,000
56.7

100,000

203.0

155.7

991.4

Reclassification
due to changed
accounting
standards

0

0

07/3

05/3 06/3 07/3 08/3 09/3
Leasing
Loans

30

790.6

54.6

52.5
173.3

Installment sales
Other businesses

Leasing
Loans

08/3
Installment sales
Other businesses

09/3

TLC

Net Assets
Net assets grew by ¥2,751 million (3.9%) as comparedwith the end of the previous accounting period, to¥72,451 million. The main factor in the change was anincrease in minority interests resulting from converting
Fujitsu Leasing Co., Ltd. into a consolidated subsidiary.
On the other hand, shareholders’ equity decreasedby ¥4,740 million (6.8%) to ¥64,614 million. This was
because despite an increase in retained earnings, net
unrealized gain on available-for-sale securities decreasedby ¥2,837 million (106.8%), and foreign currency translation adjustments decreased by ¥3,460 million

Condition of bad debt (consolidated)

Dividends in Fiscal Year Ended March 2009
Tokyo Leasing Group’s basic policy on the return of profits to shareholders is to continue steady dividend
payments, while striving to strengthen its business andfinancial foundation from a long-term perspective, andcomprehensively considering enhancing internal
reserves to prepare for future business development,
business results, dividend payout ratio, etc.
Dividends were raised ¥2 above the previous
fiscal year to ¥26 per share, for 11 consecutive fiscal
years of dividend growth since the fiscal year ended
March 1999.

Total assets andshareholder’s equity ratio

New Bad Debts Composition

Millions of yen

Real estate andconstruction

Cash Flow
The end of period balance of cash and cash equivalents
increased by ¥72,816 million as compared with the endof the previous accounting period, to ¥104,293 million.
In cash flows from operating activities, inflow due to collection of receivables based on lease and installment
contracts exceeded the outflow due to new contracts,
resulting in the provision of ¥42,552 million net cash. Net
cash used in investing activities was ¥20,794 million, due
to the acquisition of additional shares of Fujitsu Leasing
Co., Ltd., and loans provided, etc. We increased fundprocurement in order to secure liquidity of funds, resulting in the provision of ¥49,331 million net cash byfinancing activities.

Formerly Tokyo Leasing Co., Ltd.

Securing Liquidity
For the stable expansion of our funding base, in addition to diversifying our funding means, the former Tokyo
Leasing Group has signed account overdraft agreements and commitment line agreements with major
financial institutions. We secured sufficient liquidity offunds as of the end of this period, with ¥201,400 million (non-consolidated basis) of unborrowed balances
under account overdraft agreements and commitmentline agreements.

(619.5%) as the yen traded high on the translation date.
As a result, the shareholders equity ratio declined by
1.3 points to 4.1%.

Century Tokyo Leasing Corporation Annual Report 2009

¥1,015,213 million. In direct funding, commercial paper
increased by ¥12,000 million (3.7%) and corporate
bonds decreased by ¥18,300 million (83.9%), while
securitized receivables that met certain conditions andwere treated as sold (moved off the balance sheet)decreased debts payable by ¥71,314 million (86.3%).
This resulted in the total direct debt decreasing by¥77,614 million (18.2%) as compared with the end of
the previous accounting period, to ¥347,900 million. As
a result, the direct funding ratio was 25.5%, down 12.1
points year on year.

Dividends per share%

Yen

2,000,000

10

1,600,000

8

1,200,000

6

800,000

4

30
25
20

43%
21%

79%

Small and medium
receivables(<¥30 million)

Large receivables(>_¥30 million)

15
10

36%

400,000

2

Otherbusinesses0005/3 06/3 07/3 08/3 09/3
Total assets［left axis］
Shareholder’s equity ratio［right axis］

5005/3 06/3 07/3 08/3 09/3
Interim dividend
Fiscal year-end dividend

31Century Tokyo Leasing Corporation Annual Report 2009

Formerly Century Leasing System, Inc./Formerly Tokyo Leasing Co., Ltd.

CLS/TLC32

Fiscal 2009 Outlook
As global financial insecurities are continuing over a long
period, Japan’s economy is expected to require time
for the corporate earnings environment to recover, andstagnant personal consumption is expected to continue
due to the deteriorating employment and income environment.
Regarding consolidated results for the fiscal year
ending March 2010, information system integration
costs and other merger related costs will be incurred,
but allowance for doubtful accounts and valuation loss
on investments in securities are expected to decrease,resulting in a forecast total revenues of ¥760 billion (up2.3% year on year), operating income ¥24.5 billion (up17.2% year on year), ordinary income ¥27 billion (up21.2% year on year), and net income ¥15 billion (up49.6% year on year). (Year on year percentages are calculated by combining the figures for the former CLS
and TLC from consolidated results in the fiscal year
ended March 2009)
Further, for the next period’s dividends, in responseto the support by shareholders, we are planning an annual ¥28 per share (interim dividend ¥14, end of period
dividend ¥14).

operating assets, but the Group’s performance may beaffected if bad debts newly arise as a result of deterioration in the credit situations of companies, depending
on future economic trends.

Listed below are risks that may influence, among others,
Century Tokyo Leasing Group’s business performance,stock prices, and financial situation.

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

Business and Other Risks(1) Credit Risk
Leasing transactions are those in which credit is provided to a customer on an unsecured basis, in principle,
over a relatively long term (an average of about five
years) and the expected profit is secured only when thefull amount of the leasing fee, etc., is collected from thecustomer. However, if there is a non payment by thecustomer or a similar incident, we collect as much as
possible through such measures as selling the leased
property in question or leasing it to another customer.
The Group strives to minimize credit risks throughcautious credit management, the ascertaining of properties, and by controlling credit risks in the portfolio of(3) Business Performance in the Past Five Terms
and the Trend in Private Capital Investment
The values of private capital investment and capital
investment financed by leasing in the past five years areinterrelated, although there are temporary differences.
Such a trend is expected to continue in the future.
The Group’s change in value of contracts and thechanges in values of private capital investment and capital investment financed by leasing have not necessarily
coincided in recent years, but the Group’s performance
may be affected if a large decrease in the value of private
capital investment occurs in the future accompanied bya large decline in the value of capital investment financed
by leasing.

CLS/TLC(4) Stock Price Volatility Risk
The Group holds securities, for the purpose of strengthening relationships with partner companies. The Group
periodically reviews stocks held corresponding to individual business relationships, but depending on future
stock price volatility, there may be impacts on theGroup’s results.
(5) System Change Risk
The Group is developing its business on the basis ofcurrent legal, tax and accounting system and standards,
etc. If these systems change considerably in the future,
there may be impacts on the Group’s results.

(6) Other Risks
In addition to the above risks, there are information system risks such as failure and error of the computer
systems, which cover a wide range of activities such as
sales relationships, contract management, asset management and statistical operations, administrative risks
due to improper administrative procedures, residual value
risk that actual disposal values are below initial estimated residual values of lease property, and compliance riskof loss of social trust resulting from incompliance withlaws or regulations or social norms, etc.

Changes in Private Capital Investment and Capital Investment Financed by Leasing

Newly Executed Lease Contracts of the Former CLS GroupYoY comparison
Newly Executed Lease Contracts of the Former TLC GroupYoY comparison(Reference)
Newly Executed Lease Contracts of Both Former groups
YoY comparison

FY2006804,647
106.0%
71,213100.3%

FY2007
826,707102.7%
63,42089.1%

FY2008755,648
91.4%
54,444
85.8%

9.5%

9.4%

8.9%

7.7%

7.2%

2,455
—
2,816
—

2,482
101.1%
3,255
115.6%

2,388
96.2%
3,262
100.2%

2,154
90.2%
2,529
77.5%

2,081
96.6%
3,127
123.6%

5,271
—

5,737
108.8%

5,650
98.5%

4,683
82.9%

5,208
111.2%(Notes) 1. Private capital investment is based on a survey by the Cabinet Office. The figures for FY2008 are preliminary figures announced on June 11, 2009.
2. Capital investment financed by leasing is statistical data released by the Japan Leasing Association.

Century Tokyo Leasing Corporation Annual Report 2009

Private Capital Investment (a)YoY comparison
Capital Investment Financed by Leasing (b)YoY comparison
Ratio of Capital Investment Financed by Leasing toPrivate Capital Investment (b)÷(a)

FY2005759,010106.1%
71,017104.3%

Formerly Century Leasing System, Inc./Formerly Tokyo Leasing Co., Ltd.

¥100 million

FY2004
715,037
106.1%
68,086103.3%

33

CLS

Consolidated Balance Sheets
Century Tokyo Leasing Corporation and Consolidated Subsidiaries
Years ended March 31, 2009 and 2008

AssetsMillions of yen

Thousands of
U.S. dollars(Note1)

2008

2009

2009

Current assets:
Cash and cash equivalents¥

67,387

¥

7,849

$

687,622

Accounts receivable (Notes 5 and 13):
Installment sales

96,135

114,569

980,969

Lease receivables and investment assets

506,122—

5,164,510

Loans

88,351

77,532

901,541

Leases

5,356

14,53854,653

456

255

4,653

(3,381)(802)(34,500)

Inventories

66

118

673

Deferred tax assets (Note 7)

411

696

4,194

9,891

3,667

100,930

218,422

7,865,245

Other
Allowance for doubtful accounts

Other

Formerly Century Leasing System, Inc.

Century Tokyo Leasing Corporation Annual Report 2009

Total current assets

770,794

Investments and other assets:
Investments in securities (Notes 4 and 5):
Unconsolidated subsidiaries and affiliates

10,264

9,084

104,735

Other securities

11,912

12,783

121,551

Long-term loans and other assets

9,443

5,888

96,357

Deferred tax assets (Note 7)

3,653

4,353

37,276

Allowance for doubtful accounts(1,062)(553)(10,838)

Total investments and other assets

34,21031,555

349,081

38,831

452,168

396,235

Property and equipment, at cost less accumulated depreciation:
Leased assets
Own assets in use
Property and equipment, net

936

1,017

9,551

39,767453,185

405,786

115

96,705

1,173

1,064

1,058

10,858

1,179

97,763

12,031¥ 845,950¥ 800,925$ 8,632,143

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

34

CLS
Liabilities and net assets

Millions of yen

Thousands of
U.S. dollars(Note1)

2009

2008

2009

Current liabilities:¥ 307,385¥ 312,131$ 3,136,582

Current portion of long-term debt (Note 5)

135,453

110,822

1,382,173

Notes and accounts payable – trade46,722

43,487476,755

Lease obligations

4,837

—

49,357

Accrued income taxes

28

2,731

286

Advances received from customers

534

5,078

5,449

Deferred profit on installment sales

8,142

10,10783,082Other (Note 13)

8,569

8,914

87,438

Total current liabilities

511,670

493,270

5,221,122

Long-term debt (Note 5)

247,815

239,018

2,528,724

Lease obligations

10,259—104,684

744

1,171

7,592

8,524

8,340

86,980

Short-term borrowings (Note 5)

Guarantee deposits from customers (Note 13)

6,168

1,428

62,939Total long-term liabilities

273,510

249,957

2,790,919

Total liabilities

785,180

743,227

8,012,041

Authorized: 168,000,000 shares

11,867

11,867

121,092

Issued: 52,126,000 shares in 2009 and in 2008

5,538

5,538

56,51043,71339,215446,051

Other (Note 2.l)Contingent liabilities (Note 10)
Net assets:
Shareholders’ equity (Notes 12 and 15):
Common stock without par value:

Additional paid-in capital

Formerly Century Leasing System, Inc.

Retirement benefits (Notes 2.l and 8)

Century Tokyo Leasing Corporation Annual Report 2009

Long-term liabilities:

Retained earnings

(1)

(1)

(10)

61,11756,619623,643

40

1,103

408

Net unrealized losses on derivative instruments

(427)

(277)

(4,357)

Translation adjustments

(157)

21

(1,602)

(544)

847

(5,551)

Treasury stock: 789 shares in 2009 and 555 shares in 2008
Total shareholders’ equity
Valuation, translation adjustments and other:
Net unrealized holding gain on securities

Total valuation, translation adjustments, and other
Minority interests in consolidated subsidiaries
Total net assets
Total liabilities and net assets

197

232

2,010

60,77057,698620,102¥ 845,950¥ 800,925$ 8,632,143

The accompanying notes are an integral part of these statements.

35

CLS

Consolidated Statements of Income
Century Tokyo Leasing Corporation and Consolidated Subsidiaries
Years ended March 31, 2009 and 2008

Millions of yen

Thousands of
U.S. dollars(Note1)

2009

2008

2009

¥ 222,129¥ 252,359$ 2,266,622

40,621

51,596

414,500

Revenues (Note 13):
LeasesInstallment sales
Other

3,980

3,222

40,613

Total revenues

266,730

307,177

2,721,735

Leases

199,314232,200

2,033,816

Installment sales

37,49047,880382,551

Interest expense (Note 2.f)

7,466

6,572

76,184

Other

1,282

842

13,082

Total costs

245,552

287,4942,505,633

21,178

19,683

216,102

12,667

10,848129,255

8,511

8,835

86,847

Costs:

Gross profit

Operating income
Formerly Century Leasing System, Inc.

Century Tokyo Leasing Corporation Annual Report 2009

Selling, general and administrative expenses

Other income (expenses):
Interest and dividend income

285

174

2,908

Interest expense (Note 2.f)

(355)

(356)

(3,622)Equity in earnings of affiliates

1,365

1,450

13,929

229

88

2,337

526

—

5,367

(1,006)—(10,265)

Gain on sale of investments in securities
Gain on adjustment due to changes of accounting standard
for lease transactions
Loss on devaluation of investments in securities
Other, net

(579)

(63)

(5,909)

Income before income taxes and minority interests

8,976

10,12891,592

Income taxes:
Current

1,196

4,969

12,204

Deferred

1,812(1,369)18,490

3,008

3,600

30,694

10

(4)

102

Minority interests
Net income (Note 15)
The accompanying notes are an integral part of these statements.

36

¥

5,958

¥

6,532

$

60,796

CLS

Consolidated Statements of Changes in Net Assets
Century Tokyo Leasing Corporation and Consolidated Subsidiaries
Years ended March 31, 2009 and 2008

Number of shares
Thousands

Millions of yen

Thousands of
U.S. dollars(Note1)

2009

2008

2009

2008

2009

Balance at beginning of year

52,12652,126¥ 11,867¥ 11,867$ 121,092

Balance at end of year

52,12652,126

11,867

11,867

121,092

Balance at beginning of year

5,538

5,538

56,510

Balance at end of year

5,538

5,538

56,51039,21533,934400,153

Common stock

Additional paid-in capital

Retained earnings
Balance at beginning of year
Net income for year

5,958

6,532

60,786

Cash dividends(1,460)(1,251)(14,898)

Balance at end of year

43,71339,215446,051
(10)

(1)

(1)

(1)

(1)

Acquisition of treasury stock

(0)

(0)

(0)

(0)

(0)

Balance at end of year

(1)

(1)

(1)

(1)

(10)

¥ 61,117¥ 56,619$ 623,643

Balance at beginning of year

¥ 1,103¥ 3,551$ 11,255

Net changes during the year

(1,063)(2,448)(10,847)

40

1,103

408

Balance at beginning of year

(277)

(80)

(2,827)

Net changes during the year

(150)

(197)

(1,530)

Balance at end of year

(427)

(277)

(4,357)

Total shareholders’ equity
Net unrealized holding gain on securities

Balance at end of year
Net unrealized losses on derivative instruments

Formerly Century Leasing System, Inc.

Balance at beginning of year

Century Tokyo Leasing Corporation Annual Report 2009

Treasury stock

Translation adjustments
Balance at beginning of year

21

3

224

Net changes during the year

(178)

18

(1,826)(157)

Balance at end of year
Total valuation, translation adjustments and other(1,602)

21

¥

(544)

¥

847

$

(5,551)

¥

232

¥

231

$

2,367

Minority interests in consolidated subsidiaries
Balance at beginning of year
Net changes during the year

(35)

1

(357)

Balance at end of year

197

232

2,010

¥ 60,770¥ 57,698$ 620,102

Total net assets
The accompanying notes are an integral part of these statements.

37

CLS

Consolidated Statements of Cash Flows
Century Tokyo Leasing Corporation and Consolidated Subsidiaries
Years ended March 31, 2009 and 2008

Millions of yen

Thousands of
U.S. dollars(Note1)

2008

2009

Formerly Century Leasing System, Inc.

Century Tokyo Leasing Corporation Annual Report 2009

2009
Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments to reconcile income before income taxes and minority
interests to net cash provided by (used in) operating activities:
Depreciation and amortization
Increase in allowance for doubtful accounts
Loss on disposal of leased assets
Loss on devaluation of investments in securities
Interest and dividend income
Interest expense
Gain on sale of investments in securities
Gain on adjustment due to changes of accounting
standard for lease transactions
Decrease in installment sales receivable
Increase in lease receivables and investment assets
Increase in loans receivable
Purchases of leased assets
Increase in trade notes and accounts payable
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchases of own assets in use
Proceeds from sales/redemptions of investments in securities
Purchases of investments in securities
Collection of loans receivable
Payments of loans receivable
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Increase (decrease) in short-term borrowings, net
Proceeds from long-term debt
Repayment of long-term debt
Issuance of bonds
Redemption of bonds
Cash dividends paid
Other, net
Net cash provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The accompanying notes are an integral part of these statements.

38

¥

8,976

¥

10,128$91,592

8,903
993
1,910
1,006
(285)
7,821
(229)

209,183828
16,253
—
(174)
6,928
(87)

90,847
10,133
19,49010,265(2,908)79,806(2,337)(526)
15,287(17,527)(10,819)(8,150)3,265(2,729)7,896
435(8,547)(5,328)(5,544)—
1,602—(13,105)(215,419)
1,237(4,571)
12,803317(7,000)(4,479)1,641(5,367)
155,990(178,847)(110,398)(83,163)
33,316(27,848)
80,571
4,439(87,214)(54,367)(56,571)

(702)
2,376
(4,071)
3,002(3,000)113(2,282)(807)
549(3,216)2—(1)(3,473)(7,163)24,245(41,541)
30,633(30,612)
1,152(23,286)(8,498)
182,675(101,459)—(4,000)(1,460)239
67,497(133)
59,538
7,849¥ 67,387

9,126
111,156(119,628)
8,000(4,000)(1,251)
26
3,429
1
1,598
6,251
¥
7,849

(86,714)1,864,031(1,035,296)—(40,816)(14,898)
2,438
688,745(1,357)
607,53180,091$ 687,622

CLS

Notes to Consolidated Financial Statements
Century Tokyo Leasing Corporation and Consolidated Subsidiaries
March 31, 2009 and 2008b) Foreign Currency Translation
Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at theexchange rates in effect at the balance sheet date. Foreignexchange gain or loss on translation is recognized in the
consolidated statements of income.
c) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand,deposits held at call with banks, and short-term invest-d) Lease Accounting
Lease revenues and the related costs on finance leases
are recognized on receipt of lease fees.
Revenues from operating leases are recognized ona straight-line basis over the scheduled lease terms. Lease
assets are depreciated by the straight-line method basedon the scheduled lease terms of the respective assets.
e) Installment Sales
Installment sales and the related costs are recognized aseach payment becomes due under the respective installment sales agreements.
f) Allocation of Interest Expense
Interest expense is allocated to cost of sales and otherexpenses based on the balances of the respective operating assets, which consist principally of accounts
receivable and leased assets, and other assets. Interest
expense classified as cost of sales is stated net of interest income.
g) Securities
Securities held by the Group are classified as availablefor-sale securities. Marketable available-for-sale securities
are carried at fair value with any unrealized gain or loss,
net of the related income taxes, included as a separate
component of shareholders’ equity. Cost of securities
sold is determined by on the moving average method.
Other available-for-sale securities are stated at cost determined by the moving average method.
h) Inventories
Inventories are stated at cost, determined by the moving average method or net selling value (on the balance
sheet, the value of inventories is written down based onany decrease in profitability).

Formerly Century Leasing System, Inc.

2. Summary of Significant Accounting Policiesa) Principles of Consolidation
The consolidated financial statements include theaccounts of the Company and its significant subsidiaries
over which the Company exerts control, principally
Century Business Service, Inc.
Century Leasing (China) Co., Ltd.’s fiscal year-end is
December 31, and its accounts have been included inconsolidation with reasonable adjustments to conformthem to the accounts as of March 31, 2009 and 2008.
The Company’s share in the earnings or losses of affiliates over which it is able to exercise significant influencein terms of their operating and financial decisions isaccounted for by the equity method and included in the
consolidated operating results.

ments with original maturities of three months or lesswhich are readily convertible into cash and are subject
only to an insignificant risk of any change in their value.

Century Tokyo Leasing Corporation Annual Report 2009

1. Basis of Presentation
Century Tokyo Leasing Corporation (formerly, Century
Leasing System, Inc.) (the “Company”) and its consolidated subsidiaries (collectively, the “Group”) maintaintheir books of account in accordance with the provisions
set forth in the Corporation Law of Japan (the “Law”) andthe Financial Instruments and Exchange Law of Japanand in conformity with accounting principles generally
accepted in Japan (“Japanese GAAP”), which are different in certain respects as to the application anddisclosure requirements of International Financial
Reporting Standards.
The accompanying consolidated financial statements
have been compiled from the consolidated financial statements of the Group, which were filed with the Directorof the Kanto Local Finance Bureau as required by the Law.
In preparing the accompanying consolidated financial
statements, certain reclassifications and rearrangements
have been made to the consolidated financial statements
issued domestically in order to present them in a format
which is more familiar to readers outside Japan.
The translation of Japanese yen amounts into U.S.
dollar amounts is included solely for convenience, as amatter of arithmetic computation only, at ¥98 = US$1.00,
the approximate rate of exchange in effect on March 31,
2009. This translation should not be construed as a representation that Japanese yen amounts have been, could
have been, or could in the future be, converted into U.S.
dollar amounts at this or any other rate.

(Change in accounting policy)
Effective the fiscal year ended March 31, 2009, theCompany and its consolidated subsidiaries have appliedthe “Accounting Standard for Measurement of
Inventories” (ASBJ Statement No.9, issued on July 5,2006). The effect of this change on the consolidated statement of income is immaterial.
i) Property and Equipment
Property and equipment is stated at cost less accumulated depreciation. Depreciation of assets owned andused by the Group is computed primarily by the declining-balance method (while the straight-line method isapplied to buildings acquired on and after April 1, 1998)
based on the estimated useful lives of the respective
assets which range principally from three to forty-seven

39

CLS
years for buildings, and from three to twenty years forequipment.
j) Computer Software
Costs related to software purchased for internal use areamortized by the straight-line method over the estimated useful life (generally five years).

Formerly Century Leasing System, Inc.

Century Tokyo Leasing Corporation Annual Report 2009k) Income Taxes
Provision is made for the Group’s liability for various typesof income taxes, i.e., corporation, inhabitants’ and enterprise taxes.
Deferred income tax assets and liabilities for the years
ended March 31, 2009 and 2008 reflect the impact of thetemporary differences between the amounts of assets
and liabilities determined for financial reporting purposes and the bases of such assets and liabilities as calculated
for tax purposes after taking tax loss carry forwards into
consideration.
l) Retirement Benefits
The Company and certain domestic subsidiaries havedefined benefit plans covering substantially all employees other than directors and corporate auditors. Under
the terms of these plans, eligible employees are entitledto lump-sum payments or pensions based on their levelof compensation at termination and their years of service with the Company or the subsidiaries. To provide fora payments of these plans, the Company and certain
domestic subsidiaries have joined a multi-employers’ welfare pension fund (the “Fund”) established in accordancewith the Welfare Pension Insurance Law by the ITOCHU
group companies.
To provide for payments to benefit plans for employees, retirement benefits have been accrued based on an
estimate of the projected benefit obligation and the fairvalue of plan assets.
At March 31, 2008, retirement benefits to directors
and corporate auditors accrued in accordance with theGroup’s internal rules amounted to ¥168 million.
In the past, the Company recognized an amount of
directors and corporate auditors retirement benefits which
would be required to be paid if all the directors and corporate auditors retired on the balance sheet date.
However, as part of a review of retirement benefits, theCompany reached a decision to abolish the retirement
benefits to directors and corporate auditors. At the general meeting of shareholders held on June 20, 2008, it
was subsequently resolved to pay the existing director
and corporate auditor retirement benefits earned up to
the abolishment of the former system.
In relation to this resolution, accrued retirement benefits to directors and corporate auditors have been
reversed and unpaid amounts were ¥29 million ($296
thousand) and recognized in other long-term liabilities in
the consolidated balance sheet at March 31, 2009.
m) Derivatives and Hedging Activities
The Group enters into interest-rate swap contracts and40

foreign exchange forward contracts in order to hedge
interest-rate and foreign currency exchange rate exposure on certain liabilities and assets, including loans frombanks, payables under securitized lease receivable, installment sales receivable and loans denominated in foreign
currencies. The Group utilizes these derivatives to reduce
the risk of cash flow fluctuation inherent in the liabilities
and assets hedged, and such transactions are not enteredinto for speculative trading purposes.
For interest-rate swap contracts and forward foreignexchange contracts, the Group follows “AccountingStandard for Financial Instruments” and “AccountingStandard for Foreign Currency Transactions.” More specifically, interest-rate swaps not designated as hedging
instruments are recorded at fair value in the consolidated balance sheets. Interest-rate swaps which qualify forhedge accounting and meet specific matching criteria are
not measured at market value, but the differential paid or
received under the swap agreements is recognized andincluded in interest expense or income. Other interestrate swaps which qualify for hedge accounting aremeasured at fair value as of the balance sheet date andthe recognition of any unrealized gain or loss is deferred
until maturity.
For forward foreign exchange contracts, the Group
follows the accounting method specified in “AccountingStandard for Financial Instruments” (“Assignment
Accounting”), if the contracts qualify for hedge accounting. Under this method, foreign currency transactions andthe related monetary assets (installment sales receivableand loans receivable) are to be translated at the fixed yen
amount of such foreign currency contracts at the settlement dates based on the contracted rates. The difference
between this amount and the amount as translated at thecurrent rate of exchange on the date of forward contract
is allocated over the life of each contract.
With respect to portfolio hedge contracts as prescribed in the Industry Audit Committee Report No.19,“Temporary Treatment for Accounting and Auditing ofApplication of the Accounting Standards for Financial
Instruments in the Leasing Industry,” issued by theJapanese Institute of Certified Public Accountants, theGroup records these derivatives at fair value in the consolidated balance sheets and defers any unrealized gainor loss as an asset or a liability, to the extent that thenominal principal amounts of the derivatives positions
do not exceed the amounts of the underlying lease-related liabilities.
n) Appropriation of Retained Earnings
An appropriation of retained earnings with respect to agiven financial period is made by resolution of a general
meeting of shareholders to be held subsequent to theclose of such financial period. The appropriation for theyear ended March 31, 2009 has not been reflected inthese consolidated financial statements.
On May 1, 2006, the Law, which superseded theCommercial Code of Japan (the “Code”), went into effect.
Under the Code, the Company was permitted to declareCLSb) Practical Solution on Unification of Accounting
Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements
Effective the fiscal year ended March 31, 2009, theCompany has applied “Practical Solution on Unificationof Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements” (ASBJ Practical
Issues Task Force No.18 May 17, 2006) and has madethe required adjustments to the consolidated financial
statements.
The effect of this change on the consolidated statement of income is immaterial.

4. Investments in Securities
Other securities included in investments in securities at March 31, 2009 and 2008 consisted of the following:
Millions of yen

Thousands of
U.S. dollars

2008¥ 8,91110
3,862¥ 12,783

2009$ 59,969
7,755
53,827$ 121,551

2009¥ 5,877760
5,275¥ 11,912

Equity securities
Debt securities
Other

Formerly Century Leasing System, Inc.

3. Accounting Changesa) Accounting Standard for Lease Transactions
Finance lease transactions that do not transfer ownership to the lessee had been accounted for using thesame method as that for operating lease transactions.
However, the Company adopted the “AccountingStandard for Lease Transactions” (ASBJ Statement No.
13; June 17, 1993 (First Committee of the BusinessAccounting Council); revised March 30, 2007) and the“Implementation Guidance on Accounting Standard forLease Transactions” (ASBJ Statement Guidance No.16(Accounting System Committee of the JapaneseInstitute of Certified Public Accountants); revised March
30, 2007) which became effective from the fiscal year
beginning on and after April 1, 2008. Under the standard, such leases are accounted for using the same
method as sales transactions.
As for the accounting treatment for finance leasetransactions that do not transfer ownership starting before
the adoption, the amounts of “Leased assets” (excluding depreciation) at March 31, 2008 were recorded as the
beginning balance of “Investment assets,” and theamounts of rental revenues are recorded with the straightline method based on the scheduled lease terms. As aresult, for the year ended March 31, 2009 compared withthe formerly applied treatment, “Current assets”
increased by ¥505,853 million ($5,161,765 thousand).
“Property and equipment” and “Current liabilities”
decreased by ¥510,556 million ($5,209,755 thousand)and ¥4,703 million ($47,990 thousand), respectively. The
effect of this change on the consolidated statement ofincome is immaterial.
Under the standard, the accounting of transactions
for liquidation of lease receivables have been changed
from accounts payable under securitized lease receivables in long-term liabilities to the same method as forsales transactions. As a result, compared with the former
accounting method, “Current assets” and “Current liabilities” decreased by ¥39,253 million ($400,451
thousand) and ¥18,145 million ($185,153 thousand),
respectively. On the other hand, “Operating income”
decreased by ¥282 million ($2,878 thousand). “Income
before income taxes and minority interests” increasedby ¥243 million ($2,480 thousand).

Century Tokyo Leasing Corporation Annual Report 2009semiannual and annual dividends. Under the Law, flexible payment of dividends is permissible subject to certain
limits on appropriation of retained earnings and with theapproval by resolution of the shareholders.

The carrying amounts and aggregate fair value of securities with determinable market value at March 31, 2009 and 2008
were as follows:
Millions of yen
March 31, 2009

Available-for-sale securities:
Equity securities
Debt securities

Cost or book value

Unrealized gain

Unrealized loss

¥ 3,086
10

¥ 571
0

¥ 496
—

Fair value¥ 3,161
10

41

CLS
Millions of yen
March 31, 2008

Available-for-sale securities:
Equity securities
Debt securities

Cost or book value

Unrealized gain

¥ 4,07810¥ 2,069
0Unrealized loss

¥

212
—

Fair value¥ 5,935
10

Thousands of U.S. dollars
March 31, 2009

Available-for-sale securities:
Equity securities
Debt securities

Cost or book value

Unrealized gain

Unrealized loss

$ 31,490
102$ 5,8260$ 5,061—Fair value$ 32,255
102

Available-for-sale securities whose fair value was not readily determinable as of March 31, 2009 and 2008 were as follows:

Formerly Century Leasing System, Inc.

Century Tokyo Leasing Corporation Annual Report 2009

Carrying amount

Available-for-sale:
Equity securities
Debt securities
Other

Millions of yen

Thousands of
U.S. dollars

2009

2008

2009

¥ 2,716750
5,275¥ 2,976—
3,862$ 27,714
7,653
53,827

Proceeds from sale of available-for-sale securities and the resulting realized gain or loss for the years ended March 31,
2009 and 2008 are summarized as follows:
Carrying amount

Proceeds
Realized gain
Realized loss

¥

2009
100
95
—

Millions of yen

Thousands of
U.S. dollars

2008
204
88
—

2009
$ 1,020
969—¥

The following is a summary of the contractual maturities of debt securities classified as available-for-sale securities at
March 31, 2009:
Millions of yen

Due within one year
Due after one to five years
Due after five to ten years
Due after ten years

¥

10
750
—
—

Thousands of
U.S. dollars

$

102
7,653
—
—

5. Short-Term Borrowings, Long-Term Debt and Assets Pledged
Short-term borrowings at March 31, 2009 and 2008 were as follows:

Short-term loans from banks
Commercial paper
Payables under liquidation of lease receivables

42

2009
¥ 123,685
179,700
4,000¥ 307,385

Millions of yen

Thousands of
U.S. dollars

2008¥ 117,431
194,700—¥ 312,131

2009$ 1,262,092
1,833,674
40,816$ 3,136,582

Weightedaverageinterest rate

1.19%
1.09%
1.30%
—

CLS
Long-term debt at March 31, 2009 and 2008 consisted of the following:

Unsecured bonds due 2010
Long-term loans, principally from banks
Payables under securitized lease receivables
Long-term payables under liquidation of lease receivables
Medium-term notes
Total
Less current portion2009¥ 10,000
293,501—
79,267500
383,268(135,453)¥ 247,815

Millions of yen

Thousands of
U.S. dollars

Interest rate2008
¥ 10,000
295,561
39,779—4,500
349,840(110,822)¥ 239,018

2009$ 102,041
2,994,908—
808,8465,102
3,910,897(1,382,173)$ 2,528,724

1.16%
1.08% to 3.63%
1.71% to 1.72%
1.71% to 1.72%
1.40%
—
—
—

The Group has entered into overdraft contracts which provided the Group with the overdraft facilities with twenty-nine
financial institutions, as of March 31, 2009 and 2008 amounting to ¥229,900 million ($2,345,918 thousand) and ¥229,400
million, respectively. The unused facilities maintained by the Group as of March 31, 2009 and 2008 amounted to ¥131,000
million ($1,336,735 thousand) and ¥140,500 million, respectively.

Millions of yen

Thousands of
U.S. dollars¥ 135,453
103,61070,70842,98427,5352,978¥ 383,268$ 1,382,173
1,057,245
721,510438,612
280,969
30,388$ 3,910,897

The Group’s assets pledged as collateral, principally for long-term debt of ¥94,855 million ($967,908 thousand) at March
31, 2009, were as follows:
Thousands of
U.S. dollars

Millions of yen

Accounts receivable—installment sales
Lease receivables and investment assets
Accounts receivable—loans
Investments in securities

¥

3,098
112,893
64
5¥ 116,060

Formerly Century Leasing System, Inc.

Year ending March 31,
2010
2011
2012
2013
2014
2015 and thereafterCentury Tokyo Leasing Corporation Annual Report 2009

The aggregate annual maturity of long-term debt subsequent to March 31, 2009 is summarized as follows:$

31,612
1,151,970
653
51$ 1,184,286

6. Derivatives
In general, interest-rate swaps and foreign exchange forward contracts are exposed to market risk arising from fluctuation in interest rates and foreign exchange rates, and to credit risk arising from the potential for default by thecounterparties. As the derivative instruments which the Group utilizes aim to reduce the risk of fluctuation in interest
rates and foreign exchange rates associated with the underlying assets and liabilities hedged, these derivatives function to reduce the overall market risk to which the Group is subject. The Group believes that any related credit risk isvery low because all counterparties to the derivatives position are financial institutions with high credit ratings.
With respect to the interest-rate swap contracts entered into by the Company, the Treasury Department, which is
responsible for financing activities, handles the execution of, and monitors the internal control over, these transactionsin accordance with the Company’s internal regulations. Every month, the ALM Committee (whose Chairman is theCompany’s President) determines the Company’s hedging strategy for the coming six months based on an analysis ofmarket rate trends and the Treasury Department enters into derivatives transactions in accordance with this strategy.
The Treasury Department is also involved in the management of risk associated with foreign exchange rate fluctuation on an individual contract basis.

43

CLS
Before we execute the transactions of compound derivative instrument where credit derivatives are embedded,
we sufficiently confer the type or management method of the risk beforehand, and then obtain approval in accordancewith the Company’s internal regulations.
The consolidated subsidiaries of the Company follow the Company’s internal regulations, and semi-annually reportto the Company the results of their hedging activities, the counterparties, the period remaining for each contract, andthe fair value of the transactions. The consolidated subsidiaries of the Company, as of March 31, 2009, had no open
derivatives positions.
The following table presents the derivatives positions outstanding at March 31, 2009 and 2008:
Millions of yen

2008

2009
Contract amount(over one year)

Interest-rate swap contracts:
Fixed/paid; floating/received
Floating/paid; fixed/received¥ 1,460(1,460)—(—)¥ 1,460

Fair value

¥

(194)

Unrealized gain Contract amount(loss)(over one year)

¥

—
¥

(194)

(194)
—

¥

(194)

¥ 1,488(1,460)—(—)¥ 1,488

Fair value

¥

(297)

Unrealized gain
(loss)

¥

—
¥

(297)

(297)
—

¥

(297)

Formerly Century Leasing System, Inc.

Century Tokyo Leasing Corporation Annual Report 2009

Thousands of U.S. dollars

2009
Contract amount(over one year)

Interest-rate swap contracts:
Fixed/paid; floating/received
Floating/paid; fixed/received$ 14,898(14,898)—(—)$ 14,898

Fair value

Unrealized gain
(loss)$ (1,980)$ (1,980)——$ (1,980)$ (1,980)

Notes:
1. Interest-rate swap contracts and forward foreign exchange contracts which qualify for hedge accounting are excluded from the market value information disclosed above.
2. Fair value is derived from the net present value of the expected future cash flows discounted at the applicable interest rates in effect as of the respective balance sheet dates.
The following table presents the fair value of the portfolio hedge transactions outstanding at March 31, 2009 and 2008:
Millions of yen

2008

2009
Contract amount(over one year)

Interest-rate swap contracts:
Fixed/paid; floating/received¥

Floating/paid; fixed/received

¥

44

100
(100)
—
(—)
100

Fair value¥(0)

Unrealized gain Contract amount(loss)(over one year)

¥

—
¥

(0)

(0)

¥

—
¥

(0)

¥

150
(150)
—
(—)
150

Fair value¥(0)

Unrealized gain
(loss)

¥

—
¥

(0)

(0)
—

¥

(0)

CLS
Thousands of U.S. dollars

2009
Contract amount(over one year)

Interest-rate swap contracts:
Fixed/paid; floating/received
Floating/paid; fixed/received$ 1,020(1,020)—(—)$ 1,020

Fair value$(0)

Unrealized gain
(loss)

$

—
$

(0)

(0)
—

$

(0)

2008
40.6%
(5.8)
0.8
(0.1)
35.5%

Temporary differences and tax loss carry forwards which gave rise to deferred tax assets and liabilities for the years
ended March 31, 2009 and 2008 are as follows:
Millions of yen

Thousands of
U.S. dollars

2008

2009

2009
Deferred tax assets:
Allowance for doubtful accounts
Amortization of lease receivables and investment assets
Loss on devaluation of own assets in use
Depreciation
Retirement benefits
Amortization of property and equipment
Amortization of computer software
Other
Total deferred tax assets¥ 1,134
784
534
403
303
—
—
928
4,086

¥

561
—
521
1,021
—
961
909
1,822
5,795

$ 11,571
8,000
5,449
4,112
3,092
—
—
9,470
41,694

Deferred tax liabilities:
Net unrealized gain on available-for-sale securities
Total deferred tax liabilities
Net deferred tax assets

(22)
(22)
¥ 4,064

(746)
(746)
¥ 5,049

(224)
(224)
$ 41,470

Formerly Century Leasing System, Inc.

2009
40.6%
(6.2)
0.6
(1.5)
33.5%

Statutory tax rates
Equity in earnings of affiliates
Entertainment expenses not qualified as tax deductions
Other
Effective tax rates

Century Tokyo Leasing Corporation Annual Report 2009

7. Income Taxes
The Group is subject to Japanese national and local taxes which, in the aggregate, resulted in statutory tax rates ofapproximately 40.6% for the years ended March 31, 2009 and 2008. The following is a reconciliation between the statutory tax rates and the effective tax rate for the years ended March 31, 2009 and 2008.

45

CLS
8. Retirement Benefits
The following summarizes the funding status and amounts recognized in the consolidated balance sheets at March 31,
2009 and 2008 for the Company’s and the consolidated domestic subsidiaries’ defined benefit plans:

Projected benefit obligation
Fair value of plan assets
Unfunded benefit obligation
Unrecognized actuarial loss
Unrecognized prior service cost
Amount recognized2009¥ (4,267)
4,668
401
313
(1,458)¥(744)

Millions of yen

Thousands of
U.S. dollars

2008¥ (7,219)
5,882(1,337)334—¥ (1,003)

2009$ (43,541)
47,6334,092
3,194(14,878)$ (7,592)

The following summarizes the components of the net periodic pension cost for employees for the years ended March
31, 2009 and 2008:

Formerly Century Leasing System, Inc.

Century Tokyo Leasing Corporation Annual Report 2009

Millions of yen

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss (gain)
Amortization of prior service cost
Contribution to the fundContribution paid to the defined contribution pension plan

¥

¥

2009
142
104
(47)
22
(365)
136
47
39

¥

¥

2008
289
160
(57)
(26)
—
132
—
498

Thousands of
U.S. dollars

$

$

2009
1,449
1,061
(480)
224
(3,724)
1,388
480
398

The Company had participated in a welfare pension fund, a lump-sum retirement payment plan, and a qualified pension
plan. However, during the year ended March 31, 2009 the Company has changed benefit plans from these plans to adefined benefit plan and a defined contribution plan.
The following summarizes the impact of the transition.
Millions of yen

¥

3,046
(1,205)(68)(1,822)
(49)
(96)
¥
(145)

Decrease of projected benefit obligation
Decrease of fair value of plan assets
Unrecognized actuarial gain
Unrecognized prior service cost
Decrease of provision for retirement benefits
Lump sum provision resulting from the system change

Thousands of
U.S. dollars$

31,082(12,296)(694)(18,592)
(500)
(980)
$ (1,480)

The following summarizes the most recent funded status of the pension plans.

Pension plan assets
Benefit obligations
Accrued retirement benefits for employees

2008¥ 54,978(64,607)¥ (9,629)

Millions of yen

Thousands of
U.S. dollars

2007¥ 61,338(56,496)¥ 4,8422008$ 561,000(659,255)$ (98,255)

The difference above consisted of prior service cost under the pension programs of ¥3,561 million ($36,337 thousand)and a general reserve of ¥6,067 million ($61,908 thousand).
For the year ended March 31, 2008, the ratio of the Company’s contributions against total contributions to the plans
was 3.38%.

46

CLS
The assumptions used in determining the pension benefit obligation are shown below.
Discount rate
Expected rate of return on plan assets
Period for the recognition of actuarial gain or loss

2008
2.5%
1.0%
five years

2009
2.5%
1.0%
five years

9. Lease Transactions
Finance leases of the Group which do not transfer ownership to the lessee are now capitalized as lease investment
assets. Information relating to these finance leases at March 31, 2009 and for the year then ended is summarized asfollows:

Future lease payments
Estimated residual value
Future interest income

Millions of yen

Thousands of
U.S. dollars¥ 519,276
28,467(55,617)¥ 492,126$ 5,298,735
290,480(567,521)$ 5,021,694

The Group as lessor:
Due within one year
Due after one to two years
Due after two to three years
Due after three to four years
Due after four to five years
Due after five years

¥

4,477
3,637
3,204
2,406
1,222
348
¥ 15,294$$

45,684
37,112
32,69424,551
12,4693,551
156,061

The aggregate annual maturity of finance lease receivables which do not transfer ownership to the lessee subsequent
to March 31, 2009 is summarized as follows:

The Group as lessor:
Due within one year
Due after one to two years
Due after two to three years
Due after three to four years
Due after four to five years
Due after five years

Millions of yen

Thousands of
U.S. dollars¥ 180,444
138,033
95,31857,77926,231
21,471¥ 519,276$ 1,841,265
1,408,500
972,633
589,582
267,663
219,092$ 5,298,735

Formerly Century Leasing System, Inc.

Thousands of
U.S. dollars

Millions of yen

Century Tokyo Leasing Corporation Annual Report 2009

The aggregate annual maturity of finance lease receivables which transfer ownership to the lessee subsequent to March
31, 2009 is summarized as follows:

As for the lease accounting treatment for finance lease transactions that do not transfer ownership to the lessee starting before April 1, 2008, the amounts of “Leased assets” (excluding depreciation) at March 31, 2008 were recorded as
the beginning balance of “Investment assets,” and the amounts of rental revenues were recorded by the straight-line
method based on the scheduled lease terms. As a result, for the year ended March 31, 2009, “Income before income
taxes and minority interests” decreased by ¥14,325 million ($146,173 thousand) compared with the amount that would
have been reported under the accounting method used in the previous year.

47

CLS
Finance leases which do not transfer ownership to the lessee are accounted for in the same manner as operating leases. Information relating to finance leases of the Group at March 31, 2008 and for the year then ended is summarized asfollows:
Millions of yen

The Group as lessor:
Acquisition cost
Accumulated depreciation
Net book value
Future minimum lease payments
Amount due within one year
Rental revenues
Depreciation expense
Rental revenues attributable to finance income¥ 1,357,427(846,251)¥ 511,176¥ 508,743
177,427¥ 222,543
204,535
23,843

10. Commitments and Contingent Liabilities
The Group’s contingent liabilities at March 31, 2009 and 2008 were as follows:
Millions of yen

Thousands of
U.S. dollars

2008

2009

Formerly Century Leasing System, Inc.

Century Tokyo Leasing Corporation Annual Report 20092009
As a guarantor of indebtedness of:
Employees
Others

¥
¥

420
9,545
9,965

¥
¥

526
1,968
2,494

$

4,286
97,398$ 101,684

The Group, as lenders, have loan commitment agreements as of March 31, 2009 and 2008 amounting to ¥11,117 million ($113,439 thousand) and ¥18,193 million, respectively. The loans provided under these credit facilities as of March
31, 2009 and 2008 amounted to ¥4,316 million ($44,041 thousand) and ¥6,763 million, respectively. Many of the facilities may expire without being utilized and the loans provided are subject to periodic reviews of the borrowers’ credit
standing. The unused portion of these facilities may not be fully utilized.

11. Dividends(1) Dividends paid to shareholders:48

AmountAmount per share

Millions of yen
Thousands of
U.S. dollars

Yen
U.S. dollars

Shareholders’
cut-off date

Effective date¥ 14.0$ 0.14

March 31,2008

June 23,
2008

¥ 730
$ 7,449¥ 14.0$ 0.14September 30,
2008

December 8,
2008

AmountAmount per share

Millions of yen
Thousands of
U.S. dollars

Yen

Shareholders’
cut-off date

Effective date

U.S. dollars(Date of approval)
Resolution approved by(June 20, 2008)
Annual general meeting of shareholders

Type of shares

Commonstock¥ 730$ 7,449(November 7, 2008)
Board of directors

Commonstock(Date of approval)
Resolution approved by(June 22, 2007)
Annual general meeting of shareholders

Type of shares

Commonstock¥ 625$ 6,378¥ 12.0$ 0.12

March 31,2007

June 25,
2007(October 26, 2007)
Board of directors

Commonstock¥ 625$ 6,378¥ 12.0$ 0.12September 30,
2007

December 10,
2007

CLS
(2) Dividends with a shareholders’ cut-off date during the current fiscal year but an effective date subsequent to thecurrent fiscal year:(Date of approval)
Resolution approved by(June 17, 2009)
Annual general meeting of shareholders

AmountAmount per share

Type of shares(Paid from)

Millions of yen
Thousands of
U.S. dollars

Yen
U.S. dollars

Common stock(Retained earnings)¥ 730$ 7,449¥ 14.0$ 0.14

Shareholders’
cut-off date

Effective date

March 31,2009

June 18,
2009

Revenues-leases
Revenues-other
Purchases of leased assets

2009¥ 1,424
25
259

Millions of yen

Thousands of
U.S. dollars

2008¥ 1,476
54—

2009$ 14,531
255
2,643

Amounts due from and to principal shareholders at March 31, 2009 and 2008 were as follows:

Lease investment assets
Accounts receivable-leases
Guarantee deposits from customers

2009¥ 4,223—
225

Millions of yen

Thousands of
U.S. dollars

2008
—
25
225

2009
$ 43,092
—
2,296

¥

Formerly Century Leasing System, Inc.

13. Related Party Transactions
Transactions with the principal shareholders for the years ended March 31, 2009 and 2008 were as follows:

Century Tokyo Leasing Corporation Annual Report 2009

12. Legal Reserve and Additional Paid-in CapitalIn accordance with the Corporation Law of Japan (the “Law”), the Company provides a legal reserve which is included
in retained earnings. The Law provides that an amount equal to 10% of the amounts to be disbursed as distributions ofearnings be appropriated to the legal reserve until the sum of the legal reserve and additional paid-in capital equals 25%of the common stock account. The Law provides that neither additional paid-in capital nor the legal reserve is available
for the payment of dividends, but both may be used to reduce or eliminate a deficit by resolution of the shareholders or
may be transferred to common stock by resolution of the Board of Directors. The Law also provides that, if the total
amount of additional paid-in capital and the legal reserve exceeds 25% of the amount of common stock, the excess
may be distributed to the shareholders either as a return of capital or as dividends subject to the approval of the shareholders. Under the Law, such distributions can be made at any time by resolution of the shareholders or by the Boardof Directors if certain conditions are met.

The transactions with affiliates for the years ended March 31, 2009 and 2008 were as follows:

Collections on NCS’ s accounts receivable2009¥ 25,365

Millions of yen

Thousands of
U.S. dollars

2008¥ 23,671

2009$ 258,827

Millions of yen

Thousands of
U.S. dollars

2008¥ 1,6532009$ 16,449

Amounts due from and to affiliates at March 31, 2009 and 2008 were as follows:

Collection of accounts receivable on behalf of NCS

2009¥ 1,61249

CLS
Condensed financial statements of NCS, an affiliated company, at March 31, 2009 were as follows.

Total net assets
Revenues
Income before income taxes
Net income

Millions of yen

Thousands of
U.S. dollars¥ 20,616
107,282
4,962
2,731

$ 210,367
1,094,714
50,633
27,867

14. Segment Information
Information by business segment for the years ended March 31, 2009 and 2008 were as follows:
Millions of yen
Year ended March 31, 2009
Leasing

Installment
sales

Loans

Other

¥ 222,129—
222,129
210,612¥ 11,517¥ 40,621—
40,621
40,460¥161¥ 2,265
—
2,265
2,040
¥
225

¥ 1,715
—
1,715
1,434
¥ 281

¥

—
—
—
3,673
¥ (3,673)¥ 266,730—
266,730
258,219¥ 8,511(2)Total assets, depreciation and capital expenditures
Total assets¥ 556,307¥ 97,548
Depreciation
8,903—
Capital expenditures
8,143—¥ 90,844——¥ 6,511——¥ 94,740
443
423¥ 845,950
9,346
8,566

By business segment

Formerly Century Leasing System, Inc.

Century Tokyo Leasing Corporation Annual Report 2009(1)Operating revenues
Revenue from customers
Intersegment revenue
Total sales
Operating expenses
Operating income

50

Elimination or
corporate

Consolidated

Thousands of U.S. dollars
Year ended March 31, 2009
Leasing

Installment
sales

Loans

Other

$ 2,266,622—
2,266,622
2,149,102$ 117,520$ 414,500—
414,500
412,857$ 1,643$ 23,112—
23,112
20,816$ 2,296$ 17,501—
17,501
14,633$ 2,868$———
37,480$ (37,480)$ 2,721,735—
2,721,735
2,634,888$ 86,847(2)Total assets, depreciation and capital expenditures
Total assets$ 5,676,602$ 995,388
Depreciation
90,847—
Capital expenditures
83,092—$ 926,980——$ 66,438——$ 966,735
4,520
4,316

$ 8,632,143
95,36787,408(1)Operating revenues
Revenue from customers
Intersegment revenue
Total sales
Operating expenses
Operating income

Elimination or
corporate

Consolidated

CLS(Change in accounting policy)
As in Note 3.a above, the lease accounting treatment for finance lease transactions which do not transfer ownershiphave been accounted for using the same method as sales transactions.
As a result, compared with the former treatment, “operating income” and “total assets” in leasing decreased by¥282 million ($2,878 thousand) and ¥21,383 million ($218,194 thousand), respectively.
Millions of yen
Year ended March 31, 2008
Leasing

Installment
sales

Loans

Other

¥ 252,359—
252,359
241,048¥ 11,311¥ 51,596—
51,59650,798¥798¥ 1,956
—
1,956
1,681
¥
275

¥ 1,266
—
1,266
925
¥ 341

¥

—
—
—
3,890
¥ (3,890)¥ 307,177—
307,177
298,342¥ 8,835(2)Total assets, depreciation and capital expenditures
Total assets¥ 565,383¥ 115,971
Depreciation
209,183—
Capital expenditures
215,419—¥ 78,191——¥ 7,257——¥ 34,123
398
696¥ 800,925
209,581
216,115

By Geographic Segment
Sales and total assets of the Company and its domestic subsidiaries for the years ended March 31, 2009 and 2008 represented more than 90% of the consolidated sales and total assets. Accordingly, information by geographic segment
is not required to be disclosed.
Sales to Overseas Customers
Sales to overseas customers for the years ended March 31, 2009 and 2008 represented less than 10% of the consolidated sales. Accordingly, information on sales to overseas customers is not required to be disclosed.

15. Amounts per Share

Net assets
Net income

2009¥ 1,162.07
114.29Yen

U.S. dollars

2008¥ 1,102.48
125.312009$ 11.86
1.17

Formerly Century Leasing System, Inc.

Consolidated

Century Tokyo Leasing Corporation Annual Report 2009(1)Operating revenues
Revenue from customers
Intersegment revenue
Total sales
Operating expenses
Operating income

Elimination or
corporate

Under “Accounting Standard for Earnings Per Share” (ASBJ Statement No.2), for earnings per share of common stock,basic net income per share is computed by dividing the net income available for distribution to shareholders of common
stock by the weighted-average number of shares of common stock outstanding during the period. Net assets per share
are computed based on the number of shares of common stock outstanding at each balance sheet date.
The weighted-average number of shares of common stock used in the computation for the years ended March 31,
2009 and 2008 was 52,125 thousand shares.
Diluted net income per share of common stock has not been presented because there were no potentially dilutive
shares outstanding.

51

CLS
16. Subsequent Events(1) On June 17, 2009, the shareholders of the Company authorized the following appropriations of retained earnings,
which have not been reflected in the consolidated financial statements for the year ended March 31, 2009:

Appropriations:
Cash dividends of 14.0 yen (U.S.$0.140) per share

Millions of yen

Thousands of
U.S. dollars¥ 730$ 7,449(2) On February 25, 2009, at an extraordinary shareholders meeting of the Company, approval was given for a merger
agreement with Century Leasing System Inc. and Tokyo Leasing Co., Ltd. effective April 1, 2009, which stated that all
assets, liabilities, rights and obligations and employees of the Company were taken over to Century Leasing System
Inc. Under the agreement, the surviving company was defined as Century Leasing System Inc. The merged company
was renamed Century Tokyo Leasing Corporation.

Formerly Century Leasing System, Inc.

Century Tokyo Leasing Corporation Annual Report 2009a) Description of the Business in which Tokyo Leasing Co., Ltd. Operates
Leasing business, installment sales, loan business and otherb) Objective of the Merger
The leasing industry in Japan has been experiencing dramatic changes, in particular increasing competition all acrossthe industry following the recent turmoil in financial and capital markets originating in the United States, worsening capital investment due to declining business confidence and the required adoption of the “Accounting Standard for Lease
Transactions.”
On the other hand, the leasing companies must respond to a variety of customer needs. Leasing companies arehaving asked to develop lease instruments, offer advisory services for financing needs, mainly for small and mediumsized enterprises and support outsourcing throughout the production lifecycle from start to finish.
Due to these changes in the business environment, the Company recognizes relationship between increased market competitiveness and a strengthened revenue base in order to expand the scale of business and enhance the operatingbase. Therefore, the Company concluded the merger to build both corporate and shareholder value as part of a medium-term management plan.
c) Legal Form of the Business Combination
Absorption merger with Century Leasing System Inc. as the surviving companyd) Merger Ratio
The Company offered 0.85 shares of Century Leasing System Inc. for each Tokyo Leasing Co., Ltd. share. As a result,
the Company issued 54,498,620 shares of common stock.
In connection with evaluating the fairness of the merger ratio, the Company appointed PwC Advisory Co., Ltd. andTokyo Leasing Co., Ltd. appointed KPMG FAS Co., Ltd. as independent financial advisors to calculate the merger ratio.
The Company and Tokyo Leasing Co., Ltd. approached the business combination taking into consideration thereview analysis provided by the evaluation.
e) Financial Information Assumed from Dissolving Company.

(Non-consolidated)
Current assets
Fixed assets
Total assets
Current liabilities
Long-term liabilities
Total liabilities
Total net assets

52

Millions of yen

Thousands of
U.S. dollars¥ 1,045,256
112,746
1,158,002
678,077
426,778
1,104,855¥
53,147$ 10,665,878
1,150,469
11,816,347
6,919,153
4,354,878
11,274,031$ 542,326

Formerly Century Leasing System, Inc.
Century Tokyo Leasing Corporation Annual Report 2009

Report of Independent Auditors

CLS

53

TLC

Consolidated Balance Sheets
Century Tokyo Leasing Corporation (formerly Tokyo Leasing Co., Ltd.) and Consolidated Subsidiaries
Years ended March 31, 2009 and 2008

Millions of yen

Thousands of
U.S. dollars(Note4)

2008

2009

14,554
21,356$ 1,062,954—

895,112
155,715
173,277
13,786(6,644)
51,161
1,338
3,166
42,6501,434,010—
172,318
159,674
23,250(2,574)——
1,298
18,267408,146

9,109,635
1,584,725
1,763,462
140,302(67,620)
520,677
13,61732,229434,057
14,594,041

1,612
15,59525,5888,165
10,331(20,663)
40,6299,538
53,36019,1003,594
13,381(18,027)
80,947

16,414
158,714
260,411
83,103
105,140(210,292)
413,493

96,294—
3,180
99,474

717,2292,250
2,796
722,277

980,000—
32,363
1,012,364

29
3,705
3,734
¥ 1,577,849

73,333
4,776
78,110¥ 1,289,481

296
37,70838,004$ 16,057,904

AssetsCurrent assets:
Cash on hand and in banks (Notes 7 and 10)
Marketable securities (Notes 5 and 10)
Receivables:
Lease receivables and investment assets (Notes 7 and 11)
Installment sales (Note 7)
Loans (Note 7)
Other
Allowance for doubtful accounts
Operational investment securities (Note 5)
Other operating assets

Formerly Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation Annual Report 2009

Deferred tax assets (Note 13)
Other current assets

Investments and other assets:
Investments in securities (Note 5):
Unconsolidated subsidiaries and affiliates
Other securities
Uncollectible receivables (Note 7)
Deferred tax assets (Note 13)
Other assets
Allowance for doubtful accounts

Property and equipment, at cost less accumulated depreciation:
Leased assets (Note 6)
Advances for purchases of leased assets
Own-used assets (Note 6)

Intangible assets:
Computer program leased to customers
Other intangible assets
Total assets

54

2009
¥

104,445—¥

Current liabilities:
Short-term borrowings (Notes 7 and 10)
Current portion of long-term debt (Note 7)
Notes and accounts payable—trade
Lease obligations
Accrued income taxes
Advances received from customers
Deferred profit on installment sales
Other current liabilities

Long-term liabilities:
Long-term debt (Note 7)
Lease obligations
Retirement benefits (Note 14)
Deferred tax liabilities (Note 13)
Provision for directors’ retirement benefits
Allowance for automobile inspection costs
Other long-term liabilities
Total liabilities

Thousands of
U.S. dollars(Note4)

2009

2008

2009

¥ 565,890
234,086
53,906
15,948
1,359
8,242
—
22,481
901,914¥ 532,004
137,871
45,845
—
1,094
5,902
8,919
12,930744,569$ 5,759,114
2,382,318
548,611
162,304
13,831
83,880—228,797
9,178,858

563,136
18,347
538
2,774
34
218
18,433
603,483
1,505,398

460,563
—
609
2,499
—
240
11,299475,211
1,219,780

5,731,082
186,727
5,479
28,233350
2,227
187,599
6,141,702
15,320,560

22,363044,34022,363
1
42,705

227,5985451,256(81)—
66,623—(80)
64,989(831)—
678,030

(180)
2,189
(4,018)(2,009)7,837
72,451¥ 1,577,849

2,657
2,265
(558)
4,364
346
69,700¥ 1,289,481(1,833)22,287(40,899)(20,446)
79,760737,343$ 16,057,904

Contingent liabilities (Note 8)
Net assets:
Shareholders’ equity (Note 15):
Common stock, without par value:
Authorized: 160,000,000 shares
Issued: 64,199,000 shares in 2009 and 2008
Capital surplus
Retained earnings
Treasury stock, at cost:
84,226 shares in 2009
82,457 shares in 2008
Valuation and translation adjustments
Net unrealized gain (loss) on available-for-sale-securities
Deferred gain on hedges
Foreign currency translation adjustments
Minority interests
Total net assets
Total liabilities and net assets

Formerly Tokyo Leasing Co., Ltd.

Liabilities and net assets

Millions of yen

Century Tokyo Leasing Corporation Annual Report 2009TLC

See accompanying notes to consolidated financial statements.

55

TLC

Consolidated Statements of Operations
Century Tokyo Leasing Corporation (formerly Tokyo Leasing Co., Ltd.) and Consolidated Subsidiaries
Years ended March 31, 2009 and 2008

Revenues (Note 16)
Costs and expenses (Note 16):
Costs
Selling, general and administrative expenses (Note 9)

Millions of yen

Thousands of
U.S. dollars(Note4)

2009

2008

2009

¥ 476,217¥ 435,277$ 4,846,508

438,130
25,701
463,831
12,386403,239
19,375
422,615
12,662

4,458,890
261,562
4,720,452
126,055

490
(781)
(34)
620
(309)
33
18
12,404

454
(538)
175
43
(625)
(27)
(517)
12,144

4,995(7,955)(346)
6,310(3,152)335
186
126,242

122
—
92
(451)
(390)
(167)

1,004
(1)
—
—
—
—

(1,300)(2,242)(4,337)
8,067—(1,910)(907)
11,237

1,249—
937(4,590)(3,976)(1,702)(13,239)(22,821)(44,143)
82,0994,357
601(1,803)
3,155
4,911
(840)
4,071

5,938
—
(1,440)
4,497
6,739
(21)
6,717

Formerly Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation Annual Report 2009

Operating income (Note 16)
Other income (expenses):
Interest and dividend income
Interest expenses
Equity in earnings (losses) of affiliates
Foreign exchange gains
Loss on devaluation of compound financial instruments
Other, net
Income before extraordinary items and income taxes
Extraordinary gains (losses):Gain on sale of investments in securities
Loss on sale of investments in securities
Gain on sales of golf memberships
Loss on devaluation of receivables
Merger expenses
Office transfer expenses
Loss on adjustment due to changes in the accounting
standard for lease transactions
Loss on devaluation of investments in securities
Income before income taxes and minority interests
Income taxes (Note 13):
Current
Income taxes for prior periods
DeferredIncome before minority interests
Minority interests
Net income

Amounts per share of common stock
Net income (Note 17):
Cash dividends
See accompanying notes to consolidated financial statements.

56

¥

¥

$

U.S. dollars(Note4)

Yen

¥

63.50
26.00

¥

104.7724.00

44,347
6,116(18,351)
32,112
49,986(8,549)41,437

$

0.64
0.26

TLC

Consolidated Statements of Changes in Net Assets
Century Tokyo Leasing Corporation (formerly Tokyo Leasing Co., Ltd.) and Consolidated Subsidiaries
Years ended March 31, 2009 and 2008

Common stock
Balance at beginning of year
Balance at end of year
Capital Surplus
Balance at beginning of year
Disposition of treasury stock
Balance at end of year
Retained earnings
Balance at beginning of year
Net income for year

Thousands of
U.S. dollars(Note4)

2009

2008

2009

2008

2009

64,19964,19964,19964,199¥ 22,363
22,363¥ 22,363
22,363$ 227,598
227,598

1
(0)
0

0
0
1

10
(5)
5

42,705
4,071(2,436)44,34037,462
6,717(1,474)42,705434,615
41,437(24,795)
451,256

(80)
(2)
1
(81)
¥ 66,623

(77)
(3)
0
(80)
¥ 64,989

(824)
(26)
19
(831)
$ 678,030¥¥$

Cash dividends
Balance at end of year
Treasury stock
Balance at beginning of year
Acquisition of treasury stock
Disposition of treasury stock
Balance at end of year
Total shareholders’ equity

Millions of yen

(82)
(3)
1
(84)

Net unrealized gain (loss) on available-for-sale-securities
Balance at beginning of year
Net changes during the year
Balance at end of year
Deferred gain (loss) on hedges
Balance at beginning of year
Net changes during the year
Balance at end of year
Foreign currency translation adjustments
Balance at beginning of year
Net changes during the year
Balance at end of year
Total valuation, translation adjustments and other
Minority interests
Balance at beginning of year
Net changes during the year
Balance at end of year
Total net assets

(80)
(2)
0
(82)

¥
¥

2,657
(2,837)
(180)

6,065
(3,407)2,657

27,044(28,878)(1,833)

2,265
(75)
2,189

(682)
2,948
2,265

23,059(772)
22,287(558)(3,460)(4,018)(2,009)

(284)
(273)
(558)
4,364

(5,684)(35,215)(40,899)$ (20,446)

346
7,490
7,837
¥ 72,451

¥
¥

273
73
346
¥ 69,700

Formerly Tokyo Leasing Co., Ltd.

Thousands

Century Tokyo Leasing Corporation Annual Report 2009

Number of shares

$

3,530
76,22979,760$ 737,343

See accompanying notes to consolidated financial statements.

57

TLC

Consolidated Statements of Cash Flows
Century Tokyo Leasing Corporation (formerly Tokyo Leasing Co., Ltd.) and Consolidated Subsidiaries
Years ended March 31, 2009 and 2008

Millions of yen

Thousands of
U.S. dollars(Note4)

2008

2009

Formerly Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation Annual Report 2009

2009
Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments for:
Depreciation
Increase in allowance for doubtful accounts
Loss on devaluation of marketable securities
and investments in securities
Interest and dividend income
Interest expenses
Gain on sales of securities and investments in securities
Decrease (increase) in installment sales receivables
Decrease in lease receivables and investment assets
Increase in operating loans receivables
Increase in operational investment securities
Decrease in other operating assets
Purchases of leased assets
Increase in operating investments
Increase in uncollectible receivables
Decrease in notes and accounts payable
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Purchases of investments in securities
Proceeds from sales of investments in securities
Acquisition of shares of consolidated subsidiary resulting
in change in scope of consolidation (Note 10)
Acquisition of shares in a consolidated subsidiary
Payments of loans receivable
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Decrease in short-term borrowings, net
Increase in long-term debt
Repayment of long-term debt
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Net increase resulting from changes in scope of consolidation
Cash and cash equivalents at end of year (Note 10)
See accompanying notes to consolidated financial statements.

58

¥

8,067

¥

11,237$82,09926,005
5,327

269,079
634

264,656
54,222

2,242(490)
17,355(122)
19,951
40,101(15,967)(17,498)
2,327(13,755)—(5,950)(2,657)(540)
64,394607(17,520)(4,928)42,552

1,910(454)
15,151(1,003)(3,207)—(8,178)——(229,786)(14,142)(973)(8,450)(641)
31,173563(15,093)(9,527)
7,115

22,821(4,995)
176,627(1,249)203,044
408,114(162,503)(178,079)
23,688(139,990)—(60,553)(27,045)(5,504)655,351
6,177(178,310)(50,157)
433,061(497)
783(6,648)
1,408(5,059)7,974(5,288)(4,289)(10,212)(1,291)(20,794)(1,095)——(4,658)(10,993)(53,821)(43,649)(103,933)(13,141)(211,630)(1,147)291,111(224,516)(1,538)(14,577)
49,331
544
71,63331,4771,182¥ 104,293(150,738)
275,025(175,100)(1,474)(30)(52,319)
28(56,167)
87,645—¥ 31,477(11,676)
2,962,663(2,284,920)(15,660)(148,353)
502,051
5,539
729,022
320,346
12,039$ 1,061,408

Notes to Consolidated Financial Statements
Century Tokyo Leasing Corporation (formerly Tokyo Leasing Co., Ltd.) and Consolidated Subsidiaries

Consolidated subsidiaries
Affiliated companies

2009
97
4

2008
101
5

(2) Translation of Foreign Currency Transactions
and Financial Statements
Monetary assets and liabilities denominated in foreign
currencies are translated into yen at the rates in effect atthe balance sheet date and the accounts of foreign consolidated subsidiaries etc., except for the components
of net assets, are translated into yen at the rate ofexchange in effect at the respective balance sheet date.
Foreign exchange gains and losses are credited or charged
to operations and foreign currency translation adjustments
are included in net assets.
(3) Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand,deposits held at call with banks, net of overdrafts andshort-term investments with maturities of three months
or less when purchased which are readily convertible into
cash and exposed only to an insignificant risk of any
change in their value.
(4) Securities
Available-for-sale securities with a market value are carried at market value with changes in unrealized gain or
loss, net of related deferred income taxes, in a separate(5) Derivatives and Hedging Activities
The Company and certain of its subsidiaries make use ofderivative financial instruments to reduce interest raterisk exposures on certain liabilities, hedge foreignexchange risk associated with certain assets and liabilities denominated in foreign currencies and hedge credit
risk of receivables. These instruments include debt loans,exchange forward contracts, currency swaps, interest
rate swaps, interest rate options and credit default swaps.
The amount of derivatives is limited to the extent of forecasted transaction, debt loan, commercial paper and loan
receivables. The Companies do not trade in derivatives
for speculative purposes.
Derivatives are valued at market based on market
prices at the balance sheet date. If derivatives are used
for hedging purposes and qualify for hedge accounting,
the Companies defer recognition of gains or losses resulting from changes in fair value of derivatives until maturityof the hedged transactions.
The interest rate swaps which meet specific matching criteria are not valued at market based on market price,
the related interest differential paid or received underinterest rate swaps is recognized over the terms of theswap agreements in interest expenses or income.

Formerly Tokyo Leasing Co., Ltd.

2. Summary of Significant Accounting Policies(1) Consolidation Policies
All significant companies over which the Company has
effective control are consolidated. Significant companies
over which the Company has the ability to exercise significant influence have been accounted for by the equity
method. All significant intercompany transactions havebeen eliminated in consolidation.
The number of consolidated subsidiaries and affiliated companies for 2009 and 2008 are as follows:

component of valuation and translation adjustments.
Available-for-sale securities without a market value arestated at cost determined principally by the moving average method. The cost of securities sold is principally
computed based on the moving average method. Hybrid
financial instruments, from which an embedded derivative cannot be separated, are stated at fair value and theresulting gains or losses are recognized in the statementof operations. Investments in a limited partnership aremeasured using equity method. During the year ended
March 31, 2009 and 2008, the Companies did not have
any trading securities.

Century Tokyo Leasing Corporation Annual Report 2009

1. Basis of Presentation
The accompanying consolidated financial statements ofCentury Tokyo Leasing Corporation (formerly Tokyo
Leasing Co., Ltd.) (the “Company”) and its consolidated
subsidiaries (together, the “Companies”) are preparedfrom those which were filed with the Director of the Kanto
Local Finance Bureau as required by the Financial
Instruments and Exchange Law of Japan, and are in conformity with accounting principles generally accepted inJapan, which are different in certain respects as to application and disclosure requirements of International
Financial Reporting Standards. As permitted by the
Financial Instruments and Exchange Law, the amounts
presented in the consolidated financial statements arerounded down to the nearest million yen.
In addition, the notes to the consolidated financial
statements include information which is not required
under accounting principles generally accepted in Japanbut is presented herein as additional information.

TLC(6) Property and Equipment
Depreciation of leased assets is computed by the straightline method based on the lease term of the respective
assets.
Depreciation of own-used assets is computed by the
declining-balance method based on the estimated useful lives.
(7) Intangible Assets
Depreciation of the computer program leased to customers is computed by the straight-line method basedon the lease term of the respective assets.
Goodwill is amortized by the straight-line method overa period of 5 years.
(8) Income Taxes
Deferred tax assets and liabilities are accounted for under
the asset and liability method. Deferred tax assets andliabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their tax bases and operating losses and tax credits
carried forward. Deferred tax assets and liabilities are59

TLC
measured using enacted tax rates expected to apply totaxable income in the years in which these temporary differences are expected to be recovered or settled.
(9) Retirement Benefits
Accrued retirement benefits for employees’ have been
provided mainly at an amount calculated based on theretirement benefit obligation and the fair value of the pension plan assets as adjusted for unrecognized actuarial
gain or loss.
(10) Revenue Recognition(Leases)
Lease revenues and the related costs on finance leases
are recognized on receipt of lease payments.
Revenues from operating leases are recognized ona straight-line basis over the scheduled lease terms.

Formerly Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation Annual Report 2009

(Installment Sales)
Installment sales and related costs are recorded wheneach installment payment becomes due.
(11) Interest Expenses
Interest expense is allocated to costs and other expenses based on the balances of the respective operating
assets, which consist principally of accounts receivable,leased assets and other assets. Interest expense classified as cost of sales is stated net of interest income.
(12) Allowance for Doubtful Accounts
The allowance for doubtful accounts is recorded on thebasis of historical experience to provide for possible losses from bad debts related to general trade accounts andalso for the estimated amounts considered to be uncollectible after individually reviewing the specific collectibilityof certain doubtful accounts.
(13) Allowance for Automobile Inspection Costs
The allowance for automobile inspection costs is recorded on the basis of historical experience to provide for thecost of automobile inspection of the car lease with maintenance service transactions and that of private car
maintenance service.
(14) Reclassification(Operational Investment Securities and Other
Operating Assets)
Prior to the fiscal year ended March 31, 2008, securities
and other operating assets such as investments in a limited partnership were classified as “Marketablesecurities,” “Investments in securities,” and “Other
assets.” Effective April 1, 2008, they were classified as“Operational investment securities” and “Other operating assets.” The amounts of “Operational investment
securities” included in “Marketable securities” and“Investments in securities” at March 31, 2008 was¥2,354 million and ¥31,309 million respectively, and theamounts of “Other operating assets” included in “Other
assets” was ¥3,665 million.

60

3. Accounting Changes(Practical Solution on Unification of Accounting
Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements)
Effective the fiscal year ended March 31, 2009, theCompany has applied “Practical Solution on Unificationof Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements” (ASBJ Practical
Issues Task Force No.18 issued on May 17, 2006) andhas made the required adjustments to the consolidated
financial statements.
The effect of this change on the consolidated statement of income is immaterial.
(Accounting Standard for Lease Transactions)
Finance lease transactions that do not transfer ownership to the lessee had been accounted for using the same
method as that for operating lease transactions. However,the “Accounting Standard for Lease Transactions” (ASBJ
Statement No.13 originally issued June 17, 1993 by theFirst Committee of the Business Accounting Council;
revised March 30, 2007) and the “Implementation
Guidance on Accounting Standard for Lease Transactions”(ASBJ Guidance No.16 (originally issued by Accounting
System Committee of the Japanese Institute of Certified
Public Accountants); revised March 30, 2007) are applicable for financial statements for fiscal years beginningon or after April 1, 2008. Accordingly, effective the year
ended March 31, 2009, the Company has adopted theseaccounting standards, and lease transactions are now
treated as ordinary sales transactions.
As a result, operating income, income before extraordinary items and income taxes increased by ¥1,301 million($13,249 thousand) and extraordinary losses increasedby ¥1,300 million ($13,239 thousand) compared with theamount that would have been reported under the accounting method used in the previous year. The effect of thischange on income before income taxes and minority interests is immaterial.

4. U.S. Dollar Amounts
The Company maintains its accounting records in yen.
The dollar amounts included in the consolidated financial
statements and notes thereto represent the arithmeticalresults of translating yen into dollars on the basis of ¥98.26= U.S.$1, the approximate rate of exchange at March 31,
2009. The inclusion of such dollar amounts is solely forconvenience and is not intended to imply that assets andliabilities originating in yen have been or could be readily
converted, realized or settled in dollars at ¥98.26 = U.S.$1
or at any other rate.

TLC
5. Marketable Securities and Investments in Securities
Marketable securities, operational investment securities and investments in securities as of March 31, 2009 and 2008
consist of the following:
Millions of yen

Thousands of
U.S. dollars

2008

2009

¥

¥ 27,130
7,789
16,242¥ 51,161

¥

¥

¥

¥
Operational investment securities (classified as available-for-sale):Investments in a limited partnership
Loan trust beneficiary securities
Bonds and otherNon-current:
Investments in securities – others (classified as available-for-sale):
Equity securities – listed– unlisted
Investments in a limited partnership
Loan trust beneficiary securities
Bonds and other

9,538
5,738
317
—
—
¥ 15,595¥¥¥

19,000
100
1,000
1,256
21,356————

14,672
5,663
19,513
10,0283,483
53,360

$

—
—
—
—
—

$

$ 276,108
79,271
165,297$ 520,677$

97,07658,403
3,234——$ 158,714

The carrying amounts and aggregate fair values of securities as of March 31, 2009 and 2008 are as follows:
Millions of yen
March 31, 2009
Book value

Unrealized gains

Unrealized losses

Fair value

Available-for-sale securities:
Equity securities
Bonds

¥

Other

11,268
6,372
3,275

¥

2,170
12
—

¥

3,900
690
537

¥

9,538
5,694
2,738

Formerly Tokyo Leasing Co., Ltd.

—
—
—
—
—

¥

Century Tokyo Leasing Corporation Annual Report 20092009
Current:
Marketable securities (classified as available-for-sale):
Certificate of deposit
Investments in a limited partnership
Loan trust beneficiary securities
Bonds

Millions of yen
March 31, 2008
Book value

Unrealized gains

Unrealized losses

Fair value

Available-for-sale securities:
Equity securities
Bonds

Other

¥

10,509
4,600
195

¥

5,242
0
—

¥

1,079
1
54

¥

14,672
4,599
140

Thousands of U.S. dollars
March 31, 2009
Book value

Unrealized gains

Unrealized losses

Fair value

Available-for-sale securities:
Equity securities
Bonds

Other

$ 114,682
64,84833,337$ 22,088
127—$

39,694
7,026
5,470

$

97,07657,94927,86761

TLC
Proceeds from sales of available-for-sale securities and resultant gross realized gains and losses for the years ended
March 31, 2009 and 2008 are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

Proceeds
Realized gains
Realized losses¥

2008¥ 1,318
1,004
1

2009
134
122
—

$

2009
1,364
1,249
—

Securities whose fair values are not readily determinable as of March 31, 2009 and 2008 are as follows:
Thousands of
U.S. dollars

2009

2008

2009

¥ 5,885
—
8,449
7,002
27,448¥ 5,663
19,000—11,028
19,613$ 59,897—
85,996
71,262
279,343

The following is a summary of the contractual maturities of bonds classified as available-for-sale securities as of March
31, 2009:
Formerly Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation Annual Report 2009

Available-for-sale:
Unlisted equity securities
Certificate of deposit
Bonds
Trust beneficiary securities
Investments in limited partnership

Millions of yen

Thousands of
U.S. dollars¥ 2,659
21,7004,830
11,746$ 27,064
220,847
49,156
119,543

Due within one year
Due after one to five years
Due after five to ten years
Due after ten years

6. Leased Assets and Own-used Assets
Leased assets and own-used assets as of March 31, 2009 and 2008 consist of the following:

Equipment for lease to customers:
At costLess accumulated depreciation
Property and equipment for rental to customers:
At costLess accumulated depreciation
Total leased assets
Own-used assets:
Buildings and structures
Office equipment
Assets under leaseLand
At costLess accumulated depreciation

Millions of yen

Thousands of
U.S. dollars

2009

2008

2009

—
—
—

¥ 1,697,494(1,037,594)
659,899———¥ 153,018(56,723)
96,294¥ 96,294

¥

¥

¥

¥

62

Millions of yen

1,135
1,147
894
1,950
5,128
(1,947)
3,180

¥

¥

107,484(50,153)
57,330717,229$ 1,557,279(577,278)
980,000$ 980,000

1,152
931
—
1,953
4,036
(1,240)
2,796

$

$

11,551
11,6809,101
19,85552,188(19,824)
32,363

TLC
7. Short-Term Borrowings, Long-Term Debt and Assets Pledged
Short-term borrowings at March 31, 2009 are as follows:

Loans from banks
Commercial paper

Millions of yen

Thousands of
U.S. dollars

The annual averageinterest rate

¥ 232,790
333,100¥ 565,890$ 2,369,128
3,389,985$ 5,759,114

1.22%
1.00%

Millions of yen

The annual averageinterest rate

Short-term borrowings at March 31, 2008 are as follows:

Loans from banks
Commercial paper¥ 210,904
321,100¥ 532,004

1.37%
0.80%

Thousands of
U.S. dollars¥ 782,422
3,500$ 7,962,780
35,61911,300797,222
234,086¥ 563,136

115,001
8,113,401
2,382,318$ 5,731,082

Loans, principally from banks and insurance companies, maturing 2009 – 2023,
with an average rate 1.68%
Medium-term note due 2009 with an average rate 1.16%
Loans from securitization of the minimum future rentals on lease contracts due 2009
with an average rate 0.98%
Less current portionLong-term debt at March 31, 2008 consists of the following:
Millions of yen

Loans, principally from banks and insurance companies, maturing 2008 – 2019,with an average rate 1.68%
Medium-term note due 2008 – 2009 with an interest rate ranging from 0.90% – 1.10%
Unsecured bonds due 2008 with an interest rate of 0.45%
Unsecured bonds due 2008 with an interest rate of 0.50%
Loans from securitization of the minimum future rentals on lease contracts, maturing 2007 – 2012,
with an average rate of 1.13%¥ 494,020
6,800
10,0005,000

Formerly Tokyo Leasing Co., Ltd.

Millions of yen

Century Tokyo Leasing Corporation Annual Report 2009

Long-term debt at March 31, 2009 consists of the following:

82,614598,434
137,871¥ 460,563

Less current portion

The aggregate annual maturities of long-term debt after March 31, 2009 are as follows:Year ending March 31,
2010
2011
2012
2013
Thereafter

Millions of yen

Thousands of
U.S. dollars¥ 234,086
261,173
158,274
84,01559,673¥ 797,222$ 2,382,318
2,657,979
1,610,771
855,030
607,301$ 8,113,401

63

TLC
Assets of the Companies pledged as collateral for long-term debt of ¥132,519 million ($1,348,657 thousand) as of March
31, 2009 is as follows:
Millions of yen

¥

35
3,971
899
169,7151,853¥ 176,474

Cash on hand and in banks
Installment sales
Loans
Lease receivables and investment assets
Uncollectible receivables

Thousands of
U.S. dollars$

360
40,416
9,149
1,727,206
18,859$ 1,795,992

In addition, other assets with a book value of ¥955 million ($9,727 thousand) were pledged as collateral for operatingtransactions.

8. Commitments and Contingent Liabilities
Contingent liabilities at March 31, 2009 and 2008 consist of the following:

Loan and other guarantees
Asset guarantees
Formerly Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation Annual Report 2009

Millions of yen

2009¥ 11,958
2,014¥ 13,973

2008
8,236
10,311¥ 18,548¥

Thousands of
U.S. dollars

$
$

2009
121,703
20,506142,209

The Companies have loan commitment agreements as of March 31, 2009 and 2008 amounting to ¥21,860 million($222,480 thousand) and ¥25,308 million, respectively. The loans provided under these credit facilities as of March 31,
2009 and 2008 amount to ¥2,955 million ($30,080 thousand) and ¥4,250 million, respectively. Many of these facilities
expire without being utilized and the related borrowings are subject to periodic reviews of the borrowers’ credit standing. Any unused amount will not necessarily be utilized in full.

9. Selling, General and Administrative Expenses
Major components of selling, general and administrative expenses as of March 31, 2009 and 2008 are as follows:

Employee’s salaries
Allowance for doubtful receivables
Allowance for accrued bonuses
Administrative expenses

¥

2009
9,276
6,877
459
—

Millions of yen

Thousands of
U.S. dollars

2008
8,361
2,037
379
2,514

2009
$ 94,409
69,995
4,675—

Millions of yen

Thousands of
U.S. dollars

2008¥ 14,554
19,000(2,077)¥ 31,4772009$ 1,062,954—(1,545)$ 1,061,408¥

10. Notes to the Consolidated Statements of Cash Flows(1) Cash and cash equivalents at March 31, 2009 and 2008 consist of the following:

Cash on hand and in banks
Marketable securities
Bank overdraft
Cash and cash equivalents

64

2009
¥ 104,445—(151)¥ 104,293

TLC(2) Assets and liabilities at March 31, 2009 increased through the acquisition of shares of a subsidiary as follows:
FUJITSU LEASING CO., LTD. (July 1, 2008)

Millions of yen

Thousands of
U.S. dollars

Current assets
Non-current assets
Current liabilities
Non-current liabilities
Goodwill
Minority interests
Investments acquired in prior years
Acquisition priceCash and cash equivalents
Payments for purchases of shares¥ 312,955
3,034(136,781)(151,045)(1,872)(12,672)(7,744)
5,871
(582)
¥
5,288

$ 3,184,971
30,877(1,392,039)(1,537,207)(19,061)(128,971)(78,815)59,754(5,932)$53,821Thousands of
U.S. dollars¥ 913,138
14,757(75,679)¥ 852,216$ 9,293,080
150,190(770,193)$ 8,673,078

The aggregate annual maturities of finance lease receivables which transfer ownership to the lessee subsequent toMarch 31, 2009 are summarized as follows:
Millions of yen

Due within one year
Due after one to two years
Due after two to three years
Due after three to four years
Due after four to five years
Due after five years¥ 14,418
12,636
9,433
6,121
2,709
673
¥ 45,993

Thousands of
U.S. dollars$$

146,737
128,605
96,00062,296
27,5786,857
468,076

Formerly Tokyo Leasing Co., Ltd.

Future lease payments
Estimated residual value
Future interest income

Millions of yen

Century Tokyo Leasing Corporation Annual Report 2009

11. Lease Transactions(1) Finance Leases
Finance leases of the Company (and its consolidated subsidiaries) which do not transfer ownership to the lessee arecapitalized as lease investment assets. Information relating to finance leases at March 31, 2009 and for the year thenended is summarized as follows:

The aggregate annual maturities of finance lease receivables which do not transfer ownership to the lessee subsequent
to March 31, 2009 are summarized as follows:

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

Millions of yen

Thousands of
U.S. dollars¥ 320,796
233,528
163,895
96,62048,72049,575¥ 913,138$ 3,264,771
2,376,642
1,667,981
983,313495,835
504,535$ 9,293,080

As for the lease accounting treatment for finance lease transactions that do not transfer ownership to the lessee starting before April 1, 2008, the amounts of “Leased assets” (excluding depreciation) at March 31, 2008 were recorded as
the beginning balance of “Investment assets,” and the amounts of rental revenues were recorded by the straight-line
method based on the scheduled lease terms. As a result, for the year ended March 31, 2009, “Income before income
taxes and minority interests” decreased by ¥18,640 million ($189,708 thousand) compared with the amount that would
have been reported under the accounting method used in the previous year.
65

TLC
Finance leases which do not transfer ownership to the lessee are accounted for in the same manner as operating leases. Information relating to finance leases of the Group at March 31, 2008 and for the year then ended is summarized asfollows:
Millions of yen

The Companies as lessor:¥ 1,894,673(1,161,440)¥ 733,233¥ 745,556
241,653¥ 289,543
252,104
37,679At costAccumulated depreciation
Book value
Future minimum lease payments
Amount due within one year
Rental revenues
Depreciation expense
Implied interest income(2) Operating Leases
Information relating to operating leases at March 31, 2009 and 2008 and for the years then ended is as follows:
Millions of yen

The Companies as lessor:¥

Formerly Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation Annual Report 2009

Future minimum lease payment
Amount due within one year2009
57,806
17,5442008¥ 47,546
13,006

Thousands of
U.S. dollars$

2009
588,304
178,551

12. Derivatives and Hedging Activities
Derivative financial instruments are utilized by the Companies principally to reduce interest rate risk, exchange rate fluctuation risk and credit risk of receivables. The Companies have established a control environment which includes policies
and procedures for risk assessment and for the approval, reporting and monitoring of transactions involving derivative
financial instruments. The Companies do not hold or issue derivative financial instruments for trading purposes.
The Companies are exposed to certain market risks arising from forward exchange contracts and swap agreements.
The Companies are also exposed to the risk of credit loss in the event of non-performance by counterparties to the currency and interest rate transactions; however, the Companies do not anticipate non-performance by any of thesecounterparties all of whom are financial institutions with high credit ratings.
Derivative financial instruments for hedging activities were measured at fair value, and those unrealized gains weredeferred.
At March 31, 2009, the outstanding interest rate swaps are as follows:
Millions of yen
Notional amounts(over one year)

Interest rate swap agreements:
Pay fixed swaps
Interest rate caps

¥ 3,280(2,642)
925(520)

Unrealized gain
(loss)¥(5)
0

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

Unrealized gain
(loss)$ 33,386(26,889)
9,421(5,294)$(58)
3

The interest rate swaps which qualify for hedge accounting and meet specific matching criteria are excluded from disclosure of market value information.

13. Income Taxes
The Company and its domestic subsidiaries are subject to several taxes based on income, which in the aggregate resulted in a statutory tax rate of approximately 40.7% for the years ended March 31, 2009 and 2008.
Foreign subsidiaries are subject to income taxes of countries in which they operate.

66

TLC
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities asof March 31, 2009 and 2008 are presented below:

2009

2008

2009

983
9,987
4,685
3,323
18,980(6,783)
12,196¥ 1,147
7,694
3,281
2,582
14,706(7,326)
7,380

$

(23)
(721)
(3,372)(4,116)¥ 8,079(1,700)(721)(2,565)(4,987)¥ 2,392(239)(7,338)(34,319)(41,897)$ 82,228¥

10,008
101,648
47,68533,822
193,164(69,039)
124,125

In assessing the recoverability of deferred tax assets, management of the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will be recovered. The ultimate recoverability of deferred
tax assets is entirely dependent upon the generation of future taxable income in specific tax jurisdictions during the periods in which those temporary differences become deductible. Although realization is not assured, management considers
the projected future taxable income in making this assessment. Based on these factors, management believes it ismore likely than not that the Company will realize the benefits of these deductible differences, net of the existing valuation allowance as of March 31, 2009.
Income taxes have not been accrued in respect of the undistributed earnings of certain foreign subsidiaries andassociated companies, as these amounts are intended to be reinvested indefinitely. The unrecognized deferred tax liabilities related to these earnings are immaterial.

14. Retirement Benefits
The Companies had participated in defined benefit plans for employees, partially funded through a tax qualified fundedpension plan. However, during the year ended March 31, 2009, the Company has changed benefit plans from theseplans to a defined benefit plan and a defined contribution plan.
During the year ended March 31, 2005, the Company contributed certain marketable securities to an employee
retirement benefit trust. The securities are qualified as plan assets.

Formerly Tokyo Leasing Co., Ltd.

Deferred tax liabilities:
Unrealized gain on securities
Gain on contribution of securities to employee retirement benefit trust
Other
Total gross deferred liabilities
Net deferred tax assets

Thousands of
U.S. dollars

Century Tokyo Leasing Corporation Annual Report 2009

Deferred tax assets:
Retirement benefits
Allowance for doubtful accounts
Depreciation expenses
Other
Subtotal gross deferred tax assets
Less valuation allowance
Net deferred tax assets

Millions of yen

The following table summarizes the funding status and amounts recognized in the consolidated balance sheets asof March 31, 2009 and 2008:

Projected benefit obligation
Plan assets
Unfunded benefit obligation
Unrecognized actuarial loss
Net recognized retirement benefit obligation
Prepaid pension and severance costs
Accrued benefit obligation for employees2009¥ (4,204)
3,730
(473)
1,751
1,277
1,816
(538)

Millions of yen

Thousands of
U.S. dollars

2008¥ (4,489)
5,218
729
(705)
24
633
(609)

2009
$ (42,787)
37,967(4,819)17,82313,004
18,483(5,479)67

TLC
The following table summarizes the components of net periodic pension cost for employees for the years ended March
31, 2009 and 2008:
Millions of yen

Thousands of
U.S. dollars

2008
¥ 344
73
(74)
—
(283)
—
59
—
—
¥ 59

2009
$ 3,202
898
(749)
(310)
(1,127)
106
2,019
(344)
356
$ 2,031

2009
314
88
(73)
(30)
(110)
10
198
(33)
35
¥ 199

Service cost benefits earned duringthe year
Interest cost on benefit obligation
Expected return on plan assets
Amortization of prior service cost
Amortization of actuarial losses
Extra retirement payments
Net periodic pension cost
Loss on revision of retirement benefit plan
Contribution paid to the defined contribution pension plan
Total

¥

The assumptions used in determining pension benefit obligations at March 31, 2009 and 2008 are shown below:

2008
Benefit / year-of-service approach

2.0%
0.5% – 1.3%
10 years

2.0% – 2.5%
1.0% – 3.2%
10 years

Prior service cost is fully recognized as an expense in the year the Companies incur such cost.
Formerly Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation Annual Report 20092009
Attribution method of estimated benefits
Discount rate
Expected rate of return on plan assets
Recognition period of actuarial gain/loss

15. Shareholders’ Equity
Retained earnings include a legal reserve provided in accordance with the Corporation Law of Japan (the “Law”). The
Law provides that an amount equal to 10% of dividends must be appropriated as a legal reserve (of retained earnings)
or as additional paid in capital, until the total of aggregate amount of legal reserve and additional paid in capital equals
25% of the common stock. The Law also provides that the legal reserve and additional paid in capital are available forappropriations by resolution of the shareholders.

16. Segment Information
The Companies’ business segments consist of financing and operating leases, installment sales, loans and other operations.
The Company and its subsidiaries’ segment information for the years ended March 31, 2009 and 2008 are as follows:
Millions of yen
Year ended March 31, 2009

(Sales and operating income)Revenue from customers
Intersegment revenue
Total sales
Operating cost
Operating income

Leasing

Installment
sales¥ 391,672—¥ 391,672
378,036¥ 13,636¥ 69,133—¥ 69,133
67,482¥ 1,650(Identifiable assets, Depreciation, Capital expenditures)
Identifiable assets¥ 1,114,504¥ 175,679
Depreciation
24,503—
Capital expenditures
18,737
—

68

Loans

¥

Other

Elimination or
corporate

Consolidated
total

5,170
—
5,170
4,619
551

¥ 10,241210¥ 10,452
9,612
¥
840

¥

—
(210)
¥ (210)4,081¥ (4,292)¥¥ 192,594——¥ 60,687——¥ 34,383
1,501
911¥ 1,577,849
26,005
19,648¥¥¥¥476,217—476,217463,831
12,386

TLC
Millions of yen
Year ended March 31, 2008
Leasing(Sales and operating income)Revenue from customers¥
Intersegment revenue
Total sales¥
Operating cost
Operating income¥

343,19133
343,224
330,713
12,511

Installment
sales

¥
¥
¥

77,196—
77,19676,651
544(Identifiable assets, Depreciation, Capital expenditures)
Identifiable assets¥ 179,481¥ 853,954
Depreciation—
268,411
Capital expenditures—
252,911

Loans

¥

5,092
—
5,092
2,817
2,275

¥

¥ 165,951
—
—

¥

¥
¥

Elimination or
corporate

Consolidated
total

9,796
60
9,856
8,170
1,686

¥

—
(93)
(93)
4,261
(4,355)¥

39,133——¥50,961667
4,042¥ 1,289,481
269,079
256,954

Other

¥
¥

¥
¥

¥
¥

435,277—
435,277
422,615
12,662Thousands of U.S. dollars
Year ended March 31, 2009

$ 703,577—$ 703,577
686,775$ 16,801(Identifiable assets, Depreciation, Capital expenditures)
Identifiable assets$ 1,787,908$ 11,342,400
Depreciation—
249,375
Capital expenditures—
190,694

Loans

$

Other

Elimination or
corporate

52,618—52,61847,0105,608$ 104,228
2,144$ 106,372
97,823$8,549$$ 1,960,049——$ 617,625——$ 349,920
15,280
9,272

$
$

$
$

Consolidated
total— $ 4,846,508(2,144)—(2,144) $ 4,846,508
41,5364,720,452(43,680) $ 126,055$ 16,057,904
264,656
199,966

Corporate expenses not allocated to segments are principally general and administrative expenses in the Companies,and corporate assets represent principally investment securities and other assets acquired by the Companies.

Formerly Tokyo Leasing Co., Ltd.

(Sales and operating income)Revenue from customers$ 3,986,083
Intersegment revenue—
Total sales$ 3,986,083
Operating cost
3,847,306
Operating income$ 138,776

Installment
sales

Century Tokyo Leasing Corporation Annual Report 2009

Leasing(Geographic Segment)
The segment information by geographic area is not required to be disclosed because the amounts of sales and identifiable assets outside Japan are less than 10% of the consolidated total for the years ended March 31, 2009 and 2008.
(Sales to overseas Customers)
The information of sales to overseas customers is not required to be disclosed, because the amounts of sales to overseas customers are less than 10% of consolidated total for the years ended March 31, 2009 and 2008.

17. Amounts per Share
Net income per share is computed based on the net income available for distribution to shareholders of common stockand the weighted average number of shares of common stock outstanding during the year. Diluted net income per shareof common stock is not shown because there were no potentially dilutive shares outstanding.

Net income per share of common stock2009¥ 63.50

Yen

U.S. dollars

2008¥ 104.77

2009$ 0.6469

TLC
Net income available to shareholders of common stock
Net income
Weighted-average number of shares of common stock
outstanding (denominator)

Millions of yen

Thousands of
U.S. dollars

2009

2008

2009

¥ 4,071¥ 6,717$ 41,437

64,115,894

64,117,407

Net assets per share have been computed based on the net assets available for distribution to stockholders of common stock and the number of shares of common stock outstanding at each balance sheet date.

Net assets per share

Formerly Tokyo Leasing Co., Ltd.

Century Tokyo Leasing Corporation Annual Report 2009

Net assets available for distribution to stockholders of common stock
Net assets
Less: minority interests
Number of shares of common stock (denominator)
Number of shares of common stock outstanding
Less: number of shares of treasury stock

Yen

U.S. dollars

2008¥ 1,081.68

2008$ 10.25

Millions of yen

Thousands of
U.S. dollars

2009

2008

2009

¥ 72,451(7,837)¥ 64,614¥ 69,700(346)¥ 69,353$ 737,343(79,760)$ 657,583

64,199,000(84,226)
64,114,774

64,199,000(82,457)
64,116,543

2009¥ 1,007.79

18. Subsequent Event
On February 25, 2009, the extraordinary shareholders meeting of the Company approved a merger agreement between
Century Leasing System, Inc. and Tokyo Leasing Co., Ltd. effective April 1, 2009, stating that all assets, liabilities, rights
and obligations and employees of the Company were taken over by Century Leasing System, Inc. Under the merger
agreement, the surviving company was defined as Century Leasing System, Inc. The merged company was renamed
Century Tokyo Leasing Corporation.
a) Description of the business in which Century Leasing System, Inc. operates
Leasing business, installment sales, loan business and otherb) Financial data of Century Leasing System, Inc. (Year ended March 31, 2009)
Revenue¥266,729 million ($2,714,530 thousand)Net income¥5,957 million ($60,631 thousand)Total assets¥845,950 million ($8,609,305 thousand)Employees
490c) Merger ratio
1 share of the Company in exchange for 0.85 share of common stock of Century Leasing System, Inc.

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Formerly Tokyo Leasing Co., Ltd.
Century Tokyo Leasing Corporation Annual Report 2009

Report of Independent Auditors

TLC

71

Main Subsidiaries and Affiliates
As of October 1, 2009

Related Domestic Corporation
NIPPON CAR SOLUTIONS CO.,LTD.

C-TRY, Inc.

Seavans North Bldg., 1-2-1, Shibaura, Minato-Ku,
Tokyo 105-0023
Telephone: 81-3-6436-1190

World Trade Center Bldg.,
2-4-1 Hamamatsu-cho, Minato-ku,
Tokyo 105-6110
Telephone: 81-3-3435-4481

Date of Foundation: February 1987
Paid-in Capital: ¥981 Million
Main Business Operations: Leasing business of automobiles and automobile-related equipment

Date of Foundation: May 2004
Paid-in Capital: ¥21 Million
Main Business Operations: Provides data deletion services
for removal of data from PCs and servers as well as refurbishment (reuse and recycling) of PCs.

TOKYO AUTO LEASING CO., LTD.
Shin-Osaki Kangyo Bldg., 1-6-4, Osaki,
Sinagawa-ku, Tokyo 141-0032
Telephone: 81-3-5436-3711

Century Tokyo Leasing Corporation Annual Report 2009

Date of Foundation: March 1979
Paid-in Capital: ¥200 Million
Main Business Operations: Leasing business of automobiles and automobile-related equipment

TOKYO LEASE KANZAI K.K.
Kodenma-cho Bldg., 1-4, Nihonbashi-Kodenmacho,
Chuo-ku, Tokyo 103-0001
Telephone: 81-3-3662-3335
Date of Foundation: January 1987
Paid-in Capital: ¥10 Million
Main Business Operations: Insurance agency business

ORICO AUTO LEASING CO., LTD.
Shin-Osaki Kangyo Bldg., 1-6-4, Osaki,
Shinagawa-ku, Tokyo 141-0032
Telephone: 81-3-6893-3702
Date of Foundation: March 2008
Paid-in Capital: ¥240 Million
Main Business Operations: Leasing business of automobiles

Century Business Service, Inc.
FUJISOFT Bldg., 3 Kanda-neribeicho, Chiyoda-ku,
Tokyo 101-0022
Telephone: 81-3-5209-5460

FUJITSU LEASING CO., LTD.

Date of Foundation: January 1991
Paid-in Capital: ¥20 Million
Main Business Operations: Primarily engaged in providing
casualty insurance. Also involved in various financing services and sales, including short-term bridging loans for housing.

FUJISOFT Bldg., 3 Kanda-neribeicho, Chiyoda-ku,
Tokyo 101-0022
Telephone: 81-3-5843-6301

TC BUSlNESS SERVICE Corporation

Date of Foundation: March 1979
Paid-in Capital: ¥1,000 Million
Main Business Operations: Leasing business of IT-related
equipment*The office was relocated to the above address on October 26, 2009.

FUJISOFT Bldg., 3 Kanda-neribeicho, Chiyoda-ku,
Tokyo 101-0022
Telephone: 81-3-5209-8131
Date of Foundation: June 2004
Paid-in Capital: ¥20 Million
Main Business Operations: Business processing service

S.D.L CO., LTD.
Shiseido Main Bldg., 7-5-5, Ginza,
Chuo-ku, Tokyo 104-0061
Telephone: 81-3-3289-2028
Date of Foundation: January 1991
Paid-in Capital: ¥100 Million
Main Business Operations: Leasing business of automobiles, general leasing business and rental business

ITEC LEASING CO., LTD.
1-4-1, Jinnan, Shibuya-ku, Tokyo 105-0041
Telephone: 81-3-5456-4760
Date of Foundation: September 1984
Paid-in Capital: ¥20 Million
Main Business Operations: Leasing business of broadcasting equipment

72

CAPLAN Corporation
3-1-31, Minami-Aoyama, Minato-ku,
Tokyo 107-0062
Telephone: 81-3-3497-5567
Date of Foundation: January 1982
Paid-in Capital: ¥350 Million
Main Business Operations: Specializes in the staffing of
office workers and professionals, as well as in recruiting
services, educational training and outsourcing.

Related Overseas Corporation
TOKYO LEASING (U.S.A.) INC.

CENTURY LEASING (CHINA) CO., LTD.

3020 Westchester Avenue,Suite 401 Purchase, NY
10577, U.S.A.
Telephone: 1-914-697-9030

Room 806, Wangjiao Plaza, 175 East Yanan Road,
Huangpu District, Shanghai, P.R.C
Telephone: 86-21-6336-2300

Date of Foundation: December 1985
Paid-in Capital: US$26,513 thousand
Main Business Operations: General leasing business

Date of Foundation: October 2006
Paid-in Capital: US$10,000 thousand
Main Business Operations: General leasing business

TOKYO LEASING (UK) PLC

TOKYO LEASING (HONG KONG) LTD.

1st Floor, Kingsbridge House, Pinner, Middlesex
HA5 5LX, U.K.
Telephone: 44-20-8429-1963

Room 301, 3rd Floor, Sun Hung Kai Centre 30
Harbour Road, Wan chai, Hong Kong

Date of Foundation: May 1983
Paid-in Capital: STG£6,655 thousand
Main Business Operations: General leasing business

Date of Foundation: October 1972
Paid-in Capital: HK$13,000 thousand
Main Business Operations: General leasing business

138 Robinson Road, The Corporate Office #12-01,
Singapore 068906
Telephone: 65-6532-3436

12F., No.8, Dongxing Rd., Songshan District,Taipei City 10570, Taiwan R.O.C.
Telephone: 886-2-2747-8188

Date of Foundation: May 1979
Paid-in Capital: S$19,340 thousand
Main Business Operations: General leasing business

Date of Foundation: November 1997
Paid-in Capital: NT$200,000 thousand
Main Business Operations: Leasing business of automobiles and general leasing business

TLC CAPITAL (MALAYSIA) SDN. BHD.

TISCO TOKYO LEASING CO., LTD.

Suite 11.2, Level 11, Menara Weld, No.76, Jalan Raja
Chulan, 50200 Kuala Lumpur, Malaysia
Telephone: 60-3-2070-2633

19th Floor, TISCO Tower, 48/44 North Sathorn Road,
Silom, Bangrak, Bangkok, 10500, Thailand
Telephone: 66-2-638-0900

Date of Foundation: June 2007
Paid-in Capital: RM8,253 thousand
Main Business Operations: General leasing business

Date of Foundation: April 1993
Paid-in Capital: BAHT 60,000 thousand
Main Business Operations: General leasing business

TOZUI CORPORATIONISUZU FINANCE OF AMERICA, INC.

A2501-02,14, City Center Shanghai, 100 Zunyi Road,
Changning District, Shanghai P.R.C (*)
Telephone: 86-21-6213-5511

3020 Westchester Avenue, Suite 203 Purchase, N.Y.
10577, U.S.A.
Telephone: 1-914-251-0220

Date of Foundation: July 2006
Paid-in Capital: US$30,000 thousand
Main Business Operations: General leasing business

Date of Foundation: March 2007
Paid-in Capital: US$10,000 thousand
Main Business Operations: Leasing business of automobiles and automobile-related equipment(*) since October 26, 2009

Century Tokyo Leasing Corporation Annual Report 2009PRESIDENT TOKYO CORPORATIONTOKYO LEASING (SINGAPORE) PTE., LTD.

73

Stock Information/Bond Rating
As of April, 2009

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

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

Stock Listing: Tokyo Stock Exchange, First Section

Trading Lot Size: 100 shares

Securities Code: 8439

Number of Shareholders: 10,284

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

Breakdown of Shareholders

Individuals and other: 8.1%
9,856 persons

Financial institutions: 30.4%
52 persons

Securities companies: 1.1%
30 persons

Foreign investors: 7.5%
168 persons

Other institutions: 52.9%

Century Tokyo Leasing Corporation Annual Report 2009178 persons

Major Shareholders
Number of shares held
(1,000 shares)

Shareholders

ITOCHU Corporation
Nippon Tochi-Tatemono Co., Ltd.
KSO Co., Ltd.
Nippon Life Insurance Company
Mizuho Corporate Bank, Ltd.
Japan Trustee Services Bank, Ltd. (Trust accounts)
Nissin Tatemono Co., Ltd.
Japan Trustee Services Bank, Ltd. (Trust accounts 4)
Seiwa Sogo Tatemono Co., Ltd.
The Master Trust Bank of Japan, Ltd. (Trust accounts)

21,333*13,004
9,963
5,386
4,649
3,634
3,557
3,489
2,972
2,588

Percentage of shares
outstanding (%)

20.0
12.2
9.3
5.1
4.4
3.4
3.3
3.3
2.8
2.4

*As of September 1, 2009

Bond Ratings
Century Tokyo Leasing Corporation’s ratings assigned by Japan Credit Rating Agency, Ltd. and Rating and Investment
Information, Inc.
As of April 1, 2009

Credit Rating Agency
Long-term

Short-term

74

Japan Credit Rating Agency, Ltd. (JCR)(Long-Term Senior Debt)
Rating: A
Outlook: Stable(Preliminary Rating for Bonds Registered for Issuance)
Rating: A
Expected Issue Amount: ¥150 billion(Euro Medium-Term Note Program)
Rating: A
Maximum Outstanding Amount: Equivalent of US$1 billion(Commercial Paper)
Rating: J-1
Maximum Outstanding Amount: ¥650 billion

Rating and Investment Information, Inc. (R&I)(Issuer Rating)Rating: AOutlook: Stable(Preliminary Rating for Bonds Registered for Issuance)
Rating: AExpected Issue Amount: ¥150 billion(Euro Medium-Term Note Program)
Rating: AMaximum Outstanding Amount: Equivalent of US$1 billion(Commercial Paper)
Rating: a-1
Maximum Outstanding Amount: ¥650 billion

Corporate Information
As of April 1, 2009

Company Name

Century Tokyo Leasing Corporation
Head Office[Hamamatsu-cho]World Trade Center Building,
2-4-1 Hamamatsu-cho, Minato-ku, Tokyo 105-6110, Japan
Telephone: 81-3-3435-4411[Akihabara]

FUJISOFT Bldg.,
3 Kanda-neribeicho, Chiyoda-ku, Tokyo 101-0022, Japan
Telephone: 81-3-5209-7055
FoundedJuly 1, 1969
Paid-in Capital¥34,231 million
Company Representative

President & CEO Shunichi Asada
Number of Employees

1,723 (1,195 on a non-consolidated basis)
Closing of Accounts
Major Banks

Mizuho Corporate Bank, Ltd.; The Sumitomo Trust & Banking Co., Ltd.;The Norinchukin Bank; Nippon Life Insurance Company; and others
Network (Except the head office)Domestic

Tokyo Metropolitan Area, Sapporo, Sendai, Niigata, Shizuoka, Nagoya, Kanazawa, Tsukuba, Chiba.
Tachikawa, Yokohama, Saitama, Kyoto, Osaka, Kobe, Okayama, Hiroshima, Takamatsu, Fukuoka
Overseas

New York, London, Singapore, Kuala Lumpur, Hong Kong, Shanghai, Taipei, Bangkok

Century Tokyo Leasing Corporation Annual Report 2009

March 31

Additional copies of this annual report and otherinformation may be obtained by contacting

Investor Relations OfficeTelephone: 81-3-5209-6710

75

4-1 Hamamatsu-cho 2-chome
Minato-ku, Tokyo 105-6110, Japanwww.ctl.co.jp

Printed in Japan

Century Tokyo Leasing Corporation Annual Report 2009

Century Tokyo Leasing Corporation
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Make New Business with Leasing

Annual Report 2009