Orico FH 04 · Consumer Credit Co., Ltd. APRIL 1969 Consumer Credit business started. OCTOBER 1971 Guarantee and Loan Agent Services business started. OCTOBER 1972 Cashing business

Profile

50th Anniversary of Orico’s Founding .......................................................... 01

To Our Shareholders ..................................................................................... 02

Topics ........................................................................................................... 06

Business Activities ......................................................................................... 08

Management’s Discussion and Analysis ...................................................... 010

Consolidated Statements of Income ............................................................. 13

Consolidated Balance Sheets ......................................................................... 14

Consolidated Statements of Shareholders’ Equity ......................................... 16

Consolidated Statements of Cash Flows ....................................................... 17

Notes to the Consolidated Financial Statements ........................................... 18

Report of Independent Auditors ................................................................... 30

Financial Summary ....................................................................................... 31

Operating Assets by Products (Non-Consolidated) ....................................... 32

Corporate Directory ..................................................................................... 34

Shareholders’ Information ............................................................................ 35

Cautionary Remark Regarding Forward-Looking StatementsStatements made in this document with respect to Orico’s plans,strategies and beliefs, and other statements that are not historicalfacts, are forward-looking statements based on the assumptions andbeliefs of the Company’s management in light of the informationcurrently available to it and involve risks and uncertainties that mayaffect the Company’s future performance. Potential risks anduncertainties in Orico’s areas of business include, without limitation,social, economic and financial conditions.

NoteReflecting revisions to accounting procedures in Japan, Oriconow discloses its consolidated results. However, for the purposeof allowing readers to make comparisons with the Company’sperformance in previous years, the text portion of this year’s annualreport will also include non-consolidated results.

Contents

The Orico Group consists ofOrient Corporation (Orico),37 consolidated subsidiariesand two equity-methodaffiliates. The Orico Group’smain operations are financialservices, including consumercredit, credit cards, andothers. The Orico Groupalso offers debt collectionand servicing, runs atemporary employmentservice and offers a widevariety of other services tomeet customers’ needs.

As one of the largestconsumer finance companiesin Japan, Orico providesconsumer credit, creditcards, guarantee and loanagent services, and directcash loans through anetwork of 195 domesticbranches. These financialservices are also availablenationwide through morethan 609,000 membermerchants.

Orico’s business datesback to 1954, whenHiroshima Coupon wasfounded. In 1974, allbusinesses were merged andsucceeded by Orient Finance,former name of Orico, whichwas incorporated in 1951.

150th

1950

1960

1970

1980

1990

DECEMBER 1954Hiroshima Coupon established.Installment sales business with coupons(currently Credit Cards Shopping) started.

MAY 1967Trade name changed to HiroshimaConsumer Credit Co., Ltd.APRIL 1969Consumer Credit business started.

OCTOBER 1971Guarantee and Loan Agent Servicesbusiness started.OCTOBER 1972Cashing business started.

APRIL 1974Trade name changed to Orient Finance Co.,Ltd. as a result of a merger with OrientFinance Co., Ltd.JANUAR Y 1977As a divisional operation in the Guaranteeand Loan Agent Services, housing loan busi-ness started.

JULY 1977Head office moved to Tokyo from HiroshimaPrefecture.

OCTOBER 1977Stock listed on the Second Section of theTokyo Stock Exchange.NOVEMBER 1978As a divisional operation in the Guarantee andLoan Agent Services, auto loan businessstarted.

SEPTEMBER 1979Designation of listed section changed to theFirst Section of the Tokyo Stock Exchange andto the First Section of the Osaka SecuritiesExchange.MARCH 1981Handling of loan cards exclusively availablefor financing started.

NOVEMBER 1983As a divisional operation in the Guaranteeand Loan Agent Services, loan guaranteebusiness for loans to individuals by financialinstitutions started.JANUAR Y 1989Orico UC MasterCard launched.

JULY 1989Orico UC/VISA Card and Orico JCB Cardlaunched.OCTOBER 1989Renamed to Orient Corporation.

APRIL 1992Fee Collection business started.NOVEMBER 1993Study on trust-type securitization ofreceivables started.

APRIL 1995Long-term business plan (first three-yearplan) started.SEPTEMBER 1996ABS issued for the first time in Japan.

APRIL 1997Card Business Division newly established(to substantially reinforce the card business).Internet auction business started.APRIL 1998Long-term business plan (second three-yearplan) started.

JANUAR Y 1999Servicer business through a subsidiary started.FEBRUAR Y 1999MasterCard acquiring business started.

MARCH 1999Internet shopping business added to theCompany’s operations and the OricoMallopened.APRIL 2000Long-term business plan (third five-yearplan) started.

Orico Gold MasterCard launched.MARCH 2001Common stockincreased via allocationof new shares to a thirdparty (¥43.3 billion).OCTOBER 2001The number of totalOrico cardholdersexceeded 10 million.

APRIL 2002“Big Wave 50” (three-year plan) started.AUGUST 2002New preferred shares issued to a third party(¥200.0 billion).

Back Up Selefty, a deferred-type auto loan thatguarantees a vehicle’s value up to three yearsafter the purchase of a new car, launched.APRIL 2003“NEXT 50” (two-year plan) started.

Orico Card UPty, for which every customercan freely decide how to repay his/her loan,launched.JULY 2003New preferred shares issued to a third party(¥150.0 billion).

DECEMBER 2004The 50th anniversary of the foundingof Orico Corporation .

1990

2000

2004

50th Anniversary of Orico’s Founding

2

A

Q

To Our Shareholders

Please provide anoverview of business

performance for fiscal2004, the year endedMarch 31, 2004.

To briefly sum up the fiscalterm under review, it was

“the year that made me feel that wehad received a positive return onour efforts to revitalize Orico.” Byeliminating the commercial loanbusiness by the end of fiscal 2003,Orico was able to focus on recover-ing market share during the yearwith aggressive marketing efforts.As a result, total credit businesssales volume grew 14% year overyear to ¥2,922.9 billion on a non-consolidated basis in fiscal 2004.

We concentrated in our priorityfields; credit card sales volumeincreased 26% year over year andauto loan sales volume rose 16%on a non-consolidated basis. Theseefforts contributed to the firstprofitable surplus in the closingaccounts in five fiscal terms on botha consolidated and non-consolidatedbasis.

As for major operating activitiesand results for the year, Oricoreinforced the auto loan service for

Managing Strategies

Looking ahead to our 50th anniversary

in December 2004, we continue to push

ahead with our aggressive sales

strategy that maximizes our strengths,

particularly in the auto loan and

credit card businesses, in line with

the basic concept of concentrating

resources in selected areas.

In addition, we will review work

processes to create more efficient

and integrated operations that

facilitate lower costs and enhance

sales capabilities and services.

We will thus reinforce our financial

condition by improving the profitability

of our consumer credit business. We

will also pursue synergies by forming

a dedicated internal organ to proactively

address strategic tie-ups with the

Mizuho Financial Group, one of the

four mega-banking groups in Japan.

To realize a permanent high-profit-

ability financial structure, we will

strive to enhance asset efficiency

and to channel management

resources into our highly profitable

consumer credit business.

An Interview

3

institutional credits to such groups asthe JAPAN USED CAR DEALERSASSOCIATION (JU) and the AllJapan Lotus Club. In addition, Oricoestablished seven auto loan agenciesnationwide to increase the membermerchants and enhance low-costoperations. In addition, Orico issuedan auction card to JU-affiliatedmerchants. This purchase card forbusiness-to-business (B2B) settle-ments is a promising field.

As for loans for installmentpayments for high-priced items,transactions with large-scale shops,which had previously declined inmarket share, recovered with shop-ping credit sales volume stable sincemidterm fiscal 2004.

In the credit cards category, thebalance of assets increased morethan ¥100 billion, mainly due to theraised credit lines for our premiumaccount customers by implementingadvanced customer managementmeasures such as ongoing creditreview and the data mining method.Moreover, card issuance througha tie-up with Kouritsu GakkouKyousaikumiai (Japan Mutual AidAssociation of Public School Teachers)was impressive as an affinity cardalliance that broke through conven-

tional industrial barriers.I therefore believe we have

successfully achieved our goals forfiscal 2004.

Please explain youroperating strategies

and management directionfor fiscal 2005.

In fiscal 2005, Orico wel-comes its 50th anniversary in

December 2004, and I consider theyear a “new beginning under Orico’srevamped organization.”

To ensure that we achieve ourannual targets, we must dedicateourselves to aggressive marketing byreinforcing our sales capabilities.Having regained our market share,we must now devote our energies tomaximizing profitability to solidifythe basis for future growth byacquiring new customers andexpanding our shares in theinstallment credit and credit cardmarkets.

To this end, Orico radically alteredits headquarters functions in April2004. This reshuffle had four goals.

1) Realize flexible decision makingfor the speedy execution ofcorporate management;

2) Acquire sophisticated expertiseand reinforce the support functionvia strengthened collaborationamong internal organizations.

A

Q

with Ikuo Kaminishi,President and CEO

4

3) Thoroughly carry out a customer-first policy and extend directcontacts with customers, as wellas make the most of the strategiccollaboration with the MizuhoFinancial Group; and

4) Strengthen corporate governanceand streamline the risk manage-ment system.

Previously, Orico adopted a head-quarters system based on individualcore business for its business opera-tions. It worked remarkably welltoward increasing the number ofsubscribers and sales volume for autoloans and credit cards. However, toadapt to the intensifying industrialcompetition and changes in thebusiness environment, swift decision-making, expertise and integratedmarketing efforts are increasinglyindispensable. In response, we haveadopted a functional group systemorganized for three mainstayfunctions—promoting businessoperations, collection of receivablesand development of innovativeproducts—to encourage customer-oriented actions and strengthen thedirect approach to customers as thebest earnings-creating source whilealso unifying management reportinglines.

In addition to the reorganizationof its aforementioned operations,

Orico intends to streamline man-agement infrastructures and upgradeits risk-control system for furthercorporate development.

Orico’s exposure includes creditmanagement risk, interest-rate risk,system risk and compliance related toall corporations handling individualinformation in their business opera-tions. To control these risks, Oricomust build an optimum riskmanagement system.

In addition to these risk manage-ment functions, we are addressing thechallenges of achieving the goals ofour business plan by streamliningrelevant systems and improvingoverall corporate values includingcorporate governance.

Your collaborationwith the Mizuho

Financial Group has drawnmuch attention. Whatare your ideas on youralliance strategy towardfuture growth?

Orico has several strengthsthat commercial banks don’t

have. One is the “personal creditdata of 23 million customers.” Asecond is “accurate credit-riskassessment to individual customers”and a third is “overall collectionability through an excellent nation-wide network.” On the other hand,the Mizuho Financial Group boastsa huge customer base and superiorbranding. Our fundamental conceptin collaborating with the MizuhoFinancial Group is the pursuit ofsynergies by leveraging on ourmutual strengths. In other words,Orico intends to fulfill a key role inMizuho’s retail strategy, therebyexpanding the earnings of bothparties.

Orico considers the collaborationbeneficial and has deepened itsrelationship with Mizuho at differentlevels.

In the organizational reform inApril, Orico formed the MizuhoAlliance Group to proactivelyaddress strategic tie-up operations.

A

Q

5

QThis internal organ will focus onthe tie-up negotiations with theMizuho Financial Group.

Let me show here a specific benefitfrom the alliance. We approachedapproximately 200 corporationsconcerning affiliations withoutsuccess in the field of loans forinstallment payments. Thanks toour close collaboration with Mizuho,we have now finalized affiliationagreements with them and arenegotiating with 200–250 othercorporations. These new affiliationsshould have a strong favorableeffect on our sales performance inthe current fiscal year.

As for fund procurement, we canmaximize the Mizuho networknationwide by solidifying our fundprocurement bases especially fornew borrowings and increaseborrowings from regional banks.

New business alliances include thejoint development of new auto loanproducts; a business collaborationwith Japan Collection Service Co.,Ltd., Orico’s subsidiary in theservicer field; and efficiency-basedcooperation among the fourMizuho-affiliated credit cardcompanies to realize common usageof external network connectionsystems and information sharing oncredit card abuse.

A

Finally, what is yourmessage for stake-

holders, including share-holders, in your landmark50th year?

I’m happy to declare thatOrico welcomes its 50th

anniversary in December 2004. Weare now hurriedly studying goodpost-50-year business models.

In my opinion, the key points inour future business deployment areto productively grow our strengthfields of auto loans, credit cards andservicing, and to enhance oursynergies with the Mizuho FinancialGroup.

Management will carefully checkand review these issues, build specificmodels and disclose them externallyby December 2004 when ourmemorial celebration will be held.

We thank our shareholders fortheir understanding and lookforward to their continued supportas we will pursue companywideefforts to resume dividends after aninterval of six fiscal terms.

July 30, 2004

Ikuo KaminishiPresident and CEO

6

• Orico AUTO, auto loan agenciesestablished in Hiroshima andNagoya.

▲ A P R I L - ▼ M A Y

Main Activities in Fiscal To provide greater security, convenience and value, we will strive to improve services by focusing oncustomer needs to achieve greater customer satisfaction.

Topics

• Through a tie-up with Gackt, afamous music artist in Japan,the Gackt Card issued.

2003

▲ J U N E - ▼ J U L Y

▲ A U G U S T - ▼ S E P T E M B E R

• A BB+ rating for long-termpreferred debt, with two ratingcategories upgraded, and a J-3rating for commercial paperacquired.

An unsecured loan product

to small and medium-

sized companies jointly

developed with Mizuho

Bank, Ltd.

Orico develops financial products in conjunction with the Mizuho Financial Group.

Orico endeavors to develop original financial products such as unsecured loans via a tie-up with theMizuho Bank. Common interests with the Mizuho Financial Group are pursued by capitalizing on thestrengths of the Orico Group in the fields of guarantee and loan agent services, as well as collection andmanagement of consumer loans.

Mizuho Alliance Group,

an internal organ focused

on reinforcing the alliance

with the Mizuho Financial

Group, started up.

Orico Card Upty issued.

Orico Card Upty issued.

Orico issued a unique credit card for which everycustomer can freely decide how to repay his/her loan.

7

2004

• “Upty-kun,” the image characterof Orico Card Upty, created.

• Alliance with AEON CREDITSERVICE CO., LTD., CREDITSAISON, LTD., and UC CARDCO., LTD., initiated on thecountermeasures againstunauthorized use of credit cards.

2004

▲D E C E M B E R - ▼ J A N U A R Y

▲ O C T O B E R - ▼ N O V E M B E R

▲ F E B R U A R Y - ▼ M A R C H

Full-fledged operation of

the Collection Service

Centers started.

Full-fledged operation of the Collection ServiceCenters started.

In the mainstay collection operation of the consumer credit business,four collection service centers nationwide started operation to realizemore efficient and low-cost operations. State-of-the-art computertelephony integration (CTI) functions, such as automatic calling,automatic call reception and operational monitoring, were implementedto meet diverse and complicated customer needs for more efficient andrational service fulfillment.

• JU Auction Card for B2B settle-ment for purchases of used carsissued for the first time in theused car industry.

• A new loan collection system“Ori-collect” developed andoperation started.

• Five auto loan agenciesestablished.

• A new servicing companyspecializing in on-the-spotcollection established.

Guarantee and loan agent

services by the Mizuho

Bank for Orico auto loans to

individuals started.

8

10.23million cardholders

Auto loan users

Business Activities

Auto Loans

Orico auto loans have maintained atop share of Japan’s auto loan market.At the end of fiscal 2004, the balanceof Orico auto loans, includingsecuritized loans, totaled ¥1,263.4billion. We offer about 60 types ofloans to meet the diverse needs ofcustomers and car dealers. Werecently introduced two auto loanoptions: “a deferred-type loan thatguarantees a vehicle’s value eventhree years after the purchase of anew car” and “B2B settlementsavailable for used car auctions.”Each has proven popular in themarket. During 2003 and 2004, weestablished eight auto loan agenciesnationwide to develop detailed andefficient marketing strategies forspecific regions. We will continueto channel our energies into strate-gically developing products andimproving customer services.

Our popular shopping credit servicefacilitates installment payments forsuch high-ticket items as kimonosand jewelry, as well as college andtuition fees. We are utilizing ouraccumulated expertise to reinforceour performance in this core businessfield. Outstanding shopping credit,including securitized loans, totaled¥759.6 billion at the end of fiscal2004.

In fiscal 2004, credit card salesvolume increased 25.8% to ¥1,124.4billion. At the end of the fiscal year,the number of Orico cardholdersreached 10.23 million, ranking usamong the industry’s top credit cardcompanies.

We are increasing sales volumethrough marketing efforts centeredon our customer reward program—which provides some of the mostgenerous benefits in the industry —and promoting credit card pay-ments of cellular phone, electricityand other monthly bills. It is ourintention to expand this businessinto a main source of income.

Shopping Loans Credit Cards

Cardholders

¥759.6billion

Outstanding shopping credit of

1.6million

9

¥49.5billion

Since the first issuing of ABS inJapan in 1996, we have strategicallyexpanded our program to securitizereceivables. As of March 31, 2004,we had issued ABS 29 times inJapan and 15 times in the Euromarket, making a total of 44 ABSissues. To date, we have securitizedauto loans, shopping credit, houseloans and loan card receivables. Wehave also resecuritized subordinatedinterest of ABS. These achievementsare the results of our drive to increasesecuritized assets.

Financial Activities

As a result, as of March 3, 2004,direct funding outstanding totaled¥746.9 billion, thus maintaining ourtarget direct-funding ratio of 30%.We will build on this success bycontinuing to increase direct funding.Having won recognition for ourregular public issues, the stabilityof our pooled assets and the fulldisclosure of related information, wewill secure our status as a benchmarkissuer in the ABS market.

Reaching our target direct-funding ratio

In 1997, Orico became the firstcompany in Japan to offer Internetauctions. Since then, we haveexpanded our e-commerce businessahead of other companies in suchareas as consumer credit and settle-ment services. As a result of theseefforts, we have established tie-upswith more than 1,000 companiesusing our services. Our Internet-based settlement services continueto stimulate change in the e-com-merce field and provide a widerange of solutions.

Our fee collection serviceapplies settlement systemsused for installment creditand credit card transactionsto various industries. More-over, we offer a diverseselection of services thatfacilitate many types ofsettlements, including rent,fitness club membershipfees, pay-per-view televisioncharges and Internet andtelephone bills.

Electronic Commerce Fee Collection Business

Revenues from Internet-basedSettlement Services of

¥229.4billion

Revenues fromFee Collection Services of

’00 ’01 ’02 ’03 ’04

(Billions of yen)800

600

400

200

0

Fund-Raising through Asset-Backed Securities

Note: Balance of funds procured throughsecuritization

10

OverviewIn fiscal 2004, the Japanese economy saw several signs of recovery against a backdrop of increased exports and civil-sectorcapital investment in line with the upturn of the global economy. However, consumer spending lacked strong momen-tum, owing to lingering anxieties over unemployment and falling salary levels despite a rally in some sectors such asdigital home electric appliances.

The consumer credit industry suffered from a harsh operating environment that featured intensifying industrial compe-tition and a high level of individual bankruptcies. In these circumstances, Orico launched “NEXT 50,” a two-year planthat will guide us until our 50th anniversary this December via an aggressive sales strategy that maximizes our strengths.In fiscal 2004, we issued ¥150 billion of preferred stock in July 2003 to boost shareholders’ equity and committed toaggressively revamp our marketing approach and maximize the overall strengths of the Orico Group to achieve the goalsset forth in the plan.

In fiscal 2004, these efforts contributed to a 1.3% increase in operating revenues to ¥304.5 billion, and operating incometo ¥33.6 billion, up16.6%, led principally by our consumer finance businesses. As a result, we recorded net income of¥29.1 billion.

Revenues and ExpensesFinancial service revenue totaled ¥290.0 billion, up 1.1%. In contrast, non-financial service revenue decreased 29.6%to ¥2.8 billion. Consolidated operating revenues, which also include other revenue, edged up 1.3%, to ¥304.6 billion.Operating expenses amounted to ¥270.9 billion, down 1%.

Financial ServicesFinancial service revenue, which amounted to ¥290.0 billion, consisted primarily of four consumer finance businesses.

Consumer Credit

In the consumer credit category, we strengthened cooperation with major affiliated merchants in good standing anddeveloped detailed marketing strategies for specific regions. We also focused on developing new markets, such as thehome improvement loan and other loans that cover esthetic treatment and various schooling expenses. Moreover, weincreased alliances in new markets utilizing the Internet, such as “Orico Web Credit”—a credit card settlement service. Inaddition, we secured revenue and built up quality assets by sound credit control and management of affiliated merchants.

Although auto loans and shopping loans performed steadily in the consumer credit business, sales volume in the consumercredit category declined, whereas that in the guarantee and loan agent services category increased, due to a rise in tie-upproducts in guarantee and loan agent services and expanded credit lines at affiliated financial institutions. As a consequence,consumer credit revenue declined 20.3% to ¥61.8 billion.

Management’s Discussion and Analysis

’02 ’03 ’04

(Millions)12

9

6

3

0

Credit Card Holders

’02 ’03 ’04


300

200

100

0

Financial Service Revenue

’02 ’03 ’04


90

60

30

0

Revenues/Consumer Credit(Including Gain on Securitization)

’02 ’03 ’04

(Billions of yen)20

15

10

5

0

Revenues/Credit CardsShopping(Including Gain on Securitization)

11

’02 ’03 ’04


120

80

40

0

Revenues/DirectCash Loans(Including Gain on Securitization)

’02 ’03 ’04

(Billions of yen)80

60

40

20

0

Revenues/Guaranteeand Loan Agent Services

’02 ’03 ’04


120

80

40

0

Gain on Securitizationof Direct InstallmentReceivables

’02 ’03 ’04

(Billions of yen)40

0

–40

–80

–120

Net Income/(Loss)

’02 ’03 ’04

(Yen)60

0

–60

–120

–180

Net Income/(Loss)per Share

Credit Cards Shopping

In the credit cards shopping category, we concentrated on increasing the issue of major affinity cards. In addition, wemade concerted efforts to attract new cardholders through Internet sites and web pages for cellular phones. We promotedour cards to potential customers applying for credit loans. In addition, we strove to develop an infrastructure that pro-vides greater convenience, offering the payment of cellular phone bills and other everyday transactions, and expanded theservices provided by “e-Orico Service,” which allows cardholders to check their account statements online.

We also strove to increase new alliances by focusing on business-to-business (B2B), acquiring and e-commercebusinesses.

As a consequence, credit cards shopping revenue edged up 1.6%, to ¥18.7 billion.

Direct Cash Loans

In the direct cash loans category, we worked to raise the balance of quality assets. To this end, we effectively promotedcard use and attracted applications for loan cards by making strategic use of customer information—primarily obtainedthrough database marketing.

We also cooperated with financial institutions to bolster our network of cash dispensers, thereby increasing customerconvenience.

As a consequence, revenue from the direct cash division rose 5.9% to ¥153.5 billion.

Guarantee and Loan Agent Services

In the guarantee and loan agent services category, we continued our efforts to secure profits. In mainstay auto loans,we maintained and raised a top share of the used-car loan market and reinforced our sales in the new car loan marketby developing strategic alliance loans with the Mizuho Financial Group. We also capitalized on our credit monitoringand collection expertise to promote our guarantee business for card loans and loans for specific purposes from financialinstitutions.

As a result, category revenue increased 22.9% to ¥54.6 billion.

Non-Financial ServicesIn the non-financial services category, Japan Collection Service Co., Ltd., Orico’s subsidiary in the servicer field, openedthe Sapporo Branch in September and the Shinjuku Branch in October 2004. By strengthening the sales foundation viaa nationwide collection network, receivables exceeded ¥2 trillion and operating performance remained firm. We thusreinforced our groupwide collaboration among core group companies for credit-related operations, centering on aninformation processing and a credit loan peripheral service company.

However, revenue from non-financial services, which includes collection services and outsourcing, decreased 29.6% to¥2.8 billion, considerably reflecting the transfer of a group company.

12

’02 ’03 ’04


240

160

80

0

Total Shareholders’Equity

’02 ’03 ’04

(Billions of yen)6,000

4,500

3,000

1,500

0

Total Assets

’02 ’03 ’04

(Yen)60

0

–60

–120

–180

Shareholders’ Equityper Share

’02 ’03 ’04

(%)8

6

4

2

0

Equity Ratio

Net IncomeNet income totaled ¥29.2 billion.

Financial Policy and Financial PositionOur basic policy for fund procurement is to ensure a stable supply of high-quality funds. This will involve strengtheningour ability to raise funds by expanding direct procurement and building a balanced procurement base. We continued todiversify direct funding through the securitization of receivables, principally for ABS, and by issuing commercial paperby taking advantage of the short-term rating acquired. We successfully arranged a ¥411.4 billion syndicate loan, whichexceeded the previous year’s figure. Through these efforts, we sought to reinforce and stabilize our financial structure.

As a result, the balance of funds procured through securitized receivables amounted to ¥74.7 billion, while consolidatedbank loans fell from ¥1.8 trillion to ¥1.7 trillion.

Finance Receivables (Consolidated)Millions of yen

Years ended March 31 2003 2004 Change (%)

Direct installment receivables ¥1,049,123 ¥1,107,208 5.54%Guaranteed loan receivables 1,921,734 1,922,027 0.02Commercial loans 20,885 21,101 1.03Commercial loan guarantee receivables — 700 N.M.

Cash FlowsIn fiscal 2004, cash flows used for operating activities totaled ¥84.2 billion, a decrease of ¥304.6 billion compared withcash flows provided during the previous term. This was mainly attributable to direct installment receivables. Fundsprocured through securitization were ¥454.7 billion.

Cash flows used for investing activities totaled ¥9.5 billion, down ¥7.6 billion.Cash flows provided by financing activities amounted to ¥143.2 billion, an increase of ¥305.3 billion compared with

cash flows used during the previous term. This improvement was primarily due to the issuance of preferential stock.

13

Thousands ofMillions of yen U.S. dollars (Note 1)

2003 2004 2004

Operating Revenues:Financial service revenue (Note 15) ¥(286,945 ¥290,057 $2,762,448Non-financial service revenue 4,095 2,881 27,438Interest and dividend income 930 841 8,009Other operating revenues 8,604 10,779 102,657

300,574 304,558 2,900,552

Operating Expenses:Selling, general and administrative expenses (Note 16) 218,206 211,712 2,016,305Interest expenses 48,481 48,546 462,343Other operating expenses 5,057 10,679 101,704

271,744 270,937 2,580,352Operating income 28,830 33,621 320,200

Special Gain/(Loss):Gain on reversal of reserve for loss on guarantees for loans 32,341 — —Gain on securities contribution to employees’ retirement benefit trust — 2,359 22,467Gain on reversal of accrued retirement benefits (Note 11) — 8,595 81,857Provision for allowance for credit losses (41,750) — —Loss from devaluation and disposal of real estate (Note 17) (125,100) — —Special retirement allowance and related expenses — (6,133) (58,410)Other, net 8,072 926 8,819

Income/(loss) before income taxes (97,607) 39,368 374,933

Income Taxes (Note 10):Current 1,072 941 8,962Deferred 6,528 8,720 83,047

7,600 9,661 92,009Minority Interests in Net (Income)/Loss of Consolidated Subsidiaries 2,880 (535) (5,095)

Net income/(loss) ¥(102,327) ¥029,172 $0,277,829

Yen U.S. dollars (Note 1)

Per Share (Note 2 (12)):Net income/(loss), adjusted—primary ¥00(154.6.) ¥00044.1. $0,000.420.Net income/(loss), adjusted—fully diluted — 8.6. 0.082.

The accompanying notes are an integral part of these statements.

Consolidated Statements of IncomeOrient Corporation and its SubsidiariesFor the years ended March 31, 2003 and 2004

14


ASSETS 2003 2004 2004

Current Assets:Cash and bank deposits (Note 8) ¥0,190,733 ¥0,207,219 $01,973,514Marketable securities (Note 3) 19 52 495Finance receivables, including amounts maturing after one year:

Direct installment receivables (Notes 4 and 8) 1,049,123 1,107,208 10,544,838Guaranteed loan receivables (Note 5) 1,921,734 1,922,027 18,305,019Commercial loans 20,885 21,101 200,962Commercial loan guarantee receivables (Note 6) — 700 6,667Beneficiary certificates retained for receivable securitization 332,753 421,677 4,015,971Less: Allowance for credit losses (48,722) (58,287) (555,114)

3,275,733 3,414,426 32,518,343Non-finance receivables (Note 8) 6,589 1,688 16,076Real estate for sale (Note 8) 35,814 31,550 300,476Deferred tax assets—current (Note 10) 110,728 37,631 358,391Other current assets 205,901 213,445 2,032,810

Total current assets 3,825,557 3,906,011 37,200,105

Investments and Advances:Investments in securities (Notes 3 and 8) 16,051 14,397 137,114Investments in real estate 30,696 29,981 285,534Commercial loans in arrears (Note 2 (3)) 12,819 7,889 75,133Long-term loan receivables and other 15,005 5,553 52,886

Total investments and advances 74,571 57,820 550,667

Property and Equipment, at Cost Less Accumulated Depreciation (Notes 7 and 8) 143,839 138,870 1,322,571

Deferred Charges and Other Assets 40,132 40,045 381,381

Deferred Tax Assets—Non-Current (Note 10) 27,704 91,765 873,952¥4,111,803 ¥4,234,511 $40,328,676


Consolidated Balance SheetsOrient Corporation and its SubsidiariesAt March 31, 2003 and 2004

15


LIABILITIES AND SHAREHOLDERS’ EQUITY 2003 2004 2004

Current Liabilities:Short-term bank loans (Note 8) ¥1,247,567 ¥1,261,093 $12,010,409Current portion of long-term debt (Note 8) 241,224 236,465 2,252,048Finance payables to member merchants (Note 9) 157,526 146,276 1,393,105Guaranteed loan payables (Note 5) 1,921,734 1,922,027 18,305,019Commercial loan guarantee payables (Note 6) — 700 6,667Unearned finance income 21,125 14,229 135,514Income taxes payable (Note 10) 851 640 6,095Accrued expenses and other current liabilities 93,163 149,967 1,428,257

Total current liabilities 3,683,190 3,731,397 35,537,114

Long-Term Debt (Note 8) 310,515 205,523 1,957,362

Deferred Tax Liabilities (Note 10) 8 — —

Accrued Retirement Benefits (Note 11) 15,861 5,409 51,514

Accrued Retirement Benefits to Directors and Corporate Auditors 527 275 2,619

Minority Interests in Consolidated Subsidiaries 2,281 2,873 27,362

Commitments and Contingent Liabilities (Note 12)

Shareholders’ Equity (Note 14):Capital stock 123,023 198,023 1,885,933Capital surplus 100,000 75,000 714,286Profit surplus (Note 19) (123,322) 17,881 170,295Unrealized gains/(losses) on other securities, net of tax 202 348 3,314Adjustments on foreign currency statement translation (Note 2 (8)) (472) (2,201) (20,962)Treasury stock (10) (17) (161)

Total shareholders’ equity 99,421 289,034 2,752,705

¥4,111,803 ¥4,234,511 $40,328,676

16

Millions of yen

Unrealized Adjustmentsgains/(losses) on foreign

on other currencyCapital Capital Profit securities, statement Treasurystock surplus surplus net of tax translation stock

Balance at March 31, 2002 ¥174,900 ¥ — ¥0(71,479) ¥1,103 ¥01,152 ¥0(3)Net loss for the year ended March 31, 2003 — — (102,327) — — —Reduction of common stock (51,877) — 51,877 — — —Increase due to an issue of new preferred shares allotment to third parties 100,000 100,000 — — — —Directors’ and corporate auditors’ bonuses — — (3) — — —Decrease due to exclusion of an affiliate from application of equity method — — (1,390) — — —Cost of treasury stock (purchased) sold — — — — — (7)Change of foreign currency statement translation adjustments for the year — — — — (1,624) —Change of unrealized gains on other securities, net of tax for the year — — — (901) — —

Balance at March 31, 2003 123,023 100,000 (123,322) 202 (472) (10)Net income for the year ended March 31, 2004 — — 29,172 — — —Transfer from additional paid-in capital — (100,000) 100,000 — — —Increase due to an issue of new preferred shares allotment to third parties 75,000 75,000 — — — —Gain on disposal of treasury stock — 0 — — — —Increase due to exclusion of a subsidiary from application of consolidation — — 12,031 — — —Cost of treasury stock (purchased) sold — — — — — (7)Change of foreign currency statement translation adjustments for the year — — — — (1,729) —Change of unrealized gains on other securities, net of tax for the year — — — 146 — —

Balance at March 31, 2004 ¥198,023 ¥175,000 ¥,017,881 ¥0,348 ¥(2,201) ¥(17)

Thousands of U.S. dollars (Note 1)

Unrealized Adjustmentsgains/(losses) on foreign

on other currencyCapital Capital Profit securities, statement Treasurystock surpulus surplus net of tax translation stock

Balance at March 31, 2003 $1,171,647 $952,381 $(1,174,495) $1,924 $0(4,495) $0(95)Net income for the year ended March 31, 2004 — — 277,829 — — —Transfer from additional paid-in capital — (952,381) 952,381 — — —Increase due to an issue of new preferred shares allotment to third parties 714,286 714,286 — — — —Gain on disposal of treasury stock — 0 — — — —Increase due to exclusion of a subsidiary from application of consolidation — — 114,580 — — —Cost of treasury stock (purchased) sold — — — — — (66)Change of foreign currency statement translation adjustments for the year — — — — (16,467) —Change of unrealized gains on other securities, net of tax for the year — — — 1,390 — —

Balance at March 31, 2004 $1,885,933 $714,286 $(0,170,295 $3,314 $(20,962) $(161)


Consolidated Statements of Shareholders’ EquityOrient Corporation and its SubsidiariesFor the years ended March 31, 2003 and 2004

17


2003 2004 2004

Cash Flows from Operating Activities:Income/(loss) before income taxes ¥0,0(97,607) ¥(039,368 $(0,374,933Depreciation 7,260 7,569 72,086Increase/(Decrease) in allowance for credit losses (256,801) 9,751 92,867Increase/(Decrease) in accrued bonuses to employees (186) (191) (1,819)Increase/(Decrease) in reserve for loss on guaranteed debts (93,101) — —Increase/(Decrease) in accrued retirement benefits (659) (10,440) (99,429)Interest and dividend income (930) (841) (8,010)Interest expenses 48,481 48,546 462,343Decrease/(Increase) in receivables 761,879 (121,860) (1,160,571)Decrease/(Increase) in inventories 27,232 4,058 38,648Increase/(Decrease) in payables (264,228) (9,662) (92,019)Increase/(Decrease) in unearned finance income (20,946) (3,370) (32,095)Decrease/(Increase) in other assets 24,229 4,155 39,571Increase/(Decrease) in other liabilities 38,151 (2,635) (25,095)Other 101,530 (2,996) (28,534)

Subtotal 274,304 (38,548) (367,124)Receipt of interest and dividend income 1,062 721 6,867Payment of interest expenses (51,082) (45,445) (432,809)Payment of income taxes (854) (914) (8,705)

Cash flows provided by (used for) operating activities 223,430 (84,186) (801,771)

Cash Flows from Investing Activities:Deposits of time deposits (27,797) (78,075) (743,571)Reduction of time deposits 7,453 70,767 673,971Acquisitions of tangible and intangible assets (15,423) (8,238) (78,457)Acquisitions of investments in securities (2,517) (2,591) (24,676)Proceeds from sale of investments in securities 15,463 2,850 27,143Proceeds from sale of investments in subsidiaries which changed in scope of consolidation — 5,355 51,000Other 5,638 423 4,028

Cash flows used for investing activities (17,183) (9,509) (90,562)

Cash Flows from Financing Activities:Repayment of short-term bank loans, net 180,154 26,552 252,876Repayment of commercial paper, net — 60,090 572,286Borrowing of long-term bank loans 825,762 209,805 1,998,143Repayment of long-term bank loans (1,361,007) (303,155) (2,887,190)Redemption of bonds (6,964) — —Proceeds from issue of new shares 200,000 150,000 1,428,571Other 32 (6) (57)

Cash flows provided by (used for) financing activities (162,023) 143,286 1,364,629Effect of Exchange Rate Changes on Cash and Cash Equivalents (113) (173) (1,648)Change in Cash and Cash Equivalents 44,111 49,418 470,648Cash and Cash Equivalents at Beginning of Year 124,407 168,518 1,604,933Decrease in Cash and Cash Equivalents due to Exclusion of Subsidiaries from Application of Consolidation — (49) (467)Cash and Cash Equivalents at End of Year (Note 18) ¥(0,168,518 ¥(217,887 $(2,075,114


Consolidated Statements of Cash FlowsOrient Corporation and its SubsidiariesFor the years ended March 31, 2003 and 2004

18

Notes to the Consolidated Financial StatementsOrient Corporation and its Subsidiaries

1. Basis of Presenting Consolidated Financial Statements(1) Accounting Principles and Presentation

The accompanying consolidated financial statements of Orient Corporation (the “Company”) and its subsidiaries(the “Companies”) are prepared on the basis of accounting principles generally accepted in Japan, which are differ-ent in certain respects as to application and disclosure requirements of International Financial Reporting Standards,and are compiled from the consolidated financial statements prepared by the Company as required by the Securitiesand Exchange Law of Japan.

Certain items presented in the consolidated financial statements submitted to the Director of Kanto FinanceBureau (a regional branch organization of Ministry of Finance in Japan) have been reclassified in these accounts forconvenience of readers outside Japan.

Prior year’s amounts have been reclassified to conform with the current year’s presentation.Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥105=U.S.

$1, the approximate rate of exchange prevailing at March 31, 2004, has been used in translation. The inclusion ofsuch amounts is not intended to imply that Japanese yen have been or could be readily converted, realized orsettled in U.S. dollars at that or any other rate.

(2) Scope of Consolidation

The Company had 36 subsidiaries (“controlled companies”; the decision-making body of the entity is controlled)at March 31, 2004 (30 subsidiaries in 2003). The consolidated financial statements include the accounts of theCompany and all subsidiaries. The major consolidated subsidiaries are listed below:

At March 31, 2004

Equity ownership percentage, Capital stockincluding indirect ownership (Millions)

Taiwan Orico Co., Ltd. 55.0% NT$0,190Orifund Co., Ltd. 100.0 ¥0,100Tao International Co., Ltd.** 100.0 ¥0,100Kagen Co., Ltd.* 100.0 ¥0,100Orico Trading Co., Ltd. 100.0 ¥2,186Ohtori Corporation 70.1 ¥6,064Japan Collection Service Co., Ltd. 93.3 ¥0,700ORIFA Service Co., Ltd. 100.0 ¥0,400Orico Auto Chubu Co., Ltd. 100.0 ¥0,050Orico Auto Chushikoku Co., Ltd. 100.0 ¥0,050Orico Auto Tohoku Co., Ltd. 100.0 ¥0,050Orico Auto Kansai Co., Ltd. 100.0 ¥0,050Orico Auto Kyushu Co., Ltd. 100.0 ¥0,050Orico Auto Hokkaido Co., Ltd. 100.0 ¥0,050Orico Auto Kanto Co., Ltd. 100.0 ¥0,050Orico Auto Tokyo Co., Ltd. 51.0 ¥0,070ORIFA Service Servicer Co., Ltd. 100.0 ¥0,500

** This subsidiary is in the course of being liquidated.** This subsidiary is planned to be liquidated or sold.

(3) Consolidation and Elimination

For the purposes of preparing the consolidated financial statements, all significant intercompany transactions,account balances and unrealized profits among the Companies have been eliminated, and the portion thereofattributable to minority interests is charged to minority interests.

The cost of investments in the common stock of consolidated subsidiaries is eliminated with the underlyingequity in net assets of such subsidiaries. The material difference between the cost of an investment and the amount ofunderlying equity in net assets of such subsidiary is deferred and amortized over 20 years on a straight-line basis. Ifsuch amount is not material, it is directly charged/credited against income for the year.

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(4) Investments in Affiliates

The Company had 2 affiliates (“influenced companies”; financial and operating or business decision making of theentity that is not a subsidiary can be influenced to a material degree) at March 31, 2004 (4 affiliates in 2003).

All affiliates are accounted for by the equity method, under which the Company’s equity in net income of theseaffiliates is included in consolidated income with appropriate elimination of intercompany profit at March 31,2004 and for the year then ended.

(5) Remeasurement of Assets and Liabilities of Subsidiaries

Assets and liabilities of subsidiaries are remeasured at fair value as of the date of acquisition of the control. TheCompany adopts “the full fair value method” by which all assets and liabilities held by subsidiaries are marked tofair value as of the date of acquisition of the control.

2. Summary of Significant Accounting Policies(1) Recognition of Consumer Finance Income:

(i) Consumer credit serviceCustomers purchasing goods from retailers with whom the Companies have a sales finance arrangement (the“member merchants”) can use installment payments.

Commissions from customers for installment payments are recognized by the “sum-of-the-month-digits” basisover the lives of the relevant contracts as the monthly installments become due under the contract.

Commissions from member merchants for installment payments are recognized by the “in-a-lump-sum” basison which commissions from member merchants are recognized as earned at the time installment contracts withmember merchants are executed.

(ii) Credit card shopping serviceThe holders of the Companies’ credit cards are allowed to apply for the consumer credit service cited above. Thebasis of recognizing commission income is the same as (i) for consumer credit.(iii) Direct cash loan serviceThe Company makes direct cash loans to individual customers, which are to be repaid in installments. The commis-sion on such cash loans is recognized as earned on an interest-bearing basis as monthly payments become due.Card cashing is included in direct cash loan service, and commissions therefrom are accounted for on the same basis.

(iv) Guarantee and loan agent serviceGuarantee fees on loans are recognized as earned when the contracts are made and fees are received. Guarantee feeson loans are paid by the lenders (insurance companies, banks and other) at the inception of the relevant loans.

(v) Delinquency feesDelinquency fees are imposed on customers who delay payments in respect of the period of delinquency at aspecified rate. Such delinquency fees are recognized as earned on a cash (collection) basis.

(2) Unearned Finance Income

As described in (1) above, finance income (commissions from customers), except for guarantee and loan agentservice, is recognized as earned when the monthly installments become due. To achieve this, the commissionsrecorded as earned in their entirety at the inception of the contracts are adjusted at the balance sheet date, bysetting up an “unearned finance income” account for the unearned portion of commissions applicable to installmentswhich have not yet become due by that date.

(3) Allowance for Credit Losses and Write-Offs

Finance receivables are written off against the allowance for credit losses when installments have been unpaid for acertain specified period and/or uncollectibility of accounts is clearly demonstrated by conditions such as thecustomer’s bankruptcy, poverty, disappearance or other circumstances prescribed by the Companies.

Write-offs are recorded each year at the end of March and September.At the end of each fiscal year, an allowance for credit losses is provided in an amount deemed necessary to cover

possible uncollectible accounts based on management’s judgement.Commercial loans in arrears were offset against allowance for credit losses which is equivalent to potential uncol-

lectible amount. Such offset amount at March 31, 2003 and 2004 were ¥143,385 million and ¥65,678 million($625,505 thousand), respectively.

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(4) Financial Instruments

(a) DerivativesAll derivatives are stated at fair value, with changes in fair value included in net profit or loss for the period inwhich they arise, except for derivatives that are designated as “hedging instruments.” The Companies adoptedhedge accounting to all derivatives (see (c) Hedge Accounting below).(b) SecuritiesSecurities held by the Companies are classified into two categories:

Held-to-maturity debt securities, that the Companies have the intent to hold to maturity, are stated at cost afteraccounting for premium or discount on acquisition, which are amortized over the period to maturity.

Mark-to-market accounting is adopted for other securities. Under this method, those securities with marketquotations are carried at fair value that are reasonably determinable based on current market quotes on the balancesheet date, with net unrealized gains and losses, net of related tax, reported separately in shareholders’ equity. Real-ized gains or losses on securities sold are determined based on the moving-average method. If fair value is not avail-able, securities are carried at cost, cost being determined by moving-average method.

In cases where the fair value of held-to-maturity debt securities or other securities has declined significantly andsuch impairment of the value is not deemed temporary, those securities are written down to the fair value and theresulting losses are included in net profit or loss for the period.

(c) Hedge AccountingGains or losses arising from changes in fair value of the derivatives designated as “hedging instruments” aredeferred as an asset or liability and included in net profit or loss in the same period during which the gains orlosses on the hedged items or transactions are recognized.

The derivatives designated as hedging instruments by the Companies are principally currency swaps, interest rateswaps and interest rate option transactions. The related hedged items are bank borrowings.

The Companies have a policy to utilize the above hedging instruments to reduce the Companies’ exposure tothe risk of interest rate and currency fluctuations. Thus, the Companies’ purchase of the hedging instruments arelimited to, at maximum, the amounts of the hedged items.

The Companies evaluate effectiveness of its hedging activities by reference to the accumulated gains or losses onthe hedging instruments and the related hedged items from the commencement of the hedges.

(5) Property and Equipment

Depreciation except for buildings is computed generally by the declining-balance method and depreciation ofbuildings including investments in real estate is computed by the straight-line method, based on the estimateduseful lives of assets as prescribed by tax laws.

The range of useful lives is principally from three to 50 years for buildings and from three to 20 years for automobiles,furniture, fixtures and equipment.

Normal repairs and maintenance, including minor renewals and improvements, are charged to income as incurred.

(6) Deferred Charges and Other Assets

Amortization of intangible assets is computed on a straight-line basis over the period regulated by Japanese tax law.Development costs for advanced on-line EDP systems are deferred and amortized on a straight-line basis over

their estimated useful lives (five years and ten years).New share issue expense is charged to income as incurred.

(7) Accounting Standard for Impairment of Fixed Assets

On August 9, 2002, the Business Accounting Council in Japan issued “Accounting Standard for Impairment ofFixed Assets”. The standard requires that fixed assets be reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss shall berecognized in the income statement by reducing the carrying amount of impaired assets or a group of assets to therecoverable amount to be measured as the higher of net selling price and value in use.

The standard shall be effective for fiscal years beginning April 1, 2005. However, an earlier adoption is permittedfor fiscal years beginning April 1, 2004 and for fiscal years ending between March 31, 2004 and March 31, 2005.

The Companies have not adopted the accounting standard for impairment of fixed assets yet. The effect ofadopting this standard for the year ended March 31, 2006 is considered unknown.

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(8) Translation of Foreign Currency Financial Statements (Accounts of Overseas Subsidiaries and Affiliates)

The translations of assets and liabilities of overseas subsidiaries and affiliates are made at the exchange rates prevailingat the balance sheet date. Shareholders’ equity at the beginning of the year is translated into Japanese yen at thehistorical rates. Profit and loss accounts for the year are translated into Japanese yen using the average exchangerate during the year or, alternatively, using the exchange rates prevailing at the balance sheet date. Differences inJapanese yen amounts arising from the use of different rates are presented as “Adjustments on foreign currencystatement translation” in shareholders’ equity and minority interests in consolidated subsidiaries.

(9) Accounting for Leased Offices and Other

The Companies use offices leased under cancellable long-term lease agreements. In connection with such agree-ments, lessors in Japan require leasehold deposits relative to the amount of annual lease rental payments. Suchleasehold deposits do not bear interest and are generally returnable only when the lease is terminated. The leaseterms are generally two years with options for renewals for a similar period, subject to renegotiation of lease rates.Also, the Companies have cancellable long-term lease commitments for computer equipment and housing foremployees. As the lessee of these cancellable lease commitments, the Companies charge lease rentals arisingtherefrom to income as incurred.

(10) Income Taxes

Income taxes are accounted for by using the “asset and liability approach,” where deferred tax assets and liabilitiesare recognized for temporary differences between the tax reporting basis of assets and liabilities and those in thefinancial reporting.

(11) Cash and Cash Equivalents

Cash and cash equivalents in the consolidated statements of cash flows are composed of cash on hand, bank depositsthat can be withdrawn on demand and short-term investments with original maturity of three months or less andminor risk for value fluctuation.

(12) Net Income/(Loss) per Share

Net income/(loss) per share of common stock is calculated by deducting total amount not belonging to commonstock shareholders from net income/(loss), divided by the weighted average number of shares of common stockoutstanding excluded number of shares of treasury stock during each year.

The computation of diluted net income per common stock reflects the maximum possible dilution that couldoccur if securities or other contracts to issue common stock were exercised or converted into common stock orresulted in the issuance of common stock.

3. Marketable Securities and Investments in SecuritiesMarket value information on held-to-maturity debt securities held by the Companies at March 31, 2004 weresummarized as follows:

Millions of Thousands ofyen U.S. dollars

Aggregate market value ¥747 $7,114Aggregate book value 615 5,857

Unrealized ¥132 $1,257

Total acquisition cost of other securities, for which market values were available, was ¥4,387 million ($41,781thousand) at March 31, 2004, corresponding to the total book value of ¥5,042 million ($48,019 thousand).

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Proceeds, gross realized gains and gross realized losses from the sale of other securities for the years ended March31, 2003 and 2004 were as follows:

Thousands ofMillions of yen U.S. dollars

2003 2004 2004

Proceeds ¥13,713 ¥2,018 $19,219Gross realized gains 4,060 839 7,990Gross realized losses 1,825 19 181

4. Direct Installment ReceivablesDirect installment receivables are recorded in an amount equivalent to the retail purchase price on installments,plus commissions charged by the Companies to the individual customers, or, as the case may be, at the principalamount of loans plus commissions charged to the customers computed by the add-on method.

5. Guaranteed Loan ReceivablesThe Companies have adopted a policy to show the outstanding balance of loan guarantees as an asset (“Guaran-teed loan receivables”) and the corresponding contra amount as a liability (“Guaranteed loan payables”) on thebalance sheets.

The balance of guaranteed loan receivables represents the loans borrowed by customers from financial institu-tions under the Companies’ guarantee. The balance of this account is represented by monthly repayments whichhave not become due at the balance sheet date.

6. Commercial Loan Guarantee ReceivablesThe Companies provide commercial loan guarantee services to customers. Such commercial loan guarantee servicesare essentially identical to ordinary finance receivable and guaranteed loan receivable operations of the Companies,and, therefore, the outstanding balance of commercial loan guarantees is presented on the consolidated balancesheets. The outstanding balance of commercial loan guarantees is shown as an asset (“Commercial loan guaranteereceivables”) and the corresponding contra amount is shown as a liability (“Commercial loan guarantee payables”)in the accompanying consolidated balance sheets.

7. Property and EquipmentProperty and equipment at March 31, 2003 and 2004 was as follows:


2003 2004 2004

Buildings and structures ¥057,683 ¥056,484 $0,537,943Machinery and automobiles 1,795 1,286 12,247Furniture, fixtures, equipment and other 9,018 4,102 39,067

68,496 61,872 589,257Less: Accumulated depreciation (24,910) (22,242) (211,828)

43,586 39,630 377,429Land 99,622 99,232 945,066Construction in progress 631 8 76

¥143,839 ¥138,870 $1,322,571

8. Short-Term Bank Loans and Long-Term DebtThe annual average interest rates applicable to short-term bank loans at March 31, 2003 and 2004 were 2.10%and 2.36%, respectively.

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Long-term debt at March 31, 2003 and 2004 consisted of the following:Thousands of

Millions of yen U.S. dollars

2003 2004 2004

Loans from banks and other financial institutions, maturing through 2009 ¥531,473 ¥437,831 $4,169,819Guarantee deposits received and other 20,266 4,157 39,591Less: Portion due within one year (241,224) (236,465) (2,252,048)

¥310,515 ¥205,523 $1,957,362

The annual average interest rates applicable to long-term loans from banks and other financial institutions atMarch 31, 2003 and 2004 were 2.46% and 2.71%, respectively.

The Companies’ assets pledged as collateral for long-term loans from banks and other financial institutions atMarch 31, 2003 and 2004 were as follows:


2003 2004 2004

Cash and bank deposits ¥002,035 ¥001,532 $0,014,591Direct installment receivables 470,357 487,968 4,647,314Non-finance receivables 2,059 — —Real estate for sale 1,126 1,136 10,819Buildings and structures 2,092 972 9,257Machinery and automobiles 18 — —Land 2,626 1,707 16,257Other property and equipment 2,399 — —Investments in securities 126 378 3,600Other 117 1,558 14,838

¥482,955 ¥495,251 $4,716,676

The aggregate annual maturities of long-term loans from banks and other financial institutions at March 31,2004 are as follows:

Millions of Thousands ofYears ending March 31, yen U.S. dollars

2005 ¥236,465 $2,252,0482006 91,845 874,7142007 86,637 825,1142008 16,333 155,5522009 6,551 62,391

¥437,831 $4,169,819

9. Finance Payables to Member MerchantsFinance payables represent amounts payable to member merchants who sell goods or services to consumers usingcredit facilities of the Companies.

When installment purchase contracts are accepted by the Companies from member merchants, “Finance payablesto member merchants” are recorded in an amount payable by the Companies after deduction of commissions.Subsequently, the accounts payable are paid in cash or by the issuance of promissory notes.

In addition, the Companies issue promissory notes to member merchants (mostly car dealers) for customerswho buy cars on installment. Such promissory notes become due every month in accordance with the customers’installment terms, and the Companies collect cash from customers monthly.

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10. Income TaxesOn March 31, 2003, the Minister of Finance announced the introduction of an enterprise tax based on corpora-tion’s size effective from the year ended March 31, 2005. As a result of consideration of this announcement, thestatutory tax rate used for calculating deferred tax assets and liabilities at March 31, 2003 became 41.8% for thecurrent portion and 40.4% for the remainder.

At March 31, 2003 and 2004, significant components of deferred tax assets and liabilities (both current andnon-current) were as follows:


2003 2004 2004

Deferred tax assets due to:Allowance for credit losses in excess of tax limit ¥081,849 ¥042,491 $0,404,676Write-down of real estate for sale not deductible 38,389 34,186 325,581Write-down of investments in securities not deductible 5,805 5,139 48,943Accrued retirement benefits in excess of tax limit 5,778 1,812 17,257Net loss carryforward* 123,260 134,856 1,284,343Other 3,037 3,072 29,257

Total gross deferred tax assets 258,118 221,556 2,110,057Less: Valuation allowance (119,484) (91,883) (875,076)Total deferred tax assets 138,634 129,673 1,234,981

Deferred tax liabilities (210) (277) (2,638)

Net deferred tax assets ¥138,424 ¥129,396 $1,232,343

* Deferred tax assets relating to tax loss carryforward are recorded because the Japanese accounting standard requires that the benefit of tax loss carryforwardbe estimated and recorded as an asset, with deduction of a valuation allowance if it is expected that some portion or all of the deferred tax assets will notbe realized.

Reconciliations between the statutory tax rate and the effective tax rate for the years ended March 31, 2003 and2004 were as follows:

2003 2004

Statutory tax rate 41.8% 41.8%Add (Deduct):

Valuation allowance (39.1) (23.3)Pro-rata inhabitant tax (0.3) 0.7Adjustment of year-end balance of deferred tax assets due to change of tax rate (3.6) 2.2Other (6.5) 3.1

Effective tax rate (7.7)% 24.5%

11. Retirement PlanEmployees (excluding directors and corporate auditors) with more than two years service are generally entitledto lump-sum retirement benefits determined by their current rate of pay, length of service and the conditions inwhich the termination occurred. In addition, the Company has adopted a funded non-contributory pension planincluding the government-sponsored portion of benefits.

In accordance with the Defined Benefit Corporate Pension Law, the Company’s pension fund was approvedexempting the future payment obligation of the government-sponsored portion of pension plan managed underthe Company’s pension fund from the Minister of Health, Labor and Welfare on September 1, 2002.

With regard to the return to the public pension fund, the transitional measures stipulated in Article 47-2 of the“Practical Guidelines for the Retirement Benefit Accounting (Interim Report)” are applied, and it is calculated asdeemed to be the elimination of the pension fund equal to the amount of the return of the retirement benefit obli-gation managed under the Company’s pension fund at the date of approval. The amount of return was ¥12,339million as of March 31, 2003.

25

The pension plan of the Company provides for a lump-sum payment or pension payments for life after the ageof 65, at the option of those retiring employees with at least 20 years of participation in the plan. Those employeesretiring with at least two years but less than 20 years of participation are entitled to a lump-sum payment.

Accrued retirement benefits to employees have been recognized based on the estimated present value of projectedbenefit obligation in excess of the fair value of the plan assets since the year ended March 31, 2001.

Unrecognized prior service cost is amortized on a straight-line basis over the period of 15 years. Unrecognizedactuarial differences are amortized on a straight-line basis over the period of 15 years from the next year in whichthey arise.

Effective from the year ended March 31, 2004, the amortization period of unrecognized prior service cost andunrecognized actuarial differences has changed from 16 years to 15 years due to the shortening of employees’average remaining service period. The effect from the change of the amortization period is minor.

Unrecognized transition amount arising from the adoption of this method at April 1, 2000 (the beginning of theyear ended March 31, 2001) is amortized on a straight-line basis over 15 years for the Company and 5 years forone subsidiary.

As a result of the revision of the employees’ retirement plan which the Company has made for the year endedMarch 31, 2004, a significant decrease of projected benefit obligations has occurred. Such decrease amount wasrecorded together with the reversal of unrecognized prior service, unrecognized actuarial differences and unrecog-nized transition amount corresponding to decrease amount of projected benefit obligations as “Gain on reversal ofaccrued retirement benefits” amounting to ¥8,595 million ($81,857 thousand).

The accrued retirement benefits as of March 31, 2003 and 2004 were analyzed as follows:Thousands of


2003 2004 2004

Projected benefit obligations ¥54,447 ¥37,300 $355,238Plan assets (10,117) (11,613) (110,600)Retirement benefit trust — (5,441) (51,819)

44,330 20,246 192,819Unrecognized transition amount (10,778) (5,948) (56,648)Unrecognized actuarial differences (17,777) (8,953) (85,267)Unrecognized prior service cost 86 64 610

¥15,861 ¥05,409 $051,514

Note: The above table includes the amounts related to the portion subject to the Japanese Welfare Pension Insurance Law.

Net pension expense related to the retirement benefits for the years ended March 31, 2003 and 2004 were as follows:Thousands of


2003 2004 2004

Service cost ¥3,512 ¥3,001 $28,581Interest cost 1,517 1,347 12,829Expected return on plan assets (701) (349) (3,324)Amortization of transition amount 1,097 927 8,829Amortization of actuarial differences 1,095 1,278 12,171Amortization of prior service cost (94) (6) (57)

Net pension expense ¥6,426 ¥6,198 $59,029Gain on transfer of government-sponsored portion of funded non-contributory pension plan ¥4,481 ¥ — $ —

In addition to the above, the Company paid a special retirement allowance of ¥5,843 million ($55,648 thousand)for the year ended March 31, 2004.

26

Assumptions used in calculation of the above information were as follows:As of March 31

2003 2004

Discount rate 2.5% 2.5%Expected rate of return on plan assets 4.0% 3.5%Method of attributing the projected benefits to periods of services Straight-line basis Straight-line basisAmortization of transition amount 15 years (the Company) 15 years (the Company)

05 years (one subsidiary) 05 years (one subsidiary)Amortization of unrecognized actuarial differences 16 years 15 yearsAmortization of prior service cost 16 years 15 years

As is customary in Japan, the Company also provides for lump-sum retirement benefits to directors and corporateauditors upon retirement.

12. Commitments and Contingent LiabilitiesAt March 31, 2003 and 2004, the Companies guaranteed the housing loans of employees amounting to ¥14,039million and ¥11,808 million ($112,457 thousand), respectively.

13. Lease TransactionsLease rental expenses arising from the Companies’ lease contracts with lessors, which are defined as “finance leaseswithout transfer of ownership” and accounted for by the method similar to operating leases for the years endedMarch 31, 2003 and 2004 were as follows:


2003 2004 2004

Lease expenses ¥4,631 ¥4,068 $38,743

Scheduled maturity of lease rental expenses from the above lease contracts subsequent to March 31, 2003 and2004 were summarized as follows:


2003 2004 2004

Due within one year ¥04,077 ¥3,598 $34,267Due over one year 6,586 4,561 43,438

¥10,663 ¥8,159 $77,705

27

Assumed data as to acquisition cost, accumulated depreciation, net book value and depreciation and interestexpenses of the leased assets (furniture, fixtures, equipment and other) at March 31, 2003 and 2004 are summarizedas follows:


2003 2004 2004

Acquisition cost ¥18,148 ¥16,089 $153,229Accumulated depreciation (9,256) (9,257) (88,162)

Net book value ¥08,892 ¥06,832 $065,067

Depreciation* ¥03,906 ¥03,526 $033,581Interest expenses ¥00,553 ¥00,478 $004,552

* Depreciation is based on the straight-line method over the lease term of the leased assets.

14. Shareholders’ EquityCommon stock and preferred stock at March 31, 2004 were as follows:

Number of shares Per share With WithIssued and Liquidation retirement redemption

Class of stock Authorized outstanding Annual dividend ratio value (Yen) or not or not

Common Stock 3,650,000,000 661,639,986 — ¥ — — —1st Series Class A Preferred Stock 40,000,000 40,000,000 Yen TIBOR (6 month) + 1.25% 500 * —1st Series Class B Preferred Stock 60,000,000 60,000,000 Yen TIBOR (6 month) + 2.00% 500 * *1st Series Class C Preferred Stock 100,000,000 100,000,000 Yen TIBOR (6 month) + 3.00% 500 * *1st Series Class D Preferred Stock 100,000,000 100,000,000 Yen TIBOR (6 month) + 3.25% 500 * *1st Series Class E Preferred Stock 100,000,000 100,000,000 Yen TIBOR (6 month) + 3.50% 500 * *1st Series Class F Preferred Stock 30,000,000 30,000,000 Yen TIBOR (6 month) + 1.75% 1,000 * —1st Series Class G Preferred Stock 60,000,000 60,000,000 Yen TIBOR (6 month) + 2.25% 1,000 * —1st Series Class H Preferred Stock 60,000,000 60,000,000 Yen TIBOR (6 month) + 2.50% 1,000 * —

4,200,000,000 1,211,639,986

Holders or registered pledgees of preferred shares are entitled to receive annual dividends, and distribution ofresidual assets of the Company, as set out above in priority to holders of the shares but pari passu among them-selves. The Company may pay up to one-half of the annual dividend payable on each class of preferred shares asan interim dividend. Dividends on the preferred shares are not cumulative. Holders of preferred shares are notentitled to vote at a general meeting of shareholders except where any resolution of dividend distribution is notmade in series for three years.

28

All preferred shares are convertible into common shares at the option of the holder. Additional information ofconversion is as follows:Class of stock Conversion period Current conversion price

1st Series Class A Preferred Stock August 1, 2006 to August 1, 2016 ¥1141st Series Class B Preferred Stock August 1, 2009 to August 1, 2019 1141st Series Class C Preferred Stock August 1, 2010 to August 1, 2021 1141st Series Class D Preferred Stock August 1, 2011 to August 1, 2023 1141st Series Class E Preferred Stock August 1, 2012 to August 1, 2025 1141st Series Class F Preferred Stock August 1, 2007 to August 1, 2037 1081st Series Class G Preferred Stock August 1, 2013 to August 1, 2043 1081st Series Class H Preferred Stock August 1, 2014 to August 1, 2044 108

Each preferred share which has not been converted as described above by the end of the relevant conversionperiod will be converted into shares on the day following the end of the conversion period on the prescribed termsof each preferred share.

Under the Code, plans for appropriation of retained earnings proposed by the Board of Directors must beapproved at the shareholders’ meeting, which must be held within three months from the end of each fiscal year.Under Japanese accounting practices, bonuses to directors and corporate auditors are paid out of retained earningsinstead of being charged to income for the year, which constitutes a part of the appropriation referred to above.

The appropriation of retained earnings reflected in the accompanying consolidated statements of shareholders’equity represents the results of an appropriation made in the fiscal year in which it was approved by the shareholders’meeting and disposed of during the fiscal year, rather than those in the years to which they relate.

15. Breakdown of Financial Service RevenueFinancial service revenue for the years ended March 31, 2003 and 2004 consisted of the following:


2003 2004 2004

Consumer finance service:Consumer credit ¥077,657 ¥061,857 $0,589,114Credit cards shopping 18,435 18,722 178,305Direct cash loans 145,016 153,551 1,462,391Guarantee and loan agent services 44,448 54,646 520,438

285,556 288,776 2,750,248Other financing service 1,389 1,281 12,200

¥286,945 ¥290,057 $2,762,448

The amounts of gain on securitization of direct installment receivables included in consumer finance servicerevenue were as follows:


2003 2004 2004

Consumer credit ¥046,482 ¥036,203 $0,344,790Credit cards shopping 784 1,044 9,943Direct cash loans 72,009 86,668 825,410

¥119,275 ¥123,915 $1,180,143

29

16. Breakdown of Selling, General and Administrative ExpensesSelling, general and administrative expenses for the years ended March 31, 2003 and 2004 consisted of the following:


2003 2004 2004

Provision for allowance for credit losses ¥092,024 ¥084,451 $0,804,295Employees’ salaries 37,156 35,073 334,029Provision for accrued retirement benefits 6,426 6,198 59,029Provision for accrued retirement benefits to directors and corporate auditors 73 119 1,133Provision for accrued bonuses to employees 3,503 3,299 31,419Outsourcing fee 22,493 23,189 220,848Other 56,531 59,383 565,552

¥218,206 ¥211,712 $2,016,305

17. Loss from Devaluation and Disposal of Real EstateLoss from devaluation and disposal of real estate for the year ended March 31, 2003 consisted of the following:

Millions ofyen

Write-down of investments in real estate ¥084,468Loss on sale of investments in real estate 4,109Write-down of real estate for sale 21,565Loss on sale of real estate for sale 2,230Write-down of property and equipment 11,832Other 896

¥125,100

18. Reconciliation of Cash and Cash Equivalents of Consolidated Statements of Cash Flows andAccount Balance of Consolidated Balance Sheets


2003 2004 2004

Cash and bank deposits ¥190,733 ¥207,219 $1,973,514Less: Time deposits with deposit term of over 3 months (22,215) (29,340) (279,429)Short-tem loan receivables included in other current assets — 40,008 381,029

Cash and cash equivalents ¥168,518 ¥217,887 $2,075,114

19. Subsequent EventAppropriation of Retained Earnings

The appropriation of retained earnings in respect of the year ended March 31, 2004, proposed by the Company’sBoard of Directors and approved by the shareholders at their general meeting held on June 29, 2004, was as follows:

Millions of Thousands ofyen U.S. dollars

2004 2004

Retained earnings at March 31, 2004 ¥17,881 $170,295

Retained earings to be carried forward to the following year ¥17,881 $170,295

30

To the Board of Directors and Shareholders ofOrient Corporation

We have audited the accompanying consolidated balance sheets of Orient Corporation and its subsidiaries asof March 31, 2003 and 2004, and the related consolidated statements of income, shareholders’ equity and cashflows for the years then ended, all expressed in Japanese Yen. These consolidated financial statements are theresponsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in Japan. These standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financialstatements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the consolidated financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall consolidatedfinancial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, theconsolidated financial position of Orient Corporation and its subsidiaries as of March 31, 2003 and 2004, and theconsolidated results of their operations and their cash flows for the years then ended in conformity with accountingprinciples generally accepted in Japan.

The amounts expressed in US dollars, which are provided solely for the convenience of the reader, have beentranslated on the basis set forth in Note 1 to the accompanying consolidated financial statements.

ChuoAoyama PricewaterhouseCoopersTokyo, JapanJune 29, 2004

Notice to Readers:The accompanying consolidated financial statements are not intended to present the consolidated financialpositions and results of operations and cash flows in accordance with accounting principles and practices generallyaccepted in countries and jurisdictions other than Japan. The standards, procedures and practices to audit such fi-nancial statements are those generally accepted and applied in Japan.

Report of Independent Auditors

31

Thousands ofMillions of yen U.S. dollars (Note)

2003 2004 2004

For the year:Operating revenues ¥0,300,574 ¥0,304,558 $02,900,552Operating expenses 271,744 270,937 2,580,352Income/(loss) before income taxes (97,607) 39,368 374,933Net income/(loss) (102,327) 29,172 277,829Per share data (in yen and U.S. dollars):Net income/(loss), adjusted—primary ¥ (154.6) ¥ 44.1 $ 0.420Net income/(loss), adjusted—fully diluted — 8.6 0.082Cash dividends applicable to the period 0 0 0Shareholders’ equity (152.1) (92.2) (0.878)

At year-end:Working capital ¥0,142,367 ¥0,174,614 $01,662,991Long-term debt 310,515 205,523 1,957,362Total shareholders’ equity 99,421 289,034 2,752,705Total assets 4,111,803 4,234,511 40,328,676

Ratios (Percent):Net profit margin —.% 9.58.%Return on average assets — 0.70.Return on average equity — 15.0 .Equity ratio 2.42 6.83Current ratio 94.83 104.68

Other:Weighted average number of shares (Thousands) 661,522 661,484Employees 5,016 4,359

For the year:Operating revenues ¥0,290,814 ¥0,296,053 $02,819,552Operating expenses 265,236 265,147 2,525,209Income/(loss) before income taxes (103,929) 35,398 337,124Net income/(loss) (112,207) 25,847 246,162Per share data (in yen and U.S. dollars):Net income/(loss), primary ¥ (169.6) ¥ 39.1 $ 0.372Net income/(loss), fully diluted — 7.6 0.072Cash dividends applicable to the period 0 0 0Shareholders’ equity (134.5) (95.4) (0.909)

At year-end:Working capital ¥0,167,500 ¥0,198,173 $01,887,361Long-term debt 283,285 194,818 1,855,409Total shareholders’ equity 111,005 286,896 2,732,343Total assets 4,086,999 4,220,570 40,195,905

Ratios (Percent):Net profit margin —.% 8.73.%Return on average assets — 0.62Return on average equity — 13.00Equity ratio 2.72 6.80Current ratio 95.51 105.31

Other:Weighted average number of shares (Thousands) 661,563 661,484Employees 4,071 3,599

Note: U.S. dollar figures in this annual report are translated, for convenience only, at the rate of ¥105=U.S.$1, the approximate rate of exchange prevailing at March31, 2004. See Note 1 on page 18.

Financial SummaryOrient Corporation and its SubsidiariesFor the years ended March 31, 2003 and 2004

Non-Consolidated

Consolidated

32

Operating Assets by Products (Non-Consolidated)Orient CorporationAt March 31, 2003 and 2004

Billions of yen

Increase/2003 2004 decrease

Consumer finance businessCredit cards

Card shopping ¥0,099.2 [110.8] ¥0,097.4 [115.2] ¥ (1.8) [4.4]Card cashing 128.1 [285.7] 186.3 [402.7] 58.2 [117.0]

227.4 [396.5] 283.7 [517.9] 56.4 [121.4]

Installment creditAuto loans 763.8 [1,183.3] 867.0 [1,263.4] 103.2 [80.1]Shopping credit 497.0 [786.7] 490.2 [759.6] (6.8) [(27.1)]Consumer loans

Standard consumer loan 201.0 [372.3] 220.8 [381.2] 19.8 [8.9]Guaranteed bank loans 784.2 734.0 (50.2)Housing loans 469.5 [532.7] 423.9 [479.4] (45.6) [(53.4)]

1,454.7 [1,689.2] 1,378.7 [1,594.5] (76.0) [(94.7)]Subtotal 2,715.4 [3,659.2] 2,735.8 [3,617.5] 20.4 [(41.7)]

Total consumer finance business 2,942.8 [4,055.7] 3,019.6 [4,135.4] 76.8 [79.7]

Commercial finance businessSubsidiaries and affiliates 261.4 175.6 (85.8)Customers 14.9 12.2 (2.7)

276.3 187.8 (88.5)

Total ¥3,219.1 [4,332.0] ¥3,207.4 [4,323.2] ¥(11.7) [(8.8)]

Note: The figures in brackets represent balance of assets, which includes securitized receivables, for which Orico provides collection and management services.2. Balance of operating assets by division:

2001 2002

Credit cards shopping ¥0,109.3 billion ¥0,109.3 billionConsumer credit 667.1Guarantee and loan agent services 2,345.0Direct cash loans 697.3Commercial financing service 542.6

Total ¥4,361.3 ¥0,109.3

33

’00 ’01 ’02 ’03 ’04


450

300

150

0

Credit Cards

’00 ’01 ’02 ’03 ’04


1,200

800

400

0

Auto Loans

’00 ’01 ’02 ’03 ’04


900

600

300

0

Shopping Credit

’00 ’01 ’02 ’03 ’04


1,800

1,200

600

0

Consumer Loans

’00 ’01 ’02 ’03 ’04


600

400

200

0

Commercial Finance Business

’00 ’01 ’02 ’03 ’04

(%)100

75

50

25

0

Finance Business RatioConsumer Finance Business RatioCommercial Finance Business Ratio

Non-Consolidated Operating Assets by Products (Including Securitized Receivables)

Non-Consolidated Operating Assets Ratio (Including Securitized Receivables)

At March 31, 1994

Total ¥6,424.4(Billions of yen)

6.3%

21.7%

72.0%

31.1%

22.2%

3.1%

15.6%

Credit Cards

Auto Loans

Shopping Credit

Consumer Loans

Consumer Finance Business

Commercial Finance Business

Subsidiaries and Affiliates

Customers

At March 31, 2004

Total ¥4,323.2(Billions of yen)

0.3%

4.1%

95.6%

36.9% 29.2%

11.9%

17.6%

34

Corporate DirectoryAs of June 29, 2004

Management

Orico’s Principal Subsidiaries and Affiliates

ChairmanIwao Iijima•*

President and CEOIkuo Kaminishi•*

Executive Vice-PresidentOsamu Abe•*

Senior Managing ExecutiveOfficers

Nobuo Iijima*Kenzo ArigaYasutaka IsogawaKatsunori KasugaiKiyoshi Kurashige

Managing Executive OfficersTsuyoshi Kaminaga*Yoshiaki Tsuruoka*Masanobu ShinbaKouji Dogishi*Tatsutsugu FujiharaTetsuo FujinumaYoshinobu Yamauchi*

Executive OfficersMasao Shimizu*Yoshiteru ShiomiHaruki AraiKaneaki HoriguchiShinji HiragaHajime Okahata*Satoshi Saito*Takao HattaFumio TanakaTetsuo NomuraHitonari OtaNaomasa Nishida

Consumer Credit:Taiwan Orico Co., Ltd.

Other Financial Services:Orifund Co., Ltd.Tao International Co., Ltd.Tao Investment Co., Ltd.Kagen Co., Ltd.Orico Tama Co., Ltd.

Corporate AuditorsYoshio KojimaMasao TokudaEiichi OhnoMikio Yamamoto

• Representative Director* Director

Other Services (Servicing, TemporaryEmployment Service and Other):

Orico Trading Co., Ltd.Ohtori CorporationJapan Collection Service Co., Ltd.Orifa Co., Ltd.Orico Auto Chubu Co., Ltd.Orico Auto Chushikoku Co., Ltd.Orico Auto Tohoku Co., Ltd.Orico Auto Kansai Co., Ltd.Orico Auto Kyushu Co., Ltd.Orico Auto Hokkaido Co., Ltd.Orico Auto Kanto Co., Ltd.Orico Auto Tokyo Co., Ltd.

and 18 others

Improving Management Organization and Corporate Governance

Orico is augmenting its corporate governance to respond to dramatic changes in ourmanagement environment. As part of these efforts, in June 2002 we introduced anexecutive officer system to speed up work performance and encourage efficiency,enabling Orico to respond to transformation in the business environment and meetthe diversifying needs of customers and merchant stores. In 2000, Orico established the Orico Group Code—a set of standards promotingethical behavior for Orico Group executives and employees—as well as a compliancecommittee to ensure its observance. As a company providing customer services, we areimplementing the Orico Group Code to ensure good business decision making. Thiswill help to firmly establish the Orico brand as stable, convenient and advantageous.

35

Head Office

2-1, Kojimachi 5-chome,Chiyoda-ku, Tokyo 102-8503, JapanPhone: (81-3) 5877-5213Fax: (81-3) 5877-5219http://www.orico.co.jp/

Date of Establishment

March 15, 1951

Number of Employees

4,359 (Consolidated)3,599 (Non-Consolidated)

Paid-In Capital

¥198,023 million

Listings

Tokyo Stock ExchangeOsaka Securities Exchange

Number of Shareholders

16,838

Common Stock

Authorized: 2,100,000,000Outstanding: 661,639,986

Preferred Stock

Authorized: 550,000,000Outstanding: 550,000,000

Shareholders’ InformationAs of March 31, 2004, except where noted

Principal Shareholders Number ofshares held Percentage

Shareholder (Thousands) of total

Mizuho Corporate Bank, Ltd. 32,998 4.98%Seiwa Kougyo Co., Ltd. 30,700 4.63Chuo Real Estate Co., Ltd. 30,700 4.63Tokyo Leasing Co., Ltd. 30,700 4.63Nippon Tochi Tatemono Co., Ltd. 30,700 4.63Mizuho Bank, Ltd. 19,436 2.93Shinryo Corporation 16,877 2.55Fujitsu Limited 15,564 2.35TVC Finance Co., Ltd. 15,300 2.31Nissin Tatemono Co., Ltd. 15,300 2.31

Note: Principal shareholders are based on the shareholder books as of March 31, 2004.

Quarterly Results (Yen in million)

Fiscal 2004 I II III IV

Operating revenues ¥70,902 ¥78,837 ¥77,790 ¥77,029Operating income 6,693 9,724 10,744 6,459Net income 736 8,151 11,754 8,531

Fiscal 2005 I II III IV

Operating revenues ¥68,993Operating income 3,707Net income 3,440

Note: All quarterly data are unaudieted and have not been reviewed by independent auditors.

Common Stock Price Range (as of June 30,2004)

Further Information

For further information, and copies of the annual report and other publications,please contact the Finance Department at (81-3) 5877-5213.

IIIIVIIIIIIIVIIIIIIIVIIIIIIIVIIIIII

’00 ’01 ’02 ’03 ’04

900

600

300

0

(Yen)

Trademark of American Soybean Association

2-1, Kojimachi 5-chome, Chiyoda-ku, Tokyo 102-8503, JapanPhone: (81-3) 5877-5213Fax: (81-3) 5877-5219http://www.orico.co.jp/

Printed in Japan on recycled paper with soy ink

Documents

Orico FH 04 · Consumer Credit Co., Ltd. APRIL 1969 Consumer Credit business started. OCTOBER 1971 Guarantee and Loan Agent Services business started. OCTOBER 1972 Cashing business