Orix Corp Ads (IX)

(5) Challenges to be addressed

There were not any significant changes for the three months ended September 30, 2009.

Challenges to be addressed

Based on our belief that a robust and dynamic corporate structure is integral to achieving sustained growth, we intend to implement the following four measures.

We secure new transactions by providing quality products and services for our customers. Although our primary objective is to increase corporate profitability, we also seek to engage in transactions that comply with relevant laws and regulations and take environmental issues into consideration.

As a result of our efforts to improve our financial position and credit ratings during the past few years, we have achieved these goals to some extent. With an objective of securing new growth opportunities, we aim to further improve our financial position. In light of the present environment of increasing credit instability and uncertainty in global financial markets, we will pay particular attention to maintaining an appropriately weighted balance sheet.

We will strive to establish a rewarding and motivating workplace in which our employees can fulfill their potential irrespective of nationality, age, gender, career, education and employment type, and thereby increase the strength of our organization as a whole.

To enhance our risk management, we aim to achieve our management goals through implementing timely and comprehensive enterprise risk management programs incorporating capital management, individual business risk, procurement of funds and personnel strategies. We believe that these measures will also help us to flexibly adapt to changes in our business environment and to the further diversification of our business.

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4. Challenges to be Addressed

The ORIX Group understands that a robust and dynamic corporate structure is integral to achieving sustained growth. In specific terms, we intend to implement the following four measures.

In an effort to accumulate transactions, the ORIX Group aims to provide quality products and services for its customers, and seeks to increase corporate profitability, as well as to engage in those transactions that comply with relevant laws and regulations while also taking environmental issues into consideration.

From the perspective of further improving the ORIX Group’s financial position, during the past number of years, financial position and credit ratings have been commensurate with results, but in order to secure new growth opportunities, we will strive for further improvements. In light of the present environment of increasing global credit instability and uncertainty, we will pay particular attention to maintaining an appropriate balance sheet.

We will strive to establish a rewarding and motivating workplace in which employees can fulfill their potential irrespective of nationality, age, gender, career, education and employment type, thereby increasing the strength of the organization as a whole.

In relation to enhancing risk management, we will look to steadily achieve management goals through timely and comprehensive enterprise risk management programs incorporating capital management, individual business risk, procurement of funds and personnel strategies in order to flexibly adapt to changes in the business environment and the diversifications of our businesses.

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Challenges to be addressed

We understand that a robust and dynamic corporate structure is integral to achieving sustained growth. In specific terms, we intend to implement the following four measures.

From the perspective of further improving our financial position, going forward, we will continue to secure new growth opportunities aimed at realizing such improvement. We will strive to establish a rewarding and motivating workplace in which employees can fulfill their potential irrespective of nationality, age, gender or education level, thereby increasing the strength of the organization as a whole. In an effort to engage in a variety of transactions, we aim to provide quality products and services for our customers and increase our profitability, while engaging in socially-aware transactions with attention to legal compliance and environmental responsibility. In order to respond to a wide range of risks, including operational risk and market risk, we will implement a strict, multi-faceted initial screening process and will continue to implement an elaborate risk management system to minimize risk, monitoring periodically along the way. Concurrently, we will aim to carry out suitable capital allocations for the efficient utilization of shareholders’ equity by assessing levels of risk by and investing and providing loans in business areas that are expected to be highly profitable.

4. Challenges to be Addressed

ORIX understands that a robust and dynamic corporate structure is integral to achieving sustained growth. In specific terms, we intend to implement the following four measures.

From the perspective of further improving our financial position, going forward, ORIX will continue to secure new growth opportunities with the aim of realizing further improvement. We will strive to establish a rewarding and motivating workplace in which employees can fulfill their potential irrespective of nationality, age, gender, career, education and employment type, thereby increasing the strength of the organization as a whole. In an effort to accumulate transactions, ORIX aims to provide quality products and services for its customers and increase its profitability, while accumulating socially-aware transactions with attention to compliance and the environment. In order to respond to a wide range of risk, including operational risk and market risk, ORIX implements a strict, multi-faceted initial screening process and will continue to implement an elaborate risk management system to minimize risk, monitoring periodically along the way. Concurrently, ORIX will aim to carry out appropriate capital allocation for the efficient utilization of shareholders’ equity by assessing levels of risk and investing and providing loans in areas that are expected to be highly profitable.

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6. Challenges to be Addressed

(1) Strengthening Corporate Structure

ORIX understands that a robust and dynamic corporate structure is integral to achieving sustained growth from a medium- and long-term perspective. As the scale of operations continues to expand the importance to strengthen corporate structure also increases. Recognizing its growing importance in conjunction with demands to expand corporate scale, ORIX is committed to redoubling efforts in this area.

In specific terms, we intend to implement the following three measures in an effort to strengthen our corporate structure.

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From the perspective of further improving our financial position, we have in recent years enjoyed quantitative results commensurate with our efforts. Going forward, ORIX will continue to secure growth opportunities with the aim of realizing further improvement. In an effort to further develop an operating platform that is capable of creating new value, we will focus on expanding our customer base, enhancing our sales and marketing network, and fostering improvements in intangible areas such as cross-functional collaboration and teamwork, individual employee effort and our corporate culture. With the aim of establishing an optimal workplace environment, we will promote increased awareness among management as to their roles and responsibilities, while extending efforts to realize a value-creating environment in which employees can fulfill their potential irrespective of nationality, age, gender, education and employment type. At the same time, we will instill among employees a deeper understanding of the impact of our corporate activities in an effort to better contribute to the prosperity of the economy and society.

(2) Business Development

Buoyed by a steadily recovering domestic economy, ORIX will pursue business development in Japan by bolstering the activities of its core Corporate Financial Services segment focusing on small and medium-sized enterprises (SME). In response to capital investment and real estate development needs, we will expand operations in leasing and loans. Complementing these initiatives, we will propose a variety of innovative financial services to address requirements from the growing M&A market and emerging demands relating to business restructuring including the sale of businesses and operating units. Furthermore, we will expand operations in automobile leasing by providing a broad range of high-quality services.

In the Real Estate segment, we will expand the scale of operations in condominium, office building and a wide range of other property development. We will also enter new business fields including nursing and medical care services for residential development and property management. Leveraging our strengths in non-recourse loans, loan servicing and related activities, we will nurture the Real Estate and Real Estate-Related Finance segments to become new core businesses after our Corporate Financial Services segment focusing on SMEs.

Utilizing a sales and marketing network that extends across 22 countries and regions outside of Japan, we are looking to further expand our overseas operations. In January 2006, ORIX entered the investment banking field in the United States. While working to promote our activities in this new endeavor, we will also pursue synergies with our existing Corporate Finance Group.

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Commensurate with business expansion and changes in our operating environment, ORIX will confront a variety of business and market risks. Risks tend to increase along with the profitability and growth of a particular business. In order for us to ensure that the checks and balances in our operations are more effective, we examine new business transactions from a variety of perspectives and apply strict assessment criteria. Thereafter, we periodically monitor transactions, work to further diversify risk and selectively apply financial instruments, a key element in risk management. While the profit structure is constantly changing, we are also implementing capital allocation initiatives with the aim of building a portfolio that attempts to balance profitability, growth and financial stability.

(3) Corporate Governance

In order to ensure prompt decision-making and execution as well as more effective separation of roles and responsibilities between the executive and supervisory functions, ORIX adopted a “Company with Committees” board model in 2003. (This model was amended to reflect the effectiveness of the Company Law on May 1, 2006).

As of September 30, 2006, the Board of Directors consisted of five outside directors and six internal directors. By appointing external parties to its Board of Directors, ORIX is able to leverage the experience and resourcefulness of individuals from outside the Company, further strengthen its corporate governance framework and improve the Board’s ability to objectively determine whether business activities emphasize the interests of shareholders. In the future, ORIX will continue to enhance its corporate governance function with the aim of ensuring sound and efficient corporate management.

Challenges to be Addressed

We believe that it is important to develop our business in response to changes in the market and to further enhance our corporate governance while strengthening our corporate structure in order to sustain our growth over the medium and long term.

6. Challenges to be Addressed

(1) Strengthening Corporate Structure

ORIX understands that a robust and dynamic corporate structure is integral to achieving sustained growth from a medium- and long-term perspective. As the scale of operations continues to expand the importance to strengthen corporate structure also increases. Recognizing its growing importance in conjunction with demands to expand corporate scale, ORIX is committed to redoubling efforts in this area.

In specific terms, we intend to implement the following three measures in an effort to strengthen our corporate structure.

From the perspective of further improving our financial position, we have in recent years enjoyed quantitative results commensurate with our efforts. Going forward, ORIX will continue to secure growth opportunities with the aim of realizing further improvement. In an effort to further develop an operating platform that is capable of creating new value, we will focus on expanding our customer base, enhancing our sales and marketing network, and fostering improvements in intangible areas such as cross-functional collaboration and teamwork, individual employee effort and our corporate culture. With the aim of establishing an optimal workplace environment, we will promote increased awareness among management as to their roles and responsibilities, while extending efforts to realize a value-creating environment in which employees can fulfill their potential irrespective of nationality, age, gender, education and employment type. At the same time, we will instill among employees a deeper understanding of the impact of our corporate activities in an effort to better contribute to the prosperity of the economy and society.

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