Century Tokyo Leasing Corporation Annual Report 2010

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

Printed in Japan

ANNUALRE PORT
2010

Profile

CORPORATE INFORMATION

April 1, 2009 marked the launch of Century Tokyo Leasing Corporation (“TC-Lease”),

AS OF MARCH 31, 2010

a merger between Century Leasing System, Inc., a specialist in information andcommunication equipment leasing and IT services, and Tokyo Leasing Co., Ltd.,well known for its strong finance capabilities and international network.
This integration of business partners that each represent a broad array of interrelated businesses, from trading companies and financial institutions to real estatecompanies, affording us a distinct advantage. While providing advanced, high valueadded services with greater functionality, we address the global leasing and financing needs associated with our customers’ overseas business strategies.

Company Name
Century Tokyo Leasing Corporation
Head Office[Hamamatsu-cho]World Trade Center Bldg.,
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

society by offering comprehensive, solutions-oriented financing services.

Paid-in Capital¥34,231 million
Company Representative
President & CEO Shunichi Asada
Number of Employees
1,732 (1,199 on a non-consolidated basis)

Contents

Closing of Accounts
March 3101 Maximizing Merger Synergies andMoving to the Next Stage of Growth

20 At a Glance

02 Financial Highlights

An overview of each business segment, fiscal 2010
results, basic strategy and topics

03 To Our Stakeholders
04 A Message from the CEO
In a Q&A session, CEO Shunichi Asada offers an overview of the fiscal year ended March 31, 2010 with a lookback on the first year of the merger, an explanation of thetargets of the new medium-term management plan andthe outlook moving forward.

11 Special Feature
Strengths and growth strategies for core businesses in themedium-term management plan
Information and Communications/Office
Equipment Business
Automobile Leasing Business
Loan Business
Overseas Business21 Segment Information
Leasing Business
Installment Sales Business
Loan Business
Other Business

25 Corporate Governance andCompliance/CSR

Major Banks
Mizuho Corporate Bank, Ltd.; Nippon Life Insurance Company; The Sumitomo Trust & Banking Co., Ltd.;
Mitsubishi UFJ Trust and Banking Corporation; The Norinchukin Bank; Asahi Mutual Life Insurance Company
Independent Auditor
Ernst & Young ShinNihon LLC

69

Network
Domestic
Tokyo Metropolitan Area (Hamamatsu-cho, Akihabara, Gotanda, Shinjuku, Tachikawa), Sapporo, Sendai, Niigata, Tsukuba,
Saitama, Yokohama, Shizuoka, Nagoya, Kanazawa, Kyoto, Osaka, Kobe, Okayama, Hiroshima, Takamatsu, Fukuoka
Overseas
Shanghai, Guangzhou, Hong Kong, Taipei, Bangkok, Kuala Lumpur, Singapore, New York, London

Leveraging its business activities, Century Tokyo Leasing Corporation contributes to the development of society and the preservation of the environment with the aimof earning the trust and fulfilling the expectations ofsociety.

29 Corporate History
30 Management
31 Financial Section
65 Report of Independent Auditors
66 Main Subsidiaries and Affiliates
68 Stock Information/Bond Rating
69 Corporate Information

Forward-Looking Statements

Statements in this annual report with respect to Century Tokyo Leasing Group’s plans, forecasts, strategies, presumptions, and other statementsthat 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 that discussed in the forwardlooking statements.

CENTURY TOKYO LEASING CORPORATION

We are committed to growing together with our customers and to contributing to

Additional copies of this annual report and otherinformation may be obtained by contacting
Investor Relations OfficeTelephone: 81-3-5209-6710

CORPORATE INFORMATION

Make New Business with Leasing

Maximizing Merger Synergies and Moving to the Next Stage of Growth

Information
Resources

Customer Base

Human
Resources

No.1

Accumulation of Knowledge on
Tangible Assets, SophisticatedFinancing Capabilities andGlobal Network
Product Lines

Ordinary income¥33.4 billion*
No.1

FUND PROCUREMENT

Value of new contracts for
information and communication/office equipment¥241.3 billion*

No.2

Balance of
operating assets¥1,938 billion*(Including balance of operating assets in leasing/installment
sales, ¥1,611 billion)

No.3

Vehicle units undermanagement in automobile
leasing business

394,000 vehicles*** Figures for companies other than Century Tokyo Leasing are based on the IR materials of other listed companies that have adopted
accounting standards generally accepted in Japan**Based on a March 2009 survey by Nikkan Jidosha Shimbun

1
MA XIMIZING MERGER SY NERGIES AND MOV ING TO THE NE X T STAGE OF GROW TH

COST COMPETITIVENESSCENTURY TOK YO LE A SING CORPOR ATION

Broad Customer Base andRobust Network Involving Major
Shareholders and Manufacturers

FINANCIAL HIGHLIGHTSCENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31

Millions of yen

Operating Results
Revenues
Operating income
Ordinary income(Income before extraordinary items and income taxes)
Net income

CENTURY TOK YO LE A SING CORPOR ATION

Financial Condition
Total assets
Operating assets
Interest-bearing debt
Net assets

FINANCIAL HIGHLIGHTS

2

Per Share Data
Net income
Net assets
Dividends

Thousands of
U. S. dollars

2009

2010

2010

¥ 742,948
20,897¥ 758,674
30,295$ 8,154,283
325,618

22,275
10,02933,41425,542359,138
274,523¥2,423,800
2,100,016
2,053,766
133,222¥2,132,892
1,937,955
1,749,776
158,116$22,924,467
20,829,271
18,806,705
1,699,440

Yen

¥

94.05
1,174.11
28.00

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

U. S. dollars¥

239.571,410.61
32.00$ 2.57
15.16
0.34

18.5
1.5
7.1

—
—
—

%

8.0
1.0
5.2

Notes
1. Figures for the year ended March 31, 2009 are the simple sums of values recorded by the former Century Leasing System, Inc. and Tokyo
Leasing Co., Ltd. The merger ratio has been factored into per share data. Dividends are those paid by the former Century Leasing System, Inc.
2. Translated at ¥93.04 = US$1.00, the approximate rate of exchange on March 31, 2010.

Operating Income (Millions of yen)

Ordinary Income (Millions of yen)

Net Income (Millions of yen)

Net Assets (Left: millions of yen)
Equity Ratio (Right: %)35,00035,00035,000200,000

33,414

Net Assets

Equity Ratio

7.1

8.0

30,29530,00030,00030,000158,116
25,00025,00025,00020,00020,00020,00015,00015,00015,00010,00010,00010,00025,542150,000

4.0

100,000

0

50,000

5,000

5,000

5,000

0

0

06/03

07/03

08/03

09/03

10/03

0

06/03

07/03

08/03

09/03

10/03

0

06/03

07/03

08/03

09/03

10/03

06/03

07/03

08/03

09/03

10/03

Graph figures for the years ended March 31, 2006 through 2009 are the simple sums of values recorded by the former Century Leasing
System, Inc. and Tokyo Leasing Co., Ltd.

TO OUR STAKEHOLDERS

STRENGTH
through INTEGRATIONA year has passed since the launch of Century Tokyo Leasing Corporation, formed through the merging
of Century Leasing System, Inc. and Tokyo Leasing Co., Ltd. We have faced a challenging time in a

In fiscal 2009, the fiscal year ended March 31, 2010, we at the Century Tokyo Leasing Group
worked to knit together our two core strengths. The first is a stable balance of assets supported by afirm business foundation. In addition to a strong lineup of major shareholders—including the Mizuho
Group, ITOCHU Corporation, Nippon Tochi-Tatemono Co., Ltd. and Nippon Life Insurance
Company—we have realized a framework that allows the full utilization of a robust customer baseand channel structure as well as one of Japan’s top-ranking international networks in the leasing
industry. Furthermore, our stable operating asset balance has enabled us to constrain credit costs,
which, in turn, enabled us to post in our first year our highest ever ordinary income as calculated on
the basis of a simple aggregation of the two pre-merger companies’ results.
The second core strength is the Group’s unique business model. Leasing companies are, in
general, less susceptible to regulations compared with other types of financial businesses. In addition
to leasing, we may take up finance, investment or even business management. Anticipating a periodof change in the domestic leasing market, we have deepened our roots in information equipment
leasing to enhance our tangible asset appraisal functions, financing and overseas businesses with the
purpose of further strengthening businesses that take advantage of our core competencies.
The integration of these two core strengths has worked not only to support the expanded scale
generated by the merger but also to streamline businesses and subsidiaries, enabling the industry’s
fastest IT system integration. With an eye to taking advantage of future synergies, the construction of
our foundation has indeed made this a valuable first year.
Based on the “evolution scenario for maximizing merger synergies and moving to the nextstage of growth,” in April 2010 we commenced our first new medium-term management plan. Overthe next three years, we aim to take new steps and achieve growth as an industry leader.
To all of our valued stakeholders, we thank you and hope for your continued support andunderstanding.

Takao Arai, Chairman and Co-CEO

Shunichi Asada, President & CEO

3
TO OUR STAKEHOLDERS

od thanks to the aggressive implementation of various measures aimed at rapidly realizing synergies.

CENTURY TOK YO LE A SING CORPOR ATION

severe operating environment; however, we have been able to produce positive results in this short peri-

CENTURY
CENTURY
TOKYO
TOK
YO
LEASINGLE
A SINGCORPORATIONCORPORATION
CENTURYTOKYO
LEASINGCORPORATIONA MESSAGE FROM THE CEO

CREATING A NEWLEASING COMPANY
through THE MERGERA MESSAGEFROMSECTION
THE THECEO CEO
AFINANCIALMESSAGEFROM

4
44

The merger of Century Leasing System, Inc., a powerhouse in the information equipment leasing and IT
services ﬁelds, and Tokyo Leasing Co., Ltd., with its
ﬁnancial expertise and robust Asian network, produced
Century Tokyo Leasing Corporation, a company able tooffer a diverse array of services and to expand globally inthe leasing and ﬁnancial ﬁelds. Applying a new businessmodel for the leasing industry, we are striving to further
strengthen our operations.

Increased Revenue and Income in the First Fiscal Year of the Merger

ROA of 1.5% on Increased Profit-Earning Capacity and Reduced Assets
Total assets were down 12.0% from the end of the previous fiscal year, to ¥2,132.9 billion, the result of a contraction in cash on hand and in banks. Favorable earnings andreduced total assets resulted in return (ordinary income) on total assets (ROA) risingfrom 1.0% to 1.5%. Also compared with the end of the previous fiscal year, net assets
increased ¥24.9 billion to ¥158.1 billion, for an increase in return (net income) on equity(ROE) to 18.5%, up from 8.0%, and an equity ratio that rose from 5.2% to 7.1%.

Results (Market Position)(Billions of yen)

Revenues (left)

Ordinary income (right)

800

40

600

30

400

20

200

10

0

0

TCLease

A

B

C*

D

E

F

* Value of revenue for C company is operating revenue.
Source:Compiled by Century Tokyo Leasing using IR
materials from listed companies that have adopted
accounting standards generally accepted in Japan.

CENTURY TOK YO LE A SING CORPOR ATION

Consolidated results in the fiscal year ended March 31, 2010, the first year of the merger, included a 2.1% rise in revenue (compared with a simple aggregate of both premerger companies’ results) from the corresponding period of the previous fiscal year, to¥758.7 billion.
Confronted with a severe operating environment, the balance of operating assets
declined 7.7% from the end of the previous fiscal year to ¥1,938 billion. However, thefall in revenue associated with the decline in operating assets was offset by the first fullyear contribution of Fujitsu Leasing Co., Ltd., which became a consolidated subsidiaryin the previous period, resulting in an overall increase in revenues.
On the earnings front, as a result of our efforts to improve profit-earning capacity
by reducing funding and credit costs while controlling other management costs, operating income jumped 45.0% compared with the previous fiscal year, to ¥30.3 billion.
Moreover, at ¥33.4 billion, ordinary income, which was up 50.0%, was at the highest
ever calculated based on a simple aggregate of the pre-merger companies’ results.
With the added benefit of increased income in line with the conclusion of certain litigation entered into by the former Tokyo Leasing in 2007, net income rose 154.7% year on
year to ¥25.5 billion.

Balance of Operating Assets

What progress was made in the first yearof the merger?

(Market Position)(Billions of yen)

Leasing/installment sales

Loans/other

A: The Group tackled three important issues over the past year: 1) building a stronger
sales base and enhancing sales capabilities; 2) strengthening management cost control
to raise corporate earnings power; and 3) bolstering our management base and management efficiency.
The merger provided the impetus to move forward with solution-oriented sales
activities that leverage a more robust customer base, including such shareholder channels as the Mizuho Financial Group and ITOCHU Corporation. We did, however, feel theeffects of cutbacks in private capital expenditure (CAPEX) in what proved to be a yearthat challenged us with a difficult operating environment. These conditions together with
operations that progressed in parallel with the Group’s efforts at integration impacted
the value of new contracts executed in the form of a year-on-year decline of 25.1% to¥624.2 billion.
In terms of profit and loss, our market position advanced with the posting ofindustry-leading ordinary income among listed companies that have adopted Japan
GAAP. We also achieved our goal of maintaining a position among the industry’s top
three companies with regard to the balance of operating assets for leasing and installment sales.

3,000

2,000

1,000

0

A

TC- B*
Lease

C

D

E

F

* For B company, the balance of leasing is loans receivableand that of installment sales is included under other businesses.
Source: Compiled by Century Tokyo Leasing using IR materials
from listed companies that have adopted accounting
standards generally accepted in Japan.

A MESSAGE FROM THE CEO

5

MAXIMIZINGTHE SYNERGIESof INTEGRATION
Generating Early Synergies

CENTURY TOK YO LE A SING CORPOR ATIONAs the business environment surrounding theleasing industry undergoes a signiﬁcant shift,
the Century Tokyo Leasing Group, continues torealize the effects of integration, having begun
by posting record-breaking ordinary income inthe ﬁscal year ended March 31, 2010. On
schedule, in May the former companies ﬁnishedintegrating their IT systems and, now uniﬁed,
are embarking on a new medium-term
management plan.

Specifically, what were the results attributableto sales measures?

A MESSAGE FROM THE CEO

6

A:

Market Share of Vehicle Units
In July we acquired 66.5% of shares in IHI Finance Support Corporation (IFS),
under Management in Automobile
bringing it into the scope of Group consolidation. This move extended our customer
Leasing Business(As of March 31, 2010)

TC-Lease Group

13.4%

Vehicle units undermanagement in automobile
leasing business2.95 million
vehicles**Source: Japan Automotive Leasing Associationbase to encompass the IHI Group and its partners, which achieved progress in theareas of leasing, factoring of receivables and a wide variety of transactions while contributing to customer profit by enabling value-added services.
Tokyo Auto Leasing Co., Ltd. has acquired assets associated with the auto leasing business of Sumishin Panasonic Financial Services Co., Ltd., and in tandem withthis has signed an agreement with that company for the consignment of its auto leasing
operations. As a result, the entire Group, including Nippon Car Solutions Co., Ltd. andOrico Auto Leasing Co., Ltd., now manages approximately 400 thousand vehicles. The
addition of Sumishin Panasonic Financial Services’ auto leasing operations hasenhanced our sales base and placed us firmly among the industry’s largest three auto
leasing operators. We are also taking strategic steps toward expanding businessdomains and through collaboration and M&A activities with major manufacturers we
intend to expand the range of Group business.

W
What
is the status of your management
cost control?

A: The fiscal year under review was witness to a number of corporate bankruptcies,
but the Group was able to minimize the generation of bad debt thanks to its stable balance of assets. We conducted stringent credit assessments and endeavored toenhance our credit management framework while suppressing credit costs. Along with
controlling interest rate risks, securitization risks and other market risks through asset
liability management (ALM), we took advantage of favorable changes in the commercial
paper market to increase the balance of commercial paper issued and concentrated
efforts on reducing interest expenses.

W
What
efforts were made to strengthen the Group’s
management base and raise management efficiency?
m

A: Our efforts to strengthen compliance, internal control, risk management and otherinternal structures have resulted in a stronger management base. Along with the integration of redundant sales bases and Group company operations and the streamliningof subsidiaries in China, we completed the industry’s fastest IT system integration in
May 2010. We have also undertaken numerous measures to rapidly exploit the synergies generated by the merger and have made proactive efforts to enhance management efficiency.

Total Lease Transactions(Left: trillions of yen)

Share of Leasing in
Capital Expenditure(Right: %)How are you progressing with reductions inoperational costs?
oTotal Lease Transactions
Share of Leasing in Capital Expenditure
10.0

10

7.5

5

5.0

0

ress may well get a passing grade, but we intend to take ongoing measures over afour- to five-year span to improve management efficiency. Enhancing cost efficiency is
an important management issue if we are to raise competitiveness in the current business environment. Therefore, we continue to pursue operations that take cost effectiveness into account.

Aiming to achieve further growth by executing
a medium-term management plan that
addresses an evolving business environment

2.5

CENTURY TOK YO LE A SING CORPOR ATION

A: There is still much work to be done regarding cost synergies. Our first-year prog-

0

Please discuss the changing business environment
in the leasing industry.

06/03 07/03 08/03 09/03 10/03

A: Over the fiscal year under review, private CAPEX in Japan fell 18.3% comparedwith the previous fiscal year to ¥63 trillion, while total lease transaction was ¥4.9 trillion,a decline of 18.7 percentage points from the previous fiscal year, and the share of leasing included in CAPEX was 7.0%. Deflation and the strong yen are causes for concern,and companies are shifting production to overseas locations—this has led us to believethat domestic private CAPEX trends will not grow beyond current levels for the foreseeable future. Furthermore, in light of the fiscal 2008 change in the Accounting Standard
for Lease Transaction and the application of International Financial Reporting Standards(IFRS), we are maintaining a conservative stance in forecasting the share of leasing
included in CAPEX.
With regard to the procurement of funds, the unchanging low market interest ratemeans that there is little chance that procurement costs will rise significantly any timesoon. On the other hand, small- to medium-sized companies continue to be faced witha harsh earnings environment and worries remain that bankruptcies will increase.

How do you see the Company’s future position?

A: In every market around the world there is a trend toward increasingly stringent laws
to regulate the financial sector of which we are a part. At the same time, the leasing
industry’s comparatively greater level of flexibility within the sector means it is more likely to take action in areas where the needs of society exist.
Having executed this merger, the Group is backed by its human resources, investment capabilities, customer base and the strengths of its major shareholders. By fully
leveraging these assets, we think the Group’s opportunities will only increase in the future.

Market Share Based on
Lease Contracts Executed(Year ended March 31, 2010)

TC-Lease Group

9.7%

Capital Investment Financed
by Leasing¥4,405.8 billion**Source: The Japan Leasing Association
Lease Contracts Executed:
Amount of Capital Investment Financed by Leasing
Amount for Purchase of Leased Assets

7
A MESSAGE FROM THE CEO

05/03

Source: The Japan Leasing Association
Total Lease Transactions: Lease Contract Amounts
Share of Leasing in Capital Expenditure:
Share of Lease Capital Expenditure in Private Capital
Investment

Please give us an overview of the new medium-term
management plan.

A: We launched the new three-year medium-term management plan from April 1,

CENTURY TOK YO LE A SING CORPOR ATION

2010 as an “evolution scenario for maximizing merger synergies and moving to the nextstage of growth.” Our basic policy under the plan is to thoroughly implement customer
satisfaction-oriented management and strengthen our management base. We will pursue development in our core business in order to keep pace with market evolution as
well as to take steps to strategically expand our business domains. In so doing, we areaiming to break new ground and achieve growth as an industry leader.

P
Pleasetell us how your core business is
adapting to address change.
aBalance of Operating
Assets by
Business Segment(March 31, 2010)dcb

A MESSAGE FROM THE CEO

8

A: Together with promoting sales activities that take full advantage of our customer
base and sales channel structure, and creating areas of expertise with regard to tangible assets, businesses and fields, we are working to flexibly expand our financing business that only a non-bank can offer. Synergies yielded by the merger will help boost themarket shares of our leasing and installment sales businesses, and we will strive to sustain the amount of operating assets—including those undertaken due to the merger—toa certain level. On the other hand, we plan to grow the ratio of asset portfolio accounted
for by our finance-related business, currently at about 20% on a unit basis, to approximately 30% within three years.

aPlease describe your strategic development.
a. Leasingb. Installment salesc. Loans
d. Other

72.8％
10.4％
13.2％
3.6％

A: The three themes that best describe our efforts in business domain expansion are“globalization,” “potential growth areas,” and “alliances.” While globally expanding business domains through our industry-leading international network, we will concentrateon developing what will become pillars of future earnings by aggressively moving forward in fields where growth is anticipated. To these ends, we will effectively use Groupcustomer and shareholder bases in our information network. It is also necessary toenter into strategic relationships and collaborations with new customers.

Please update us on your overseas
business development.

A: We are expanding overseas, having designated China and the rest of Asia as a particularly strategic region. With five Group companies based in Asia at present, our overseas subsidiaries’ total assets amount to almost ¥70.0 billion, and we expect this to
grow approximately 20% in the current fiscal year. Our two China-based subsidiaries
merged in January 2010 and commenced business as Century Tokyo Leasing China
Corporation. Business is brisk backed by a partnership with a major construction
machinery vendor.
We are concentrating management resources to bolster profits at our Asian locations and, by strengthening ties with domestic sales divisions, are enlarging sales basesthat meet the CAPEX needs of Japanese companies overseas.

What are the fields of anticipated growth?

A: The environment and energy, food and agriculture, medical and welfare services are
all fields we consider to have good growth potential. For example the environment andenergy fields can expect enormous growth worldwide, and we are looking to them inour efforts to secure new business foundations and nurture sources of income. In foodand agriculture, we are aiming to develop a new financing scheme and to build a new
business foundation. And, in medical care and welfare services, we are developing customers and suppliers and promoting collaborative relationships with the goal of increasing volume of transactions handled.

CENTURY TOK YO LE A SING CORPOR ATION

Please tell us about theP
IIT-related services business.

AA: We are concentrating on asset management that meets our customers’ outsourcing needs. We offer LINCS, a service that manages leasing contract information via the
Web and C-x, an integrated asset management service that uniformly manages a wide
range of asset information. These proprietary IT solutions are recognized as exceptional
cutting-edge services.
In the fiscal year under review, we partnered with trust banks and others, leveraging C-x to develop new asset collateral loan schemes. By linking our asset management
know-how with the functions of a financial institution, this scheme systemized asset collateral management and expanded collateral processing functions. We take pride inthese efforts having contributed to the spread of asset-based lending (ABL).

A MESSAGE FROM THE CEO

9
W
What
is your stance on alliance and
M&A activities?

AA:

The consolidation of IFS and Sumishin Panasonic Financial Services’ auto leasing
business contributed substantially to performance in the fiscal year under review.
Alliances and M&A focusing on major manufacturers who offer synergies in the leasing
business are a significant part of Group business strategy. By tying up with the Group,
these leading manufacturers can receive more sophisticated financial services and raise
the level of their outsourcing services and other financial functions, enabling an efficient
corporate structure that allows them a greater concentration of management resourcesin their main business areas. For us, on the other hand, these M&A activities enable theacquisition of exceptional assets and know-how while expanding our business baseand market share.

What are the management targets oftthe new medium-term management plan?

AA:

Management Targets of the New
Medium-Term
Management Plan

In fiscal 2012, the final year of the new medium-term management plan, we have
FY2012 Targets
set goals for ordinary income of more than ¥35.0 billion, up from ¥33.4 billion in fiscal
Ordinary income
2009, a balance of operating assets of over ¥2,000 billion, compared to the ¥1,938
More than ¥35 billion
billion in fiscal 2009, and a shareholders’ equity ratio of 8.5%, rising from 7.1%.
While the effect of upfront profits in line with changes to the Accounting Standard Balance of operating assets
for Lease Transactions is diminishing, we aim to build a new foundation that canOver ¥2,000 billion
address a changing business environment, and have established a target of sustainable Shareholders’ equity ratio
growth. This signifies our even greater level of determination.
Over 8.5%

LEASING
AND AN ARRAY
of SERVICE
Building a New Business Centered on Leasing

CENTURY TOK YO LE A SING CORPOR ATIONAs we work toward attaining the managementtargets of the new medium-term management
plan, we will continue solidifying our position in
the industry’s top three, and, as a comprehensive
ﬁnance and service company that eagerly accepts
challenges, we intend to grow with ourcustomers and contribute to society.
Outlook for Fiscal 2010: Decreased Revenue, Increased Income
We anticipate major changes in the operating environment given the sluggishness ofprivate CAPEX, the continuing high rate of bankruptcies and the overall severity of thebusiness environment as well as the implementation of IFRS and globalization ofJapanese companies. Prompted by this outlook, we continue to pursue operations thatfully leverage our customer base while working to reduce interest expenses and credit
costs and raise profitability.
Regarding consolidated results for the fiscal year ending March 31, 2011, we
expect to see a 9.1% year-on-year decline in revenue to ¥690.0 billion in line with a fallin operating assets. Operating income, on the other hand, is forecast to climb 4.0% to¥31.5 billion, buoyed by financing and overseas businesses, and ordinary income isexpected to edge up 1.8% to ¥34.0 billion. Net income is predicted to fall 23.7% to¥19.5 billion as factors that had increased income by approximately ¥7.2 billion in linewith the end of litigation no longer apply. Excluding these extraordinary factors, net
income increased by 6.5%.

A MESSAGE FROM THE CEO

10

Dividends per Share
(Yen)
35

Aiming to Raise the Dividend Payout Ratio

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

30

25

20

15

10

5

0

06/03

07/03

08/03

09/03

10/03

In addition to working to bolster retained earnings to maximize corporate value, theGroup maintains a basic policy of securing the long-term and stable return of dividends
to shareholders. In the fiscal year under review, we raised dividends to ¥2 per sharehigher than we had initially planned that, with the ¥2 dividend awarded to commemorate the merger, resulted in a total annual dividend of ¥32 per share. In light of current
economic conditions and business environment, for the year ending March 31, 2011,
we plan a total annual dividend, comprising an interim dividend of ¥16 and an end of
period dividend of ¥16, of ¥32.
The dividend payout ratio for the fiscal year under review amounted to 13.4%. This is
expected to rise to 17.5% in the fiscal year ending March 31, 2011. We will work to enhanceincome and growth by steadily executing the raft of measures stated in the new mediumterm management plan. In tandem with this, it is our intention to work to increase dividends
and raise the payout ratio with the goal of further returning profits to shareholders.

Taking the Medium- to Long-Term Perspective as We Expand
Our Network of Sales Bases
We believe that the initiatives implemented under the new medium-term management
plan will from fiscal 2012 set us on course for all-out growth. We will advance the leasing, installment sales and financing businesses, broadening the range of fields where
we can offer an increased level of expertise. Overseas, we are considering the establishment of new bases that will fortify our earnings base in Asia. We will also concentrate efforts on the pillars of future earnings in anticipated growth fields.
By moving forward and actively pursuing transformation to ensure steady growth,
we aim to achieve ever greater heights in the medium to long term. To this end, we
hope for your continued support and encouragement.

Century Tokyo Leasing Corporation has positioned its new
medium-term management plan as an “evolution scenario for
maximizing merger synergies and moving to the next stage of
growth.” Promoting customer satisfaction-oriented management
and a strengthened management foundation, the Company will
work to develop a core business that can adapt to change while
strategically expanding its business domains.

11
FINANCIAL SECTION

MAKE
NEW BUSINESS
with LEASING

CENTURY TOK YO LE A SING CORPOR ATIONSPECIAL FEATURE:

CENTURY TOK YO LE A SING CORPOR ATIONINFORMATION and
COMMUNICATIONS/OFFICEEQUIPMENT

Offering new products and services that utilize its expertise in the informationequipment field, Century Tokyo Leasing is taking steps to strengthen its asset
management services and remarketing business.

SPECIAL FE ATURE:MAKE NE W BUSINESS WITH LE A SING

12
Industry-Leading Information and Communications Equipment Leasing
Information and Communications/Office Equipment
Share of the Value of New Lease Contracts Executed(Year ended March 31, 2010; Graph based on listed company ranking data found by TC-Lease)

Leasing industry

TC-Lease

43%

13%

A 10%
TC-Lease

56%

The leasing of information and communications/office equipment is the Group’s forte. In the fiscal year under review thevalue of new lease contracts executed amounted to ¥241.3
billion, or 56% of the Group’s consolidated total. In addition
to operating a sales division dedicated specifically to information equipment, Fujitsu Leasing Co., Ltd., which primarily
leases IT-related equipment, is a major domestic subsidiarythat puts the Group at the top of the industry in terms ofvalue of new information and communications equipment
leasing contracts executed.

Other 69%

B 8%

The portfolio of Company services covers everythingfrom equipment installation to disposal. To meet customer
needs, asset management services, remarketing for disposalof assets and other services are provided based on topnotch expertise.
Placing importance on maintaining the value of tangible
assets, the Company will continue to utilize its long-cultivatedcustomer base, alliances with makers and dealers, and relationships with shareholders to further bolster its sales base.

CENTURY TOK YO LE A SING CORPOR ATION

13

Enhancing Company Expertise in the Area of Asset Disposal by Strengthening Refurbishment Business

Strength in IT leasings (IGH QUALITY HIGH SPECIFICATIONS
s 3TABLE LARGE VOLUME END OFLEASE ASSETSAppropriate Data Deletion

Enhancing Added-Values )MPLEMENTED TO GUARD AGAINSTINFORMATION LEAKS
s !DOPTED A DATA DELETION METHODTHAT COMPLIES WITH STANDARDS SET BY
THE 5NITED 3TATES $EPARTMENT
OF $EFENSE

s 2EFURBISHMENT /PERATION
s %NVIRONMENTAL 0ROTECTION

The Century Tokyo Leasing Group promotes initiatives thatemphasize the value of tangible assets. As one element of
this, the Group’s PC Security Recycling Center and TRY Inc.,
both of which have acquired ISO/IEC 270011 and ISO
140012 certification, are now operating a refurbishment business focused on the reuse and recycling of PCs.
The refurbishment of PCs for reuse and recycling
involves completely deleting data in accordance with thorough security management standards. Known by customers
for reliable and safe information leak countermeasures,
Century Tokyo Leasing-branded PCs have earned highmarks from those in the used computer market for their highquality and reusability and because they are available througha stable supply structure that is able to consistently deliver
mass volumes. This initiative is linked to the reduction ofindustrial waste and is helping contribute to the formation ofa recycling society.

!CQUISITION OF)3/)%#  AND)3/  CERTIFICATIONSTC-Lease Brand

Sold inmarket

The refurbishment business’s sales volume in the period under review fell 21% to 111,000 units compared to theprevious fiscal year due to anemic capital investment Revenue
also declined, falling 34% to ¥1.2 billion on a drop in unit
prices. In the current fiscal year, however, replacement
demand is expected to lift PC sales.
Notes 1: ISO/IEC 27001 is the international standard for information
security management systems.
2: ISO 14001 is the international standard for environmental
management systems.

Reuse and Recycling of PCs
Revenues(Billions of yen)

No. of PCs handled(Thousands, approx.)

08/03

09/03

10/03

2.28

1.75

1.16

115

141

111

Figures for the years ended March 31, 2008 and 2009 are the simple
sums of values recorded by the former Century Leasing System, Inc.
and Tokyo Leasing Co., Ltd.

SPECIAL FE ATURE:MAKE NE W BUSINESS WITH LE A SING

Refurbishment BusinessCENTURY TOK YO LE A SING CORPOR ATION

Strengthening Asset Management Services

SPECIAL FE ATURE:MAKE NE W BUSINESS WITH LE A SING

14

To enhance customer convenience, Century Tokyo Leasing
has developed services that focus on property management.
One such service is LINCS, which offers the Web-based
management of lease contracts. Another service is C-x, anintegrated asset management system that no matter what
the leased property is, can comprehensively handle relevant
information, including customer assets.
The integrated asset management service C-x is a
cloud-computing service that manages lease contracts forand information on a wide variety of corporate assets—fromequipment and machinery and fixtures and fittings to vehicles. Highly flexible, the service allows customers to freely set
their management categories. In addition, as a record of theentire process can be generated internal control requirements
can be satisfied.
Able to do more than manage assets, C-x can handle anumber of new financial schemes. For example, the systemallows the tracking of raw materials, work in progress andproducts held by customers, providing a “visualization” thatcan be used by management in tandem with shipping information. Moreover, C-x makes it feasible for financial institutions to collateralize stock—a financial conservation measurepreviously difficult to perform. What C-x does in this regard isto provide a way to conceptually manage assets on an individual basis. In October 2009, Century Tokyo Leasing developed a new, asset-based lending (ABL) scheme, now patentpending, that leverages its alliances with trust banks andother financial institutions, entrusting them with C-x-based
security warranties.
Addressing questions of internal control and preparing
for the application of IFRS are issues that make business
management increasingly burdensome for customers.
Offering a high-quality IT service that can assuage these concerns enables Century Tokyo Leasing to rise above others in
the leasing industry, differentiating itself from competitors with
its extensive capabilities.

LINCS

Asset-based lending (ABL) scheme

LINCS for Web-based integrated management of lease
contracts and property• Comprehensive management of lease contracts andproperty information by reference to and acquisitionof lease contract information and property spec
sheets• Simple, Web-based processes for information
updates and lease renewals• Management of financing and accounting based on
accounting information (financial notes andon-balance sheet data) and payment schedules

Development of an asset based lending scheme thatutilizes the management system for movable assets andsecurity trust

Borrower
Loan

Security trusts formovable assets

Financial
institutions

Beneficial
interests

TC-Lease
Provides functions of thePurchasing guarantee for management system for
movable assets
movable assets

C-x
Integrated asset management system

Trust
banks

C-x for integrated management of customer assets• Integrated management service handlingcomprehensive property-related contract
information and contract history, etc., which
responds effectively to internal control requirements• Gradually building a track record of completed
contracts centered on major listed corporations andmedium-sized enterprises• Business alliance with leading accounting software
vendor Pro-Ship Incorporated to integrate asset
management and accounting under new standards
for leasing through a linkup with C-x

Application for business model patent◎ Sharing of realtime information on movable assets◎ Automatic calculation of value of movable assets,transmission of alerts on credit line changes◎ Credit insurance through purchasing guarantee
for movable assets (inventory, etc.)◎ Enhanced utility for financial institutions throughsecurity trusts◎ Provision of new fund procurement methods

one pillar of a core business that can adapt to change

A Solid Network Leveraging theCapabilities of Group Companies

Measures to Augment Customer Base in
Fiscal 2009

The Group’s automobile leasing business is well-anchored bycorporate customer-focused Nippon Car Solutions Co., Ltd.
(NCS) and Tokyo Auto Leasing Co., Ltd. (TALC), and for individual customers, Orico Auto Leasing, Co., Ltd. (OAL), a
50:50 joint venture held with Orient Corporation.
At the end of the fiscal year under review, the automobile leasing industry in Japan saw the number of vehicles
under management decline 3% compared with the end of
the previous fiscal year. The Century Tokyo Leasing Group,
however, increased the number of vehicles it manages 6%
over the same period, to 394 thousand units, to establish afirm presence among the top three companies in the industry.

In April 2010, NCS absorbed through a merger the subsidiaryShowa Auto Rental & Leasing Co., Ltd. (SARL). This merger
endowed Century Tokyo Leasing with the benefits of themerger including overwhelming sales capabilities, creating
the synergistic effects of economies of scale and fortifying
earnings capabilities.
Furthermore, in July 2009, TALC acquired approximately 14 thousand vehicles and leasing receivables associated with the automobile leasing business of Sumishin
Panasonic Financial Services Co., Ltd., together with a consignment agreement for that company’s automobile leasing
business. This not only gave TALC a new sales base in theform of the Panasonic Group and its regional electronics
stores, but helped to boost the number of vehicles managed
by the Century Tokyo Leasing Group.

Automobile Leasing Group Companies (As of March 31, 2010)
Number is percentage of shares outstanding

TC-Lease

50%

100%

50%

Nippon Telegraph andTelephone (NTT)50%
TOKYO AUTO LEASING

Market share of vehicle units under management inautomobile leasing business(As of March 31, 2010)

TC-Lease Group

13.4%

NIPPON CAR SOLUTIONSBusiness alliance

100%
Sumishin Panasonic
Financial Services

2.95 million
Showa Auto Rental & Leasing

ORICO AUTO LEASING

Vehicle units under managementin automobile leasing businessvehicles*Merger in April 2010

Orient Corporation (Orico)*Source: Japan Automotive Leasing Association

15
SPECIAL FE ATURE:MAKE NE W BUSINESS WITH LE A SING

Moving forward on further strengthening its automobile leasing operations as

CENTURY TOK YO LE A SING CORPOR ATIONAUTOMOBILELEASING
BUSINESSCENTURY TOK YO LE A SING CORPOR ATION

LOAN
BUSINESSSPECIAL FE ATURE:MAKE NE W BUSINESS WITH LE A SING

16

In addition to an expanding finance business that boasts the flexibility that only a
non-bank can offer, Century Tokyo Leasing is taking the initiative in such fields as theenvironment and other areas of anticipated growth.

Offering Tailor-Made Financial Services

Expanding the Real Estate Business Domain

Under the new medium-term management plan, theCompany is targeting operating assets of ¥2,000 billion ormore by March 31, 2013. While halting the fall of operating
assets in the leasing and installment sales areas, theCompany aims to achieve its numerical targets by expanding
its finance business. Century Tokyo Leasing intends tostrengthen origination functions, developing proprietary systems and products to differentiate itself as well as expanding
its involvement in the real estate field to secure the foundations of new businesses in anticipated fields of growth.
At the end of the fiscal year under review, approximately 20% of Century Tokyo Leasing’s asset portfolio wasfinance related. The Company plans to increase this proportion to 30% within three years.

At the end of the fiscal year under review, the Group’s realestate-related transactions could be broken down toapproximately 40% real estate leases with an emphasis on
shopping centers and other properties and approximately
60% finance-related transactions, such as those involving
real estate loans, beneficial interests, corporate bonds andinvestments. Century Tokyo Leasing primarily focuses on
office buildings in metropolitan areas, with its main efforts to
support properties that have the involvement of major realestate companies and other significant sponsors. Moving
forward, the Company hopes to expand information channels by advancing collaborative relationships with influential
partners. It will also take into consideration how to expand
its activities in the real estate business domain.

Balance of operating assets (Non-consolidated)

Development of real estate-related transactions (Non-consolidated)(Billions of yen)
300

(Year ended March 31, 2010)

250

Purchased loans
Environmental financing

200

Loans for ships
Real estate loans

150

Real estateleases¥74.7 billion
(45%)

100

Other
50

Real estate
financings/PERATING LOANSs"ENEFICIAL INTERESTSs#ORPORATE BONDS
s#APITAL
investments, etc.

¥92.2 billion(55%)

Office buildings 67%

Housing (Apartments) 4%
Commercial facilities 21%
Other 9%

0

08/03

09/03

10/03

Figures for the years ended March 31, 2008 and 2009 are the simple sums of values recordedby the former Century Leasing System, Inc. and Tokyo Leasing Co., Ltd.

Grand total: ¥166.9 billion

CENTURY TOK YO LE A SING CORPOR ATIONTo realize finance-related business expansion, the key will be
to concentrate Company efforts in anticipated growth fields.
Century Tokyo Leasing has positioned the environment andenergy, food and agriculture, and medical and welfare services as three fields where growth can be anticipated, and will
move ahead by effectively using the Group’s customer andshareholder bases as sources of information, identifying
companies for strategic partnerships and developing collaborative alliances.
Businesses, governments and consumers around theworld are looking to the natural energy business, including
wind, solar and biomass power generation, as one path tothe easing of global warming. Even in Japan, electricity sellback systems and other initiatives are being taken as themarket develops. Century Tokyo Leasing has held a positionat the forefront of the industry thanks to its efforts to provide
project financing geared toward operators of wind power
generation facilities. Specifically, the Company has been offering non-recourse loans for wind power generation projects
with revenue generated by the sale of electricity as the only
source of repayment. This kind of finance scheme does not
require the use of the credit or capital of the power generation
facility operator and thus frees them to use funds provided by
the cash flow of their core business. As of March 31, 2010,
the Company leads the leasing industry in its support ofapproximately 167 wind turbines at 15 sites nationwide.
In food and agriculture, new business opportunities are
generated as general operators stream into the field. This pro-vides the impetus for Century Tokyo Leasing to develop
finance schemes, to devise systems and to build new business foundations to address emerging markets. A similar situation exists in the medical and welfare field, an area in which
the market is expected to grow along with the rapid aging ofJapan’s society. In recent years, Century Tokyo Leasing hasoffered financing and securitization (rapid fund acquisition) tocover accounts receivable for medical treatment and nursing
care fees, but in preparation for an increase in demand, theCompany will develop new finance schemes.

Project financing for wind power generation businesses
Loan

TC-Lease

Customer
Repayment

Dividends
Sale ofelectricity

Revenues

Sponsors,
etc.
Electric
power
companies,
etc.

SPECIAL FE ATURE:M AKE NE W BUSINESS WITH LE A SING

17

Active Development in Anticipated Growth Fields

CENTURY TOK YO LE A SING CORPOR ATIONOVERSEAS
BUSINESSSPECIAL FE ATURE:M AKE NE W BUSINESS WITH LE A SING

18

Aiming to promote and expand business in the Asian region, Century Tokyo Leasing isconcentrating its efforts on strengthening a global operation through collaboration
with its domestic sales departments.

Overseas Business Development throughAlliance with ITOCHU

Integration of China-Based
Subsidiaries

The Group is working to develop its business on a global
scale—with particular emphasis on China and other Asian
countries—in order to achieve strategic expansion of its business fields. Reflecting that Asian emphasis, Century Tokyo
Leasing’s current overseas network covers China (Shanghai,
Guangzhou and Hong Kong), Singapore, Malaysia, Taiwan
and Thailand. When added to those in the United States andthe United Kingdom, the Company boasts an industry-leading business network operating a total of nine bases in sevencountries. Furthermore, Century Tokyo Leasing plans to open
a branch office in Beijing to complement the Company’s
existing bases in Shanghai and Guangzhou and to enableeffective coverage of northern, eastern and southern China.
This structure will allow the Company to comprehensively
support Japanese companies operating in the country.
Asia is the world economy’s growth driver, and Century
Tokyo Leasing has strengthened collaboration with major
shareholders ITOCHU Corporation and Mizuho Financial
Group to promote joint projects in Asia. As of March 31,
2010, overseas subsidiaries—primarily the five companies inAsia—held total assets worth close to ¥70.0 billion, andexpectations are for this figure to increase approximately
20% in the current fiscal year, ending March 31, 2011.
Century Tokyo Leasing will continue to provide optimal financial services that reflect the different taxation and accounting
systems in each country where it has operations. In this way,
the Company supports the overseas business activities of its
customers when they formulate business strategies andestablish overseas networks. This approach will, in turn,enable the Company to expand its operations in China andother Asian countries.

In line with the merger that resulted in Century Tokyo
Leasing, in January 2010 the China-based subsidiaries of theformer companies were integrated to newly establish Century
Tokyo Leasing China Corporation.
Business in China is brisk, Century Tokyo Leasing has
signed contracts with major Japanese manufacturers andentered into a partnership with a leading construction
machinery vendor. Looking to the future, Century Tokyo
Leasing will stay a step ahead of its competition by taking
advantage of its acquisition of a license to conduct businessin the medical field—a market where growth is expected—as
it spurs earnings as a leading company.
Century Tokyo Leasing has its sights firmly set on seizing the top share of the leasing business in China. This ambition is backed by the alliances it holds with ITOCHU
Corporation, a strong player in China, by the close businessties it has with manufacturers and by its involvement in joint
ventures with leading Taiwan-based companies.

PRESIDENT TOKYO CORPORATIONCENTURY TOKYO LEASING CHINA CORPORATIONTOKYO LEASING (UK) PLC

Guangzhou branchTOKYO LEASING(HONG KONG) LTD.

CENTURY TOK YO LE A SING CORPOR ATIONCENTURY TOKYO LEASING (USA) INC.

Development in the Asian Region
Outside of China, Century Tokyo Leasing is taking steps tostrengthen its business in other Asian countries. In Singapore
the Company provides installment sales for used cars for personal use, in Malaysia it collaborates on Japanese companybacked projects and with major IT vendors, and in Thailand it
is steadily expanding transactions primarily with Japanesecompanies doing business in that country. At each location
the Company works to strengthen ties with its domestic sales
departments and to meet the capital investment needs ofJapan-based companies’ Asian operations. Century Tokyo
Leasing will also endeavor to establish new business sites
with an eye to expanding its sales base.

CENTURY TOKYO CAPITAL(MALAYSIA) SDN. BHD.

TISCO TOKYO LEASING CO., LTD.

Balance of assets at overseas subsidiaries

Vendor Finance Initiatives(Billions of yen)70

60

In addition to its support of Japanese companies operating
overseas, Century Tokyo Leasing also works to meet the
global needs of its vendors and partners. Utilizing its sophisticated financial know-how, the Group offers vendor financeservices to global corporations that seek to expand theiroperations around the world. In so doing, the Company supports the sales activities of its vendors, which, in turn, allows
it to accumulate operating assets for the Group. Moving forward, the Group will continue to address the diverse needs of
its vendors and promote their global development.

Other regions

50

40

Asian region, excluding China

30

20

10

China
0

08/03

09/03

10/03

Total assets of each company including directl managed affiliated companies basedon the equity method and excluding inactive companies.

19
SPECIAL FE ATURE:MAKE NE W BUSINESS WITH LE A SING

CENTURY TOKYO LEASING(SINGAPORE) PTE. LTD.

AT A GLANCEYEARS ENDED MARCH 31

Breakdown of Sales Revenues
by Business Domain(Year ended March, 31 2010 )Sales Revenues/
Operating Income( Millions of yen)

Revenues( Millions of yen)

Major Products
and Services

Leasing Business
700,000• Finance leases• Operating leases• Real-estate leases• Automobile leases• Rental• Sale of end-of-leaseassets or rental assets
for which the contract
has expired

80,000600,000
60,000500,000
400,000

79.8%

40,000300,000
20,000200,000
100,000
0

0
06/03

07/03

08/03

09/03

06/03

10/03

07/03

CENTURY TOK YO LE A SING CORPOR ATION

Sales Revenues

09/03

10/03

Operating Income

Installment Sales Business
150,000• Installment sales

10,0008,000

8.3%
100,000

6,000

4,000
50,000
2,000

0

0
06/03

07/03

08/03

09/03

10/03

06/03

20
AT A GL ANCE

08/03

07/03

Sales Revenues

08/03

09/03

10/03

Operating Income

Loan Business• Business loans• Real-estate fi nancing• Environmental andenergy fi nancing• Ship and aircraft financing•Medical and welfarerelated fi nancing• Project fi nancing• Factoring

10,00010,000

8,000

9.5%

6,000
5,000
4,000

2,000

0

0
06/03

07/03

08/03

09/03

06/03

10/03

07/03

Sales Revenues

08/03

09/03

10/03

Operating Income

Other Businesses
4,000

15,0002.4%

3,000
10,000
2,000
5,000
1,000

0

0
06/03

07/03

08/03

09/03

10/03

06/03

07/03

Sales Revenues

Sales revenues are revenues minus
costs (excluding cost of funds).

Revenues do not include intersegment transactions.

08/03

09/03

10/03

Operating Income• Commercial investment
activities, such as equity
participation in
partnerships• Guarantee business• Entrusted management
services for movable
assets• Origination and sale ofinvestment products(e.g., aircraft operatingleases)• Insurance agency

Sales revenues and operating income include
inter-segment transactions and operating costs.

Graph ﬁgures for the years ended March 31, 2006 through 2009 are the simple sums of values recorded by the former Century Leasing System, Inc. and Tokyo Leasing Co., Ltd.

SEGMENT INFORMATIONLEASING
BUSINESSIn the leasing business, Century Tokyo Leasing is engaged in a variety of leasing and rental
transactions involving equipment and machinery used by customers in their business activities, ranging from IT devices and office equipment to industrial/machine tools and construction equipment. In addition, through its remarketing business, the leasing business sells usedequipment following contract completion or mid-term contract cancellation.

Value of
New Contracts Executed(Billions of yen)
600

500

400

300

Results

In comparison with the financial statements of the former Century Leasing System, thesurviving company, the value of new contracts executed rose 105.7% year on year, while revenue and operating income rose 186.2% and 205.9%, respectively.

200

100

0

08/03

09/03

10/03

Balance ofOperating Assets

21(Billions of yen)
1,800

SEGMENT INFORMATION

The value of new lease contracts executed during the fiscal year under review fell 17.8%(based on a simple aggregate of the former companies’ results for the previous fiscal year) to¥428,185 million. This result was attributable to the impact of stagnant private capital investment and a focus on selecting contracts that prioritize profitability as well as curbing credit
debt. By contrast, revenue rose 3.6% to ¥635,808 million, owing to the first full-year contribution made by the consolidation of Fujitsu Leasing Co., Ltd. in the fiscal year under review.
Operating income jumped 40.0% to ¥35,222 million due to lower funding costs and the curtailment of credit costs.

1,500

Fundamental Strategy
Century Tokyo Leasing projects that the conditions surrounding the leasing business will
increase in severity due to ongoing changes in the Accounting Standards for Lease
Transactions and expected application of International Financial Reporting Standards (IFRS).
Striving to achieve the early realization of cost synergies through the merger, the Group is taking steps to enhance management efficiency, which includes integrating sales branches. In
addition to pursuing increased efficiency, the Group is striving to raise profitability through thestrengthening of its sales base by leveraging its customer base and sales channels; byupgrading IT services with the aim of improving convenience for customers; and by focusing
on bolstering the remarketing and auto leasing businesses.

TOPICS

Revenue from IT equipment leasing at 56% of
all lease contracts executed
In terms of the value of new lease contracts executed by equipment type during the ﬁscal
year under review, IT and ofﬁce equipment accounted for 56% of overall contracts.
The Group promotes initiatives that emphasize property value. Such initiatives,
which encompass equipment life cycles from installation to disposal, include a management system that provides a kitting service for such IT devices as personal computersand routers that installs necessary software prior to delivery and asset management reuse
and resale services. There is also enormous demand for services that counter information
leaks from the perspective of maintaining internal control. Looking ahead, the Groupwill focus on further promoting IT device-related leasing through the expansion of services in the IT equipment ﬁeld, one of its strengths.

1,200

900

600

300

0

CENTURY TOK YO LE A SING CORPOR ATIONBusiness Description

08/03

09/03

10/03

Figures for the years ended March 31, 2008 and2009 are the simple sums of values recorded by
the former Century Leasing System, Inc. andTokyo Leasing Co., Ltd.

INSTALLMENT
SALES BUSINESSCENTURY TOK YO LE A SING CORPOR ATIONBusiness Description

SEGMENT INFORMATION22

The installment sales business involves purchasing such items as industrial/machine tools
and construction machinery, commercial facilities and building-related equipment on behalfof customers in accordance with their business purposes and applications. The customer
then pays for these items in a series of long-term installments. Once these installment payments are complete, the Company shifts ownership of the equipment and machinery tomeet the needs of those customers who wish to acquire these items.

Value of
New Contracts Executed(Billions of yen)
150

120

90

60

Results
The value of new contracts executed (based on the simple aggregate of the former companies’ results for the previous fiscal year) dropped 35.1% to ¥51,077 million. Revenue
declined 4.0% to ¥105,413 million, and operating income fell 46.3% year on year to ¥974
million. Impacted by anemic private capital investment, the installment sales business experienced declines in the value of new contracts executed as well as revenue and operating
income.
In the financial statements, as compared with the former Century Leasing System, thevalue of new contracts executed surged 122.9% year on year, and revenue and operating
income jumped 159.5% and 503.5%, respectively.

30

0

08/03

09/03

10/03

Balance ofOperating Assets(Billions of yen)
300

Fundamental Strategy
Along with the leasing business, the installment sales business has been significantly impacted by trends in private capital investment. In light of the steady economic recovery, theCompany aims to increase the value of new contracts executed while taking steps toimprove the Company’s industry share and stem decreases in the balance of credit.

250

200

150

100

50

0

08/03

09/03

10/03

Figures for the years ended March 31, 2008 and2009 are the simple sums of values recorded by
the former Century Leasing System, Inc. andTokyo Leasing Co., Ltd.

TOPICS

Fujitsu Leasing Co., Ltd.’s ﬁrst full-year contribution
For Fujitsu Leasing Co., Ltd., ﬁscal 2009 was the ﬁrst full ﬁscal year of consolidation
since it became a subsidiary in July 2008.
Integrating a broad business base that encompasses the Fujitsu Group’s communication device segment with the Century Tokyo Leasing Group’s lease/ﬁnance functions, Fujitsu Leasing promotes innovations in its business model and aims to be atrusted business partner to customers. Fujitsu Leasing’s revenue during the ﬁscal year
under review increased 33.6% year on year to ¥123,242 million, while net income wasbrisk, rising 40.8% to ¥2,654 million. Including Fujitsu Leasing within the scope of
consolidation for the full ﬁscal year contributed enormously to Century Tokyo
Leasing’s consolidated performance.

LOAN
BUSINESSBusiness Description
In addition to engaging in corporate loans, the loan business provides financial services tomeet fund-procurement needs, including the factoring of receivables as well as liquidation of
medical and nursing care loans. In addition, the loan business undertakes specialized financing primarily related to real estate, the environment and energy, shipping and aircraft procurement financing.

Value of
New Contracts Executed(Billions of yen)
250

200

Results
The value of new contracts executed (based on the simple aggregate of the former companies’ results for the previous fiscal year) declined 35.4% year on year to ¥131,413 million.
However, revenue increased 9.3% to ¥8,126 million, and operating income improved 29.5%
year on year to ¥1,005 million.

100

50

0

08/03

09/03

10/03

Although the balance of debt from shipping and environment finance operations grew,
the balance of debt in real estate finance operations declined due to the thorough implementation of prudent measures, such as focusing on transactions with leading sponsors.
Compared with the former Century Leasing System’s financial statements, the value of
new contracts executed increased 68.6% year on year, while revenue and operating income
rose 258.7% and 346.9%, respectively.

Balance ofOperating Assets

23(Billions of yen)300

The finance business is the Group business where growth is most anticipated going into the
future. The Group will strive to effectively utilize its customer and shareholder bases as well as
flexibly expand its financing business, which is one that only a non-bank can offer, whiledeveloping a range of systems and products that set it apart from other companies. In particular, the Group positions environment and energy, food and agriculture, and medical and welfare as fields of anticipated growth, and aims to build the foundations of new businesses.

250

SEGMENT INFORMATION

Fundamental Strategy

200

150

100

50

0

08/03

09/03

10/03

Figures for the years ended March 31, 2008 and2009 are the simple sums of values recorded by
the former Century Leasing System, Inc. andTokyo Leasing Co., Ltd.

TOPICS

Expanding ﬁnancial products
TOPICS
Century Tokyo Leasing has from the ﬁscal year under review been handling eGuarantee Inc.’s accounts receivable assured service guaranteed commitment line schemes. The
combination of eGuarantee’s guaranteed services and the Company’s acquisition of
accounts receivable ensures that customers that have entered into an eGuarantee guaranteed contract are hedged against seller default risks and are able to obtain funding on
accounts receivable as needed. The Company will work to enhance ﬁnancial products
and promote ﬁnancial assistance services to customers while pursuing the diversiﬁcation of funding methods and expanding its customer base.

CENTURY TOK YO LE A SING CORPOR ATION

150

OTHER
BUSINESSCENTURY TOK YO LE A SING CORPOR ATIONBusiness Description

SEGMENT INFORMATION24

The other businesses segment handles fee transactions related to the investment services ofvarious liquidated and securitized products covering real estate and other assets; trustee services for property management; sales services for investment products (operating leases foraircraft and other equipment); and a fee business conducted through distributor services forlife and accident insurance.

Value of
New Contracts Executed(Billions of yen)
30

24

18

Results
The value of new contracts executed (based on the simple aggregate of the former companies’ results for the previous fiscal year) dropped 54.8% to ¥13,508 million, while revenue fell
22.0% to ¥9,328 million. However, operating income increased 15.5% year on year to ¥1,295
million.

12

6

0

08/03

09/03

10/03

In the financial statement comparison with the former Century Leasing System the valueof new contracts executed surged 242.2% year on year, while revenue and operating income
jumped 443.9% and 360.4%, respectively.

Fundamental Strategy
The other business diversifies sources of income and plays a critical role in raising the added
value of the Group’s businesses. The Company will continue to focus on investment services
for various liquidity and securitized products, sales of investment products and asset management services, which are expected to come into increasing demand. The Company will develop a diverse array of products and services to meet customer needs.

Balance ofOperating Assets(Billions of yen)
80
70
60
50
40
30
20
10
0

TOPICS

Development of C-Guard, a system to verify andmonitor data deletion from computers
The Group is working to enhance peripheral services related to one of its fortes, IT
device lease operations. When PCs are disposed of, hard disk data must be deleted. To
meet this need, the Group has developed C-Guard, a patent-pending network-type service that deletes data on site. As C-Guard is a data deletion service that uses application
service providers, customers are able to substantially reduce administrative load andcosts.

08/03

09/03

10/03

Figures for the years ended March 31, 2008 and2009 are the simple sums of values recorded by
the former Century Leasing System, Inc. andTokyo Leasing Co., Ltd.

CORPORATE GOVERNANCE

are full-time corporate auditors), six of whom are outside corporate auditors as defined by Article 2-16 of the Corporation Law
of Japan. The Board of Corporate Auditors strives to fulfill its
responsibility by thoroughly conducting fair audits of complianceand the appropriateness of corporate activity, starting with operations executed by Directors and Executive Officers, by holding
regular meetings and maintaining the independence of its auditing activities. Corporate Auditors attend the Board of Directors
Meeting as well as other important meetings, such as theManagement Meeting and meetings of principal committees,
etc. They then execute audits of Directors and Executive
Officers, their responsibilities, and progress made in the improvement and management of the internal control system.

With regard to maximizing its corporate value, Century Tokyo
Leasing Corporation recognizes that the effective functioningof corporate governance is an important management issue.
To this end, we require a management system capable ofswift and precise decision making in response to changes inthe environment, as well as a properly operating and effectively functioning systems of internal control and risk management. We are striving to fortify our management system toachieve highly sound and transparent corporate management.

Management System
The management system of the Company—composed mainlyof Directors and Corporate Auditors, which comprise, respectively, directors and auditors selected at the general meeting ofshareholders—is designed to sufficiently reflect the intentions of
the shareholders. Furthermore, with the aim of making faster
resolutions on management strategy and of further strengthening the supervisory structure and the structure for executing
operations, we introduced an executive officer system.
Board of Directors
The Board of Directors consists of eight Directors and supervises the execution of operations by Directors and Executive
Officers. Moreover, it deliberates on and decides important
issues associated with the management of Century Tokyo
Leasing and its Group companies as well as matters specified
by prevailing laws, regulations, articles of incorporation, andrules governing the Board of Directors.

Note: Independence of Management Oversight Structure
Century Tokyo Leasing does not appoint outside directors, however, audits are performed by seven corporate auditors, including six outside corporate auditors, thereby maintaining theobjectivity and neutrality of the management monitoring function.
All outside corporate auditors are employed by other companies,
and two have no affiliation with any principal partners. Because
they are judged to not have any conflict of interest with generalshareholders, the Tokyo Stock Exchange has designated themas independent officers and obliges them to guarantee their
independence when monitoring management.

Board of Corporate Auditors
Century Tokyo Leasing has adopted the organizational structureof a company with auditors. It maintains a Board of Corporate
Auditors that consists of seven corporate auditors (two of whom

System of Corporate Governance and Internal Control

As of June 24, 2010

Shareholders’ Meeting
Election/Dismissal

Election/Dismissal

Election/Dismissal

Company’sCounselCoordination

Auditors (Board of Auditors)

Audit

Board of Directors

Coordination
Audit

Coordination

Election/Dismissal/Supervision

Business Risks Management Division

Coordination

Independent Auditor

Audit Division

ReportAppointment

President & CEO

Audit
Audit
Audit

Internal Audit

Direction/Supervision

Management
Meeting

Chief Compliance Officer

ReportCredit Management
Meeting
Executive Committee
Election/Dismissal/Supervision

Sales Divisions/Operation Divisions
Group Companies

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

25
CORPOR ATE GOV ERNANCE /CSR

We established the Management Meeting, which is chaired by
the President and officers appointed by the President. As a general rule, the Management Meeting is convened once a weekwhere it deliberates on particularly important matters concerning
the execution of operations and makes decisions for the entire
Group. During the meeting the status of business execution isreported on.

CENTURY TOK YO LE A SING CORPOR ATIONManagement MeetingInternal Control
Basic Policy of Internal Control System
Every manager and employee is expected to refer to the following Management Philosophy as a basic policy for executing
operations.
Management Philosophy

CENTURY TOK YO LE A SING CORPOR ATION

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

CORPOR ATE GOV ERNANCE /CSR

26

Guided by this Management Philosophy, we have established aninternal control system that recognizes the importance of ensuring the appropriate execution of operations as a vital managerial
responsibility of the corporation. We also established the Internal
Control Committee for the effective functioning of the internal
control system. This committee is chaired by the officer in chargeof the Internal Control Office. It deliberates on the overall internal
control system, including on such topics as the effectiveness andscope of evaluation for financial reporting internal controls, andthen reports to the Management Meeting.
The Audit Division was established as an independent entity that is directly managed by the President, and conducts business audits and assesses the internal control of the Company
and subsidiaries on a regular basis. In so doing, the Audit
Division gains an accurate understanding of the situation of theGroup, strives to preserve Group assets and to improve management efficiency. It reports audit results to the President (at theManagement Meeting) and the Board of Directors. The internal
control system is upgraded as conditions within and outside of
the Group necessitate.

Risk Management
To minimize the risk of loss, we prepare in advance appropriate
preventive measures for various risks that may affect theCompany, according to the potential scale and probability of theiroccurrence. These measures are organizationally implemented
through the establishment of a range of meetings and committees.

Credit Risks
Credit risks are defined as risks associated with the potential failure to repay leasing fees, as well as the principal or interest on
installment sales loans or financing loans. Concern about thecollection of these leasing fees and other amounts due relates tosuch factors as the deterioration of the financial condition of thecounterparty. We have developed a rating model to provide multidimensional assessments based on the counterparty’s financial
condition and qualitative information, and depending on the rating and volume of projects can apply precise limitations. To
deliberate and decide upon large projects and matters requiring
complex judgment, we established the Credit Management
Meeting comprising the President and officers designated by the
Presidents. Furthermore, to properly manage the portfolio ofcredit risks held by the Company and subsidiaries we alsoestablished the Credit Risk Management Committee, chaired by
the Audit Division’s officer in charge, in order to gauge and manage credit risks throughout the Group.
Market Risks
Market risks are the risks incurred with the variation of a range ofmarket risk factors, such as interest rates and exchange rates.
We established the ALM Committee to comprehend and minimize such risks. The ALM Committee, chaired by the President,
deliberates on how to manage market, liquidity and other risks,and comprehensively manages assets and their procurement.
Comprehensive Risk
Every year the risks companies confront become more varied
and complex. Given this, rather than attempting to manage eachparticular risk on an individual basis, we believe it is important toconsolidate and control risks on a scale that management cantolerate.
With this goal in mind we established the Business Risks
Management Division to manage system risks and information
security risks based on the Information Security Basic Policy,
and to acquire ISO/IEC 27001 certification. The Business Risks
Management Division also revises risk countermeasures for business, legal and other operational risks determined and gauged
together with relevant departments. Furthermore, we haveestablished the Comprehensive Risk Management Committee,
chaired by the officer responsible for the Business Risks
Management Division. This committee comprehensively examines the overall control of the company’s risks and our system,
policy, and measures concerning risk management. Based on
our crisis countermeasure rules, this committee is set up to
immediately respond and take charge as a crisis headquarters
headed by the President in the event of a large disaster or othercrisis.

CSR
Compliance
Basic Policy for CSR Management

The chief compliance officer and the Compliance Office of
the Business Risks Management Division promote complianceactivities, including education and training based on the
Compliance Program. Officers and employees constantly carry
the Compliance Handbook which states our code of conduct,
compliance management rules and other internal rules and regulations, the prohibition of sexual and power harassment andother compliance issues to maintain and enhance a fair andtransparent corporate culture.
In addition, we have established several contacts, including an external law office, with whom employees can consult oncompliance issues and to whom they can provide information on
fraudulent actions and practices. Consequently, we operate awhistle-blower system that strictly protects those reporting problems. Rooted in our basic policy with regard to upgrading ourinternal control system, we are fundamentally prepared to act ina systematic and resolute way against any improper demands
made by antisocial forces, and we will sever any relations with
antisocial forces.

Century Tokyo Leasing Group aims to fulfill the expectations andearn the trust of all its stakeholders, including customers, vendors, shareholders, investors, employees and the local community. In order to fulfill our social responsibilities as a company, we
will endeavor to implement CSR-oriented management focusedon strengthening our system of corporate governance, and conducting ongoing business activities that work toward environmental preservation, social contributions, compliance, risk
management and information security.

Social Contributions through Business Activities
The Group’s leasing business plays an enormous role in contributing to the formation of a recycling society. We are working allout toward this goal through the thorough implementation of“3R” activities—reduce, reuse and recycle (re-leasing, remarketing and reusing of components and materials)—following thecompletion of a property’s lease period. Furthermore, we promote environmental preservation as we strive toward becoming
an environmental business that works to utilize finance functions
and to contribute to the sustainable development of society
through activities that include the support of medical and welfare
businesses.

CENTURY TOK YO LE A SING CORPOR ATION

Compliance begins with obeying the law and extends to adhering to our code of business conduct, social norms, corporate
ethics and the range of corporate rules and regulations. We recognize that thorough compliance is essential for the continued
existence of a corporation. Therefore, we aim to establish amanagement system that ensures that every officer and employee operates under the principle of fairness and with the highest
ethical standards to earn the trust of society.

27

Social Contributions through Business Activities
The Company strives to build bonds of trust with shareholders
and investors by offering to them an accurate understanding of
the Company through the disclosure of management strategies,
the status of business activities and financial conditions in atimely, fair, accurate, proactive and ongoing manner.
We disclose information based on various laws, including
the Corporation Law of Japan and the Financial Instruments andExchange Law of Japan as well as rules on timely disclosure
stipulated by the Tokyo Stock Exchange. In addition to information disclosure based on these laws, we disclose other information determined to be appropriate and useful to promote agreater understanding of the Company.
Together with disclosing information via TDnet, the company announcements disclosure service provided by the Tokyo
Stock Exchange, we also use mass media channels and disseminate information widely through the Company’s website.

* Remarketing BusinessIn the refurbishment business operated by the Group’s PC
Security Recycling Center and TRY Inc., a Group subsidiary,
such end-of-lease assets as PCs undergo a process in which all
residual data is completely erased. Used PCs are then remarketed or recycled for their components or materials. In the year
ended March 31, 2010, approximately 111,000 PC units wereresold. In this way we can assist in the prevention of customers’
data leaks and contribute to environmental preservation and the
reduction of industrial waste.

CORPOR ATE GOV ERNANCE /CSR

Environmental Initiatives
Information Disclosure (IR Policy)

CENTURY TOK YO LE A SING CORPOR ATION* Carbon Offset Leasing

CORPOR ATE GOV ERNANCE /CSR

28

Century Tokyo Leasing obtained a greenhouse gas (GHG) emissions allowance of 150,000 tons that it offers to customers
under a carbon offset leasing scheme in which the GHG emissions discharged by leased properties are mitigated by the utilization of this emissions allowance. Not limited to the leased
properties that we provide, this service is also offered to offset
the GHG emissions of customer-held assets and properties
leased from other companies. Customers are thus able to apply
countermeasures for the GHG emissions generated by theirbusiness vehicles, server devices and other properties. We also
undertake the burdensome procedures associated with carbon
offsets, further supporting customers’ environmental preservation activities.

Together with All of Our Stakeholders

Environmental Management System* Shareholders and Investors

Tackling environmental issues is one of the Group’s importantsocial responsibilities. Group members therefore work assiduously to obtain ISO 14001 (International Environmental
Management System) certification. Moreover, in addition to formulating an environmental manual for internal use, we continue
to work to reduce the volumes of electricity, paper and gasoline
we use and promote the green procurement of office supplies. In
these ways, each and every employee puts into practice actions
that take environmental preservation into consideration.

We disseminate information for stakeholders, starting with shareholders and investors, in a timely, appropriate and fair manner.
We also use the opportunity of corporate briefings for individual
investors and financial results meetings for institutional investors
to diligently explain Group business strategy and other information.

Social Initiatives
Social Contributions through Business Activities* Customers and Vendors
We at Century Tokyo Leasing have positioned at the pinnacle ofour basic policy the promotion of customer satisfaction-oriented
management. We work toward this ideal by building into ourSales Force Automation (SFA)1 the ability to listen to our customers in a framework jointly utilized by sales personnel and relevant
divisions. This sharing of customer requests and complaints
throughout the Company enables us to offer optimum services
and develop new products.
1 SFA is a system in which information essential to sales operations is streamlined to help sales divisions work more efficiently.

* Local Communities
As one element of our social contribution activities, Century
Tokyo Leasing Group members present and donate used PCs toorganizations and groups to contribute to the public good, without any intent of commercial gain. In addition, the Group contributes an amount equivalent to 5% of the total amount ofshareholder special benefit to The Defense of Green Earth
Foundation.

* Support for Medical Care and Welfare Environments
Century Tokyo Leasing places special emphasis on the medicalcare and welfare services fields so as to support their sounddevelopment. We, of course, conduct lease transactions for
medical equipment, but our diverse services extend across thisbroad business domain and include liquidity (advance fundacquisition) to cover medical treatment fees and nursing careloans as well as consulting and financing for rental nursing care
bed operators. In the auto lease business, we also support
improving the welfare services environment by offering suchleasing plans as those for welfare-purpose vehicles that meet theneeds of caregivers and individuals.
Information Security Management System
In our aim to earn the ongoing trust of society, Group member
companies have obtained ISO/IEC 27001 (Information Security
Management System) certification. We are also formulating relevant rules and regulations, starting with our Information Security
Basic Policy, and clarifying the management structure and roles
associated with information security. In addition, in our efforts toimprove awareness of information security, we conduct ongoingeducation and inspections of all officers.

* Employees
We at the Group aim for an environment and organization filledwith vitality in which each and every employee can maximize
their abilities. From the perspective of employment and recruitment, the Group hires those with disabilities, operates careertransfer systems and takes other approaches to select personnel from a wide range of fields, offering fair assessments andtreatment. In addition, based on The Law for Measures to
Support the Development of the Next Generation, we haveestablished systems in which improvements are made throughsuch measures as extending child-rearing leave and shortening
work hours. In so doing we support the work-life balance of
those employees who are raising families.

CORPORATE HISTORY
Year Month

Former Century Leasing System, Inc.

Former Tokyo Leasing Co., Ltd.

Month

Aug. Jointly established by Nippon Kangyo Bank, Ltd. (currently
Mizuho Financial Group, Inc.), Kangin Tochi-Tatemono Co.,Ltd (currently Nippon Tochi-Tatemono Co., Ltd.), and NanohCo., Ltd. (currently Nissin Tatemono Co., Ltd.), with a capitalization of 1 million yen

19641969 July

Jointly established by ITOCHU Corporation, Daiichi Bank,
Ltd. (currently Mizuho Financial Group, Inc.), Nippon Life
Insurance Company, and Asahi Mutual Life Insurance
Company, with a capitalization of 500 million yen

1972

Oct.

1979

Mar. Established Tokyo Auto Leasing Co., Ltd.
May

Established Tokyo Leasing (Hong Kong) Ltd. in Hong Kong
Established Tokyo Leasing (Singapore) Pte., Ltd. (currently
Century Tokyo Leasing (Singapore) Pte., Ltd.) as a subsidiary in Singapore

1983 Oct. Established Century Staff Inc. (currently Caplan Corporation ) May Established Tokyo Leasing (UK) PLC as a subsidiary inDec. Established Tokyo Leasing (U.S.A.) Inc. (currently Century
Tokyo Leasing (USA) Inc.) as a subsidiary in Connecticut,
U.S.A. (relocated to New York in 1994)

1990

Feb. Listed shares on the Second Section of the Tokyo Stock
Exchange

1997

Nov. Jointly established President Tokyo Corporation in Taiwan

2000 Oct. Century Auto Leasing Co., Ltd. merged with Asahi Auto
Lease Co., Ltd.
Sept. Listed shares on the First Section of the Tokyo Stock
Exchange

2002

Oct.

Merged with Kawasaki Enterprises, Inc.

2003 Sept. Listed shares on the Second Section of the Tokyo Stock
Exchange

2004 Sept. Listed shares on the First Section of the Tokyo Stock
Exchange29

2005 June Launched the refurbishment business (currently TRY Inc.)
Oct.

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

2006 Oct. Established Century Leasing (China) Co., Ltd. (currently

July

Century Tokyo Leasing China Corporation) as a subsidiary inShanghai, China

Established TOZUI CORPORATION (currently Century Tokyo
Leasing China Corporation) as a subsidiary in Shanghai,
China

June Established TLC Capital (Malaysia) Sdn. Bhd. (currently
Century Tokyo Capital (Malaysia) Sdn. Bhd.) as a subsidiaryin Malaysia

2007

2008 Sept. Nippon Car Solutions Co., Ltd. acquired all shares of Showa Jan. Turned Shiseido Lease Co., Ltd. (currently S.D.L. Co., Ltd.)
Auto Rental & Leasing Co., Ltd.

into a consolidated subsidiary
Mar. Jointly established Orico Auto Leasing Co., Ltd. with Orient
Corporation
July

Turned Mizuho Corporate Leasing (Thailand) Co., Ltd. (currently TISCO Tokyo Leasing Co., Ltd.) in Thailand into a corporate affiliate based on the equity method
Acquired additional shares of Fujitsu Leasing Co., Ltd.,making it a consolidated subsidiary

Mar. Established the Guangzhou Branch of Century Tokyo
Leasing China Corporation

2009

Century Tokyo Leasing Corporation2009 Apr.
Oct.

Century Tokyo Leasing Corporation was established April 1, 2009, through a merger between Century Leasing System, Inc. andTokyo Leasing Co., Ltd.
TLC Business Service Co., Ltd. unified business processing service sections of Century Business Service, Inc. and company
name changed to TC Business Service Co., Ltd.

2010 Jan. Century Tokyo Leasing China Corporation was established, through a merger between TOZUI CORPORATION and Century
Leasing (China) Co., Ltd.
Apr.

TC AGENCY Corporation was established, through a merger between TOKYO LEASE KANZAI K.K. and Century Business
Service, Inc.
Established TC BUSINESS EXPERTS Corporation

July

Turned IHI Finance Support Corporation into a consolidated subsidiary

CORPOR ATE HISTORY

Established Century Auto Leasing Co., Ltd.（currently
Nippon Car Solutions, Co., Ltd.)CENTURY TOK YO LE A SING CORPOR ATION

London, U.K.

1985 Apr.

MANAGEMENTCENTURY TOKYO LEASING CORPORATIONAs of June 24, 2010

MANAGEMENT

30

BOARD OF DIRECTORSCORPORATE AUDITORSEXECUTIVE OFFICERS

Chairman & Co-CEO,Representative Director
Takao Arai

Standing Corporate Auditor
Yukio Sekiguchi
Mikio Nishimura*

Deputy President,
Executive Officer
Koei Yamashiro

President & CEO,
Representative Director
Shunichi Asada

Corporate Auditor
Shigekazu Matsui*
Masahiko Sumida*
Syunsuke Wada*
Tetsurou Ito*
Osamu Saito*

Managing Executive
Officer
Michio Ito
Takeshi Honda
Yuichiro Ikeda
Osamu Oike
Masao Mizuno
Takashi Muramatsu
Kazuo Tanaka

Deputy President,
Representative Director
Masahiro Nakagawa
Koichi Nakajima
Director and Senior
Managing Executive Officer
Makoto Nogami
Director and Managing
Executive Officer
Akihiko Nishimura
Hideo Kondou
Tsuneichiro Masaki*External

Executive Officer
Masuo Suzuki
Mitsutaka Ohshima
Eiji Hara
Koichiro Izutsu
Yoshihiko Morimoto
Masami Tsuboi
Shuichi Sato
Atsuhiko Iwatake
Hidenori Fujimori
Hidenori Yamada
Masahiko Shishido
Yasuo Mori
Masatatsu Shimazu
Kenji Murai
Akira Sugimoto
Yukio Tanaka
Yoshio Nomura
Hiroshi Yoshida

FINANCIAL SECTION
32

Five-Year Summary

34

Management’s Discussion
and Analysis

39

Consolidated Statements ofIncome40

Consolidated Balance
Sheets42Consolidated Statements of
Changes in Net Assets

43

Consolidated Statements ofCash Flows

44

Notes to Consolidated
Financial Statements

65

Report of Independent
Auditors

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

Millions of yen

CENTURY TOKYO LEASING CORPORATION

2006

FINANCIAL SECTION

32

Operating Results
Revenues
Leasing
Installment sales
Loans
Other businesses
Costs
Leasing
Installment sales
Loans
Other businesses
Interest expenses
Gross profit on revenues
Sales revenues (Gross profit
on revenues before deducting
cost of funds)
SG&A expenses
Personnel and non-personnel
expenses
Allowance for doubtful accounts
Operating income
Ordinary income (Income before
extraordinary items and income taxes)
Extraordinary gains (losses)
Net income
Financial Condition
Total assets
Operating assets
Leasing
Installment sales (after deducting
deferred profit on installment sales)
Loans
Other businesses
Interest-bearing debt
Net assets
Cash FlowsNet cash provided byoperating activities
Net cash used in investing activities
Net cash used in financing activities
Cash and cash equivalents
at end of year

2007

2008

2009

2010

¥ 705,110 ¥ 753,972 ¥ 742,454 ¥ 742,948
565,789
611,421595,551
613,801
123,602126,111
128,793
109,755
3,385
5,450
7,048
7,435
12,334
10,99011,062
11,957652,929
698,681690,734
683,683
517,247
556,403542,831548,323
115,796
118,039
119,300
102,195
9
31
23
28
8,949
7,685
7,394
9,097
10,92916,522
21,18524,03952,18055,292
51,72059,265¥ 758,674
635,808
105,4138,126
9,327
693,569
567,884
98,37835
7,272
20,001
65,105

63,11026,51371,814
27,20472,90630,223

83,30438,368

85,10634,81026,278235
25,66726,264940
28,08826,406
3,817
21,49727,654
10,71420,897

29,153
5,657
30,29527,201
4,448
20,05030,133(13,742)
3,784

22,359(994)
13,25022,275(5,232)
10,02933,414(250)
25,542¥1,887,598 ¥2,131,277 ¥2,090,407 ¥2,423,800
1,717,049
1,885,710
1,881,581
2,100,016
1,279,082
1,379,198
1,336,707
1,536,504¥2,132,892
1,937,955
1,410,109

242,981
172,830
22,156
1,589,973
124,533

264,224
216,327
25,961
1,834,450
120,163

267,860
237,206
39,808
1,792,410
127,400

243,708
261,629
58,1752,053,766
133,222200,539
256,693
70,614
1,749,775
158,116

—
—
—

—
—
—

—
—
—

—
—
—

¥ 194,308(8,949)(306,146)

—

—

—

—

50,947

Notes: 1. Figures for the years ended March 31, 2006 through 2009 are the simple sums of values recorded by the former Century Leasing
System, Inc. (CLS) and Tokyo Leasing Co., Ltd. (TLC)
2. Revenues do not include internal revenues or transfers between segments.

¥—
137.21200.19—964.17
1,157.39
—
20.00
18.00

¥

—
145.53(59.29)—1,051.53
1,011.35
—
22.00
22.00

2008
¥

—
125.31104.77—
1,102.48
1,081.69
—
26.00
24.00

¥

2009

2010

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

¥ 239.57——
1,410.61
—
—
32.00
—
—

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

—
15.6%
19.1%
—
1.5%
1.4%
—
6.7%
6.5%
—
49.7%
50.8%

—
14.4%
(5.5)%
—
1.5%
1.5%
—
6.9%
4.8%
—
47.0%
47.8%

—
11.6%
10.0%
—
1.3%
0.9%
—
7.2%
5.4%
—
46.1%
54.1%

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

18.5%
—
—
1.5%
—
—
7.1%
—
—
44.8%
—
—

Other Data
Employee (persons)
Former CLS
Former TLC

—
454
1,023

—
470
1,044

—
486
1,090

1,701
490
1,211

1,732
—
—

3. Figures for the year ended March 31, 2009 are the simple sums of values recorded by the former Century Leasing System, Inc.
and Tokyo Leasing Co., Ltd. The merger ratio has been factored into per share data.
4. ROE = Net income / Equity (simple average of beginning and end of term balance sheet figures) X 100
ROA = Ordinary income / Total assets (simple average of beginning and end of term balance sheet figures) X 100
Overhead ratio = (Personnel expenses + Non-personnel expenses) / Gross profit on revenues X 100

33
FINANCIAL SECTION

Per Share Data
Net income (loss)
Former CLS
Former TLC
Net assets
Former CLS
Former TLC
Dividends
Former CLS
Former TLC

2007

CENTURY TOKYO LEASING CORPORATION

Yen

2006

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

FINANCIAL SECTION

34

chased 2,660 shares (66.5%) of IHI Finance Support,
including that company in its scope of consolidation. In thisway, the Group is proactively expanding its business fields.
In addition to such efforts, the Group has been working
to quickly integrate the overlapping marketing bases andbusinesses of companies in the two merged companies’
groups, including their subsidiaries in China. Simultaneously,with the aim of coordinating the two companies’ basic systems, the Group completed the industry’s fastest IT system
integration in May 2010.
In order to report business status more accurately, prioryears’ results of the former Century Leasing System, Inc.
and the former Tokyo Leasing Co., Ltd. have been combined as simple aggregates and are represented as follows
unless otherwise stated.

Business Environment and the Group’s Approaches
During the period under review, the Japanese economy saw
signs of gradual improvement on the back of increasing
exports thanks to the overseas economic recovery mainly in
China and other Asian countries. Despite such conditions,the business environment for the leasing industry remained
harsh, reflecting stagnant private capital expenditure.
According to statistics compiled by the Japan Leasing
Association, the value of lease transactions on a monthly
basis continued to fall short of the year-on-year value.
Under such circumstances, in this first year following themerger the Group focused on various management objectives, including the reinforcement of sales bases andenhancement of operational efficiencies, with the aim ofquickly creating merger synergies through proactive business consolidation during the earliest stages of integration.
As part of such efforts, the Group promoted solution-oriented sales activities and profit-focused initiatives while developing an “asset-based lending scheme utilizing a movable
asset management system and security trusts (businessmodel patent pending)” that focuses on the management oftangible assets. In the automobile leasing business, theconsolidated subsidiary TOKYO AUTO LEASING CO., LTD.
purchased shares in the automobile leasing business ofSumishin Panasonic Financial Services Co., Ltd. As a result,the number of vehicles managed by the entire Group,
including by the industry’s third largest company, the equity
method affiliate NIPPON CAR SOLUTIONS CO., LTD.,
totaled approximately 400,000. Furthermore, the Group
entered into a basic agreement with IHI Corporation regarding the purchase of shares of IHI Finance Support
Corporation, an IHI Corporation consolidated subsidiary that
handles financing for the IHI Group and its business partners. Based on this agreement, in July 2010 the Group pur-

Total Private Capital Investment(Trillions of yen)

Overview of Results
Amid intensifying competition caused by sluggish capital
investment, the value of new contracts executed in the fiscal year ended March 31, 2010 fell 25.1% year on year to¥624,182 million, reflecting the Group’s approach to focus
rather on profit. As a result, the balance of operating assets
decreased 7.7% year on year to ¥1,937,955 million.
In profit and loss, total revenue rose 2.1% year on yearto ¥758,674 million, while gross profit grew 9.9% to¥65,105 million. This was attributable to the inclusion of
Fujitsu Leasing Co., Ltd. into the scope of consolidation,
which offset lower revenue caused by decreases in operating assets. Operating income surged 45.0% to ¥30,295 million due to reductions in interest expense and the allowancefor doubtful accounts, and ordinary income jumped 50.0%
to ¥33,414 million. Net income soared 154.7% year on yearto ¥25,542 million, owing to increased revenues thanks to
the termination of litigation.

Total Lease Transactions(Lease Contract Amounts)

Value of New Contracts

10

1,000

8

800

6

600

4

400

2

200

(Billions of yen)

Leasing
Installment sales
Loans/Other(Trillions of yen)
90

60

30

0

0

06/03

07/03

08/03

09/03

10/03

Source: Private capital investment is based on a survey by the
Cabinet Office. The figures for “10/03” (FY2009) are
preliminary and nominal figures announced on
September 10, 2010.

0

06/03

07/03

08/03

Source: Japan Leasing Association

09/03

10/03

06/03

07/03

08/03

09/03

10/03

Graph figures for the years ended March 31, 2006 through2009 are the simple sums of values recorded by the former
Century Leasing System, Inc. and Tokyo Leasing Co., Ltd.

Operating Income
Selling, general and administrative expenses declined¥3,559 million, or 9.3%, year on year to ¥34,810 million.
Major components included increases in such personnel
and non-personnel expenses including merger-related costsby ¥1,498 million (5.4%) to ¥29,153 million as well as adrop in allowance for doubtful accounts by ¥5,057 million(47.2%) to ¥5,657 million. As a result, operating income
surged ¥9,399 million, or 45.0% year on year to ¥30,295
million.

Results by Segment
Results by business segment are as follows (operating
income in “Elimination or corporate” is stated as an unclassifiable expense before deduction).
In the leasing business, the value of new contracts executed declined 17.8% year on year to ¥428,185 million.
Total revenues grew 3.6% to ¥635,808 million, and operating income surged 40.0% to ¥35,222 million.
In the installment sales business, the value of new contracts executed fell 35.1% year on year to ¥51,077 million.
Total revenues decreased 4.0% to ¥105,413 million, andoperating income dropped 46.3% to ¥974 million.
In the loans business, the value of new contracts executed was down 35.4% year on year to ¥131,413 million.
Total revenues climbed 9.3% to ¥8,126 million, and operating income increased 29.5% to ¥1,005 million.
In other businesses, the value of new contracts executed dropped 54.8% to ¥13,508 million. Total revenues fell
22.0% to ¥9,327 million, while operating income grew
15.5% to ¥1,295 million.

Ordinary Income
Non-operating income surged ¥1,740 million, or 126.3%,
year on year to ¥3,119 million due to the recording of foreign exchange gains and profit on amortization of negative
goodwill. To that end, ordinary income increased ¥11,139
million, or 50.0%, to ¥33,414 million, topping both precursor companies’ peak figures.

Interest Expenses

Credit Costs(Billions of yen)

Main Factors of Increase and Decrease in Net Income(Billions of yen)

25

(Billions of yen)

12
Main income
increase factors
Total ¥12.6 billion

Main income
decrease factors
Total 1.5 billion
Extraordinary Income tax, etc.
incomeCost of sales
13.9

20
9

Non-operating
income15

Allowancefor doubtful
accounts

Total revenues
15.7

1.7

SG&A expenses(not including
allowancefor doubtful
accounts)

5.0

0.6

1.5

5.1

6

Net income
15.5
10Interest expenses

Ordinary income
11.1

4.0

3
5

Sales revenues
1.8
0

0

06/03

07/03

08/03

09/03

10/03

Graph figures for the years ended March 31, 2006 through2009 are the simple sums of values recorded by the former
Century Leasing System, Inc. and Tokyo Leasing Co., Ltd.

06/03

07/03

08/03

09/03

35
FINANCIAL SECTION

Net Income
Extraordinary loss totaled ¥250 million, showing an
improvement of ¥4,983 million (95.2%) year on year. This
was attributable to a ¥2,146 million reversal of allowance for
doubtful accounts due to the termination of former Tokyo
Leasing Co., Ltd.’s litigation as well as a ¥3,002 million
decrease in loss on devaluation of investments in securities.
As a result, income before income taxes and minority

CENTURY TOKYO LEASING CORPORATION

interests jumped ¥16,121 million, or 94.6%, to ¥33,165
million. Income taxes rose ¥929 million, or 15.1%, to ¥7,091
million, with ¥5,081 million lower taxes due to thetermination of litigation. Minority interests decreased ¥319
million, or 37.5%, to ¥531 million.
As a result, net income soared ¥15,512 million, or
154.7%, to ¥25,542 million.
Net income per share rose ¥145.52 compared with theprevious fiscal year to ¥239.57, while ROE improved 10.5
percentage points to 18.5% and ROA edged up 0.5 of apercentage point to 1.5%.

Revenues, Gross Profit on Revenues
Total revenues grew ¥15,727 million, or 2.1%, to ¥758,674
million.
Gross profit rose ¥5,840 million, or 9.9%, to ¥65,105
million. This was due to a decrease in interest expense of¥4,038 million, or 16.8%, to ¥20,001 million along with thedecrease in balance of borrowings and fund procurement
reflecting the contraction of cash on hand and in banks.

10/03

Credit costs represent the sum of doubtful account costs,
which were included in costs of sales, and allowance for
doubtful accounts, which was included in SG&A expenses.
Graph figures for the years ended March 31, 2006 through2009 are the simple sums of values recorded by the former
Century Leasing System, Inc. and Tokyo Leasing Co., Ltd.

Figures represent year-on-year changes.

CENTURY TOKYO LEASING CORPORATIONFINANCIAL SECTION

36

Financial Condition
Total Assets
Total assets as of March 31, 2010 decreased ¥290,908 million, or 12.0%, from a year earlier to ¥2,132,892 million.
This was mainly attributable to the contraction of cash on
hand and in banks as well as a decrease in the balance of
operating assets due to the improved financial environment.

Net Assets
Net assets rose ¥24,894 million, or 18.7%, year on year to¥158,116 million due to an increase in retained earnings.
The shareholders equity ratio edged up 1.9 percentage
points compared with the previous accounting period-end
to 7.1%.

Operating Assets
The balance of operating assets as of March 31, 2010
declined ¥162,061 million, or 7.7%, compared with the corresponding period of the previous fiscal year to ¥1,937,955
million. By segment, the leasing business saw a ¥126,395
million, or 8.2%, decrease in the balance of operating
assets to ¥1,410,109 million, the installment sales businessrecorded a ¥43,169 million, or 17.7%, decline to ¥200,539
million, the loans business saw a ¥4,936 million, or 1.9%,
decrease to ¥256,693 million, while other businesses
recorded a ¥12,439 million or 21.4%, increase year on yearto ¥70,614 million.

Indirect Funding and Direct Funding
During the period under review, indirect funding decreased¥236,028 million to ¥1,118,146 million, reflecting thedecrease in long- and short-term borrowings. Direct financing also decreased ¥67,963 million year on year to¥631,630 million due to decrease in fund procurement
through debt securitization and the issuance of corporate
bonds as well as an increase in commercial paper. As aresult, the direct financing ratio of the period ended March
31, 2010 was 36.1%, up 2.0 percentage points from theprevious accounting period.

Liabilities
Total liabilities as of the accounting period end fell ¥315,801
million, or 13.8%, to ¥1,974,776 million. This was owing to
the contraction of debt due to cash on hand and in banks
collected in the previous accounting period-end, as well asa decrease in demand for funding in operating activities.
Interest-bearing debt declined ¥303,991 million, or
14.8%, year on year to ¥1,749,775 million. Total short-term
financing decreased ¥140,159 million, or 15.8%, to¥747,916 million, with commercial paper increasing¥16,700 million, or 3.3%, year on year to ¥529,500 million,
and short-term borrowings falling ¥150,059 million, or
42.1%, to ¥206,416 million. Total long-term fund procurement, including current portion, declined ¥163,831 million,or 14.1%, to ¥1,001,859 million, due mainly to an ¥85,968
million (8.6%) decrease in long-term loans, principally frombanks, to ¥911,730 million.

Securing Liquidity
With the aim of securing liquidity, the Group signed overdraft agreements and commitment line agreements with 54
financial institutions. As of March 31, 2010, the total valueof contracts amounted to ¥642,802 million.
The Group secured sufficient liquidity of funds as of theend of this period, with ¥458,805 million in unused facilities.

Cash Flows
In the cash flow analysis that follows, the consolidated values given for the fiscal year ended March 31, 2009, arethose of the former Century Leasing System, Inc., theassets and liabilities of former Tokyo Leasing Group are
excluded from calculations of increase and decrease andfrom comparisons with previous years’ figures.

Operating Assets by Segment

Condition of Fund Procurement

Leasing
Installment sales(after deducting
deferred profit
on installment sales)

Long-term borrowings
Short term financing(left: billions of yen)(right: %)Short-term borrowings
Direct financing(left: billions of yen)(right: %)MTN, corporate bonds,
securitized lease assets (left: billions of yen)
CP (left: billions of yen)(Billions of yen)

Loans
Other businesses

Total Net Assets

2,000

2,000

60

1,500

1,500

45

1,000

1,000

30

500

500

15

0

0

06/03

07/03

08/03

09/03

10/03

Graph figures for the years ended March 31, 2006 through2009 are the simple sums of values recorded by the former
Century Leasing System, Inc. and Tokyo Leasing Co., Ltd.

0

06/03

07/03

08/03

09/03

Net Assets (Left: billions of yen)
Equity Ratio (Right: %)10/03

Graph figures for the years ended March 31, 2006 through 2009 are
the simple sums of values recorded by the former Century Leasing
System, Inc. and Tokyo Leasing Co., Ltd.

Equity Ratio

200

8

150

6

100

4

50

2

0

0

06/03

07/03

08/03

09/03

10/03

Graph figures for the years ended March 31, 2006 through 2009 are
the simple sums of values recorded by the former Century Leasing
System, Inc. and Tokyo Leasing Co., Ltd.

Dividends in the Fiscal Year Ended March 31, 2010
In light of the support afforded the Company by stakeholders, including shareholders, as well as the healthy businessperformance after the merger, the Group upwardly revised
the dividend decided on at the beginning of the fiscal year.

Dividends per Share
(Yen)
35

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

30

25

20

15

10

5

0

06/03

07/03

08/03

09/03

10/03

Fiscal 2010 Outlook
The business environment surrounding the Group is anticipated to change drastically as international accounting
standards are introduced and companies in the Japanesemarket become increasingly globalized against a backdrop
of a harsh business environment characterized by sluggish
private capital expenditure and corporate bankruptcy due toeconomic recession.
Amid this situation, the Group will make maximum useof its customer base to facilitate operating activities, while
striving to cut interest expenses and credit costs to increase
profitability.
For the accounting period ending March 31, 2011, theGroup expects revenues amounting to ¥690,000 million(down 9.1%), reflecting a decrease in operating assets;¥31,500 million in operating income (up 4.0%) due to the
expansion of finance-related and overseas businesses;¥34,000 million in ordinary income (up 1.8%) and net
income of ¥19,500 million (down 23.7%).
The Group currently anticipates a 23.7% decrease in net
income due to the absence, in line with the conclusion ofcertain litigation, of factors that increase profits. Discounting
the effect of these factors, net income is expected toincrease 6.5%.

Dividends in the Fiscal Year Ending March 31, 2011
The Group’s basic policy on the return of profits to shareholders is to continue steady dividend payments, while striving to strengthen its business and financial foundation froma long-term perspective to prepare for future businessdevelopment, business results, and maintaining the dividend payout ratio.
For the fiscal ending March 31, 2011, the Group is planning an annual dividend of ¥32 per share (¥16 per share forboth interim and end-of-period dividends) based on its policy of returning profits to shareholders in recognition of the
support they provide.

CENTURY TOKYO LEASING CORPORATION

Thus, the Group added ¥2 per share to the planned amountas well as a commemorative dividend of ¥2 per share for apayout totaling ¥32 per share. This resulted in the sixth consecutive dividend increase for shareholders of former
Century Leasing System, Inc. since its listing in stock markets in 2003, and the 12th consecutive dividend increase
for shareholders of former Tokyo Leasing Co., Ltd. since
March 31, 1999.

37
FINANCIAL SECTION

Net cash provided by operating activities was ¥194,308 million, a turnaround from net cash used in operating activitiesof ¥5,544 million in the previous accounting period. Major
components included increased income before income
taxes and minority interests due to decrease in installment
sales receivables, lease receivables and investment assets.
Net cash used in investing activities was ¥8,949 million,
up from net cash used in investing activities of ¥2,282 million in the previous accounting period. This was mainly
attributable to decreased proceeds from sales/redemptionsof investments in securities and increased purchases ofinvestments in securities.
Net cash used in financing activities totaled ¥306,146
million, a turnaround from net cash provided by financing
activities of ¥67,497 million in the previous accounting period. Major components included increased repayment ofinterest-bearing debt.
During the period under review, the Group conductedshort-term financing through securitized lease assets.
However, the Group recorded a net cash outflow of¥137,665 million due to the repayment of short-term borrowings and redemption of commercial paper. On the other
hand, in long-term fund procurement, the Group recorded
total cash outflow of ¥166,368 million due to the net repayment of long-term debt, redemption of securitized leaseassets and redemption of corporate bonds.
As a result, cash on hand and cash equivalents at endof year were down ¥16,440 million year on year to ¥50,947
million.

CENTURY TOKYO LEASING CORPORATIONFINANCIAL SECTION

38

Business and Other Risks
Listed below are risks that may influence the Group’s business performance, stock prices and financial conditions.

controls these fund procurement related risks on the basisof ALM (Asset Liability Management) analysis and hedges
risks as necessary.

(1) Credit Risk
Leasing transactions are those in which credit is provided toa 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 the full amount of theleasing fee, etc., is collected from the customer. However, if
there is nonpayment by the customer or a similar incident,
we collect as much as possible through such measures as
selling lease assets in question or leasing it to another customer.
The Group strives to minimize credit risks through cautious credit management, the assessment of assets, and bycontrolling credit risks in the portfolio of operating assets;
however, the Group’s performance may be affected if bad
debt newly arises as a result of deterioration in the credit situations of companies, depending on future economic
trends.

(3) Business Performance in the Past Five Terms andthe Trend in Private Capital Investment
The values of private capital investment and capital investment financed by leasing in the past five years are interrelated, although there are temporary differences. This trend is
expected to continue in the future.
The change in the value of the Group’s contracts andthe changes in the values of private capital investment andcapital investment financed by leasing have not necessarily
coincided in recent years; however, the Group’s performance may be affected if a large decrease in the value ofprivate capital investment occurs in the future accompanied
by a large decline in the value of capital investment financed
by leasing.

(2) Impacts of Interest Rate Volatility and Changes in theFund Procurement Environment
In our main business of lease and installment sales transactions, leasing fees are set on the basis of the purchaseprice, interest rate level when the contract is signed, etc.,
and leasing fees do not vary during the contract period. On
the other hand, the portion of the cost of funds (financing
costs), which is the cost of lease transactions, is affected byfluctuations in market interest rates because funds are also
raised by obtaining loans with variable interest rates, inaddition 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 of commercial
paper, corporate bonds, etc. Depending on changes in thefunding environment, there may be impacts on fund procurement.
As mentioned above, depending on interest rate volatility and changes in the funding environment, there may be
impacts on the Group’s results. However, the Group strictly(4) Stock Price Volatility Risk
The Group holds securities for the purpose of strengthening
relationship with partner companies. The Group periodicallyreviews stocks held that correspond to individual business
relationships; however, depending on future stock price volatility, there may be impacts on the Group’s results.
(5) System Change Risk
The Group is developing its business on the basis of current
legal, tax and accounting systems 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 systemrisks, such as failure and errors in such areas as sales relationships, contact management, asset management andstatistical operations; administrative risks due to improper
administrative procedures; residual value risk that the actual
disposal values are below the initial estimated residual values of lease assets; and compliance risk of loss of social
trust resulting from noncompliance with laws or regulations
or social norms, etc.

Private Capital Investment and Capital Investment Financed by Leasing(Billions of yen)

FY2005

FY2006

FY2007

FY2008FY2009

Private capital investment (a)75,901.0

79,825.9

81,338.6

76,760.6

62,660.8

YoY comparison

106.1%

105.2%

101.9%

94.4%

81.6%

Total lease transaction

7,941.3

7,867.7

7,154.2

6,056.4

4,921.9

YoY comparison

104.1%

99.1%

90.9%

84.7%

81.3%

Capital investment financed by leasing (b)7,101.7

7,121.3

6,342.0

5,444.4

4,405.8

YoY comparison

104.3%

100.3%

89.1%

85.8%

80.9%

Ratio of capital investment financed byleasing to private capital investment (b)÷(a)

9.4%

8.9%

7.8%

7.1%

7.0%

Newly executed lease contracts of the Group

573.7

565.0

468.3

520.8

428.2

108.8%

98.5%

82.9%

111.2%

82.2%

YoY comparison

Notes:
1. Private capital investment is based on a survey by the Cabinet Office. The figures for FY2009 are preliminary and nominal figures announced on September
10, 2010.
2. Capital investment financed by leasing is statistical data released by the Japan Leasing Association.
3. Figures for the years ended March 31, 2006 through 2009 are the simple aggregate of values recorded by former Century Leasing System, Inc. and former
Tokyo Leasing Co., Ltd.

CONSOLIDATED STATEMENTS OF INCOME
CENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2010 AND 2009“2009” FIGURES ARE FOR THE FORMER CENTURY LEASING SYSTEM, INC. ON A CONSOLIDATED BASIS.

Thousands of
U.S. dollars(Note1)Millions of yen

2010

2009

2010

Leases¥635,808¥222,129$6,833,711

Installment sales

105,41340,621

1,132,983

Other

17,453

3,980

187,589

758,674

266,730

8,154,283

567,884

199,314

6,103,654

Revenues (Note 19):

Total revenues

LeasesInstallment sales

98,37837,4901,057,372

Interest expense

20,001

7,466

214,970

Other

7,306

1,282

78,533

Total costs

693,569

245,552

7,454,529

65,105

21,178

699,754

34,81012,667374,136

30,295

8,511

325,618

653

285

7,018

(1,322)(355)(14,210)Equity in earnings of affiliates

909

1,365

9,774

Profit on amortization of negative goodwill

890

—

9,568

Foreign exchange gains

1,762

—

18,941

Profit on reversal of allowance for doubtful accounts

2,146

—

23,065Gain on sale of investments in securities

170

229

1,825

Gain on adjustment due to changes of accounting standard
for lease transactions

—

526

—

(2,058)—(22,122)

Loss on devaluation of investments in securities(246)(1,006)(2,646)

Other, net

(35)

(579)

(376)

33,164

8,976

356,455

Current

4,799

1,196

51,583

Deferred

2,292

1,812

24,637

7,091

3,008

76,220

531

10

5,712

5,958

$ 274,523

Gross profit
Selling, general and administrative expenses (Note 9)
Operating income

CENTURY TOKYO LEASING CORPORATION

Costs:

Other income (expenses):
Interest expense

Merger costs

Income before income taxes and minority interests
Income taxes (Note 11):

Minority interests
Net income (Note 20)
The accompanying notes are an integral part of these statements.

¥ 25,542¥

39
FINANCIAL SECTION

Interest and dividend income

CONSOLIDATED BALANCE SHEETSCENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESAS OF MARCH 31, 2010 AND 2009“2009” FIGURES ARE FOR THE FORMER CENTURY LEASING SYSTEM, INC. ON A CONSOLIDATED BASIS.

Thousands of
U.S. dollars(Note1)CENTURY TOKYO LEASING CORPORATION

Millions of yen

2010
ASSETS
Current assets:
Cash on hand and in banks (Notes 7, 10 and 15)¥ 31,632
Accounts receivable:
Installment sales (Notes 7 and 15)
214,460
Lease receivables and investment assets (Notes 7, 13 and 15) 1,288,873
Loans (Notes 7 and 15)
256,693
Leases
17,743
Other
5,242
Allowance for doubtful accounts (Note 15)(9,993)Operational investment securities (Notes 3, 5 and 15)
63,981Other operating assets
1,452
Short-term investment securities (Notes 5 and 15)
20,000Inventories
962
Deferred tax assets (Note 11)
4,223
Other current assets
36,828
Total current assets
1,932,096

2009¥ 67,387

2010$

339,986

96,135506,12288,351
5,356
456(3,381)
—
—
—
66
411
9,891
770,794

2,305,028
13,852,887
2,758,953
190,701
56,345(107,409)
687,676
15,607214,961
10,33845,392395,825
20,766,290

FINANCIAL SECTION

40
Investments and other assets:
Investments in securities (Notes 5, 7 and 15):
Unconsolidated subsidiaries and affiliates
Other securities
Long-term loans and other assets

12,67330,631
13,54910,264
11,912
9,443

136,211329,223
145,624

Claims provable in bankruptcy or rehabilitation(Notes 4, 7 and 15)
Deferred tax assets (Note 11)
Allowance for doubtful accounts (Note 15)
Total investments and other assets

11,0697,872(4,223)
71,571—
3,653(1,062)
34,210118,976
84,608(45,390)769,252

Property and equipment, at cost less accumulated depreciation:
Leased assets (Notes 6 and 7)
Own assets in use (Note 6)
Property and equipment, net

121,658
3,228
124,886

38,831936
39,7671,307,592
34,696
1,342,288

331
4,008
4,339
¥2,132,892

115
1,064
1,179
¥845,950

3,562
43,076
46,638$22,924,467

Intangible assets:
Computer programs leased to customers
Other intangible assets
Total intangible assets
Total assets
The accompanying notes are an integral part of these statements.

2010

2009

2010

LIABILITIES AND NET ASSETS
Current liabilities:
Short-term borrowings (Notes 7, 10 and 15)
Current portion of long-term debt (Note 7)
Notes and accounts payable – trade (Note 15)
Lease obligations (Note 15)
Accrued income taxes
Advances received from customers
Deferred profit on installment sales
Other current liabilities
Total current liabilities¥ 747,916
382,208
95,69013,751
2,151
3,577
13,921
33,6591,292,873¥307,385
135,453
46,722
4,837
28
534
8,142
8,569
511,670$ 8,038,651
4,108,001
1,028,485
147,799
23,11838,444
149,619
361,772
13,895,889

Long-term liabilities:
Long-term debt (Notes 7 and 15)
Lease obligations (Note 15)
Retirement benefits (Note 12)
Guarantee deposits from customers
Deferred tax liabilities (Note 11)
Allowance for automobile inspection costs
Negative goodwill
Other long-term liabilities
Total long-term liabilities
Total liabilities

619,651
13,351
1,031
23,350
3,259
162
1,304
19,795681,903
1,974,776

247,815
10,259
744
8,524
—
—
—
6,168
273,510785,180

6,660,053
143,492
11,077250,969
35,023
1,747
14,015
212,762
7,329,138
21,225,027

34,231
5,538
111,293

11,867
5,538
43,713367,91759,522
1,196,179(9)
151,053(1)
61,117(96)
1,623,522

1,797
1,291
(3,750)(662)
7,725
158,116¥2,132,892

40
(427)
(157)
(544)
197
60,770¥845,950

19,312
13,881(40,304)(7,111)
83,0291,699,440$22,924,467

Contingent liabilities (Note 14)
Net assets:
Shareholders’ equity (Notes 17 and 18):
Common stock without par value:
Authorized: 400,000,000 shares
Issued: 106,624,620 shares in 2010 and 52,126,000
shares in 2009
Capital surplus
Retained earnings
Treasury stock:
10,181 shares in 2010 and 789 shares in 2009
Total shareholders’ equity
Valuation, translation adjustments and otherNet unrealized holding gain on securities
Net unrealized profits_(losses) on derivative instruments
Translation adjustments
Total valuation, translation adjustment, and other
Minority interests in consolidated subsidiaries
Total net assets
Total liabilities and net assets

41
FINANCIAL SECTION

Millions of yen

CENTURY TOKYO LEASING CORPORATION

Thousands of
U.S. dollars(Note1)CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSCENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2010 AND 2009“2009” FIGURES ARE FOR THE FORMER CENTURY LEASING SYSTEM, INC. ON A CONSOLIDATED BASIS.

CENTURY TOKYO LEASING CORPORATION

Number of shares
Thousands

FINANCIAL SECTION

42

Common stock
Balance at beginning of year
Changes due to merger
Balance at end of year
Capital surplus
Balance at beginning of year
Balance at end of year
Retained earnings
Balance at beginning of year
Changes due to merger
Net income for the year
Cash dividends
Disposal of treasury stock
Other
Balance at end of year
Treasury stock
Balance at beginning of year
Changes due to merger
Acquisition of treasury stock
Disposal of treasury stock
Balance at end of year
Total shareholders’ equity

Thousands of
U.S. dollars(Note1)Millions of yen

2010

2009

2010

2009

2010

52,12654,499106,625

52,126—52,126¥ 11,867
22,364
34,231¥11,867—
11,867$ 127,549
240,368
367,917

5,538
5,538

5,538
5,538

59,52259,522

43,71344,26025,542(2,222)0(0)111,293

39,215—
5,958(1,460)——43,713469,830
475,711274,523(23,886)2(1)
1,196,179

(1)
(1)
(8)
1
(9)
¥151,053

(1)
—
0
—
(1)
¥61,117

(11)
(9)
(83)
7
(96)
$1,623,522

¥

40
(180)
1,937
1,797

¥ 1,103—(1,063)
40

$

(427)
2,190
(472)
1,291

(277)
—
(150)
(427)

(4,587)23,537(5,069)13,881(157)(4,019)426(3,750)
¥
(662)

21

¥

(1,696)(43,195)
4,587(40,304)(7,111)

¥

¥

(1)
(2)
(8)
1
(10)

(1)
—
0
—
(1)

Net unrealized holding gain on securities
Balance at beginning of year
Changes due to merger
Net changes during the year
Balance at end of year
Net unrealized profits (losses) on derivative instruments
Balance at beginning of year
Changes due to merger
Net changes during the year
Balance at end of year
Translation adjustments
Balance at beginning of year
Changes due to merger
Net changes during the year
Balance at end of year
Total valuation, translation adjustment, and other
Minority interests in consolidated subsidiaries
Balance at beginning of year
Changes due to merger
Net changes during the year
Balance at end of year
Total net assets
The accompanying notes are an integral part of these statements.

197
7,837
(309)
7,725
¥158,116

(178)
(157)
(544)

232
—
(35)
197
¥60,770$$435(1,937)
20,814
19,312

2,125
84,235(3,331)
83,029$1,699,440

CONSOLIDATED STATEMENTS OF CASH FLOWSCENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2010 AND 2009“2009” FIGURES ARE FOR THE FORMER CENTURY LEASING SYSTEM, INC. ON A CONSOLIDATED BASIS.

Thousands of
U.S. dollars(Note1)Millions of yen

The accompanying notes are an integral part of these statements.

2010
356,455

274,893(146,657)
249,269
2,644(19,357)(7,018)229,181(1,816)—
621,098
824,452
53,009(83,792)(253,118)
164,940(53,117)
119,174
2,330,240
8,942(226,408)(24,333)
2,088,441(18,046)
8,491(59,383)(8,276)21
0(18,992)(96,185)(1,444,174)
2,308,212(3,986,715)(145,099)(23,882)
1,181(3,290,477)
570(1,297,651)
724,280
764,542
356,417$547,588

CENTURY TOKYO LEASING CORPORATION$

43
FINANCIAL SECTION

2010
2009
Cash flows from operating activities:
Income before income taxes and minority interests¥ 33,164¥ 8,976
Adjustments to reconcile income before income taxes and minority
interests to net cash provided by (used in) operating activities:
Depreciation and amortization of leased assets
25,576
8,903
Increase (decrease) in allowance for doubtful accounts(13,645)
993
Loss on disposal of leased assets
23,192
1,910
Loss on devaluation of investments in securities
246
1,006
Foreign exchange gains(1,801)—
Interest and dividend income
(653)
(285)
Interest expenses
21,323
7,821
Gain on sale of investments in securities
(169)
(229)
Gain on adjustment for changes of accounting standard
for lease transactions—(526)
Decrease in installment sales receivable
57,787
15,287
Decrease (increase) in lease receivables and investment assets
76,707(17,527)
Decrease (increase) in loans receivable
4,932(10,819)
Increase in operational investment securities(7,796)—
Purchase of leased assets(23,550)(8,150)Decrease in Claims provable in bankruptcy or rehabilitation
15,346—
Increase (decrease) in trade notes and accounts payable(4,942)
3,265
Other, net
11,088(2,728)Subtotal
216,805
7,896Interest and dividend income received
832
435
Interest expenses paid
(21,065)(8,547)
Income taxes paid
(2,264)(5,328)Net cash provided by (used in) operating activities
194,308(5,544)
Cash flows from investing activities:
Purchases of own assets in use(1,679)(702)
Proceeds from sales/redemptions of investments in securities
790
2,376
Purchases of investments in securities(5,525)(4,071)
Purchase of shares of a consolidated subsidiary(770)—
Collection of loans receivable
2
3,002
Payments of loans receivable—(3,000)
Other, net(1,767)113
Net cash used in investing activities(8,949)(2,282)
Cash flows from financing activities:
Decrease in short-term borrowings, net(134,366)(8,498)Proceeds from long-term debt
214,756
182,675
Repayment of long-term debt
(370,924)(101,459)
Redemption of bonds(13,500)(4,000)Cash dividends paid
(2,222)(1,460)
Other, net
110239
Net cash provided by (used in) financing activities(306,146)
67,497
Effect of exchange rate changes on cash and cash equivalents
53(133)
Net increase (decrease) in cash and cash equivalents(120,734)
59,538Cash and cash equivalents at beginning of year
67,387
7,849
Cash and cash equivalents increased by merger
71,133—
Increase due to inclusion in consolidation
33,161—
Cash and cash equivalents at end of year (Note 10)¥ 50,947 ¥ 67,387

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CENTURY TOKYO LEASING CORPORATIONCENTURY TOKYO LEASING CORPORATION AND CONSOLIDATED SUBSIDIARIESMARCH 31, 2010 AND 2009“2009” AND “MARCH 31, 2009” FIGURES ARE FOR THE FORMER CENTURY LEASING SYSTEM, INC. ON A CONSOLIDATED BASIS.

FINANCIAL SECTION

44

1. Basis of Presentation
Century Tokyo Leasing Corporation (the “Company”) andits consolidated subsidiaries (collectively, the“Companies”) maintain their books of account in accordance with the provisions set forth in the Corporation
Law of Japan (the “Law”) and the Financial Instruments
and Exchange Law of Japan and in conformity withaccounting principles generally accepted in Japan(“Japanese GAAP”), which are different in certain
respects as to the application and disclosure requirements of International Financial Reporting Standards.
The accompanying consolidated financial statements
have been compiled from the consolidated financial
statements of the Companies, which were filed with the
Director of the Kanto Local Finance Bureau as requiredby 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 ¥93.04 =US$1.00, the approximate rate of exchange in effect on
March 31, 2010. This translation should not be construed
as a representation that Japanese yen amounts havebeen, could have been, or could in the future be, converted into U.S. dollar amounts at this or any other rate.
2. Summary of Significant Accounting Policiesa) Principles of consolidation
The consolidated financial statements include theaccounts of the Company and its significant subsidiaries
over which the Company exerts control, principally
Fujitsu Leasing Co., Ltd.
The Company’s share in the earnings or losses ofaffiliates over which it is able to exercise significant influence in terms of their operating and financial decisions isaccounted for by the equity method and included in the
consolidated operating results.
In conjunction with the merger with Tokyo Leasing
Co., Ltd. on April 1, 2009, TOKYO AUTO LEASING CO.,LTD. and 96 other subsidiaries are consolidated from thefiscal year ended March 31, 2010.
The number of consolidated subsidiaries and affiliated companies for 2010 and 2009 are as follows:
Consolidated subsidiaries
Affiliated companies

2010

2009

94
5

4
1

In preparing the consolidated financial statements asof March 31, 2009, Century Leasing (China) Co., Ltd.
was consolidated using its financial statements as ofDecember 31, 2008 and necessary adjustments weremade to its financial statements to reflect any significant
transactions from January 1 to March 31, 2009.
In preparing the consolidated financial statements asof March 31, 2010, the financial statements of TLC
Freesia Co., Ltd. and 19 other subsidiaries were consolidated by using their financial statements as of the parent
fiscal year end and were prepared solely for consolidation purposes. Century Tokyo Leasing (USA) and 10
other subsidiaries were consolidated using their financial
statements as of their respective fiscal year end, whichfalls on December 31, 2009 and necessary adjustments
were made to their financial statements to reflect any significant transactions from January 1 to March 31, 2010.
b) 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.
Foreign exchange gain or loss on translation is recognized in the consolidated statements of income.
The balance sheet accounts of the foreign consolidated subsidiaries are translated into yen at the rates of
exchange in effect at the balance sheet date, except forthe components of net assets excluding minority interests which are translated at their historical exchange
rates. Revenue and expense accounts are translated at
the average rate of exchange in effect during the year.
Differences arising from the translation are presented astranslation adjustments and minority interests in its consolidated financial statements.
c) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand,deposits held at call with banks, net of overdrafts andshort-term investments with original maturities of threemonths or less which are readily convertible into cash
and are subject to little risk of any change in their value.
d) Revenue recognition(Leases)
Lease revenues and the related costs on finance leases
are recognized on receipt of lease payment.
Revenues from operating leases are recognized on astraight-line basis over the scheduled lease terms, andleased property is depreciated by the straight-line method
based on the scheduled lease terms of the respective assets.

f) Securities
Securities held by the Companies are classified as available-for-sale securities. Marketable available-for-salesecurities are carried at fair value with any unrealized
gain or loss, net of the related income taxes, included asa separate component of valuation and translation
adjustments. Cost of securities sold is determined principally by the moving average method. Non-marketableavailable-for-sale securities are stated at cost determinedprincipally by the moving average method.
Hybrid financial instruments, from which an embedded derivative cannot be separated, are stated at fairvalue and the resulting gains or losses are recognized in
the consolidated statements of income. Investments in alimited partnership are measured using the equity method. As of March 31, 2010 and 2009, the Companies did
not have any trading securities.
Effective for the fiscal year ended March 31, 2010,
the Companies have applied a revised accounting standard for financial instruments and related implementation
guidance. The effect of this change as of March 31,
2010 was to increase operational investment securities
included in current assets by ¥31 million ($339 thousand)and net unrealized holding gain on securities by ¥18 million ($201 thousand), but to decrease deferred tax
assets by ¥12 million ($138 thousand).
g) Inventories
Inventories held by the Company are stated at cost
determined by specific identification method (of whichcarrying values are calculated based on the method of
reduction of book value accompanied with decline inmarket value).
h) Property and equipment
Property and equipment is stated at cost less accumulated depreciation. Depreciation of leased assets is computed by the straight-line method based on the leaseterm of the respective assets. Depreciation of assets
owned and used by the Companies is computed primar-i) 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. Costs related
to software purchased for internal use are amortized by
the straight-line method over the estimated useful life
(generally five years).
Goodwill is amortized by the straight-line method
over a period of five years.
j) Income taxes
Provision is made for the Companies’ liabilities for various types of income taxes, i.e., corporation, inhabitants,
and enterprise taxes.
Deferred tax assets and liabilities are accounted forunder the asset and liability method. Deferred tax assets
and liabilities are recognized for the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their tax bases and operating losses and tax credits carried forward. Deferred tax assets and liabilities aremeasured using enacted tax rates expected to be applied
to taxable income in the years in which these temporary
differences are expected to be recovered or settled.
k) Retirement benefits
Accrued retirement benefits for employees have been
provided mainly at an amount calculated based on theretirement benefit obligation and the fair value of the pension plan assets as adjusted for unrecognized actuarial
gain or loss. The Company and certain domestic subsidiaries have defined benefit plans covering substantially all
employees other than directors and corporate auditors.
Under the terms of these plans, eligible employees areentitled to lump-sum or annuity payments based on theirlevel of compensation at termination and their years ofservice with the Company or the subsidiaries. To provide
coverage for part of the lump-sum or annuity payments,
the Company and certain domestic subsidiaries havejoined a multi-employers’ welfare pension fund (the“Fund”) established in accordance with the Welfare
Pension Insurance Law by the ITOCHU group companies.
In addition, accrued retirement benefits for directors
and corporate auditors are provided at an amount to berequired at the year-end according to internal regulations.

CENTURY TOKYO LEASING CORPORATIONe) Allocation of interest expenses
Interest expenses are allocated to cost of sales and otherexpenses based on the balances of the respective operating assets, which consist principally of lease receivable andinvestment assets, and other assets. Interest expenses
classified as cost of sales are stated net of interest income.

ily by the declining-balance method (while the straightline method is applied to buildings acquired on and after
April 1, 1998) based on the estimated useful lives of therespective assets which range principally from three toforty-seven years for buildings, and from three to twenty
years for equipment.

45
FINANCIAL SECTION(Installment sales)
Installment sales and the related costs are recognizedwhen each payment becomes due under the respective
installment sales agreements.

CENTURY TOKYO LEASING CORPORATIONFINANCIAL SECTION

46l) Derivatives and hedging activities
The Companies enter into interest-rate swap contracts
and foreign exchange forward contracts in order tohedge interest-rate and foreign currency exchange rate
exposure on certain liabilities and assets, including loans
from banks, payables under securitized lease receivables, installment sales receivable and loans denominated in foreign currencies. The Companies utilize thesederivatives to reduce the risk of cash flow fluctuation
inherent in the liabilities and assets hedged, and suchtransactions are not entered into for speculative or trading purposes.
For interest-rate swap contracts and forward foreignexchange contracts, the Companies follow “AccountingStandard for Financial Instruments” and “AccountingStandard for Foreign Currency Transactions.” More specifically, interest-rate swaps not designated as hedging
instruments are recorded at fair value in the consolidatedbalance 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 and included in interest expense or income. Other
interest-rate swaps which qualify for hedge accounting
are measured at fair value as of the balance sheet date
and the recognition of any unrealized gain or loss isdeferred until maturity.
For forward foreign exchange contracts, theCompanies follow the accounting method specified in“Accounting Standard for Financial Instruments”(“Allocation method”), if the contracts qualify for hedge
accounting. Under this method, foreign currency transactions and the related monetary assets (installment
sales receivable and 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 theamount as translated at the current rate of exchange on
the date of forward contract is allocated over the life ofeach contract.
Hedge effectiveness is assessed based on comparative analysis between the accumulated future cash flows
for hedged item and those for hedging instruments. As
for the future hedging transactions denominated in foreign currencies, hedge effectiveness is assessed if substantial terms and conditions such as amounts andperiods of the hedging instruments and the hedged forecasted transactions are the same. Hedge effectivenessis not assessed for the foreign currency exchange contracts which meet the requirements for allocation method and the interest rate swaps which meet therequirements for short-cut method. The consolidated
subsidiaries for the Company assess hedge effectiveness primarily based on the above methods.
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, theCompanies record these derivatives at fair value in the
consolidated balance sheets and defer any unrealized
gain or loss as an asset or a liability, to the extent thatthe notional principal amounts of the derivatives positions do not exceed the amounts of the underlying leaserelated liabilities.
m) Appropriation of retained earnings
Under the Law the appropriation of retained earnings
with respect to a given financial period is made by resolution of the shareholders at a general meeting to be held
subsequent to the close of such financial period. The
accounts for that period do not, therefore, reflect suchappropriations.
On May 1, 2006, the Law, which superseded theCommercial Code of Japan (the “Code”), went into
effect. Under the Code, the Company was permitted todeclare semiannual and annual dividends. Under theLaw, flexible payment of dividends is permissible subject
to certain limits on appropriation of retained earnings aswell as to approval by resolution of the shareholders.
n) Allowance for doubtful accounts
The allowance for doubtful accounts is recorded on thebasis of historical experience to provide for possible
losses from bad debts related to general trade accounts
and also for the estimated amounts considered to beuncollectible after individually reviewing the specific collectibility of certain doubtful accounts.
o) Consumption taxes
Transactions subject to consumption taxes are recorded
at amounts exclusive of consumption taxes.
p) Allowance for automobile inspection costs
Under lease and maintenance service contracts, allowance for automobile inspection costs is recorded on thebasis of historical experience.
q) Negative goodwill
Negative goodwill is amortized by straight-line method
over a period of five years.

(Accounting Standard for Retirement Benefits)
Effective the year ended March 31, 2010, the Company
adopted a new accounting standard, Statement No. 19,“Partial Amendments to Accounting Standard for
Retirement Benefits (Part 3),” issued by the AccountingStandards Board of Japan. This change had no effect on
the consolidated statements of income as the change
did not impact the amount of the “Provision for retirement benefits,” which is related to the application of therevised accounting standard.
(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 Unification(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 “Accounting Standard for Lease
Transactions” and the “Implementation Guidance on
Accounting Standard for Lease Transactions” are applicable for financial statements for the fiscal year beginning on or after April 1, 2008. Accordingly, effective theyear ended March 31, 2009, the Company has adopted
these accounting standards, and finance lease transactions are now treated as ordinary sales transactions.
As a result, operating income decreased by ¥282
million ($3,040 thousand) and income before income
taxes and minority interests increased by ¥243 million($2,614 thousand) for the year ended March 31, 2009
compared with the amount that would have been reported under the accounting method used in the previous
years.
4. Change in Presentation Method(Consolidated Balance Sheets)
Emission right in the amount of ¥6 million as at March
31, 2009 formally included in other intangible assets waspresented as part of inventories from the fiscal year
ended March 31, 2010.
Claims provable in bankruptcy or rehabilitation in theamount of ¥4,715 million as at March 31, 2009 formally
included in “Long-term loans and other assets” were
presented as “Claims provable in bankruptcy or rehabilitation” from the fiscal year ended March 31, 2010.
(Consolidated Statements of Income)
Foreign exchange profit in the amount of ¥5 million forthe year ended March 31, 2009, which was included in“Other, net,” was presented as “Foreign exchange gains”
since the amount of the account exceeded 10% of thetotal of “Other income.”

CENTURY TOKYO LEASING CORPORATION(Emission Right)
Prior to the fiscal year ended March 31, 2009, emission
right was accounted for as an intangible asset for which
the holding purpose was projected to be own use.
Effective April 1, 2009, the accounting treatment foremission right was changed and it is classified underinventories as a result of a review of holding purposes.

of Accounting Policies Applied to Foreign Subsidiaries
for Consolidated Financial Statements” and has madethe required adjustments to the consolidated financial
statements.
The effect of this change on the consolidated statements of income for the year ended March 31, 2009 isimmaterial.

47
FINANCIAL SECTION

3. Accounting Changes(Operational Investment Securities)
Prior to the fiscal year ended March 31, 2009, securities
held to receive interest income for business purposes
were accounted for as non-business transactions.
Effective April 1, 2009, this treatment was changed
as a result of consideration of the accounting treatment
accompanying the merger with Tokyo Leasing Co., Ltd.
Due to this change, consolidated sales and operating
income increased by ¥217 million and ¥103 million,
respectively, while other income and other expenses
decreased by ¥217 million and ¥114 million, respectively.
As for the consolidated balance sheets, operational
investment securities under current assets increased by¥5,488 million ($58,991 thousand) and investments insecurities of investments and other assets decreased by
the same amount.
The effect of this change on segment information isshown in Note 19.

5. Operational Investment Securities, Short-term Investment Securities and Investments in Securities
Available-for-sale securities included in operational investment securities, short-term investment securities and investments in securities at March 31, 2010 and 2009 consisted of the following:Thousands of
U.S. dollars

Millions of yen

Equity securities
Debt securities
Other

2010

2009

2010

¥ 26,513
15,37572,691¥114,579¥ 5,877760
5,275¥11,912$ 284,967
165,249
781,282$1,231,498

The carrying amounts and aggregate fair value of securities with determinable market value at March 31, 2010 and2009 were as follows:
CENTURY TOKYO LEASING CORPORATION

Millions of yen

FINANCIAL SECTION

48

March 31, 2010

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

Cost or bookvalue

Unrealized gain

Unrealized loss

Fair value¥11,776
15,02528,072¥5,165315
23¥1,389166
904¥15,552
15,17527,192Millions of yen

March 31, 2009

Available-for-sale securities:
Equity securities
Debt securities

Cost or bookvalue

Unrealized gain

Unrealized loss

Fair value¥3,086
10

¥571
0

¥496
—

¥3,161
10

Thousands of U.S. dollars

March 31, 2010

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

Cost or bookvalue

Unrealized gain

Unrealized loss

Fair value$126,571
161,491
301,725$55,5143,389
250$14,930
1,780
9,713

$167,155
163,100
292,261

Available-for-sale securities whose fair value was not readily determinable as of March 31, 2010 and 2009 were as
follows:
Carrying amountMillions of yen

Available-for-sale:
Equity securities
Debt securities
Other

Thousands of
U.S. dollars

2010

2009

2010

¥10,961200
45,499¥2,716750
5,275$117,813
2,150
489,021

Proceeds from sale of available-for-sale securities and the resulting realized gain or loss for the years ended March
31, 2010 and 2009 are summarized as follows:
Carrying amountThousands of
U.S. dollars

Millions of yen

Proceeds
Realized gain
Realized loss

2010

2009

2010

¥435
170
0

¥100
95
—

$4,6761,824
4

6. Accumulated Depreciation for Property and Equipment
Accumulated depreciation for property and equipment at March 31, 2010 and 2009 was as follows:

2010

2009

2010

¥90,462
1,928¥28,116
1,273$972,295
20,726

Thousands of
U.S. dollars

Weightedaverageinterest rate

7. Short-Term Borrowings, Long-Term Debt and Assets Pledged
Short-term borrowings at March 31, 2010 and 2009 were as follows:

Millions of yen

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

2010

2009

2010

¥206,416
529,500
12,000¥747,916¥123,685
179,700
4,000¥307,385$2,218,573
5,691,101
128,977$8,038,651

0.83%
0.16%
0.54%

Long-term debt at March 31, 2010 and 2009 consisted of the following:

Millions of yen

Unsecured bonds due 2010
Long-term loans, principally from banks
Payables under securitized lease receivables
Medium-term notes
Total
Less current portion

2010

2009

—
911,730
89,629500
1,001,859(382,208)¥ 619,651¥ 10,000
293,501
79,267500
383,268(135,453)¥ 247,815¥

Thousands of
U.S. dollars

Weightedaverageinterest rate

2010
$

—
9,799,331
963,349
5,374
10,768,054(4,108,001)$ 6,660,053

—
1.26%
1.43%
1.40%

CENTURY TOKYO LEASING CORPORATION

Leased assets
Own assets in use

Thousands of
U.S. dollars

49
FINANCIAL SECTION

Millions of yen

CENTURY TOKYO LEASING CORPORATIONThe Companies have entered into overdraft contracts which provided the Companies with the overdraft facilities
with fifty-four and twenty-nine financial institutions as of March 31, 2010 and 2009 amounting to ¥642,802 million($6,908,877 thousand) and ¥229,900 million, respectively. The unused facilities maintained by the Companies as ofMarch 31, 2010 and 2009 amounted to ¥458,805 million ($4,931,265 thousand) and ¥131,000 million, respectively.
The aggregate annual maturity of long-term debt subsequent to March 31, 2010 is summarized as follows:

FINANCIAL SECTION

50

Year ending March 31,

Millions of yen

Thousands of
U.S. dollars

2011
2012
2013
2014
2015
2016 and thereafter¥ 382,208
267,122
203,341
88,10434,916
26,169¥1,001,860$ 4,108,001
2,871,042
2,185,524
946,944375,281281,262$10,768,054

The Companies’ assets pledged as collateral, principally for long-term debt of ¥150,880 million ($1,621,672 thousand), at March 31, 2010 were as follows:

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

Millions of yen

Thousands of
U.S. dollars

¥

$

33
13,911
158,364
41,369413
51,205¥215,300

354
149,520
1,702,102
444,641
4,433
57
12,956$2,314,063

8. 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 the counterparties. As the derivative instruments which the Companies utilize aim to reduce the risk of fluctuation in interest rates
and foreign exchange rates associated with the underlying assets and liabilities hedged, these derivatives function to
reduce the overall market risk to which the Companies are subject. The Companies believe that any related credit risk
is very 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. The ALM Committee determines the Company’s hedging
strategy for the coming six months based on an analysis of market rate trends and the Treasury Department enters
into derivatives transactions in accordance with this strategy.
The Treasury Department is also involved in the management of risk associated with foreign exchange rate fluctuation on an individual contract basis.
Before the Company executes the transactions involving compound derivative instruments where credit derivatives
are embedded, persons responsible sufficiently confer on the type or management method of the risk beforehand,
and then obtain approval in accordance with the Company’s internal regulations.
The consolidated subsidiaries of the Company follow the Company’s internal regulations, and regularly report to
the Company the results of their hedging activities, the counterparties, the period remaining for each contract, and thefair value of the transactions.

The following table presents the outstanding derivatives positions that do not qualify for hedge accounting at
March 31, 2010:

Receive/JPY;
Pay/SGD
Total
Interest-rate swap contracts:
Receive/fixed; Pay/floating
Pay/fixed; Receive/floating
Interest-rate cap contracts
Call
Total

921
(921)

¥ (17)¥ (17)

411(411)¥ 1,332

(30)

(30)

¥ (47)¥ (47)¥ 2,072(268)
22,219(7,250)¥ (25)¥ (25)

(238)

(238)

517
(—)
¥24,80800¥(263)¥(263)¥

Thousands of U.S. dollars
Notional amount
Unrealized(over one year)
Fair value
gain (loss)

$

9,894
(9,894)$ (187)$ (187)

4,418(4,418)$ 14,312

(327)

(327)

$ (514)$ (514)$ 22,270(2,883)
238,814(77,923)$ (269)$ (269)(2,554)(2,554)

5,554(—)$266,63800$(2,823)$(2,823)

Note: Fair value is primarily based on the prices indicated by corresponding financial institutions.
The following table presents the derivatives positions outstanding at March 31, 2009:
Millions of yen
Notional amount(over one year)

Interest-rate swap contracts:
Pay/fixed; Receive/floating
Total¥1,460(1,460)¥1,460Fair value

Unrealized
gain (loss)¥(194)¥(194)¥(194)¥(194)

The following table presents the fair value of the portfolio hedge transactions outstanding at March 31, 2009:
Millions of yen
Notional amount(over one year)

Interest-rate swap contracts:
Pay/fixed; Receive/floating
Total

¥100
(100)
¥100

Fair value

Unrealized
gain (loss)

¥(0)

¥(0)

¥(0)

¥(0)

CENTURY TOKYO LEASING CORPORATION

Currency swap contracts:
Receive/USD;
Pay/SGD

Fair value

Unrealized
gain (loss)

51
FINANCIAL SECTION

Millions of yen
Notional amount(over one year)

The following table presents the outstanding derivative positions that qualify for hedge accounting at March 31,
2010:
Millions of yen
Notional
amount (overone year)Hedged items

CENTURY TOKYO LEASING CORPORATION

Allocation method:
Forward exchange contracts:
Put
Accounts-receivable–installment sales
USD

FINANCIAL SECTION

52

Fair value

¥ 996
(742)
325
(—)

¥ (7)

$10,701(7,974)3,493(—)$ (73)

THB

Accounts-receivable–installment sales

Call
USD

Accounts-receivable–installment sales

430
(—)

17

4,625
(—)

181

Deferral hedge accounting:
Forward exchange contracts:
Put
USD

Inventories

785
(90)

(14)

8,432
(972)

(147)

Call
USD

Inventories

533
(—)

6

5,727
(—)

69

Currency options :
Call
USD

Inventories

1,086
(—)

13

11,679
(—)

135

Put
USD

Inventories

1,086
(—)
¥5,241(832)

5

11,679(—)$56,336(8,946)

48

Total

(7)

Thousands of U.S. dollars
Notional
amount (overone year)
Fair value¥ 13

Millions of yen
Underlying
assets or
liabilities hedged

Notional amount(over one year)$ 142

Thousands of U.S. dollars

Fair value

Notional amount(over one year)$

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

Borrowings¥ 86,779(54,067)¥ (884)

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

Borrowings(140)

Pay/fixed; Receive/floating

Borrowings

Receive/floating; Pay/fixed

Borrowings

70,552(54,226)
152,056(107,477)
12,500(10,500)¥ 321,887(226,270)

Total

(72)

(1,502)75¥(2,451)

Fair value

932,707(581,117)$ (9,500)

758,300(582,823)
1,634,304(1,155,175)
134,351(112,855)$ 3,459,662(2,431,970)(1,505)(16,143)804$(26,344)

The following table presents the fair value of the portfolio hedge transactions outstanding at March 31, 2010:
Millions of yen

Thousands of U.S. dollars

2010
Notional amount(over one year)

Interest-rate swap contracts:
Pay/fixed; Receive/floating

¥50
(—)
¥50

2010

Fair value

Unrealized gain
(loss)

Notional amount(over one year)

¥(0)

¥(0)

¥(0)

¥(0)

$537
(—)
$537

Fair value

Unrealized gain
(loss)

$(3)

$(3)

$(3)

$(3)

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

Thousands of
U.S. dollars

2010

2009

2010

¥13,285
5,657
1,540
491
65
24
—

¥3,801
3,770
590
40
40
8
1,276

$142,792
60,801
16,552
5,282
697
256
—

10. Notes to the Consolidated Statements of Cash Flows(1) Cash and cash equivalents at March 31, 2010 and 2009 are reconciled to the accounts reported in the consolidated balance sheet as follows:
Millions of yen

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

Thousands of
U.S. dollars

2010

2009

2010

¥31,632(100)
20,000(585)¥50,947¥67,387———¥67,387$339,986(1,075)214,961(6,284)$547,588(2) The following is the summary of assets acquired and liabilities assumed through the merger with Tokyo Leasing
Co., Ltd. (including assets and liabilities of newly consolidated subsidiaries) for the year ended March 31, 2010.

Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities

Millions of yen

Thousands of
U.S. dollars¥1,434,011
143,839
1,577,850
901,914603,484¥1,505,398$15,412,838
1,545,993
16,958,831
9,693,837
6,486,282$16,180,119

53
FINANCIAL SECTION

Millions of yen

CENTURY TOKYO LEASING CORPORATION

9. Selling, General and Administrative Expenses
Major components of selling, general and administrative expenses for the year ended March 31, 2010 and 2009 wereas follows:

11. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local taxes which, in the aggregate,
resulted in statutory tax rates of approximately 40.7% and 40.6% for the years ended March 31, 2010 and 2009,
respectively. The following is a reconciliation between the statutory tax rates and the effective tax rates for the years
ended March 31, 2010 and 2009.

CENTURY TOKYO LEASING CORPORATION

Statutory tax rates
Valuation allowance
Equity in earnings of affiliates
Entertainment expenses not qualified as tax deductions
Amortization of consolidation adjustment account
Other
Effective tax rates

FINANCIAL SECTION

54

2010

2009

40.7%
(17.1)
(1.1)
—
(0.9)
(0.2)
21.4%

40.6%
—
(6.2)
0.6
—
(1.5)
33.5%

Temporary differences and tax loss carry forwards which gave rise to deferred tax assets and liabilities for the years
ended March 31, 2010 and 2009 were as follows:
Millions of yen

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

Thousands of
U.S. dollars

2010

2009

2010

¥ 5,752
1,437
572
1,389
1,090
1,361
628
2,992
15,221(1,130)14,091¥1,134
784
534
403
303
—
—
928
4,086
—
4,086

$ 61,826
15,443
6,149
14,934
11,72014,631
6,753
32,144
163,600(12,141)
151,459(1,190)(4,064)(5,254)¥ 8,837

(22)
—
(22)
¥4,064(12,786)(43,697)(56,483)$ 94,976

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

Thousands of
U.S. dollars

2010

2009

2010

¥(8,702)
9,904
1,202
636
(1,093)¥ 745(1,725)¥ (980)¥(4,267)
4,668
401
313
(1,458)¥ (744)—¥ (744)$ (93,534)
106,458
12,924
6,837(11,754)$ 8,007(18,545)$ (10,538)

The following summarizes the components of the net periodic pension cost for employees for the years ended
March 31, 2010 and 2009:
Millions of yen

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

Thousands of
U.S. dollars

2010

2009

2010

¥ 386
186
(103)
116
(365)
137
133
491
—
¥ 491

¥ 142
104
(47)
22
(365)
136
47
40
145
¥ 185

$ 4,152
2,001(1,108)
1,244(3,918)
1,477
1,434
5,282
—
$ 5,282

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

Discount rate
Expected rate of return on plan assets
Period for the recognition of actuarial gain or loss
Period for the recognition of prior service cost

2010

2009

2.0~2.5%
1.0~3.2%
five or ten years
five years or accrual basis

2.5%
1.0%
five years
five years

55
FINANCIAL SECTION

Millions of yen

CENTURY TOKYO LEASING CORPORATION

12. Retirement Benefits
Although the Company merged with Tokyo Leasing Co., Ltd. on April 1, 2009, the retirement benefit schemes for bothof Tokyo Leasing Co., Ltd. and the Company remained unchanged during the fiscal year ended March 31, 2010.
The former Century Leasing System Corporation has a multi-employer welfare pension fund plan and a defined
benefit plan as a defined benefit scheme, and also has a defined contribution plan as a defined contribution scheme.
The former Tokyo Leasing Co., Ltd. has a lump-sum payment plan and a defined benefit plan as a defined benefit
scheme, and also has a defined contribution plan as a defined contribution scheme.
During the year ended March 31, 2005, former Tokyo Leasing Co., Ltd. contributed certain marketable securities,
which are qualified as plan assets, to an employee retirement benefit trust.
Certain domestic subsidiaries have a lump-sum payment plan and a defined benefit plan as a defined benefit
scheme.
The following summarizes the funding status of, and amounts recognized in the consolidated balance sheets at
March 31, 2010 and 2009 for the Company’s and the consolidated domestic subsidiaries’ defined benefit plans:

The following summarizes the most recent funded status of the multi-employer welfare pension fund as of March
31, 2010 and 2009 plans.
Millions of yen

Amount of pension assets
Benefit obligations under pension funding programs
Difference

Thousands of
U.S. dollars

2010

2009

2010

¥ 45,585(70,099)¥(24,514)¥ 54,978(64,607)¥ (9,629)$ 489,947(753,429)$(263,482)

CENTURY TOKYO LEASING CORPORATION

The difference at March 31, 2010 above consisted of prior service cost under pension funding programs of ¥7,864
million ($84,525 thousand) and a general reserve of ¥16,650 million ($178,957 thousand).
For the year ended March 31, 2010, the ratio of the Company’s contributions against total contributions to the plan
was 2.82%.
13. Lease Transactions
Finance leases that do not transfer ownership to the lessee are capitalized as lease investment assets. Information
relating to finance leases of the Companies at March 31, 2010 and 2009 is summarized as follows:
Millions of yen

2010

2009

2010

¥1,295,151
40,027(116,051)¥1,219,127¥519,276
28,467(55,617)¥492,126$13,920,369
430,208(1,247,322)$13,103,255

Future lease payments
Estimated residual value
Future interest income

56
FINANCIAL SECTION

Thousands of
U.S. dollars

The aggregate annual maturity of finance lease receivables that transfer ownership to the lessees, subsequent toMarch 31, 2010 and 2009, is summarized as follows:
Millions of yen

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

Thousands of
U.S. dollars

2010

2009

2010

¥25,233
20,334
14,187
9,563
4,000
1,183
¥74,500¥ 4,477
3,637
3,204
2,406
1,222
348
¥15,294$271,201
218,550
152,483
102,786
42,997
12,712$800,729

The aggregate annual maturity of finance lease receivables that do not transfer ownership to the lessees, subsequent to March 31, 2010 and 2009, is summarized as follows:
Millions of yen

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

Thousands of
U.S. dollars

2010

2009

2010

461,638
337,306
230,216
138,359
66,23861,394¥1,295,151¥180,444
138,033
95,31857,77926,231
21,471¥519,276$ 4,961,719
3,625,390
2,474,380
1,487,092
711,925
659,863$13,920,369

As for the lease accounting treatment for finance lease transactions that do not transfer ownership to the lessees
starting before April 1, 2008, the amounts of “Leased assets” (net of accumulated depreciation) at March 31, 2008
were recorded as the beginning balance of “Investment assets,” and the amounts of rental revenues were recorded by
the straight-line method based on the scheduled lease terms. As a result, “Income before income taxes and minority
interests” increased by ¥7,015 million ($75,406 thousand) for the year ended March 31, 2010 and decreased by¥14,325 million for the year ended March 31, 2009, respectively compared with the amount calculated on theassumption that the finance lease transactions that do not transfer ownership to the lessee starting before April 1,2008 would have been accounted for using the interest method retroactively from each commencement date.
The future minimum lease income subsequent to March 31, 2010 under non-cancellable operating leases is summarized as follows:

2010

2009

2010

¥24,175
66,324¥90,499¥ 5,70730,608¥36,315$259,836
712,853$972,689

14. Commitments and Contingent Liabilities
The Companies’ contingent liabilities at March 31, 2010 and 2009 were as follows:
Millions of yen

As a guarantor of indebtedness of:Loan and other guarantees
Asset guarantees
Employees

Thousands of
U.S. dollars

2010

2009

2010

¥31,027
2,390
356¥33,773¥9,545—420¥9,965$333,484
25,6833,830$362,997

The Companies, as lenders, have loan commitment agreements as of March 31, 2010 and 2009 amounting to¥40,680 million ($437,235 thousand) and ¥11,116 million, respectively. The loans provided under these credit facilities
as of March 31, 2010 and 2009 amounted to ¥8,053 million ($86,555 thousand) and ¥4,316 million, respectively.
Many of the facilities may expire without being utilized and the loans provided are subject to periodic reviews of theborrowers’ credit standing. The unused portion of these facilities may not be fully utilized.

CENTURY TOKYO LEASING CORPORATION

Due within one year
Due after one years

Thousands of
U.S. dollars

57
FINANCIAL SECTION

Millions of yen

15. Estimated Fair Value of Financial Instruments
The following table presents the carrying value and estimated fair value of financial instruments at March 31, 2010.
The following table does not include financial instruments for which it is extremely difficult to determine the fair value.
Millions of yen

As of March 31, 2010
Carrying value

Estimated fair value

Difference

Assets(1) Cash on hand and in banks(2) Accounts receivable-installment sales
Deferred profit on installment sales

CENTURY TOKYO LEASING CORPORATION

Allowance for doubtful accounts

FINANCIAL SECTION

58(3) Accounts receivable-lease receivables and investment assets
Estimated residual value
Allowance for doubtful accounts(4) Accounts receivable-loans
Allowance for doubtful accounts(5) Operational investment securities(6) Short-term investment securities and investments in securities(7) Claims provable in bankruptcy or rehabilitation
Allowance for doubtful accounts
Total assets
Liabilities(1) Notes and accounts payable-trade(2) Short-term loans from banks(3) Commercial paper(4) Payables under lease receivables(5) Medium-term notes(6) Long-term loans, principally from banks(7) Long-term payables under securitized lease receivables(8) Lease obligations
Total liabilities
Derivatives
Hedge accounting applied
Hedge accounting not applied
Total derivatives¥

31,632
214,460(13,921)200,539(1,740)198,799
1,288,873(40,027)
1,248,846(5,539)1,243,307
256,693(2,702)
253,991
22,36735,552
11,069(4,223)
6,846¥1,792,494

31,632—

202,368

3,569

1,315,597

72,290259,608
22,36735,552

5,617
—
—

6,846
¥1,873,970—¥81,476

95,690206,416
529,500
12,000500
911,730
89,62927,102¥1,872,567

95,690206,416
529,500
12,000501
914,831
91,057
26,443¥1,876,438

—
—
—
—
(1)
(3,101)(1,428)659¥ (3,871)

(310)
(874)
(1,184)(310)(2,438)(2,748)—(1,564)¥ (1,564)¥¥¥

Thousands of U.S. dollars

As of March 31, 2010
Carrying value

Estimated fair value

Difference

339,986 $ 339,986
2,305,028(149,619)
2,155,409(18,702)2,136,707
2,175,066
13,852,887(430,208)
13,422,679(59,531)
13,363,148
14,140,127
2,758,953(29,041)
2,729,912
2,790,279
240,400
240,400
382,116
382,116
118,976
118,976(45,390)(45,390)
73,58673,586$19,265,855 $20,141,560——$875,705

1,028,485
2,218,573
5,691,101
128,977
5,374
9,799,331
963,349
291,291$20,126,481

—
—
—
—
(13)
(33,332)(15,332)
7,077$ (41,600)

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

1,028,485
2,218,573
5,691,101
128,977
5,387
9,832,663
978,681284,214$20,168,081(3,336)(9,398)(12,734) $(3,336)(26,204)(29,540)

38,359776,979

60,367———(16,806)$ (16,806)(*1) General and specific allowances are deducted from the amounts of accounts receivable-installment sales, leasereceivables and investment assets, accounts receivable-loans and claims provable in bankruptcy or rehabilitation,
respectively.
(*2) Estimated residual values included in the account of lease receivables and investment assets are deducted.

CENTURY TOKYO LEASING CORPORATION

Allowance for doubtful accounts$

59
FINANCIAL SECTION(1) Cash on hand and in banks(2) Accounts receivable-installment sales
Deferred profit on installment sales

CENTURY TOKYO LEASING CORPORATION(Note 1) Methods to determine the estimated fair value of financial instruments and other matters related tosecurities and derivative transactions.

FINANCIAL SECTION

60

Assets(1) Cash on hand and in banks
Since these items are settled in a short period of time, the carrying value approximates fair value.
(2) Accounts receivable-installment sales, (3) Lease receivables and investment assets and (4) Accounts receivableloans
Based on the classification by internal rating and contract terms, the fair value is estimated by the present value ofthe total of principal and interest discounted by the interest rate to be applied if similar contracts were entered into.
(5) Operational investment securities and (6) Short-term investment securities and Investments in securities
The fair values of the above securities are based on the prices provided by the counterparty financial institutions.
For information on securities by holding purpose, please refer to Note 5.
(7) Claims provable in bankruptcy or rehabilitation
The fair value of above are assumed to approximate their carrying value with the deduction of relevant allowances
because their carrying value are measured based on the fair value of the collateral and guarantees.
Liabilities(1) Notes and accounts payable-trade, (2) Short-term loans from banks, (3) Commercial paper and (4)Payables underlease receivables
Since these items are settled in a short period of time, the carrying value approximates fair value.
(5) Medium-term notes, (6) Long-term loans, principally from banks and (7) Long-term payables under securitizedlease receivables
The fair value is based on the present value of the total of principal and interest discounted by an interest rate to be
applied if similar new bonds or loan agreements were entered into.
(8) Lease obligations
Based on the classification by internal rating and contract terms, the fair value is estimated by the present value ofthe total of principal and interest discounted by the interest rate to be applied if similar contract were entered into.
Derivatives
Assets and liabilities arising from derivative are shown at net value in the above table, and with the amount in parentheses representing net liability position. Please refer to Note 8 Derivatives regarding the details of derivative transactions.
(Note 2) Financial instruments for which it is extremely difficult to determine the fair value
Millions of yen

Thousands of
U.S. dollars

As of March 31, 2010
Description

Unlisted shares
Bonds
Trust beneficiary rights
Investments in limited partnerships, etc.
Total

Carrying value¥23,634
200
6,134
39,364¥69,332$254,024
2,150
65,930423,091$745,195

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above financial instruments are not included in the above table.

(Note 3) Redemption schedule for receivables and marketable securities with maturities at March 31, 2010
Millions of yen

As of March 31, 2010¥—
31,02936,502¥—
16,23724,187¥—
10,63814,815¥—
16,81939,414

1,911
900

6,850
—

532
700

2,126
—

—
—
¥70,342——¥47,274——¥26,685——¥58,359

Due after one Due after two Due after three Due after four
Due in one year year through years through years through years throughor less
two years
three years
four years
five years

Due after five
years

Thousands of U.S. dollars

As of March 31, 2010

Cash on hand and in banks
Accounts receivable-installment sales
Accounts receivable-loans
Operational investment securities:
Available-for-sale securities with maturities(1) Bonds(2) Other
Short-term investment securities and investments
in securities:
Available-for-sale securities with maturities(1) Bonds(2) OtherTotal$ 339,986 $
— $
— $
— $
— $
—
913,765
588,136 333,501
174,511
114,340
180,775
842,797
681,013 392,624
259,963
159,229423,627

11,469—16,541
7,347

20,546
9,673

73,626
—

5,721
7,524

22,852————214,961——$2,322,978 $1,293,037 $756,044——$508,100——$286,814——$627,254

The redemption schedule for long-term debt and lease receivables and investment assets are disclosed Note 7
and Note 13, respectively.
16. Business Combination
On February 25, 2009, the extraordinary shareholders meeting of the Company approved a merger agreement with
Tokyo Leasing Co., Ltd. effective April 1, 2009, stating that all of assets, rights and obligations and employees ofTokyo Leasing Co., Ltd. were taken over by Century Leasing System Inc.
1. Name of combined company and its main business, date of the merger, legal form of the combination and thename of the company merged.
(1) Name of the combined company and its main business
Name
Tokyo Leasing Co., Ltd.
Main businessLeasing business, installment sales, loan business and other

CENTURY TOKYO LEASING CORPORATIONCash on hand and in banks¥ 31,632 ¥—Accounts receivable-installment sales
85,01754,720Accounts receivable-loans
78,41463,361
Operational investment securities:
Available-for-sale securities with maturities(1) Bonds
1,067
1,539
(2) Other—
684
Short-term investment securities and investments
in securities:
Available-for-sale securities with maturities(1) Bonds——(2) Other
20,000—
Total¥216,130 ¥120,304

Due after five
years

61
FINANCIAL SECTION

Due after one Due after two Due after three Due after four
Due in one year year through years through years through years throughor less
two years
three years
four years
five years

CENTURY TOKYO LEASING CORPORATIONFINANCIAL SECTION

62(2) Date of the merger
April 1, 2009(3) Legal form of the business combination
Merger by pool of interest method between the Company as the surviving corporation and Tokyo Leasing Co.,
Ltd. as the dissolved corporation(4) Name of the merged company
The merged company was renamed, the Century Tokyo Leasing Corporation
2. Merger ratio, number of shares issued by merger and voting right ratio after the merger.
(1) Merger ratio
1 share of Tokyo Leasing Co., Ltd. in exchange for 0.85 of a share of common stock of the Company(2) Number of share issued by the merger
Common stock 54,498,620 shares(3) Ratio of voting right after the merger
The Company
49.0 %
Tokyo Leasing Co., Ltd. 51.0 %3. Details of assets, liabilities and net assets taken over from the dissolved corporation. (As of April 1, 2009)

Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets

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$11,234,485
1,211,800
12,446,285
7,288,016
4,587,036
11,875,052$ 571,233

17. Dividends(1) Dividends paid to shareholders(Date of approval)
Resolution approved byType of shares

AmountMillions of yen
Thousands of
U.S. dollars

Amount per share
Yen
U.S. dollars

Shareholders’
cut-off date

March 31,2009

(June 17, 2009)
Annual general meeting of shareholders

Common stock¥729$7,843

¥14.0
$0.15

(November 9, 2009)
Board of directors

Common stock¥1,493$16,043

¥14.0
$0.15

AmountMillions of yen
Thousands of
U.S. dollars

Amount per share
Yen
U.S. dollars

Shareholders’
cut-off date

March 31,2008

(Date of approval)
Resolution approved byType of shares(June 20, 2008)
Annual general meeting of shareholders

Common stock¥729$7,439

¥14.0
$0.14

(November 7, 2008)
Board of directors

Common stock¥729$7,439

¥14.0
$0.14

Effective dateJune 18, 2009

September 30, December 10,
2009
2009

Effective dateJune 23, 2008

September 30, December 8,
2008
2008

(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 byType of shares(Paid from)(June 24, 2010)
Common stock
Annual general meeting of shareholders (Retained earnings)

AmountMillions of yen
Thousands of
U.S. dollars

Amount per share
Yen
U.S. dollars

Shareholders’
cut-off date

¥1,919$20,626

¥18.0
$0.19

March 31,2010

Effective dateJune 25, 2010

18. Legal Reserve and Additional Paid-in CapitalIn accordance with the Law, the Company provides a legal reserve which is included in retained earnings. The Law
provides that an amount equal to 10% of the amounts to be disbursed as distributions of earnings 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 ofdividends, 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 ofadditional 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, however, such distributions can be made at any time by resolution of the shareholders or by the Boardof Directors if certain conditions are met.

Millions of yen

Year ended March 31, 2010
Leasing(1) Operating revenues
Revenue from customers ¥ 635,808
Intersegment revenue—
Total sales
635,808
Operating expenses
600,586
Operating income¥ 35,222

Installment sales¥105,413—
105,413
104,439
¥
974

Loans

¥

Other

Elimination or
corporate

Consolidated

8,126
—
8,126
7,121
1,005

¥ 9,327
655
9,982
8,687
¥ 1,295

¥

—
(655)
(655)
7,546
¥ (8,201)¥ 758,674—
758,674
728,379¥ 30,295(2) Total assets, depreciation and capital expenditures
Total assets¥1,466,555¥225,303¥264,066
Depreciation
25,576——
Capital expenditures
23,552——¥78,631——¥98,337
2,050
3,216

¥2,132,892
27,626
26,768Elimination or
corporate

Consolidated¥

Thousands of U.S. dollars

Year ended March 31, 2010
Leasing(1) Operating revenues
Revenue from customers $ 6,833,711
Intersegment revenue—
Total sales
6,833,711
Operating expenses
6,455,142
Operating income$ 378,569

Installment sales$1,132,983—
1,132,983
1,122,517$ 10,466

Loans

$

Other

87,336—87,33676,532
10,804$100,253
7,037
107,290
93,374$ 13,916$—(7,037)(7,037)
81,100(88,137)$ 8,154,283—
8,154,283
7,828,665$ 325,618(2) Total assets, depreciation and capital expenditures
Total assets$15,762,632 $2,421,566$2,838,202
Depreciation
274,891——
Capital expenditures
253,137——$845,130——$1,056,937
22,03434,568$22,924,467
296,926
287,705$$

As mentioned in Note 3, effective April 1, 2009, the accounting treatment for securities held for interest income forbusiness purposes was changed and is now accounted for as a business transaction.
Due to the above change, consolidated sales and operating income for the other segment increased by ¥217 million ($2,341 thousand) and ¥60 million ($653 thousand), respectively compared with the figures based on the former
accounting treatment.

63
FINANCIAL SECTION

By business segment

CENTURY TOKYO LEASING CORPORATION

19. Segment Information
Information by business segment for the years ended March 31, 2010 and 2009 is as follows:Millions of yen

Year ended March 31, 2009

CENTURY TOKYO LEASING CORPORATION(1) Operating revenues
Revenue from customers
Intersegment revenue
Total sales
Operating expenses
Operating income

FINANCIAL SECTION

64

Elimination or
corporate

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¥90,844——¥6,511——¥94,740443
423¥845,950
9,346
8,566

(2) Total assets, depreciation and capital expenditures
Total assets¥556,307¥97,548
Depreciation
8,903—
Capital expenditures
8,143—

Consolidated

By geographic segment
Sales and total assets of the Company and its domestic subsidiaries for the years ended March 31, 2010 and 2009
represented more than 90% of the consolidated sales and total assets for the respective years. Accordingly, information by geographic segment is not disclosed.
Sales to overseas customers
Sales to overseas customers for the years ended March 31, 2010 and 2009 represented less than 10% of the consolidated sales for the respective years. Accordingly, information on sales to overseas customers is not disclosed.
20. Amounts Per Share
Millions of yen

Net assets
Net income

Thousands of
U.S. dollars

2010

2009

2010

¥1,410.61
239.57¥1,162.07
114.29$15.16
2.57

Under Statement No. 2, the accounting standard for earnings per share of common stock issued by the
Accounting Standards Board of Japan, basic net income per share is computed by dividing the net income available
for distribution to shareholders of common stock by the weighted-average number of shares of common stock outstanding during the period. The weighted-average number of shares of common stock used in the computation forthe year ended March 31, 2010 and 2009 was 106,616 and 52,125 thousand shares, respectively.
Diluted net income per share of common stock has not been presented because there were no potentially dilutive
shares outstanding.
Net assets per share are computed based on net assets available for distribution to the shareholders of common
stock (i.e., net assets excluding minority interests) and the number of shares of common stock outstanding at eachbalance sheet date.

FINANCIAL SECTION

CENTURY TOKYO LEASING CORPORATIONREPORT OF INDEPENDENT AUDITORS

65

MAIN SUBSIDIARIES AND AFFILIATESAS OF JULY 1, 2010

CENTURY TOKYO LEASING CORPORATION

Consolidated Subsidiaries

MAIN SUBSIDIARIES AND AFFILIATES

66

TOKYO AUTO LEASING CO., LTD.
Nittochi Okachimachi Bldg., 2-27-5, Taito,
Taito-ku, Tokyo 110-0016
Telephone: 81-3-6357-5566

ITEC LEASING CO., LTD.
Kyodo Bldg. #7, 1-4-1, Jinnan, Shibuya-ku,
Tokyo 150-0041
Telephone: 81-3-5456-4760

Date Founded: March 1979
Paid-in Capital: ¥200 Million
Voting Shares: 100%
Main Business Operations: Automobile and automobilerelated equipment leasing

Date Founded: September 1984
Paid-in Capital: ¥20 Million
Voting Shares: 85%
Main Business Operations: Broadcasting equipment leasing

ORICO AUTO LEASING CO., LTD.
Nittochi Okachimachi Bldg., 2-27-5, Taito,
Taito-ku, Tokyo 110-0016
Telephone: 81-3-6865-5515

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

Date Founded: March 2008
Paid-in Capital: ¥240 Million
Voting Shares: 50%
Main Business Operations: Automobile leasing

Date Founded: May 2004
Paid-in Capital: ¥21 Million
Voting Shares: 100%
Main Business Operations: Refurbishment (reuse andrecycling) of PCs

FUJITSU LEASING CO., LTD.
FUJISOFT Bldg., 3, Kanda-Neribeicho, Chiyoda-ku,
Tokyo 101-0022
Telephone: 81-3-5843-6301

TC AGENCY CORPORATION
Nittochi Okachimachi Bldg., 2-27-5, Taito, Taito-ku,
Tokyo 110-0016
Telephone: 81-3-5818-8370

Date Founded: March 1978
Paid-in Capital: ¥1,000 Million
Voting Shares: 80%
Main Business Operations: IT-related equipment leasing

Date Founded: January 1987
Paid-in Capital: ¥10 Million
Voting Shares: 100%
Main Business Operations: Casualty insurance (primarybusiness)

S.D.L CO., LTD.
Shiseido Main Bldg., 7-5-5, Ginza, Chuo-ku, Tokyo
104-0061
Telephone: 81-3-3289-2028
Date Founded: January 1991
Paid-in Capital: ¥100 Million
Voting Shares: 90%
Main Business Operations: Automobile leasing and generalleasing

IHI FINANCE SUPPORT CORPORATION
1-8-17, Yaesu, Chuo-ku, Tokyo 103-0028
Telephone: 81-3-3275-3721
Date Founded: December 1991
Paid-in Capital: ¥200 Million
Voting Shares: 67%
Main Business Operations: Finance and general leasing

TC BUSlNESS SERVICE CORPORATION
Nittochi Okachimachi Bldg., 2-27-5, Taito, Taito-ku,
Tokyo 110-0016
Telephone: 81-3-5818-8076
Date Founded: June 2004
Paid-in Capital: ¥20 Million
Voting Shares: 100%
Main Business Operations: Business processing services for
the Group

TC BUSINESS EXPERTS CORPORATION
Nittochi Okachimachi Bldg., 2-27-5, Taito, Taito-ku,
Tokyo 110-0016
Telephone: 81-3-5818-8501
Date Founded: April 2010
Paid-in Capital: ¥10 Million
Voting Shares: 100%
Main Business Operations: Business inspection services for
the GroupConsolidated Subsidiaries

CENTURY TOKYO LEASING (SINGAPORE)
PTE., LTD.
138 Robinson Road, The Corporate Office #12-01,
Singapore 068906
Telephone: 65-6532-3436
Date Founded: May 1979
Paid-in Capital: S$19,340 thousand
Voting Shares: 100%
Main Business Operations: General leasing

CENTURY TOKYO CAPITAL (MALAYSIA) SDN. BHD.
Suite 11.2, Level 11, Menara Weld,
No. 76 Jalan Raja Chulan, 50200 Kuala Lumpur,
Malaysia
Telephone: 60-3-2070-2633
Date Founded: June 2007
Paid-in Capital: RM8,253 thousand
Voting Shares: 100%
Main Business Operations: General leasing

Date Founded: October 1972
Paid-in Capital: HK$13,000 thousand
Voting Shares: 100%
Main Business Operations: General leasing

CENTURY TOKYO LEASING (USA) INC.
Suite 401, 3020 Westchester Avenue, Purchase,
NY 10577, U.S.A.
Telephone: 1-914-697-9030
Date Founded: December 1985
Paid-in Capital: US$26,513 thousand
Voting Shares: 100%
Main Business Operations: General leasing

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

Equity-Method Affiliates
NIPPON CAR SOLUTIONS CO., LTD.
Seavans North Bldg., 1-2-1, Shibaura, Minato-ku,
Tokyo 105-0023
Telephone: 81-3-6436-1190

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

Date Founded: February 1987
Paid-in Capital: ¥981 Million
Voting Shares: 50%
Main Business Operations: Automobile leasing

Date Founded: April 1993
Paid-in Capital: BAHT60,000 thousand
Voting Shares: 49%
Main Business Operations: General leasing

PRESIDENT TOKYO CORPORATION
12th Floor, No. 8 Dongxing Rd., Songshan District,Taipei City 10570, Taiwan R.O.C.
Telephone: 886-2-2747-8188
Date Founded: November 1997
Paid-in Capital: NT$200,000 thousand
Voting Shares: 49%
Main Business Operations: Automobile leasing and generalleasing

CENTURY TOKYO LEASING CORPORATION

Date Founded: July 2006
Paid-in Capital US$40,000 thousand
Voting Shares: 95%
Main Business Operations: General leasing

TOKYO LEASING (HONG KONG) LTD.
Room 301, 3rd Floor, Sun Hung Kai Centre,
30 Harbour Road, Wan Chai, Hong Kong

67
MAIN SUBSIDIARIES AND AFFILIATES

CENTURY TOKYO LEASING CHINA CORPORATION
A2501-92, 14, City Center Shanghai, 100 Zunyi Road,
Changning District, Shanghai 200051
Telephone: 86-21-6237-0066

STOCK INFORMATION/BOND RATINGSAS OF MARCH 31, 2010

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

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

Stock Listing: Tokyo Stock Exchange, First Section

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

Securities Code: 8439

Number of Shareholders: 10,368

Trading Lot Size: 100 shares

Breakdown of Shareholders

CENTURY TOKYO LEASING CORPORATION

Individuals and other: 7.8%
8,322,963 shares

STOCK INFORMATION/BOND RATING

68

Financial institutions: 28.5%
30,363,215 shares

Foreign investors: 6.3%
6,668,972 shares

Securities companies: 0.8%
869,381 shares
Other institutions: 56.6%
60,390,970 shares
Excluding 9,119 shares of treasury stock

Major Shareholders
Shareholders

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

Number of shares held
(1,000 shares)

Percentage of shares
outstanding (%)*

21,33313,004
9,963
5,386
4,649
3,537
3,366
3,037
2,972
2,327

20.0
12.2
9.3
5.1
4.4
3.3
3.2
2.8
2.8
2.2

*Percentage of shares outstanding (%) is calculated after deducting 9,119 shares of treasury stock.

Bond Ratings (As of January 29, 2010)
Century Tokyo Leasing Corporation’s ratings assigned by Japan Credit Rating Agency, Ltd. and Rating and Investment
Information, Inc.
Credit Rating Agency Japan Credit Rating Agency, Ltd. (JCR)

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

Long-term(Long-Term Senior Debt)
Rating: A
Outlook: Stable(Issuer Rating)Rating: AOutlook: Stable(Preliminary Rating for Bonds Registered for Issuance)
Rating: A
Expected Issue Amount: ¥150 billion(Preliminary Rating for Bonds Registered for Issuance)
Rating: AExpected Issue Amount: ¥150 billion(Euro Medium-Term Note Program)(Euro Medium-Term Note Program)
Rating: A
Rating: AMaximum Outstanding Amount: Equivalent of US$1 billion Maximum Outstanding Amount: Equivalent of US$1 billion
Short-term(Commercial Paper)
Rating: J-1
Maximum Outstanding Amount: ¥650 billion(Commercial Paper)
Rating: a-1
Maximum Outstanding Amount: ¥650 billion

Profile

CORPORATE INFORMATION

April 1, 2009 marked the launch of Century Tokyo Leasing Corporation (“TC-Lease”),

AS OF MARCH 31, 2010

a merger between Century Leasing System, Inc., a specialist in information andcommunication equipment leasing and IT services, and Tokyo Leasing Co., Ltd.,well known for its strong finance capabilities and international network.
This integration of business partners that each represent a broad array of interrelated businesses, from trading companies and financial institutions to real estatecompanies, affording us a distinct advantage. While providing advanced, high valueadded services with greater functionality, we address the global leasing and financing needs associated with our customers’ overseas business strategies.

Company Name
Century Tokyo Leasing Corporation
Head Office[Hamamatsu-cho]World Trade Center Bldg.,
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

society by offering comprehensive, solutions-oriented financing services.

Paid-in Capital¥34,231 million
Company Representative
President & CEO Shunichi Asada
Number of Employees
1,732 (1,199 on a non-consolidated basis)

Contents

Closing of Accounts
March 3101 Maximizing Merger Synergies andMoving to the Next Stage of Growth

20 At a Glance

02 Financial Highlights

An overview of each business segment, fiscal 2010
results, basic strategy and topics

03 To Our Stakeholders
04 A Message from the CEO
In a Q&A session, CEO Shunichi Asada offers an overview of the fiscal year ended March 31, 2010 with a lookback on the first year of the merger, an explanation of thetargets of the new medium-term management plan andthe outlook moving forward.

11 Special Feature
Strengths and growth strategies for core businesses in themedium-term management plan
Information and Communications/Office
Equipment Business
Automobile Leasing Business
Loan Business
Overseas Business21 Segment Information
Leasing Business
Installment Sales Business
Loan Business
Other Business

25 Corporate Governance andCompliance/CSR

Major Banks
Mizuho Corporate Bank, Ltd.; Nippon Life Insurance Company; The Sumitomo Trust & Banking Co., Ltd.;
Mitsubishi UFJ Trust and Banking Corporation; The Norinchukin Bank; Asahi Mutual Life Insurance Company
Independent Auditor
Ernst & Young ShinNihon LLC

69

Network
Domestic
Tokyo Metropolitan Area (Hamamatsu-cho, Akihabara, Gotanda, Shinjuku, Tachikawa), Sapporo, Sendai, Niigata, Tsukuba,
Saitama, Yokohama, Shizuoka, Nagoya, Kanazawa, Kyoto, Osaka, Kobe, Okayama, Hiroshima, Takamatsu, Fukuoka
Overseas
Shanghai, Guangzhou, Hong Kong, Taipei, Bangkok, Kuala Lumpur, Singapore, New York, London

Leveraging its business activities, Century Tokyo Leasing Corporation contributes to the development of society and the preservation of the environment with the aimof earning the trust and fulfilling the expectations ofsociety.

29 Corporate History
30 Management
31 Financial Section
65 Report of Independent Auditors
66 Main Subsidiaries and Affiliates
68 Stock Information/Bond Rating
69 Corporate Information

Forward-Looking Statements

Statements in this annual report with respect to Century Tokyo Leasing Group’s plans, forecasts, strategies, presumptions, and other statementsthat 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 that discussed in the forwardlooking statements.

CENTURY TOKYO LEASING CORPORATION

We are committed to growing together with our customers and to contributing to

Additional copies of this annual report and otherinformation may be obtained by contacting
Investor Relations OfficeTelephone: 81-3-5209-6710

CORPORATE INFORMATION

Make New Business with Leasing

Century Tokyo Leasing Corporation Annual Report 2010

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

Printed in Japan

ANNUALRE PORT
2010