BALANCE SHEET (Translation) As of March 31, ?· BALANCE SHEET (Translation) As of March 31, 2011 ...…

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<ul><li><p> 1</p><p>BALANCE SHEET (Translation) As of March 31, 2011 </p><p>(Millions of yen) Account item Amount Account item Amount </p><p>ASSETS LIABILITIES </p><p>Current assets 971,205 Current liabilities 586,668 Cash and deposits 28,397 Notes payable-trade 3,939 Notes receivable-trade 23 Accounts payable-trade 25,354 Installment contract receivables 133,025 Short-term borrowings 50,975 Lease receivables 85,974 Current portion of bonds 2,000 Lease investment assets 502,844 Current portion of long-term debt 237,903 Loans receivables from customers 60,308 Commercial paper 190,958 </p><p>Other loans receivables from customers 62,627 Payables under securitized lease receivables 19,090 </p><p>Lease contract receivables 1,582 Lease payables 3,608 Other operating assets 7,914 Accounts payables 8,217 Advance on contracts 1,413 Accrued income taxes 3,630 Prepaid expenses 1,538 Accrued expenses 2,156 </p><p>Accrued income 476 Advances received on lease contracts 11,370 </p><p>Short-term loans receivables 89,773 Deposits received 7,666 Deferred tax assets 8,562 Deferred income 48 </p><p>Other current assets 11,177 Unrealized gross profits on installment contracts 18,456 </p><p>Allowance for doubtful receivables (24,435) Provision for bonuses 925 Other current liabilities 366 </p><p>Fixed assets 160,183 Long-term liabilities 420,738 Tangible assets 14,581 Bonds 2,003 Property for lease and rent 13,372 Long-term debt 390,788 </p><p>Property for lease and rent 13,461 Long-term payables under securitized lease receivables 16,350 </p><p>Allowance for loss on disposal of property for lease and rent (89) Guarantee deposits received 6,723 </p><p>Own-used assets 1,209 Long-term deferred income 31 </p><p> Provision for employees retirement benefits 2,493 </p><p>Intangible assets 5,017 Other long-term liabilities 2,347 Property for lease and rent 591 </p><p>Property for lease and rent 594 Total liabilities 1,007,406 </p><p>Allowance for loss on disposal of property for lease and rent (3) NET ASSETS </p><p>Goodwill 96 Stockholders equity 123,496 Software 3,982 Capital stock 32,000 Other intangible assets 347 Capital surplus 66,264 </p><p> Legal capital surplus 30,000 Investments and other assets 140,584 Other capital surplus 36,264 Investment securities 13,687 Retained earnings 25,231 Investments in affiliated companies 25,750 Earned surplus reserve 412 Long-term loans receivables 89,596 Other retained earnings 24,819 Claims provable in bankruptcy, in </p><p>rehabilitation and other 4,895 Unappropriated 24,819 </p><p>Long-term prepaid expenses 120 Valuation and translation adjustments 485 </p><p>Long-term deferred tax assets 4,140 Net unrealized gain on available-for-sale securities 1,302 </p><p>Long-term money deposited 2,115 Deferred gains (losses) on hedges (816) Other investments 4,829 </p><p>Allowance for doubtful receivables (4,551) Total net assets 123,982 </p><p>Total assets 1,131,388 Total liabilities and net assets 1,131,388 </p></li><li><p> 2</p><p> STATEMENT OF INCOME (Translation) For the year ended March 31, 2011 </p><p>(Millions of yen) Account item Amount </p><p>Revenues Lease revenue 255,916 Installment sales 39,456 Finance revenue 4,919 Other revenue 7,245 307,538 </p><p>Costs Cost of lease 224,269 Cost of installment sales 34,676 Cost of finance 563 Cost of other sales 5,928 Financing costs 6,537 271,976 </p><p>Gross profit 35,562 Selling, general and administrative expenses 14,535 </p><p>Operating income 21,026 Non-operating income </p><p>Interest and dividends received 2,658 Other 326 2,984 </p><p>Non-operating expenses Interest expense 1,565 Other 185 1,751 </p><p>Ordinary income 22,258 Special gains </p><p>Gain on sales of investment securities 4 Reversal of allowance for doubtful receivables 7,694 7,698 </p><p>Special losses Loss on disposal of operating assets, etc. 18 Loss on disposal of fixed assets 8 Impairment loss 757 Loss on sales of investment securities 930 Loss on valuation of investment securities 1,547 Loss on sales of investments in affiliated </p><p>companies 238 </p><p>Loss on liquidation of investments in affiliated companies 17 </p><p>Loss on valuation of investments in affiliated companies 55 </p><p>Loss on sales of golf club memberships 28 Loss on effect of adoption of accounting standard </p><p>for asset retirement obligations 182 </p><p>Extra retirement payment 1,855 5,640 Income before income taxes 24,317 </p><p>Income taxes-current 4,463 Income taxes-deferred 4,375 </p><p>Net income 15,478 </p></li><li><p> 3</p><p>STATEMENT OF CHANGES IN NET ASSETS (Translation) For the year ended March 31, 2011 </p><p>(Millions of yen) </p><p>Stockholders equity </p><p>Capital stock Capital surplus </p><p>Legal capital surplus Other capital surplus Total capital surplus</p><p>Balance at March 31, 2010 32,000 30,000 36,264 66,264 </p><p>(Changes during the year) </p><p>Net income Changes during the year for items other than stockholders equity (net) </p><p>Total of changes during the year </p><p>Balance at March 31, 2011 32,000 30,000 36,264 66,264 </p><p>Stockholders equity </p><p>Retained earnings Total stockholders </p><p>equity Earned surplus reserve </p><p>Other retained earnings Total retained </p><p>earnings Unappropriated </p><p>Balance at March 31, 2010 412 9,340 9,753 108,018 </p><p>(Changes during the year) </p><p>Net income 15,478 15,478 15,478 Changes during the year for items other than stockholders equity (net) </p><p>Total of changes during the year 15,478 15,478 15,478 </p><p>Balance at March 31, 2011 412 24,819 25,231 123,496 </p><p> Valuation and translation adjustments </p><p>Net unrealized gain on </p><p>available-for-sale securities </p><p>Deferred gains (losses) on hedges </p><p>Total valuation and translation </p><p>adjustments Total net assets </p><p>Balance at March 31, 2010 1,848 (747) 1,100 109,118 </p><p>(Changes during the year) </p><p>Net income 15,478 Changes during the year for items other than stockholders equity (net) </p><p>(545) (69) (615) (615) </p><p>Total of changes during the year (545) (69) (615) 14,863 </p><p>Balance at March 31, 2011 1,302 (816) 485 123,982 </p></li><li><p> 4</p><p>NOTES TO FINANCIAL STATEMENTS (Translation) For the year ended March 31, 2011 (Notes to Significant Accounting Policies) 1. Valuation basis and methods applied for assets </p><p>(1) Securities Trading securities. At fair value based on market price etc., as of the </p><p>balance-sheet date. (The cost of securities sold is determined by the moving-average method.) </p><p> Held-to-maturity debt securities. At amortized cost or accumulated cost Investments in subsidiaries and affiliates. At cost determined by the moving-average method Available-for-sale securities </p><p>Those with determinable fair values.......... At fair value based on market price etc., as of the balance-sheet date. (All valuation differences are reported as a component of net assets. The cost of securities sold is determined by the moving-average method.) </p><p>Those without determinable fair values..... At cost determined by the moving-average method (2) Derivative financial instruments......................... At fair value </p><p>2. Methods of depreciation and amortization applied for fixed assets </p><p>(1) Property for lease and rent </p><p>Property for lease and rent is depreciated under the straight-line method within the estimated lease and rent </p><p>period, assuming that useful lives are the same as the estimated lease and rent period, and that residual values </p><p>are the disposal price estimable at the end of the estimated lease and rent period. </p><p>In some of the property for lease and rent, tangible assets are depreciated under the declining-balance method. </p><p>However, buildings (excluding improvements) acquired on or after April 1, 1998 are depreciated under the </p><p>straight-line method. Intangible assets are amortized under the straight-line method. </p><p>(2) Other fixed assets </p><p>Of the other fixed assets, tangible assets are depreciated under the declining-balance method while intangible </p><p>assets are amortized under the straight-line method. However, buildings (excluding improvements) acquired on </p><p>or after April 1, 1998 are depreciated under the straight-line method. </p><p>Software of internal use is amortized under the straight-line method over internal useful lives (5 years). </p><p>3. Significant allowance and provisions </p><p>(1) Allowance for doubtful receivables </p><p>For general receivables, allowance for estimated uncollectible receivables is provided for at an adequate rate </p><p>calculated based on the probability of bankruptcy, while allowance for certain categories including seriously </p><p>doubtful receivables is provided for based on case-by-case collectability assessment. </p><p>(2) Allowance for loss on disposal of property for lease and rent </p><p>Allowance for estimated loss is provided for potential loss associated with disposal of property for lease and </p><p>rent. </p><p>(3) Provision for bonuses </p><p>Of the estimated amount of bonuses payable to employees in the following fiscal year, the portion attributable </p><p>to their service during current fiscal year has been set aside as provision for employees bonuses. </p><p>(4) Provision for employees retirement benefits </p><p>The Company provides for the estimated year-end liabilities for retirement benefits based on the projected </p></li><li><p> 5</p><p>benefit obligations and plan assets at the balance sheet date. </p><p>Past service liabilities are recognized in each fiscal year as they arise. Actuarial differences are charged to </p><p>income on a straight-line basis, beginning from the year after they are recognized, over the then average </p><p>remaining years of service of employees (13 to 15 years). </p><p>4. Lease accounting </p><p>Accounting policy for revenues and costs from finance lease transactions </p><p>The Company adopts the method in which lease revenue and cost of lease are recorded at the time when lease </p><p>fees are collectible. </p><p>Accounting policy for revenues from operating lease transactions </p><p>The Company records lease revenues corresponding to the elapsed period of the lease contract term, on the </p><p>basis of the monthly lease fees collectible according to the lease contract for such contract term. </p><p>5. Accounting for installment contracts </p><p>The Company accounts for the full amount of contract as installment contract receivables upon delivery of </p><p>goods, and records installment sales and costs of installment sales as each payment becomes due. </p><p>Unrealized gross profits on installment contract receivables with installment payments becoming due at later </p><p>dates are deferred. </p><p>Meanwhile, for some of the installment contracts, amount equivalent to interest is allocated to each period as </p><p>installment sales. </p><p>6. Accounting treatment for financial expenses </p><p>Total assets are divided into assets based on sales transactions and other assets, where financial expenses </p><p>corresponding to the former are recorded as financing costs under the heading of operating expenses while </p><p>financial expenses corresponding to the latter are recorded as non-operating expense, based on the balance </p><p>proportion of such assets. </p><p>Financial expenses related to operating assets less corresponding interest received, etc. are recorded as </p><p>financing costs. </p><p>7. The method of hedge accounting </p><p>Gains or losses on derivatives are deferred until maturity of the hedged items. For interest rate swap, the </p><p>Company applies the exceptional method as far as it qualifies for the required rules. </p><p>In respect of blanket hedging of liabilities as stipulated in Temporary Accounting and Auditing Treatment in </p><p>the Application of the Accounting Standard for Financial Instruments in Leasing Business (Report No. 19 </p><p>issued by the Industrial Auditing Committee of the Japanese Institute of Certified Public Accountants on </p><p>November 14, 2000), gains or losses thereon are deferred until maturity of the hedged items. </p><p>8. Translation of foreign currency accounts </p><p>All monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the </p><p>spot exchange rates on the balance sheet date, and the foreign exchange gains and losses therefrom are </p><p>recognized in the statement of income. </p></li><li><p> 6</p><p>9. Other significant matters that serve as the basis for preparing financial statements </p><p>(1) Accounting treatment for consumption taxes </p><p>Consumption tax and local consumption tax are accounted for by the tax exclusion method. </p><p>(2) Amortization of goodwill </p><p>Goodwill is amortized over five years under the straight-line method. </p><p>(Change in Accounting Policies) Effective this fiscal year, the Company adopted the Accounting Standard for Asset Retirement Obligations </p><p>(Accounting Standards Board of Japan (ASBJ) Statement No. 18, issued on March 31, 2008) and the Guidance </p><p>on Accounting Standard for Asset Retirement Obligations (ASBJ Guidance No. 21, issued on March 31, 2008). </p><p>As a result, operating income and ordinary income decreased by 30 million, respectively, and income before </p><p>income taxes decreased by 213 million. (The Additional Information) Recording of allowance for doubtful receivables due to the effects of the Great East Japan Earthquake </p><p>In order to prepare for the risk of loan losses from operating receivables caused by the deteriorating financial </p><p>conditions of customers following the Great East Japan Earthquake, which struck on March 11, 2011, the </p><p>Company has recorded an allowance for doubtful receivables based on a reasonable estimate of the </p><p>uncollectible receivables. </p></li><li><p> 7</p><p>(Notes to Balance Sheet) 1. Assets pledged as collateral and corresponding liabilities </p><p>(1) Assets pledged as collateral </p><p> (Millions of yen) Installment contract receivables 2,652 Lease receivables 374 Lease investment assets 34,459 Other loans receivables to customers 3,976 Property for lease and rent 44 Investment securities 9 Other investments 15 Total 41,530 </p><p>(2) Liabilities corresponding to assets pledged as collateral </p><p> (Millions of yen) Current portion of long-term debt 97 Payables under securitized lease receivables 16,090 Long-term payables under securitized lease receivables 16,350 Other liabilities 531 Total 33,068 </p><p>2. Accumulated depreciation of tangible assets </p><p> (Millions of yen) Property for lease and rent 22,803 Other tangible assets 1,283 Total 24,086 </p><p>3. Contingent liabilities </p><p>Contingent liabilities for the subsidiaries borrowing liabilities etc. from financial institutions </p><p> (Millions of yen) Altair Lines S.A. 63,374 PT. Mitsui Leasing Capital Indonesia 23,389 JA MITSUI LEASING TATEMONO CO., LTD. 2,060 Mitsui Leasing Capital Corporation 1,725 Others 1,050 Total 91,599 </p><p>4. Breakout of lease receivables and lease investment assets </p><p> (Millions of yen) Lease receivables Lease investment assets </p><p>Amount of receivables 108,630 525,899 Estimated residual value 29,163 Amount equivalent to interest receivables 22,656 52,218 Total 85,974 502,844 </p></li><li><p> 8</p><p>5. Notes received as guarantees </p><p> (Millions of yen) Notes received for installment contract receivables 11,727 Notes received for lease receivables 20 Notes received for lease investment assets 4,133 Notes received for other loans receivables to customers 475 </p><p>6. Operating lease contract receivables under the remaining lease terms </p><p> (Millions of yen) Notes received as guarantees 16 Other lease contract receivables 8,405 Total 8,422 </p><p>7. Trade receivables due after one year </p><p> (Millions of yen) Installment contract receivables 85,484 Lease receivables 61,390 Lease investment assets 336,171 Loans receivables from customers 40,481 Other loans receivables from custome...</p></li></ul>