Annual Report 2008
For the Fiscal Year Ended March 2008
Integrated
Capital
Solutions
NEC Leasing, Ltd.
Financial Highlights
NEC Leasing, Ltd. Years ended March 31, 2008 and 2007
Millions of yen
Thousands of U.S. dollars
2008
Consolidated
By offering Integrated Capital Solutions, NEC Leasing aims to
create the advanced information and communications
technology (ICT) society that NEC Group seeks.
Integrated Capital Solutions are integrated solutions that we provide for a wide
range of business challenges, centered on the capital of the customer.
2007
2008
Non-Consolidated Non-Consolidated
Consolidated
Non-Consolidated
For the year:
Revenues
Income before income taxes
Net income
¥264,116
6,043
3,946
¥264,112
6,044
3,947
¥265,739 $2,641,156 $2,641,122
6,779
60,427
60,436
4,074
39,459
39,466
At year-end:
Total assets
Total net assets
¥780,334
62,012
¥780,335
62,013
¥732,121 $7,803,342 $7,803,347
59,317
620,121
620,128
(Yen)
Per share data:
Basic net income
Cash dividends
(U.S. Dollars)
¥ 183.25
44.00
¥ 183.28
44.00
465
465
477
–
21,533
21,533
Number of employees
Number of shares issued
(Thousand shares)
¥ 189.21 $
44.00
1.83 $
0.44
1.83
0.44
The U.S. dollar amounts represent translation of Japanese yen, for convenience only, at the rate of ¥100=U.S.$1.00 in effect on March 31, 2008.
Revenues
Net income
Million yen
300,000
Non-Consolidated
260,105 262,247
265,310
265,739
Million yen
Consolidated
Non-Consolidated
6,000
Consolidated
5,302
264,116
4,888
264,112
250,000
Contents
5,000
200,000
4,000
150,000
3,000
100,000
2,000
50,000
1,000
0
04
1 Financial Highlights
1 2 Corporate Governance
2 To Our Shareholders Interview with the President
1 3 Directors and Corporate Auditors
4 Business in Brief and Operating Review
1 4 Financial Section
5 Feature: NEC Leasing’s Third Medium-Term
3 8 Corporate Information
Business Plan
1 0 Environmental and Community Commitments
3 9 Stock Information
05
06
Total net assets /
ROE
07
0
08
Total net assets (Non-Consolidated)
Total net assets (Consolidated)
ROE (Non-Consolidated)
ROE (Consolidated)
62,012
Million yen / %
60,000
56,104
59,317
62,013
18
05
06
3,947
3,946
07
08
Total assets (Non-Consolidated)
Total assets (Consolidated)
ROA (Non-Consolidated)
780,334
780,335
0.8
800,000
717,884
700,000
0.63
0.74
0.69
732,121
725,722
0.6
706,193
12
40,000 38,975
4,074
Million yen / %
15
12.2
04
Total assets /
ROA
50,979
50,000
4,472
0.56
10.9
9.9
30,000
Forward-Looking
Statements
The statements on this annual report with respect to the Company’s current plans, strategies and decisions are
forward-looking statements. Such forward-looking statements are based on the management’s assumptions and
decisions in the light of information currently available. Since these forward-looking statements involve risks and
uncertainties, actual results could differ materially from them. Therefore, we caution that you should not place
undue reliance on them.
7.1
9
6
10,000
3
0
0
05
06
07
600,000
0.4
500,000
0.2
6.5 6.5
20,000
04
0.52
08
0
0
04
05
06
07
08
1
To Our Shareholders
Annual Report 2008
Interview with the President
“As we mark thirty years in business,
we are determined to revamp our
business, developing five core
businesses that will take us toward
another thirty years.”
Q
A
Could you provide a
review of fiscal 2007?
As happens every year, fiscal 2007
brought both good and bad outcomes.
First, our revenues regrettably declined
Q
A
A
What were the Company’s
achievements in fiscal 2007?
We announced a new medium-term
business plan in the second year of our
Second Medium-Term Business Plan (a
A
In the past, most of our revenues were
generated by our leasing business. We now
plan to tap our accumulated skills and
assets to develop a portfolio of five
leasing environment has been changing—
businesses. This is the key element in our
for instance with amendments to lease
business strategy, and it is described in
accounting standards—more quickly than
more detail in our annual report. The next
we had initially anticipated. We need to
three years will be a challenging period of
accelerate reforms in our business
restructuring, as we build our business
structure. As a consequence, we elected to
portfolio, including our infrastructure. We
announce our Third Medium-Term Business
see our 30th anniversary as the right time
Plan, which marks a clear departure from
to unite in our commitment to this
our past growth strategy.
challenge, marking the start of a new era
for our Company. We hope that we can
lease business contracts executed
continue to count on the support of our
exceeded the year-ago result. In particular,
shareholders in the years to come.
annual contracts executed in the small ticket
apologize sincerely to our shareholders for
leasing business—a promising area which
this result.
has been a focus for us—topped ¥30 billion.
Q
Would you explain the key
points of the Third MediumTerm Business Plan?
A
We now no longer see NEC Leasing as
Other positive factors included the
standards as well as changes in the
development of asset-based lending (ABL)
taxation system were very unfavorable for
and other new business areas that we
leasing companies since they have
targeted in our Second Medium-Term
deprived us of one of our roles, creating a
Business Plan (fiscal 2006 to fiscal 2008).
much bleaker competitive environment.
These new businesses have enjoyed steady
consideration. In other words, our new
growth. As a result, we achieved the target
approach originates with the understanding
triggered by the emergence of giant leasing
of ¥1 billion gross profit on new business in
that we offer solutions to customers that
companies, and particularly those affiliated
the final year of our Second Medium-Term
help them solve their business issues,
with banks, is also likely to create tougher
Business Plan, which is one year earlier
under the NEC brand. During the Third
competition.
than we had originally planned. We also
Medium-Term Business Plan, NEC Leasing
formed some strategic alliances during
will reorganize its business in a way that
fiscal 2007, for instance setting up a joint
takes advantage of the characteristics of a
venture with Macquarie Capital Finance
manufacturer-affiliated company.
Finally, the industry reorganization
Q
What points in the Third
Medium-Term Business Plan
are especially important in
terms of your strategy?
three-year plan). We did this because the
The good news is that the amount of
for the second consecutive year. We
Moreover, changes in lease accounting
Q
You announced the Third
Medium-Term Business Plan
in March 2008. What was the
purpose of the announcement?
June 2008
Tomoyuki Kato, President
an NEC affiliate that simply offers leases for
the NEC Group with little additional
Japan Limited.
2
3
Business in Brief and Operating Review
Our operations consist of our core leasing
business, loan business, and other business.
Since we set up NL Asset Service, Ltd. as a
wholly owned subsidiary in October 2007, we
prepared consolidated financial statements
starting the fiscal year under review. The
operating reviews provided below are described
on an individual basis to enable a full comparison
with the results of the preceding year.
1 Leasing Business
Business in brief
Our leasing business is a core operation of the
Company. It consists of leasing and small ticket
leasing.
Leasing
We lease equipment to customers who require
funds for capital expenditures under a long-term
lease contract.
We lease a broad range of equipment. Since we
have a mission of promoting NEC sales as a
financing company, ICT products account for a high
percentage of our leases. As a manufactureraffiliated leasing company, NEC Leasing offers
leases that combine ICT equipment and related
services, including maintenance lease and vendorcollaborating programs. To diversify the lineup of our
business, we are also emphasizing non-ICT
equipment leases.
Small ticket leasing
Small ticket leasing is a business that provides
distributors, who conclude a sales promotion
agreement with NEC Leasing, with programs to
provide finance of up to five million yen per user
under a lease agreement.
Operating review
Leasing business contracts executed rose 5.4%
year on year, to ¥229.6 billion, reflecting strong
results from small ticket leasing and non-ICT
equipment leasing. However, since contracts
executed were concentrated in the second half of the
year, lease revenues fell 1.3%, to ¥244.2 billion. In
addition, gross profit decreased 9.4%, to ¥12.7
billion, because of increased funding costs stemming
from higher interest rates, as well as increased
allowances for acceptance inspections associated
with the increase in the number of contracts
executed in the small ticket leasing business.
Feature: NEC Leasing‘s Third Medium-Term Business Plan
2 Loan Business
Business in brief
Our loan business consists of installment sales
and business loans.
NEC Leasing‘s Third Medium-Term Business Plan
Next 30
Installment sales
Our installment sales business involves
purchasing equipment on behalf of customers who
require funds for capital expenditures and equipment
acquisition, and then selling the equipment to them
on installment contracts. This business complements
our leasing business.
Business loans
We extend business loans principally to NEC
Group companies and their business partners for the
purpose of providing programs to liquidate
receivables. We also provide customers with loans
through structured finance for capital investment.
Operating review
Turnover from the loan business increased as a
result of expanding finance, including corporate
finance that we have emphasized since fiscal 2007,
and factoring. As a consequence, net sales from the
loan business rose 46.7% year on year, to ¥2.8
billion. Gross profit was up 36.4% from the year-ago
result, to ¥2.1 billion.
3 Other Business
Business in brief
Our other business includes establishing
structured finance, sales of off-lease equipment in
our leasing business, and the collection of
maintenance fees and accounts receivables
management on behalf of clients to meet their needs
for operational efficiency and outsourcing.
Operating review
Although commissions on the design of structured
finance increased, gains on disposal at the
cancellation of contracts were lower than last year.
Allowances for doubtful accounts also increased,
reflecting a higher number of bankruptcies from the
small ticket leasing business prior to the introduction
of tougher crediting processes and from medium risk
contracts. As a result, net sales from our other
business were up 4.2% year on year, to ¥17.1 billion.
In contrast, gross profit declined 8.0%, to ¥1.9 billion.
New Challenges for the Next 30 Years
NEC Leasing will transform itself into a unique,
manufacturer-affiliated financial services company.
We will do this by reforming our structure and building
new business portfolios.
We have adopted our Third Medium-Term Business Plan (fiscal 2008 to 2010), which redefines
our corporate identity and seeks to transform our operations into high valued-added businesses
that embody the NEC brand, leaving behind the existing sales finance business model.
New Corporate Identity
Creating the advanced ICT society that NEC Group seeks, by offering
Integrated Capital Solutions
Three-year target values:
Consolidated ROE:
12
%
or higher
Consolidated ROA:
1.6
%
or higher
Ordinary income ratio
in key business* areas:
45
%
or higher
*The key business areas refer to the finance solutions domain and the asset solutions domain.
4
5
Feature: NEC Leasing‘s Third Medium-Term Business Plan
Why was the Third Medium-Term
Business Plan formulated?
The Second Medium-Term
Business Plan’s deviation
from prevailing conditions
What is the present situation and
what is the prevailing
environment?
Results in the Second
Medium-Term Business Plan
Our Second Medium-Term Business Plan
aimed to set up new business areas, from which
The leasing environment today features rising
it would seek to generate a gross profit of ¥1
interest rates, a decline in overall leasing contracts
billion. Thanks to successful launches of our
following unexpectedly sweeping changes to lease
services associated with the liquidity of medical
accounting standards and the taxation system, an
institution receivables for medical services, ABL
associated reorganization of the leasing industry,
and structured finance, we were able to achieve
and competition that is intensifying at an
the target one year ahead of schedule. We were
accelerating pace. This situation is quite different
also successful with our alliance strategy,
from the environment that prevailed in February
including an alliance with Tokyo Servicer, Inc.
2006, when the Second Medium-Term Business
and the formation of a joint venture with
Plan was prepared. In particular, our operating
Macquarie Capital Finance Japan Limited, which
environment has changed markedly. For example,
served to bolster our business portfolios.
competition in the government and municipal
market, which is our key client segment, has
become more fierce. The amount of leasing
contracts for ICT equipment, our major product
group, has fallen.
More specifically, contracts executed for fiscal
Unstable macro and business
environments and the transformation
of leasing companies
For the time being, the macroeconomic
What identity does NEC Leasing aim for in the Third Medium-Term Business
Plan?
Core competence and corporate identity
NEC Leasing will present a new corporate identity that makes full use of its existing advantages as
well as the new strengths that it will develop.
Existing core competence
Core competence to be developed
The “NEC brand” accumulated as a result of the
sustained efforts of the NEC Group
Integrated Capital Solutions = The ability to propose
solutions to customers that match their business
resource needs (such as their capital requirements)
NEC Leasing’s new corporate identity
Creating the advanced ICT society that
NEC Group seeks, by offering Integrated Capital Solutions
Business Domains
years 2006 and 2007 in the Leasing Business fell
environment is likely to remain unstable, primarily
13.0% and 8.2%, respectively, over those for fiscal
because of fears of a US recession stemming
business centering on leasing (Vendor Solutions) and two new domains that will become key areas of
2005. As a consequence, we were unable to
from the subprime lending problem, although a
focus for us (Finance Solutions and Asset Solutions).
achieve the organic growth that we had envisaged
cyclical rise in ICT investment is expected. Amid
in our Second Medium-Term Business Plan.
the severe conditions in the leasing industry,
Income from our business decreased for two
leasing companies are aggressively expanding
consecutive years in fiscal 2006 and fiscal 2007,
into more comprehensive finance operations.
signaling a serious situation that requires rapid action.
This is making it increasingly important for us to
Because of this, we decided at the beginning of
fiscal 2007 that we would be unable to achieve the
develop a range of services that are not limited to
leasing.
target values set out in our Second Medium-Term
Business Plan (fiscal 2006 to fiscal 2008) and we
therefore retracted them.
It was essential that we discontinue the
Second Medium-Term Business Plan and
formulate a new growth plan.
6
Annual Report 2008
To achieve future growth, we must transform
ourselves into a company that offers a
comprehensive array of services not limited to
leasing, by taking advantage of the features of a
manufacturer-affiliated company.
To offer Integrated Capital Solutions, we are transforming our business into three domains: an existing
Finance Solutions domain
Asset Solutions domain
Vendor Solutions domain
The Finance Solutions domain employs
asset finance methods, and develops
structured finance related to large
projects in the NEC Group’s supply
chain from a non-bank standpoint.
The Asset Solutions domain delivers an
array of asset solutions that leverage our
manufacturer-affiliated advantage,
centering on the core ICT asset
remarketing and services associated
with ICT equipment operation.
The Vendor Solutions domain pursues
maximum efficiency as it converts
existing business models in the sales
finance business in collaboration with
vendors centering on the NEC Group’s
sales finance.
We will reorganize the Company’s structure and maximize shareholder value by
redefining our core competence, corporate identity and business domains.
7
Feature: NEC Leasing‘s Third Medium-Term Business Plan
Management Strategy
Annual Report 2008
2
Strategy for Strengthening Management Functions
To reinforce the management functions, which will be the basis for effectively pursuing our business portfolio
1
strategy, we will steadily institute strategies to strengthen management functions through four priority initiatives:
Business Portfolio Strategy
Bolstering consolidation management
NEC Leasing has hitherto offered leases to vendors primarily based on sales finance for NEC’s ICT
equipment. To expand its business domains, the Company has decided to develop a future strategy that covers
a portfolio of five businesses within Finance Solutions and Asset Solutions as new target domains, in addition to
the existing Vendor Solutions. Individual strategies are described below.
We will practice highly efficient management through
consolidation, and accelerate the expansion of business
portfolios by using capital and alliances.
The Asset Finance business, including ABL, which uses
equipment, inventory, and trade receivables as collateral,
as well as financial services related to corporate assets
such as factoring and asset liquidation. Our efforts in
these areas will bolster the financial solutions functions
that we can offer to small and midsize businesses in the
ICT supply chain, as well as to companies in the NEC
Group supply chain.
2 Financial Engineering business
The Financial Engineering business is positioned to offer
more professional financial solutions. For instance, as a
segment of a manufacturer-affiliated company, the
business focuses on creating unique structured finance,
such as finance for large projects in the NEC Group’s
supply chain. The business also seeks to be a player in
medium risk zones in the corporate finance segment,
and will boost business opportunities for buyout finance
and mezzanine loans.
With the promotion of BPR, we will seek to improve our
overhead ratio.
Strengthening enterprise
risk management (ERM)
Human resources management
To bolster our comprehensive risk management system,
we will approach risk management, such as crediting,
from the asset side, adding to the liability-side
(fundraising-side) initiatives we have taken to date.
To expand our business portfolios, we will raise the level
of professionalism throughout the Company by upgrading
employee education and recruiting highly capable
personnel from outside the Company.
Finance Solutions domain
1 Asset Finance business
Pursuing business process
reengineering (BPR)
3
Initiatives to Bolster Governance and CSR
To fulfill our Third Medium-Term Business Plan, we will bolster corporate governance and corporate social
responsibility (CSR), two areas that are essential components of corporate activities.
Asset Solutions domain
Initiatives to bolster Governance
3 Asset Remarketing business
We will step up remarketing of used ICT products such
as off-lease equipment by, for example, exporting them
through Reboot Technology Services Limited, a joint
venture founded with Macquarie Capital Finance Japan
Limited.
4 ICT Solution business
Our ICT Solution business uses the remarketing function
of the Asset Remarketing business to build business
models, including short-term and inexpensive operating
leases and rentals, in addition to offering ICT lifecycle
management services with improved added-value.
Vendor Solutions domain
Initiatives to bolster CSR
Reinforcing ability to execute operations and
developing the monitoring system
Activities contributing to the environment
and the community through business
We will boost monitoring of internal control by, for
example, complying with the Financial Instrument and
Exchange Law. We will also ensure the execution of our
Third Medium-Term Business Plan by stepping up
monitoring of our business portfolios by unit at the
management level and clarifying executive
responsibilities.
Through our Asset Remarketing business, we promote
the reuse of used ICT equipment and dispose of it
responsibly under a compliance regime.
In addition, NEC Leasing began in fiscal 2007 to
donate off-lease personal computers through the ICT
Educational Consortium. The Company will continue
donating to schools so that it can help create a recyclingbased society that places less stress on the environment.
Environmental educational activities
5 Vendor Solution business
Our Vendor Solution business will boost the efficiency and service level of the sales finance function for vendors in NEC
Group’s supply chain, by reinforcing collaboration with the NEC Group. The business will also promote more sophisticated
sales finance services for small vendors with a view to seeking alliances.
8
In cooperation with municipalities and a nonprofit
organization, we are supporting a voluntary project called
the Waku-waku Children’s Pond Project, which is building
biotopes and providing associated education at primary
schools. The project will lay the foundations for the next
generation’s environmental awareness.
9
Environmental and Community Commitments
Environmental management
initiatives
Environmental initiatives
NEC Leasing is developing specific
environmental initiatives in offices and has defined
The greatest burden placed on the environment
by the leasing industry is the disposal waste from
off-lease equipment. NEC Leasing minimizes this
waste through re-leasing or disposal for value.
Waste equipment items that are not suitable for
disposal for value are discarded through the 3R
(reduce, reuse, recycle) system to achieve the zero
landfill target. In addition, leases can encourage the
use of energy-saving equipment through periodical
replacement with the newest equipment.Through
our leasing, we also aim to replace equipment with
energy-saving alternatives.
As a manufacturer-affiliated leasing company, we
operate sophisticated recycling processes by using
resources through 3R system development.
NEC Leasing encourages the use of
environmentally friendly equipment and the adoption
of eco-business by offering “Eco-Lease” (financial
services for environmentally friendly equipment) and
long-term goals which it aims to achieve by fiscal
2020 based on fiscal 1999 standards. Our
Annual Report 2008
Activities contributing to
the environment and to society
Social contribution-oriented
shareholder special benefit plan
NEC Leasing operates a social
contribution-oriented shareholder special
Donating off-lease PCs to primary,
secondary and high schools
benefit plan that donates an amount, equivalent to
the special benefit, to the Green Fund managed by
environmental items cover CO2 emissions, energy
NEC Leasing has been donating a number of off-
and resource conservation, industrial and general
lease used personal computers (PCs), returned from
when a shareholder declines to receive a
waste discharge volumes, green purchase rate, and
customers, to the Used PC Donation Program
shareholder special benefit.
other issues.
established by the ICT Education Consortium to
Our environmental management activities employ
a unique method for assessing not only
promote reuse.
The consortium was founded in 2003 to provide
the National Afforestation Promotion Organization
In fiscal 2007, 58 shareholders agreed to donate
such amount and 152,000 yen in total was donated
to the Green Fund through NEC Leasing.
environmental aspects, but also profitability,
education to future participants in the information
sociality, feasibility and continuous improvement,
society. The donation program recycles and donates
enabling us to assess our business activities. To
used PCs—after the data contained in them is
achieve the targets set out in our environmental
deleted pursuant to the procedures defined by the
management policy, each section in NEC Leasing
consortium—to educational institutions such as
contribution-oriented “NEC Make-a-Difference
sets annual environmental management goals and
primary, secondary and high schools that require
Drive,” where employees take part in bolstering the
follows the PDCA cycle at Environmental
support to develop their ICT facilities.
value of NEC. Employees of NEC Leasing also take
Management Committee, which is held four times a
NEC Leasing believes that by effectively reusing
Participation in the NEC
Make-a-Difference Drive
NEC Group is working on the local community
part in the Drive by donating blood, carrying out
year. This enables us to reduce the burden we place
its off-lease equipment under the program, it can
cleaning town, and providing support for education
on the environment and helps customers and the
help reduce the burden on the environment and
and medical treatment for children in developing
community do the same.
build a recycling society.
countries.
Support for the Waku-waku
Children’s Pond Project launched
External assessment of
NEC Leasing in Fiscal 2007
by taking advantage of the low-interest eco-funds
that are made available to NEC Leasing, as one of
the highest ranking companies in the Promotion of
Environmentally Conscious Management (a system
of finance based on environmental rankings) of the
Development Bank of Japan (DBJ).
Environmental management
To encourage environmental management, we
employ an environmental management system
based on the PDCA (plan-do-check-act) cycles
centering on ISO14001. As part of our
environmental risk management, we also check offlease equipment in accordance with the Waste
Management Law, and investigate and check soil
Environmental accounting
In cooperation with Asaza Fund, a non-profit
In contrast to manufacturers, the leasing sector
organization, NEC Leasing staff volunteer to support
does not believe that the most effective
the Waku-waku Children’s Pond Project, which runs
NEC Leasing ranked second in the Financial
environmental accounting approach is to check, for
a series of programs to help interested primary
Category of the 11th Environmental Management
instance, energy consumption in its business. So
schools build, maintain, and manage biotopes for
Survey published by the Nihon Keizai Shimbun
instead, we adopt a unique environmental
their students. Through first-hand experience of
(after coming second in 2005 and first in 2006).
accounting that focuses on “Eco-Lease,” one of our
observing frogs, insects and other creatures in the
businesses, while conforming to the guidelines set
biotope, the students will develop insight into the
At Environmental rating in the Promotion of
out by the Ministry of the Environment. Among our
mechanisms of natural eco-systems from small
Environmentally Conscious Management System
activities, we check the economic effects of the
“recycling societies.” The program serves to
of the DBJ, NEC Leasing received a special
contribution our leasing business makes to the
enhance the environmental awareness of the
award as a model company for the second
environment and corporate profit (gross profit), to
younger generation.
consecutive year.
identify the costs and effects of environmental
During the initial
fiscal year of 2007,
NEC Leasing is the first leasing company to be
contamination at office buildings, asbestos, and
twenty employees
registered as a “Gold” member of the Waste and
other potential issues.
volunteered to take
Recycle Governance (WRG) registration system
part in the program
operated by the Japan Environmental
and built biotopes at
Management Association for Industry.
preservation.
two primary schools.
10
11
Directors and Corporate Auditors
Corporate Governance
(as of June 25, 2008)
Corporate governance system
To make clear the responsibility for managing the
control system, in July 2007 the Company set up the
Internal Control Promotion Committee, which is
presided by the President. The committee focused
Company and executing business actions, and to
on fully executing compliance measures, improving
make swift decisions, we have an executive officer
information security, ensuring the credibility of
system. Executive officers have executive
financial reports, enforcing risk management and
responsibility for their duties, while the Board of
other tasks.
Directors supervises and monitors the action of
To develop an internal control system, we set up
executive officers. The Auditing Division undertakes
the Compliance Committee to control all compliance
internal audits of all operations from the viewpoint of
activities of the Company. The committee makes a
appropriateness, effectiveness and compliance.
compliance program, revises and develops the
Corporate Auditors attend meetings of the Board of
Code of Conduct, internal rules and other
Directors and other important internal meetings, and
regulations, and provides compliance training. We
audit the actions of directors, executive officers, and
have also built an internal notification system that
other employees through direct hearings about their
reports violations by employee and director of laws
actions.
and regulations, the Articles of Incorporation and
The Board of Corporate Auditors, the Auditing
Division and accounting auditors cooperate to
other rules of the Company. The system sustains
and strengthens self-correcting processes.
enhance the transparence and soundness of the
management of the Company as well as to audit the
actions taken by the Company.
Information management system
We have set up the Information Security
General Shareholders’ Meeting
Election/
Dismissal
Election/Dismissal
Election/Dismissal
Directors
Board of Directors
Audit
Corporate Auditors
Board of Corporate
Auditors
addition, we properly store and manage documents
President
Cooperation
Management
Committee
information security to maintain and improve
information security throughout the Company. In
Cooperation
Election/
Dismissal/
Supervision
Committee and prepared basic policies on
related to important meetings and job execution
pursuant to our internal rules.
Accounting
Audit
Accounting
Auditor
We have acquired ISO27001 certification, the
international standard for information security
Auditing Division
Cooperation
Executive
Officers
Sales/
Staff Division
management systems, to ensure and maintain the
confidentiality of our information assets.
Internal Audit
Internal control system
Under the leadership of the President, we are
Basic concept for excluding
anti-social forces
Our Code of Conduct stipulates that employees
developing an internal control system based on the
shall have no relations with anti-social forces that
Policy for Establishing and Strengthening an Internal
threaten the order and security of civil society, and
Control System. The internal control system has
that all employees shall be resolute in their stand
been constantly reviewed and reinforced so that we
against such forces.
Shigeho Tanaka
Tomoyuki Kato
Hidetaka Itahashi
Member of the Board
President
Member of the Board
President
Tomoyuki Kato
Members of the Board
Shigeho Tanaka
Hidetaka Itahashi
Shigehiko Yamamoto (Director at Executive Partners, Inc.)
Manabu Kinoshita
(Associate Senior Vice President at NEC Corporation)
Hirofumi Domyo
(Department Manager, Corporate Finance Office,
Corporate Finance & IR Division at NEC Corporation)
Corporate Auditors
Hiromi Urita
Toshio Matsushita
Takao Kaneko
(General Manager, Corporate Auditing Bureau at NEC
Corporation)
Masayoshi Kyogoku
(General Manager, Controller Department, Enterprise
Solutions Planning Division at NEC Corporation)
can build and develop an efficient and compliance
management control system. To bolster the internal
12
13
Operating and Financial Review
5-Year Summary
1) Consolidated Year Summary
NEC Leasing, Ltd.
Years ended March 31
Thousands of
U.S. dollars
Millions of yen
Financial
Section
2008
2007
2006
2005
2008
2004
For the year:
Revenues
Income before income taxes
Net income
¥264,116
6,043
3,946
–
–
–
–
–
–
–
–
–
– $2,641,156
–
60,427
–
39,459
At year-end:
Total assets
Total net assets
¥780,334
62,012
–
–
–
–
–
–
– $7,803,342
–
620,121
(Yen)
Per share data:
Basic net income
Cash dividends
Key indicators:
Price Earnings Ratio
Number of employees
¥ 183.25
44.00
7.14%
465
(U.S. Dollars)
–
–
–
–
–
–
– $
–
–
–
–
–
–
–
–
–
1.83
0.44
1.The U.S. dollar amounts represent translation of Japanese yen, for convenience only, at the rate of ¥100=U.S.$1.00 in effect on March 31, 2008.
2) Non-Consolidated Year Summary
NEC Leasing, Ltd.
Years ended March 31
Thousands of
U.S. dollars
Millions of yen
Contents
15
5-Year Summary
16
Operating and Financial Review
19
Consolidated Balance Sheet
21
Consolidated Statement of Income
22
Consolidated Statement
of Changes in Net Assets
23
Consolidated Statement of Cash Flows
24
Notes to Consolidated Financial Statements
32
Non-Consolidated Balance Sheets (Non-Audited)
34
Non-Consolidated Statements of Income
(Non-Audited)
35
Non-Consolidated Statement of Changes in Net
Assets (Non-Audited)
36
Non-Consolidated Statement of Cash Flows
(Non-Audited)
37
14
Report of Independent Auditors
2008
2007
2006
2005
2004
For the year:
Revenues
Income before income taxes
Net income
¥264,112
6,044
3,947
¥265,739
6,779
4,074
¥265,310
9,026
5,302
¥262,247
8,387
4,888
¥260,105 $2,641,122
8,153
60,436
4,472
39,466
At year-end:
Total assets
Total net assets
¥780,335
62,013
¥732,121
59,317
¥725,722
56,104
¥706,193
50,979
¥717,884 $7,803,347
38,975
620,128
(Yen)
Per share data:
Basic net income
Cash dividends
¥ 183.28
44.00
¥ 189.21
44.00
¥ 246.23
40.00
2008
(U.S. Dollars)
¥ 262.05
25.00
¥ 248.47 $
16.67
1.83
0.44
(%)
Key indicators:
Dividend Payout Ratio
Price Earnings Ratio
Number of employees
Number of shares issued (Thousand shares)
24.0
7.14
23.3
12.90
16.2
10.92
9.5
8.22
6.7
–
465
21,533
477
21,533
479
21,533
475
21,533
472
12,000
1.The U.S. dollar amounts represent translation of Japanese yen, for convenience only, at the rate of ¥100=U.S.$1.00 in effect on March 31, 2008.
2.Basic net income per share has been adjusted to the stock split on a 1.5 for 1 basis effective as of October 1, 2004.
3.Dividends per share have been adjusted to the stock split on a 1.5 for 1 basis effective as of October 1, 2004.
4.Price earnings ratio up to the fiscal year ended March 31, 2004, when the Company was not listed in the stock market, is not disclosed.
15
Operating and Financial Review
Annual Report 2008
executed increased 5.4% from the preceding year, to
1 Business Results
2 Forecasts for Fiscal Year
stemming from rises in interest rates.
¥229,582 million, including a 34.4% jump in smallticket leasing from the year-ago period. This increase
The Company established NL Asset Service Ltd., a
was achieved despite aggressive competition for
Ending March 31, 2009
(2) Loan Business
Loans and installment sales increased 46.7% from
wholly owned subsidiary, in October 2007 and has
market share stemming from industry reorganization
the year-ago period, to ¥2,771 million, reflecting
prepared consolidated financial statements starting the
and the expected impact as customers, including major
increases in factoring and corporate financing. Gross
2008 remains unclear, primarily because of the
fiscal year under review. Because a comparison of
corporations, avoided leasing in the wake of changes
profit after the deduction of funding costs, increased
weakening stock market and sluggish real estate
consolidated results with those of last year is
to accounting and taxation systems. The Company
36.4% year on year, to ¥2,119 million.
transactions following the global financial market
unavailable, the following qualitative information is
also achieved solid results in large structured financing
based on individual performances. The consolidation
and ABL (Asset Based Lending: a method for financing
of the above subsidiary has had a minor impact on the
inventories, trade receivables, equipment, or other
Company’s performance for the fiscal year under
income-generating business assets), areas which the
million. A decline in cancellations and disposals as well
avoiding leases because of the application of the new
review.
Company introduced in the fiscal year under review.
as increases in allowance for the loss on disposition of
lease accounting standards and changes in the
operating assets offset higher revenues such as
depreciation system for fiscal 2007. These factors
commissions derived from finance schemes.
would appear to suggest an increasingly difficult
In terms of profit and loss, although contracts
Operating Review
executed in our Leasing Business increased over the
The Japanese economy in the first half of the fiscal
The outlook for the Japanese economy during fiscal
turbulence stemming from the subprime lending
(3) Other Business
problem in the United States. The leasing industry is
also concerned about the impact of customers
Gross profit decreased 8.0% year on year, to ¥1,884
environment.
preceding year, they were concentrated in the second
year under review maintained a slow recovery enabled
half. As results, net sales fell 0.6% year on year, to
by rising capital spending and improved employment
¥264,112 million. Income before income taxes
Medium-Term Business Plan (running from fiscal 2008
led by steady corporate earnings. During the second
decreased to ¥6,044 million, because of an increase in
to fiscal 2010). The initial year of fiscal 2008 is an
half, however, the economy became increasingly
funding costs stemming from higher interest rates and
important period for building the foundations that will
uncertain in the face of continuing rises in prices of
an increase in doubtful accounts. Net income also fell
lead to the successful execution of the plan. To this
crude oil and other raw materials, disturbances in
by 3.1%, to ¥3,947 million.
end, the Company is focusing on improving profitability
financial markets stemming from the subprime lending
In response, the Company has prepared its Third
by bolstering its existing simple and effective business
A description of performance by business segment
problem in the United States, a strengthening yen,
model geared to sales finance. At the same time, we
follows:
falling stock prices, and other factors.
are committed to offering value-added solutions to
(1) Leasing Business
In the leasing industry, recent capital outlays for
customers by expanding our business portfolio into
Leases decreased 1.3% year on year, to ¥244,195
lease equipment have continued to decrease
million. Gross profit, after the deduction of funding
advantage of the NEC brand value, which lies in our
reflecting the severe circumstances. In the Company’s
costs, decreased 9.4% year on year, to ¥12,652 million
areas of core competence.
Leasing Business, however, leasing contracts
because of a substantial increase in funding cost
Contracts executed
by business
Leasing business
Other business
Loan business
Billion yen
600
500
400
541.7
2.4
472.8
469.2
3.3
3.0
Leasing business contracts
executed by equipment
Information and communication equipment
Office equipment Others
Billion yen
300
250.1
250
33.7
17.0
219.4
248.5
309.7
200
217.7
31.2
14.0
229.6
36.9
Operating assets
by business
Leasing business
Billion yen
668.0
700
90.2
600
Loan business
682.8
115.3
709.3
139.2
500
200
250.1
217.7
229.6
100
0
172.5
169.1
100
2007
2008
0
Leasing business
Other business
Loan business
Billion yen
300
264.1
265.3
265.7
17.1
17.3
16.4
250
1.8
1.9
2.8
2007
2008
0
Securitization Bonds CP
Long-term loans Short-term loans
Billion yen
664.6
700
0.5
629.1
629.7
0.6
10.0
600
Cost of funding ratio
Cost of funding ratio (%)
= Cost of funding ÷ average balance of
interest-bearing debts
%
1.2
1.01
1.0
0.77
370.4
384.2
400.1
0.8
400
246.2
577.8
567.5
570.1
247.4
244.2
0.6
100
50
2006
2007
2008
0
0.62
300
200
100
2006
Interest-bearing debts
500
200
50
2006
300
Revenue by business
150
150
199.4
Consequently, the Company forecasts net sales of
200
23.6
400
300
16
finance and asset services, and by taking full
substantially compared with levels of previous years,
0.4
172.0
206.0
230.0
0.2
100
70.0 7.3 37.0 1.3 34.0
2006
2007
2008
0
2006
2007
2008
0.0
2006
2007
2008
17
Operating and Financial Review
Consolidated Balance Sheet
NEC Leasing, Ltd. March 31, 2008
¥2,640 million, ordinary income of ¥6.5 billion, and net
assets associated with an increase in contracts
income of ¥3.8 billion for the fiscal year ending March
executed.
Assets
31, 2009.
(Cash Flows from Investing Activities)
Net cash used in investing activities was ¥17,234
3 Assets, Liabilities, and
Net Assets
million, with the outflow increasing ¥12,817 million from
the year-ago result. The principal factor was an
increase in investment securities acquired for the
efficient management of funds.
Total assets for the fiscal year ended March 31,
2008 increased by ¥48,213 million year on year, to
¥780,334 million.
Current assets increased by ¥30,147 million, to
(Cash Flows from Financing Activities)
Net cash provided by financing activities, part of
which was used for operating activities and investing
¥181,149 million, primarily reflecting an increase in
activities, was ¥34,543 million, with the inflow
outstanding loans, such as corporate finances and
increasing by ¥36,943 million from the year-ago result.
Current assets:
Cash and cash equivalents
Accounts receivable:
Installment sales
Loans (Note 11)
Leases
Other
Allowance for doubtful accounts
Deferred tax assets (Note 5)
Other
Total current assets
Millions of yen
Thousands of
U.S. dollars (Note 1)
2008
2008
¥ 13,202
$ 132,020
31,459
107,808
23,707
3
(1,624)
1,357
5,247
181,159
314,588
1,078,078
237,068
35
(16,244)
13,570
52,470
1,811,585
19,875
2,688
8,664
(1,874)
29,353
198,755
26,877
86,637
(18,736)
293,533
381,097
3,810,973
(2,842)
444
378,699
(28,420)
4,436
3,786,989
187,236
3,887
191,123
1,872,366
38,869
1,911,235
¥780,334
$7,803,342
factoring.
Fixed assets rose ¥18,065 million, to ¥599,185
million. The increase is primarily attributable to a
¥2,545 million increase in the outstanding leased
assets associated with a rise in contracts executed to
the end of the fiscal year and an increase in
investment securities of ¥14,603 million.
Investments and other assets:
Investment securities (Note 3)
Deferred tax assets (Note 5)
Other
Allowance for doubtful accounts
Total investments and other assets
Meanwhile, liabilities at the end of the fiscal year
were up ¥45,517 million, to ¥718,322 million. This
result was mainly a reflection of an increase in
commercial paper of ¥24,000 million from the year-ago
period. Net assets increased ¥2,696 million, to ¥62,012
million, mainly because of an increase in retrained
earnings.
4 Cash Flow Status
Cash and cash equivalents at the end of the fiscal
Property and equipment, net:
Leased assets
Allowance for loss on disposal of
leased property and equipment
Owned assets
Property and equipment, net
Intangible assets:
Computer programs leased to customers
Other
Total intangible assets
year under review increased by ¥5,401 million year on
year, to ¥13,196 million.
The following is a description of cash flows and
important factors:
Total assets
The accompanying notes are an integral part of these statements.
(Cash Flows from Operating Activities)
Net cash used in operating activities was ¥11,908
million, with the outflow increasing ¥8,776 million from
the year-ago result. The major factor in this result was
an increase in payments for the acquisition of lease
18
19
Consolidated Balance Sheet
Consolidated Statement of Income
NEC Leasing, Ltd. March 31, 2008
NEC Leasing, Ltd. Year ended March 31, 2008
Liabilities and net assets
Current liabilities:
Short-term borrowings (Note 4)
Current portion of long-term debt (Note 4)
Notes and accounts payable-trade (Note 11)
Accrued income taxes
Deposits received
Other
Total current liabilities
Long-term liabilities:
Long-term debt (Note 4)
Accrued retirement benefits (Note 7)
Other
Total long-term liabilities
Total liabilities
Millions of yen
Thousands of
U.S. dollars (Note 1)
Millions of yen
Thousands of
U.S. dollars (Note 1)
2008
2008
2008
2008
¥230,483
137,138
28,841
1,569
5,239
14,459
417,729
$2,304,828
1,371,381
288,406
15,694
52,387
144,595
4,177,291
¥244,195
2,771
17,150
264,116
$2,441,951
27,710
171,495
2,641,156
296,956
789
2,848
300,593
718,322
2,969,556
7,890
28,484
3,005,930
7,183,221
225,456
6,532
15,472
247,460
16,656
2,254,557
65,324
154,714
2,474,595
166,561
10,673
5,983
106,729
59,832
Net assets:
Shareholders’ equity
Common stock
Authorized: 86,000,000 shares
Issued: 21,533,400 shares
Capital surplus
Retained earnings
Treasury stock, at cost: 150 shares
Total shareholders’ equity
3,777
37,769
4,648
52,760
(0)
61,185
46,480
527,606
(4)
611,851
Valuation and translation adjustments
Net unrealized gain on other marketable securities
Deferred gains on hedging derivatives
Total valuation and translation adjustments
Total net assets
621
206
827
62,012
6,208
2,062
8,270
620,121
¥780,334
$7,803,342
Total liabilities and net assets
The accompanying notes are an integral part of these statements.
Revenues:
Leases
Loans and installment sales
Other
Total revenues
Costs:
Leases
Interest expense
Other
Total costs
Gross profit
Selling, general, and administrative expenses
Operating income
Other income (expenses):
Interest and dividend income
Interest expense
Other, net
Income before income taxes
Income taxes (Note 5):
Current
Deferred
Net income
Amounts per share:
Basic net income
Cash dividends applicable to the year
¥
31
(87)
116
6,043
304
(873)
1,164
60,427
3,186
(1,089)
2,097
31,861
(10,893)
20,968
3,946
$
39,459
Yen
U.S. dollars (Note 1)
2008
2008
¥183.25
44.00
$1.83
0.44
The accompanying notes are an integral part of these statements.
20
21
Consolidated Statement of Changes in Net Assets
Consolidated Statement of Cash Flows
NEC Leasing, Ltd. Year ended March 31, 2008
NEC Leasing, Ltd. Year ended March 31, 2008
Millions of yen
Balance at March 31, 2007
Net income
Cash dividends
Other, net
Balance at March 31, 2008
Capital
surplus
Retained
earnings
21,533 ¥3,777 ¥4,648 ¥49,762
–
–
–
3,946
–
–
–
(948)
–
–
–
–
21,533 ¥3,777 ¥4,648 ¥52,760
Treasury
stock
Net
Total
unrealized Deferred
gains on net assets
gain on
hedging
other
marketable derivatives
securities
¥(0) ¥1,115
–
–
–
–
–
(494)
¥(0) ¥ 621
¥ 15 ¥59,317
–
3,946
–
(948)
191
(303)
¥206 ¥62,012
Income before income taxes
Thousands of U.S. dollars (Note 1)
Shareholders’ Equity
Valuation and translation
adjustments
Capital
surplus
Net
Total
unrealized Deferred
gains on net assets
gain on
hedging
other
marketable derivatives
securities
$37,769 $46,480 $497,620
–
–
39,459
–
–
(9,473)
–
–
–
$37,769 $46,480 $527,606
Treasury
stock
$(4) $11,152 $ 148 $593,165
–
–
– 39,459
–
–
–
(9,473)
– (4,944) 1,914
(3,030)
$(4) $ 6,208 $2,062 $620,121
¥
6,043
$
60,427
net cash used in operating activities:
Depreciation and amortization
Decrease in allowance for losses on disposal of leased property
Increase in allowance for doubtful accounts
Loss on sales/disposal of leased assets
Proceeds from sales of leased assets
Balance at March 31, 2007
Net income
Cash dividends
Other, net
Balance at March 31, 2008
2008
Adjustments to reconcile income before income taxes to
Loss on valuation of investments securities
Retained
earnings
2008
Cash flows from operating activities:
Gain on sales of investment securities
Common
stock
Thousands of
U.S. dollars (Note 1)
Valuation and translation
adjustments
Shareholders’ Equity
Number of
shares
Common
issued
stock
(Thousands
of shares)
Millions of yen
Interest and dividend income
Interest expense
215,768
2,157,677
1,125
11,250
356
3,560
4,335
43,354
(196)
(1,955)
65
653
7,137
71,370
(29)
(295)
6,620
66,197
(5,690)
(56,895)
Increase in loans receivable
(18,322)
(183,224)
Purchases of leased assets
(228,257)
(2,282,571)
Increase in installment sales receivable
Other, net
Subtotal
Interest and dividend income received
Interest paid
Income taxes paid
Net cash used in operating activities
8,520
85,200
(2,525)
(25,252)
457
4,575
(7,055)
(70,551)
(2,790)
(27,897)
(11,913)
(119,125)
(949)
(9,493)
(16,661)
(166,606)
The accompanying notes are an integral part of these statements.
Cash flows from investing activities:
Purchases of owned assets
Purchases of investment securities
Other
386
3,859
(17,224)
(172,240)
Increase in short-term borrowings, net
23,891
238,906
Increase in long-term debt/bonds
74,115
741,148
(72,514)
(725,145)
10,000
100,000
Net cash used in investing activities
Cash flows from financing activities:
Repayment of long-term debt/bonds
Issuance of bond
Cash dividends paid
(948)
(9,473)
Net cash provided by financing activities
34,544
345,436
Net increase in cash and cash equivalents
5,407
54,071
Cash and cash equivalents at beginning of year
7,795
77,949
¥ 13,202
$ 132,020
Cash and cash equivalents at end of year
The accompanying notes are an integral part of these statements.
22
23
Notes to Consolidated Financial Statements
Annual Report 2008
NEC Leasing, Ltd. Year ended March 31, 2008
1. Basis of Presentation
NEC Leasing, Ltd. (the “Company”) maintains its
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 (formerly, the Securities
and Exchange Law of Japan) and in conformity
with accounting principles generally accepted in
Japan (“Japanese GAAP”), which are different in
certain respects as to the application and
disclosure requirements of International Financial
Reporting Standards. The accompanying
consolidated financial statements have been
compiled from the consolidated financial
statements which were filed with the Director of the
Kanto Local Finance Bureau as required by the
Financial Instruments and Exchange Law of Japan.
In preparing the accompanying consolidated
financial statements, certain reclassifications and
rearrangements have been made to the
consolidated financial statements issued
domestically in order to present them in a format
that is more familiar to readers outside Japan.
The translation of Japanese yen amounts into
U.S. dollar amounts is included solely for
convenience, as a matter of arithmetic computation
only, at ¥100=U.S.$1.00, the approximate rate of
exchange in effect on March 31, 2008. This
translation should not be construed as a
representation that Japanese yen amounts have
been, could have been, or could in the future be,
converted into U.S. dollar amounts at this or any
other rate.
2. Summary of Significant
Accounting Policies
a) Consolidation
The consolidated financial statements include
the accounts of the following consolidated
subsidiary for the year ended March 31, 2008:
Consolidated subsidiary—NL Asset Service, Ltd.
The consolidated subsidiary closes its book at
March 31, the same financial year as the
Company. All significant intercompany balances
and transactions have been eliminated in
consolidation.
b) Revenue recognition
Leases:
Rental revenues from lease contracts with
customers are recognized at the time the payments
under the leases are due as stipulated in the lease
contracts without regard to the actual collection of
the rent. All leases are accounted for as operating
leases.
Installment sales:
Operating revenues from installment sales and
the related costs are recognized at the time of the
contracts, and income on such contracts is
deferred and allocated over the contract periods as
the related installment receivables become due.
c) Allocation of interest expense
Interest expense on borrowings is allocated to
operating expenses and other expenses based on
the balances of the respective assets relating to
operating and other activities. Interest expense is
classified as an operating expense and is recorded
net of the corresponding interest income from the
respective operating assets.
d) Allowance for doubtful accounts
Allowance for doubtful accounts is recorded
based on historical experience to provide for
provable losses on bad debts related to receivables
in the normal course of business, and at an
estimate of the uncollectible amounts after a review
of the collectibility of specific doubtful receivables.
24
e) Allowance for loss on disposal of
leased assets
Allowance for loss on disposal of leased assets
is recorded based on historical experience in order
to provide for provable losses on bad debts related
to ordinary assets, and at an estimated amount
based on a review of the leased assets to be
disposed of.
f) Cash and cash equivalents
Cash and cash equivalents consist of callable
cash deposits at banks and short-term investments
with original maturities of three months or less
which are readily convertible into cash with only an
insignificant risk of any change in their value.
g) Lease accounting
The Company accounts for all finance leases as
operating leases, except when the leased property
is to be transferred to the lessee. Under the
Japanese accounting standard for leases, finance
leases which transfer the ownership of the leased
property to the lessee are to be capitalized,
whereas other finance leases are permitted to be
accounted for as operating leases if certain “as if
capitalized” information is disclosed in the notes to
the consolidated financial statements.
The leased assets and computer programs
leased to customers are initially recorded at
acquisition cost and depreciated over the term of
each lease on a straight-line basis.
h) Marketable and investment securities
Marketable and investment securities are
classified into two categories. These securities are
accounted for as follows:
1. Held-to-maturity securities
Held-to-maturity securities are stated at
amortized cost.
2. Available-for-sale securities
Marketable available-for-sale securities are
reported at fair value, with any unrealized gain or
loss, net of the applicable taxes, reported as a
separate component of net assets. The cost of
securities sold is determined by the movingaverage method. Non-marketable available-for-
sale securities are stated at cost determined by
the moving-average method.
i) Property and equipment
Property and equipment owned and used by the
Company is stated at cost less accumulated
depreciation. Depreciation of owned assets is
computed by the declining-balance method over
the respective useful lives of the assets which
range from five to six years.
j) Computer software
Costs related to software purchased for internal
use are amortized by the straight-line method over
an estimated useful life of five years.
k) Accounting for derivatives
The Company utilizes derivative financial
instruments principally in order to mitigate the risk
of fluctuation in interest rates on borrowings. The
Company has established entity level controls
which includes policies and procedures for risk
assessment in accordance with the Company’s
rules for interest-rate swap transactions. Under
these rules, the Company conducts transactions
within a certain range and places limits on the
applicable assets and liabilities based on the actual
demand. In addition, the Company also assesses
the effectiveness of the hedging and verifies the
approval, reporting and monitoring of all
transactions involving derivatives. The Company
does not hold or issue derivative financial
instruments for trading purposes. Derivatives are
carried at fair value with any changes in unrealized
gain or loss credited or charged to operations,
except for those which meet the criteria for deferral
hedge accounting under which unrealized gain or
loss is deferred as a separate component of net
assets.
l) Retirement benefit plan
Employees’ retirement benefits:
The Company has a defined-benefit corporate
pension plan which is essentially a defined-benefit
plan with guaranteed benefits and definedcontribution pension plan as well as a severance
25
Notes to Consolidated Financial Statements
Annual Report 2008
NEC Leasing, Ltd. Year ended March 31, 2008
indemnity plan covering virtually all employees
other than directors and corporate auditors. Under
the terms of these plans, eligible employees upon
retirement are entitled to lump-sum severance
payments or annuity pension payments based on
their level of compensation upon termination and
their years of service with the Company. To provide
a portion of the lump-sum benefits or annuity
payments, the Company participates in the NEC
corporate pension fund established for NEC group
companies in accordance with the Welfare Pension
Insurance Law.
Accrued retirement benefits have been provided
for employees’ retirement benefits, based on an
estimate of the projected benefit obligation and the
pension plan assets at the end of the year.
3. Investment Securities
4. Short-Term Borrowings and
Long-Term Debt
Investment securities at March 31, 2008
consisted of the following:
Non-current:
Available-for-sale securities
Held-to-maturity securities
Non-marketable securities
Total
Millions of yen
Thousands of
U.S. dollars
2008
2008
¥ 1,760
15,000
3,115
¥19,875
$ 17,598
150,000
31,157
$198,755
The acquisition cost and aggregate fair value of
securities with readily determinable market value at
March 31, 2008 were as follows:
Acquisition
cost
Unrealized
gain
Unrealized
loss
Fair value
Millions of yen
m) Income taxes
Income taxes are calculated based on taxable
income and charged to income on an accrual
basis. Deferred income tax assets and liabilities are
calculated to determine the temporary differences
between the financial reporting and the tax bases
of the assets and liabilities which will result in
taxable or deductible amounts in the future.
Calculations of deferred tax assets and liabilities
are based on the enacted tax laws.
Available-for-sale
securities:
Equity securities
¥712
Acquisition
cost
¥1
Unrealized
gain
Unrealized
loss
¥1,760
$7,120
$10,486
$8
$17,598
Unrealized
gain
Unrealized
loss
Fair value
Millions of yen
Held-to-maturity
securities:
Debt securities
¥15,000
–
¥3,006
2008
2008
¥
483
230,000
¥230,483
$
4,828
2,300,000
$2,304,828
Weightedaverage
interest rate
2.85%
0.79%
–
Long-term debt at March 31, 2008 consisted of
the following:
Long-term loans,
principally from banks
Unsecured bonds
Total
Less current portion
Millions of yen
Thousands of
U.S. dollars
2008
2008
¥400,094
34,000
434,094
137,138
¥296,956
$4,000,937
340,000
4,340,937
1,371,381
$2,969,556
Weightedaverage
interest rate
1.26%
1.33%
–
–
–
The aggregate annual maturities of long-term
debt subsequent to March 31, 2008 are
summarized as follows:
Year ending March 31,
2009
2010
2011
2012
2013
2014 and thereafter
Millions of yen
Thousands of
U.S. dollars
¥137,138
88,439
77,287
67,009
47,800
16,421
¥434,094
$1,371,381
884,392
772,869
670,091
477,992
164,212
$4,340,937
No assets were pledged as collateral for secured
debt at March 31, 2008.
Carrying
amount
Held-to-maturity
securities:
Debt securities
Unrealized
gain
Unrealized
loss
Fair value
$150,000
–
$30,060
$119,940
Non-marketable securities whose fair value was
not readily determinable at March 31, 2008 were as
follows:
Carrying value
Non-marketable securities:
Equity securities
Other
Total
26
Thousands of
U.S. dollars
¥11,994
Thousands of U.S. dollars
Cash dividends per share presented in the
accompanying statements of income, including the
dividends to be paid subsequent to the end of the
year, are stated as applicable to the respective
years.
Short-term loans
from banks
Commercial paper
Total
Millions of yen
Fair value
Held-to-maturity securities with readily
determinable market value at March 31, 2008 were
as follows:
n) Per share data
Diluted net income per share has not been
disclosed because no potentially dilutive shares
were outstanding.
Short-term borrowings at March 31, 2008 were
as follows:
Thousands of U.S. dollars
Available-for-sale
securities:
Equity securities
Carrying
amount
Basic net income per share is calculated by
dividing the net income available to shareholders of
common stock by the weighted-average number of
shares of common stock outstanding during for the
year.
¥1,049
5. Income Taxes
Millions of yen
Thousands of
U.S. dollars
2008
2008
¥2,675
440
¥3,115
The Company is subject to Japanese national
and local income taxes which, in the aggregate,
resulted in a statutory tax rate of approximately
40.5% for the year ended March 31, 2008.
The tax effects of significant temporary
differences which resulted in deferred tax assets
and liabilities at March 31, 2008 were as follows:
Millions of yen
Thousands of
U.S. dollars
2008
2008
Deferred tax assets:
Property and equipment
Allowance for doubtful accounts
Accrued retirement benefits for employees
Accrued bonuses
Accrued business tax
Other
Total deferred tax assets
¥1,320
766
320
215
126
1,858
¥4,605
$13,202
7,657
3,195
2,154
1,263
18,581
$46,052
Deferred tax liabilities:
Net unrealized gain on other marketable
securities
Other
Total deferred tax liabilities
Net deferred tax assets
(420)
(140)
(560)
¥4,045
(4,202)
(1,403)
(5,605)
$40,447
Reconciliation between the statutory income tax
rate and the effective income tax rate as a
percentage of income before income tax and
minority interests is as follows:
2008
Statutory income tax rate
Expenses not deductible for tax purposes
Per capita inhabitants tax
Increase in deferred tax asset due to valuation of allowance
Other
Actual effective income tax rate
40.5%
0.4
0.2
(6.1)
(0.3)
34.7%
At March 31, 2008, the Company had overdraft
facilities or line-of-credit agreements with 29
financial institutions which were set up in order to
procure working capital effectively. The unused
committed lines of credit under such agreements at
March 31, 2008 totaled ¥188,929 million
($1,889,286 thousand).
$26,754
4,403
$31,157
27
Notes to Consolidated Financial Statements
Annual Report 2008
NEC Leasing, Ltd. Year ended March 31, 2008
6. Derivatives
(1) Objectives of derivative instruments
The Company enters into derivative instruments
including interest rate swaps associated with its
financing activities, and credit default swaps and
currency-linked derivatives that are embedded in
structured bonds associated with its investing
activities.
The Company’s operating assets are comprised
principally of those with fixed income such as
leased assets. However, it primarily utilizes
variable-rate debt obligations to raise its funds. The
variable-rate debt obligations expose the Company
to variability in cash flows as well as profit margin
due to change in interest rates. To manage the
variability in cash flows caused by interest rate
changes, the Company enters into interest rate
swaps. The Company does not hold and issue
derivative instruments for trading purposes. The
Company accounts for the interest rate swaps by
using the hedge accounting, which is more fully
discussed in note 2. k).
Hedging instruments and hedged items are as
follows:
Hedging instruments: interest rate swaps
Hedged items: variable-rate debt obligations
The Company evaluates risk of default as well as
other characteristics of derivative instruments
embedded within its structured bonds.
instruments since the counterparties are
internationally recognized financial institutions with
limited risk of default.
Credit default swaps and currency-linked
derivatives embedded in structured bonds are
exposed to market risks and credit risks. The
market risks include risks of decline in the market
value of the structured bonds as well as reduction
in future interest income to be received due to
changes in foreign exchange and credit default
swaps markets. Credit risks include risks that
principal amounts of debt securities are not repaid
upon an occurrence of credit events under the
credit default swap agreement. However, the
Company monitors the credit default swap market
to assess and evaluate the likelihood of credit
events.
The Company enters into derivative instruments
in accordance with its internal policies. The policies
include the objectives for derivative instruments,
risk management policies and procedures
(including authorization, responsibilities and
reporting). In addition, the Company maintains
segregation of duties by assigning different
employees in the Finance Business Division with
the authority to enter into derivative instruments
separate from employees responsible for
bookkeeping.
March 31, 2008
Amount of
Contract
Gain
Loss
Fair value
Millions of yen
The nature of the Company’s derivative
instruments generally have both market and credit
risks. The Company primarily uses pay-fixed,
receive-variable interest rate swaps to effectively
change variable-rate debt obligations to fixed-rate
debt obligations. Through these swaps, market
risks resulted from mismatching cash due under
borrowings and cash collected from lessees and
other debtors are offset against the effect of
hedging derivative instruments. Due to the hedging
objectives, gains or losses from derivative
instruments caused by market risks will not
significantly affect the Company’s operating results.
The Company does not expect an event of nonperformance by counterparties to derivative
28
8. Lease Transactions
The Company has a defined-benefit corporate
pension plan, which consists of a defined-benefit
plan with guaranteed benefits and definedcontribution pension plan, as well as a severance
indemnity plan covering virtually all employees
other than directors and corporate auditors. Under
the terms of these plans, eligible employees are
entitled to lump-sum payments or annuity
payments based on their level of compensation
upon termination and their years of service with the
Company.
Finance leases which do not transfer ownership
to the lessees are accounted for in the same
manner as operating leases. Information relating to
finance leases of the Company as of and for the
year ended March 31, 2008 is summarized as
follows:
In April 2007, the Company transferred part of
the defined-benefit pension plans to definedcontribution pension plans. No past service liability
has been incurred as a result of the transfer to
defined-contribution pension plans.
(3) Risk management policy
Structured debt at fair value at March 31, 2008
was as follows:
(2) Risks associated with derivative
instruments
7. Accrued Retirement Benefits
Credit default swap and
others
March 31, 2008
¥7,000
Amount of
Contract
–
Gain
¥352
¥6,648
Loss
Fair value
Accrued retirement benefits for employees at
March 31, 2008 consisted of the following:
Reconciliation
Projected benefit obligation
Fair value of pension plan assets
Unfunded retirement benefit obligation
Unrecognized actuarial loss
Accrued retirement benefits
Millions of yen
Thousands of
U.S. dollars
2008
2008
¥(2,509)
1,439
(1,070)
281
¥ (789)
$(25,091)
14,389
(10,702)
2,812
$ (7,890)
Millions of yen
Thousands of
U.S. dollars
2008
2008
The Company as lessor:
Acquisition cost
Accumulated depreciation
Net carrying amount
¥1,226,397 $12,263,972
660,849
6,608,492
¥ 565,548 $ 5,655,480
Future lease payments
Future lease payments due within one year
¥ 575,403 $ 5,754,029
198,480
1,984,800
Rental revenues
Depreciation expense
Rental revenues attributable to
finance income
¥ 229,566 $ 2,295,658
166,578
1,665,780
The Company as lessee:
Acquisition cost
Accumulated depreciation
Net carrying amount
17,743
¥
¥
177,427
218 $
178
40 $
2,182
1,779
403
Future lease payments
Future lease payments due within one year
¥
44 $
33
441
333
Lease payments
Depreciation expense
Lease payments attributable to
interest expense
¥
47 $
42
469
417
3
35
The components of net periodic benefit costs for
the year ended March 31, 2008 were as follows:
Components of net periodic
retirement benefit expense:
Service cost
Interest cost
Expected return on pension plan assets
Amortization of actuarial loss
Amortization of prior service cost
Other
Net periodic retirement benefit expense
Millions of yen
Thousands of
U.S. dollars
2008
2008
¥127
62
(41)
57
–
27
¥232
$1,267
617
(413)
575
–
271
$2,317
Thousands of U.S, Dollars
Credit default swap and
others
$70,000
–
$3,515
$66,485
1. The fair value is determined based on quoted
prices provided by dealers and other financial
institutions.
2. Credit default swaps are derivatives embedded
in structured debt.
3. The structured debt is carried at fair value, and
any unrealized losses are included in net
income.
The major assumptions used in the calculation of
the projected benefit obligation were as follows:
2008
Method of attributing projected
benefits to years of service
Discount rate at end of year
Expected rate of return on pension plan assets
Amortization of prior service cost
Point basis and
straight-line method
2.5%
2.5%
Charged to income
for the year
Amortization of actuarial gain (loss)
Charged to income
for the following year
29
Notes to Consolidated Financial Statements
Annual Report 2008
NEC Leasing, Ltd. Year ended March 31, 2008
9. Segment Information
10. Legal Reserve and Retained
Earnings, and Dividends
a) Industry Segments
2008
Leasing
Loans
Other
Total
Elimination and/or
corporate
Consolidated
Millions of yen
Revenues
Revenues from customers
Intersegment revenues
Total
¥244,195
–
244,195
¥
2,771
–
2,771
¥17,150
0
17,150
¥264,116
0
264,116
Operating expenses
Operating income
238,239
5,956
2,109
662
16,951
199
257,299
6,817
Assets
Depreciation
Capital expenditures
593,766
215,291
230,224
142,263
175
140
21,210
202
161
757,239
215,668
230,525
Leasing
Loans
2008
Other
Total
¥
–
(0)
(0)
¥264,116
–
264,116
834
(834)
258,133
5,983
23,095
100
80
Elimination and/or
corporate
780,334
215,768
230,605
The Law provides that earnings in an amount
equal to at least 10 percent of appropriations of
retained earnings to be paid as dividends should
be appropriated as a capital surplus or a legal
reserve until the total of capital surplus and legal
reserve equals 25 percent of stated common stock.
In addition to transfer from capital surplus to stated
common stock, either capital surplus or legal
reserve may be available for dividends by
resolution of the shareholders’ meeting.
12. Subsequent Event
On April 28, 2008, the Company established
Reboot Technology Services Limited, a 50%
owned joint venture with Macquarie Capital
Finance Japan Limited. The total amount of
invested capital was ¥100 million.
Consolidated
Thousands of dollars
Revenues
Revenues from customers
Intersegment revenues
Total
$2,441,951
–
2,441,951
$27,710
–
27,710
$171,495
4
171,499
$2,641,156
4
2,641,160
Operating expenses
Operating income
2,382,386
59,565
21,091
6,619
169,509
1,990
2,572,986
68,174
Assets
Depreciation
Capital expenditures
5,937,656
2,152,903
2,302,243
1,422,634
1,750
1,397
212,098
2,022
1,615
7,572,388
2,156,675
2,305,255
•Segment categories are defined according to lines
of business.
•Business segments are classified as follows:
a) Leasing—leasing of office equipments and
industrial machinery, etc.
b) Loans—loans, factoring and installment sales,
etc.
c) Other—sales of used equipments of off-leased
or terminated leasing contract and collection of
maintenance fees, etc.
•Operating expenses unable to be distributed to a
certain segment in elimination and/or corporate
are ¥834 million ($8,341 thousand); a large portion
of these expenses are selling, general, and
administrative expenses used for administrative
departments.
•Assets for whole company in elimination and/or
corporate are ¥23,105 million ($231,055
thousand), and a large portion of these assets are
extra funds (cash and cash equivalents) and longterm investments (investment securities).
•Capital expenditures include payments for longterm prepaid expenses.
30
$
–
(4)
(4)
$2,641,156
–
2,641,156
8,338
(8,342)
2,581,324
59,832
230,954
1,002
800
7,803,342
2,157,677
2,306,055
b) Geographical Segments
The Company has no subsidiaries or branches in
foreign countries.
c) Revenues from Foreign Customers
There is no revenue from foreign customers.
11. Related Party Transactions
The year ended March 31, 2008:
The Company procured equipment for lease
transactions from NEC Corporation, at transaction
amount of ¥64,040 million ($640,400 thousand)
and the outstanding balance of ¥17,035 million
($170,352 thousand) at the year end has been
included in “Accounts payable-trade.” The
Company entered into factoring contracts with NEC
Corporation at transaction amount of ¥17,483
million ($174,826 thousand) and the outstanding
balance of ¥3,639 million ($36,386 thousand) at the
year end has been included in “Accounts
receivable-loans.” The Company also entered into
factoring contracts with certain group companies,
(NEC Saitama, Ltd., NEC Personal Products, Ltd.,
and NEC Wireless Networks, Ltd.) at aggregate net
investments of ¥11,043 million ($110,432
thousand), ¥9,685 million ($96,849 thousand), and
¥9,081 million ($90,815 thousand), respectively,
and the outstanding balances at the year end have
been included in “Accounts receivable-loans” of
¥3,750 million ($37,504 thousand), ¥1,756 million
($17,563 thousand) and ¥2,006 million ($20,056
thousand), respectively.
The Company procured equipment for lease
transactions from a group company, NEC
Nexsolutions, Ltd. at transaction amount of ¥8,633
million ($86,333 thousand) and the outstanding
balance of ¥1,498 million ($14,983 thousand) at the
year end has been was included in “Accounts
payable-trade.”
31
Non-Consolidated Balance Sheets (Non-Audited)
Annual Report 2008
NEC Leasing, Ltd. March 31, 2008 and 2007
Thousands of
U.S. dollars (Note 1)
Millions of yen
Assets
Current assets:
Cash and cash equivalents
Accounts receivable:
Installment sales
Loans
Leases
Other
Allowance for doubtful accounts
Deferred tax assets
Other
Total current assets
Investments and other assets:
Investment securities
Investments in stocks of subsidiaries and affiliated
companies
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Property and equipment, net:
Leased assets
Allowance for loss on disposal of leased property and
equipment
Owned assets
Property and equipment, net
Intangible assets:
Computer programs leased to customers
Other
Total intangible assets
Total assets
32
2008
¥ 13,196
31,459
107,808
23,706
0
(1,624)
1,357
5,247
181,149
2007
¥
7,795
25,771
89,485
24,267
33
(1,262)
1,124
3,788
151,001
2008
$ 131,964
314,588
1,078,078
237,066
0
(16,244)
13,570
52,470
1,811,492
19,876
5,272
198,755
10
2,687
8,664
(1,874)
29,363
–
1,623
9,323
(1,880)
14,338
100
26,874
86,638
(18,736)
293,631
381,097
381,307
3,810,973
(2,842)
444
378,699
(1,944)
557
379,920
(28,420)
4,436
3,786,989
187,237
3,887
191,124
182,830
4,032
186,862
1,872,366
38,869
1,911,235
¥780,335
¥732,121
$7,803,347
Thousands of
U.S. dollars (Note 1)
Millions of yen
Liabilities and net assets
Current liabilities:
Short-term borrowings
Current portion of long-term debt
Notes and accounts payable – trade
Accrued income taxes
Deposits received
Other
Total current liabilities
Long-term liabilities:
Long-term debt
Accrued retirement benefits
Other
Total long-term liabilities
Total liabilities
2008
2007
2008
¥230,483
137,138
28,841
1,569
5,239
14,459
417,729
¥206,592
71,291
24,619
1,321
3,146
12,329
319,298
$2,304,829
1,371,381
288,406
15,693
52,387
144,594
4,177,290
296,956
789
2,848
300,593
718,322
351,202
757
1,547
353,506
672,804
2,969,556
7,890
28,483
3,005,929
7,183,219
Net assets:
Shareholders’ equity
Common stock
Authorized: 86,000,000 shares
Issued: 21,533,400 shares
Capital surplus
Retained earnings
Treasury stock, at cost: 150 shares
Total shareholders’ equity
3,777
3,777
37,769
4,648
52,761
(0)
61,186
4,648
49,762
(0)
58,187
46,480
527,613
(4)
611,858
Valuation and translation adjustments
Net unrealized gain on other marketable securities
Deferred gains on hedging derivatives
Total valuation and translation adjustments
Total net assets
621
206
827
62,013
1,115
15
1,130
59,317
6,208
2,062
8,270
620,128
¥780,335
¥732,121
$7,803,347
Total liabilities and net assets
33
Non-Consolidated Statements of Income (Non-Audited)
Non-Consolidated Statement of Changes in Net Assets (Non-Audited)
NEC Leasing, Ltd. Years ended March 31, 2008 and 2007
NEC Leasing, Ltd. Year ended March 31, 2007
Thousands of
U.S. dollars (Note 1)
Millions of yen
2008
Revenues:
Leases
Loans and installment sales
Other
Total revenues
Costs:
Leases
Interest expense
Other
Total costs
Gross profit
¥247,390
1,889
16,460
265,739
$2,441,951
27,711
171,460
2,641,122
225,443
6,532
15,481
247,456
16,656
228,649
4,853
14,662
248,164
17,575
2,254,425
65,324
154,810
2,474,559
166,563
10,672
5,984
10,543
7,032
106,722
59,841
30
(87)
117
6,044
32
(52)
(233)
6,779
304
(872)
1,163
60,436
3,186
(1,089)
2,097
2,516
189
2,705
31,860
(10,890)
20,970
Other income (expenses):
Interest and dividend income
Interest expense
Other, net
Income before income taxes
Income taxes:
Current
Deferred
¥
3,947
¥
4,074
Yen
Amounts per share:
Basic net income
Cash dividends applicable to the year
34
2008
¥244,195
2,771
17,146
264,112
Selling, general, and administrative expenses
Operating income
Net income
2007
Millions of yen
$
Valuation and translation
adjustments
Shareholders’ Equity
Number of
shares
Common
issued
stock
(Thousands
of shares)
Balance at March 31, 2006
Net income
Cash dividends
Other, net
Balance at March 31, 2007
Capital
surplus
Retained
earnings
21,533 ¥3,777 ¥4,648 ¥46,635
–
–
–
4,074
–
–
–
(947)
–
–
–
–
21,533 ¥3,777 ¥4,648 ¥49,762
Treasury
stock
Net
Total
unrealized Deferred
gains on net assets
gain on
hedging
other
marketable derivatives
securities
¥(0) ¥1,044
–
–
–
–
–
71
¥(0) ¥1,115
– ¥56,104
–
4,074
–
(947)
15
86
¥15 ¥59,317
39,466
U.S. dollars (Note 1)
2008
2007
¥183.28
44.00
¥189.21
44.00
2008
$1.83
0.44
35
Non-Consolidated Statement of Cash Flows (Non-Audited)
NEC Leasing, Ltd. Year ended March 31, 2007
Millions of yen
2007
Cash flows from operating activities:
Income before income taxes
¥
6,779
Adjustments to reconcile income before income taxes to net cash
used in operating activities:
Depreciation and amortization
217,566
Decrease in allowance for losses on disposal of leased property
(77)
Increase in allowance for doubtful accounts
240
Loss on sales/disposal of leased assets
5,622
Proceeds from sales of leased assets
5,830
Interest and dividend income
(31)
Interest expense
4,905
Increase in installment sales receivable
(887)
Increase in loans receivable
(24,227)
Purchases of leased assets
(215,460)
Other, net
5,092
Subtotal
5,352
Interest and dividend income received
31
Interest paid
(5,026)
Income taxes paid
(3,488)
Net cash used in operating activities
(3,131)
Cash flows from investing activities:
Purchases of owned assets
(2,077)
Other
(2,340)
Net cash used in investing activities
(4,417)
Cash flows from financing activities:
Increase in short-term borrowings, net
24,592
Increase in long-term debt/bonds
96,616
Repayment of long-term debt/bonds
(122,661)
Cash dividends paid
(947)
Net cash used in financing activities
Net decrease in cash and cash equivalents
(9,948)
Cash and cash equivalents at beginning of year
17,743
Cash and cash equivalents at end of year
36
(2,400)
¥
7,795
37
Corporate Information
Stock Information
(as of March 31, 2008)
(as of March 31, 2008)
Corporate data
Stock information
Operation Started
November 30, 1978
Paid-in Capital
¥3,776 million
Representative
Tomoyuki Kato, President
Employees
465
Main Business
Leasing business
86,000,000 shares
Number of shares issued
21,533,400 shares
Number of shares of one unit
100 shares
Number of shareholders
Leasing of information and communication equipment,
office equipment, industrial equipment and various other equipment
Main Banks
Number of shares authorized
5,618
Principal shareholders
Shareholders
Number of shares
(Thousands)
Voting rights
(%)
Installment sales and factoring, business loans, collection agency
NEC Corporation
8,110
37.66
services, and others
Sumitomo Mitsui Finance and Leasing Co., Ltd.
5,390
25.03
Sumitomo Mitsui Banking Corporation
The Master Trust Bank of Japan, Ltd.
904
4.20
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Goldman Sachs International
847
3.94
The Sumitomo Trust and Banking Co., Ltd.
Japan Trustee Services Bank, Ltd.
445
2.07
Mizuho Corporate Bank, Ltd.
Trust & Custody Services Bank, Ltd.
373
1.73
The Norinchukin Bank, and others
Northern Trust Company (AFVC) Sub-account American Clientst
341
1.59
The Nomura Trust and Banking Co., Ltd.
237
1.10
The Sumitomo Trust and Banking Co., Ltd.
229
1.07
Citibank London S.A. Stitching Shell Pension Fund
227
1.06
Network
Head Office
Branches
Offices
Hokkaido Branch
Kanagawa Branch
Kobe Branch
Aomori Office
Tohoku Branch
Shizuoka Branch
Chugoku Branch
Yamagata Office
Nishitokyo Branch
Chubu Branch
Shikoku Branch
Hamamatsu Office
Kanto Branch
Hokuriku Branch
Kyushu Branch
Fukui Office
Niigata Branch
Kansai Branch
Kumamoto Branch
Oita Office
Chiba Branch
Kyoto Branch
Minamikyushu Branch
Nagasaki Office
Share distribution
by type of shareholder
Individuals / private and
other investors
Securities companies
0.39%
8.80%
Financial institutions
13.70%
Miyazaki Office
Non-resident investors
Other corporations
14.27%
IR information
http://www.nec-lease.co.jp/english/index.html
Stock price and trading volume
62.84%
(From April 2007 to June 2008)
Stock price (Yen)
Trading volume (Thousands of shares)
3,000
1,000
2,400
800
1,800
600
1,200
400
600
200
The Company offers ample IR information to its
shareholders and investors through the Company’s website.
The website discloses useful information such as its
management policies, financial results, share information
and other information for the shareholders and investors to
better understand the Company.
0
4
2007
38
5
6
7
8
9
10
11
12
1
2
3
4
5
6
0
2008
39
NEC Leasing, Ltd.
NEC Sumisei Bldg, 29-11, Shiba 5-chome, Minato-ku, Tokyo 108-0014, Japan
Tel. +81 (0)3-5476-5625
http://www.nec-lease.co.jp/
This annual report is printed on recycled paper.
Printed in Japan