Present Procurement System

As of the end of July 2003, we boast the highest shareholders’ equity rate in the industry at 62.2%. We also boast liquid funds on hand of 47.7 billion yen as of the end of July 2003. These combined with the 11.0 billion yen scheduled for repayment this fiscal year is evidence of our very strong liquidity on hand. Furthermore, we added the Hypovereins Bank of Germany and Lehman Brothers to our traditional funding source of Citibank to initiate a balanced triangular fund procurement system. In addition, there is no danger of a steep increase in borrowing costs or in other words little risk of an increase in interest. This arises from the fact that the long-term and fixed interest borrowing rates as of the end of July 2003 were 97% and 86%, respectively. This strong financial foundation places us in an overwhelmingly superior position in respect to rivals in the industry.

Procurement Strategy — Optimal Funding Mix

As for our future capital procurement configuration, our funding strategy is the optimal funding mix, which uses the three procurement methods of (1) Equity, (2) Indirect procurement, and (3) SB and ABS in the most desirable balance according to the procurement environment.

We have more proactively tackled the procurement of funds through ABS. We are also proactively tackling the establishment of friendly relations not only with foreign financial institutions but also Japanese banks, as a means to procure funds in line with our future growth. In addition, we are considering direct fund procurement means such as corporate bonds. The use of direct procurement heightens our financial flexibility in addition to improving our negotiation ability for indirect procurement. We believe they will further reinforce our fund procurement ability.

It is our position that direct procurement from the market through SB, commercial papers and other means, and procurement through ABS will increase in importance in the future. However, even then, indirect procurement will have importance within the spreading of procurement means. As for borrowings from financial institutions, we will consider using credit lines as well as continue to spread out our counter parties. The final objective for the optimal procurement configuration we are building is to construct a stable and flexible procurement structure through the flexible changing of procurement ratios, using the three methods in accordance with the procurement environment.