CREDIT SAISONINTEGRATED REPORT

2023

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Introduction

CONTENTS
Introduction
Management Philosophy

We will fulfill our corporate social responsibility by striving to meet the
expectations of all our customers, shareholders, and business partners.
We will compete successfully in the market by promoting our threeshared values: practical implementation of the principles of customer
satisfaction as a leading-edge service company; mutual respect forour interests and those of our business partners; and developing a
corporate culture of creative innovation.

To realize Credit Saison’s management philosophy, the Declaration of
Conduct and the Standards of Conduct have been established.
Declaration of Conduct

Standards of Conduct

Credit Saison has established the
Declaration of Conduct to clarify
how the Company should conduct
its activities in order to realize its
management philosophy.

We have established the Standardsof Conduct that provide specificguidelines for employees to act
in accordance with the
Declaration of Conduct.
We shall share the Standards ofConduct and act accordingly.

Click here for details of the Declaration of Conduct and Standards of Conduct.
https://corporate.saisoncard.co.jp/en/company/compliance.html

About the Company’s corporate colors

Saison Blue
Symbolizing people’s happinessand aspirations

Saison Green
Symbolizing trust, peace of mind,
culture, and innovation

Contents/Editorial Policy
Basic Concept of the Medium-term Management Plan
Credit Saison’s History of Continuing to Create New Value
Transforming the Business Portfolio
The Six Businesses

Management Vision

6 Message from the CEO
8 Interview with the COO

Value Creation Strategy

Declaration of Conduct and Standards of Conduct

The concept behind our logo

1
2
3
4
5

12 Value Creation Process
13 Retrospective Overviews of Past Medium-termManagement Plans
14 Overview of the Current Medium-term Management Plan
15 Establishment of the Saison Partner Economic Zone
and Reinforcement of Cooperation among the Group‘sCompanies: Interview with the Executive Officer in Charge
19 Capital and Business Alliance with Suruga Bank Ltd.
21 Global Business: Interview with the Director in Charge
23 Acceleration of Global Business Expansion
27 Revitalization of the Payment Business29 Promotion of Healthy Growth and Expansion into New
Fields for the Finance Business
30 Integrating the Finance Business and the Payment Business
31 Human Resource Strategy: Interview with the Executive
Officer in Charge
33 Human Resource
38 CSDX Strategy: Interview with the Director in Charge
41 Financial Capital Strategy: Interview with the Executive
Officer in Charge

Editorial Policy

Credit Saison works diligently to provide its wide range of stakeholders, including customers,
shareholders, and investors, with accurate information in an equitable manner on a timely basis.
In addition to an overview of its operating results and financial standing, theCredit Saison Integrated Report 2023 contains non-financial information thatcovers environmental, social, and governance (ESG), as well as a wide rangeof other fields. This report is intended to help our many stakeholders to better
understand the Company’s efforts to create value over the medium and longterm and ensure its sustainable growth.
In compiling this report, we have referred to the International Integrated
Reporting Framework recommended by the IFRS Foundation and the
Guidance for Collaborative Value Creation issued by Japanʼs Ministry of
Economy, Trade, and Industry (METI).

1

Sustainability

44 Sustainability of the Credit SaisonGroup
46 Response to Risks/Opportunities
48 Response to Climate Change(Information Disclosure Based on
the TCFD Recommendations)
50 Environment
52 Human Rights
53 Contributing to a Safe, Secure,
and Convenient Cashless Society
54 Information/Cybersecurity
55 Coexistence with Local
Communities
56 Roundtable Discussion between
Outside Directors
59 Corporate Governance
63 Board of Directors/Audit &Supervisory Board Members/
Executive Officers

Data Section

65 11-Year Summary of Selected
Financial Data
66 Segment Highlights/
5-Year Non-financial Data
67 Corporate Information/
Investor Relations Information
68 Major External Awards/
Editor’s Postscript

Forward-looking Statements

This report contains information including details of theCompany’s management plans, projections, strategies, andestimates that are not historical facts. This information reflects
the beliefs of management based on currently available
information. Projections and forward-looking statements are
subject to certain risks and uncertainties.
As a result, projections of future performance, the businessenvironment, and other forward-looking estimates might differ
materially from actual results.

Reporting Period

This Report covers the 2022 fiscal year (FY2022: April 1, 2022, toMarch 31, 2023). Some activities in FY2023 are described as well.

Introduction

Basic Concept of the Medium-term Management Plan

Innovative

Internal
Venture Program

Utilizing
Generative AI

P35

P40

DigitalWith all kinds ofproblems as starting points,
innovate existing values
and create new value

By promoting digital conversion
in combination with real life,change the customer/
employee experience

DNA of Creative
Destruction

P3

We follow three concepts to drive
our businesses and create new value

Expansion into
Latin America

P25

GlobalUse ﬁnancial services as a method
to take on the challengeof ﬁnancial inclusion

2

Breakthrough in
the India Business

P24

Developing DX
Human Resources

P38

Introduction

Credit Saison’s History of Continuing to Create New Value
New unconventional services
1988
Developed an international credit card withno annual membership fees through a tie-up
with Visa and Mastercard

1951Founding of Midoriya Co.,
Ltd., a department store thatsold products on a monthly
installment basis
1982
Issued the Seibu Card with noannual fee and started instantcredit screening, instant card
issuance, and instant use at
Saison Card counters

1951

The dawn of the Saison Group’s
philosophy and culture

2002
Started Eikyufumetsu Points,
a program for points thatnever expire

1985
Launched the credit
guarantee business

Making society more
prosperous throughinnovation

Founding

Seiji Tsutsumi, the founder of the Saison Group, foresaw
the growth of consumer needs after the needs for food,clothing, and shelter had been satisfied following WorldWar II. Tsutsumi advocated an “integrated lifestyle industry”
to promote distribution reform by expanding business toall areas of daily life while leading the consumption
culture. “Always paying attention to thecustomer and providing society withnew innovations”—this idea is at theheart of the Saison Group.

2006
Launched the points exchange
website Eikyufumetsu.com (currently
Saison Point Mall)
2009
Entered the Flat 35 loans business

1997
Issued the Saison American
Express® Card through a tieup with American Express

Neo Finance Company

1980

2000

A change of businessstructure

Acceleration of the
Global Business

Creating revolutionary
innovations one after
another to become the No. 1
credit card company

Expansion of the credit cardbusiness and full-fledged
advance into the financebusiness

Growing from a Japanese
non-bank to a financecompany distinctive in Asia

Conversion to thepayment business

2014

2022

Acceleration ofdigitalization
Transformation into acomprehensive life
services group
Fusing real and digital toachieve customer success

Always from thecustomer’s perspective

2010
Issued the world’s first Centurion designcard with American Express

2017
Started handling Saison Rent
Guarantee services

2013
Started handling Saison Asset Formation Loans

Providing exhilarating experiencesthat exceed customer expectations
by utilizing digital technologies

2018
Established Kisetsu Saison Finance (India) Pvt. Ltd. in India

2014
Established a subsidiary in Singapore

32023
Brazil/Mexico market entries

2021
CSDX Strategy announced
Launched Saison’s Lifestyle Research website
toward transformation into a comprehensive
life services group

Note: “American Express” is a registered trademark of American Express.
Credit Saison Co., Ltd., uses the trademark under license from American Express.

Introduction

Transforming the Business Portfolio
Global Business

Construct a business model without relying on the Payment (Credit) Business

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34.5 billion

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60.9 billion

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Bus

iness

Est
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Business
Lea
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Entertain

Paym e

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New
Business

3:3:3:1

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Bu s
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FY2008Operating Revenue(JGAAP)

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F

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FY2022Business Proﬁt(IFRS)

Medium- to long-term
Business Portfolio Balance
FinCredit Saison has continued to transform its business portfolio with a view to securing mediumto long-term growth while responding to changes in the environment, including the launch of
payment services by other industries, enforcement of the revised Money Lending Business Act(2010), and the global spread of COVID-19. In particular, we are working to strengthen otherexisting businesses and create new businesses with the aim of constructing a business model
without relying on our longstanding mainstay Payment Business.
In terms of the balance for the medium- to long-term business portfolio, we envision a
3:3:3:1 ratio structure for the Payment, Finance, global, and new businesses, respectively. We
are steadily approaching this 3:3:3:1 ratio by expanding the Global Business and bolstering the
Payment Business structure.

P ay m en

si
t Bu

ne

ss

ss
ine
Bus
t
n
nme
Entertai

GlobalBusinessine

ssPayment Business*1
Finance Business*1

ss
ne
usi
B
t
n
inme
EntertaGlobal Business*2
New Business*1 The Payment Business includes the Entertainment Business; the Finance Business includes the Lease and Real Estate–Related Businesses*2 From the ﬁrst quarter of FY2023, the Global Business, which was included in the Payment Business up to FY2022, has been changed to an independent reporting segment.

Payment Business
Finance Business
Global BusinessChanges in mainstay businesses

1980

2010

2014

4

2023

(FY)

Introduction

The Six Businesses
We offer a variety of payment services, including
credit cards and smartphone-based payments,
with an eye to bringing about a cashless society.
We also engage in rent guarantee businessactivities that are closely aligned to our credit cardbusiness. Moreover, we undertake back-officeprocessing operations on a contract basis onbehalf of credit card and other companies.

Including the credit guarantee and financebusinesses, we fulfill a variety of financial functions
that address market needs, while providing suchproducts and services as credit guarantees forfree loans that can also be used for businessfunds, Flat 35 with preferential benefits for card
members, and Saison Asset Formation Loans toassist in the acquisition of investment real estate.

Finance Business

Payment Business

We undertake concert andother ticket sales and engage
in related activities thatencompass the amusementbusiness, among others.

Entertainment
Business

Real EstateRelated Business

Global BusinessWe conduct the real estatebusiness, real estate leasing
business, and servicing(loan collection agency)
business, among others.

Lease BusinessWe offer “finance leases” and “business-use
installment sales” based on office automation(OA) communication equipment tailored to thecapital investment plans of business operators.
Besides supporting business trends suchas the POS cash register peripherals market,
which facilitates cashless payments, wetake on challenges in growth fields such asenvironmental products.

Driven largely by the lending and investment
businesses, we promote business development
not only in Asia but also globally. We aim toachieve financial inclusion by offering digitalized
and localized financial services to people(underserved people) and small businesses
that are unable to receive sufficient or adequate
financial services.

5Management Vision

Message from the CEO

Expanding the economic zone of a comprehensive life services groupwhile balancing “creative destruction” and “individual freedom”
Always paying close attention to international political trends, I think about the global position of Japanese companies.
Geopolitical risks are rising more than ever, with the Russia-Ukraine conflict and the situation in the Middle East becoming
increasingly tense. In addition to the ongoing friction between the United States and China, the world is heading in the
direction of multipolarization, as exemplified by the European Union and Russia as well as the Global South movement,
which includes India.
Under these circumstances, Japan’s presence is greatly diminished compared to its standing in the second half of the20th century, when the country was recognized as the world’s second-ranked economic power. It is my belief, however, thatJapanese companies have a chance to raise their profiles even against the backdrop of this multipolarizing world if they areable to create 21st century global business models that differ from those of the 20th century.

Global strategy that calls for a multifaceted response
In the 20th century, “control” was the mainstream global strategy of Japanese companies, which involved holding most of
the capital of local companies and dispatching presidents from Japan. In the 21st century, this approach no longer works.
The important thing is to contribute to the economic development of the countries and regions into which companies have
expanded, in a form that meets the wishes of those countries and regions. Also demanded in an era of multipolarization are
multifaceted responses tailored to the local area. Investment ratios are not a major factor.
As reflected in the Company’s FY2022 financial results, Credit Saison’s global business is currently experiencing rapid
growth, primarily in India. A major characteristic is that we develop original businesses from the perspectives of the local
people, using those countries and regions that are continuing to grow economically as our starting point. At Kisetsu Saison
Finance (India) Pvt. Ltd., an Indian subsidiary for which the main business is lending to the underserved population who
cannot receive sufficient financial services from banks and other financial institutions, we steadily expanded our businessthrough a collaborative model (BtoB) with local Fintech businesses and eventually launched a BtoC model geared toward
individuals. This Indian model will also be deployed in other countries, such as Brazil and Mexico.

Building a loosely connected economic zone in Japan, aiming eventually for a global ripple effect

Hiroshi Rinno
Representative,
Chairman and CEO

Toward the achievement of our “transformation into a comprehensive life services group” goal, we are currently building aloosely connected economic zone of equal partners called the Saison Partner Economic Zone. To compete against othercompanies, which are enclosing themselves within their own economic zones, it is important to adopt a loose approach that6

Message from the CEO

excludes regulations, such as the number of companies within a single industry that can be partnered with or whether there are
any capital ties. Equally important is how well customer needs can be met.
As a comprehensive life services group that solves customers’ problems, Saison’s Lifestyle Research website that welaunched in September 2021 continues to grow steadily, as evidenced, for example, by recently recording 4.7 million pageviews per month. As far as the speed of monetization through the building of an economic zone is concerned, althoughdifferences can be seen in the expectations of each of the relevant parties, I believe it is important to have the patience toproceed calmly and gradually.
In the real estate industry, Credit Saison already enjoys relationships and collaborations with such companies as Mitsui
Fudosan Co., Ltd., Tokyu Land Corporation, and Daiwa House Industry Co., Ltd. Up to now, we have also formed alliances inareas such as the credit guarantee business with nearly 400 financial institutions, including regional banks, credit unions, andcredit associations. Going forward, we will also face the challenges of creating new business models that combine the strengths
of both banks and non-banks while taking on the challenges of diversifying our business. Working to enhance our partnershipnetwork with a wide variety of companies, we have entered into a capital and business alliance with Suruga Bank, which has
strengths in the retail business.
The only thing that yields profit for companies is their customers. It is therefore important to have partnerships launched on
the basis of customer needs, and thus I think it is better to build a system that creates synergies while building “give and take”–
based relationships. This loosely connected economic zone naturally has its sights set on global expansion.

“Creative destruction” and “freedom”
I often point out four important management resources for companies: human resources, brands, innovation, and time.
Discovering and securing the human resources that will support growth is never easy. For the human resources at the level ofrunning businesses, they will need to be drilled through hard training. Also, as human resources are demonstrating increased job
mobility, to retain these talented human resources Credit Saison must itself continue to be an attractive and interesting company.
We human beings have an instinctual desire for knowledge, we want to know things we don’t know. Just as there is a lot of learningthat can be gained through play, playing, learning, and working are essentially equivalent when it comes to stimulating that instinct.
A free and rewarding work culture, and an environment in which diverse values are embraced, make it possible for individuals withdifferent values to proactively pursue work by saying, “I want to try that job.” This encourages the active engagement of talent.
To expand and upgrade the Saison Partner Economic Zone, branding is critical to creating a favorable impression, andthe organization must be innovative to create new business models. Innovative organizations have the deep-rooted habit ofcreatively destroying, for example, products, services, and work styles, and this creative destruction arises from interactions
with diverse people.
In organizations as well, so that being free leads to a rich life with no regrets, I would like each and every human resource
to think for themselves about what to do with the time they are given and act on their own, based on their own free will. In theyears to come, Credit Saison wants to remain the kind of company that mutually recognizes each individual’s diverse values andsupports each individual’s desire for growth. I am convinced that my current job is to offer my support in this respect.
7

Management VisionInterview with the COO

Scaling up business inside and outside Japan through a process of“Innovative,” “Digital,” and “Global” evolution
As we expand our business both inside and outside Japan, the future remains shrouded in uncertainty. This is due to avariety of factors, including current international conditions, which are characterized by heightened geopolitical risks,
uncertainty surrounding the Chinese economy, and foreign exchange trends such as the prolonged depreciation of the yen.
Even within Japan, there exist countless signs of change, including future interest rate policies, price trends, and even a shift
from savings to investment. While these trends can have both positive and negative effects, as Credit Saison, we view eachsign as an opportunity.

Q

Credit Saison has announced robust results for FY2022. What do you believe are the factors behind
this performance?

In the Company’s financial results for FY2022 we recorded our highest ever consolidated final profit of ¥43.5 billion. As aresult, we now expect to achieve the business profit target of ¥70 billion set under the Medium-term Management Plan in
FY2023, one year ahead of our plan. The factors contributing to this result were the recovery of the Payment Business andthe steady growth of the Finance Business against the backdrop of steady real estate market conditions. At the same time,
our global business has grown significantly, with growth exceeding our initial expectations and making a major contribution.
In addition, valuation gains from the fair value of funds held exerted a positive impact on financial results.
Group companies are also making progress in reforming their business models, including Saison Fundex and Saison
Realty (formerly Atrium Group), which have reformed their management systems. Our human resources are key to achieving
the overarching goal of “transforming ourselves into a comprehensive life services group.” Having secured and developed
professional human resources for a variety of fields, I believe that our lineup is now fairly well rounded.

Q

Katsumi Mizuno
Representative,
Executive President
and COO

Can you give us some background on the rapid expansion of your global business, especially in India?

We commenced operations in India in 2019 after establishing a company in 2018. Shortly thereafter, we faced an extended
period during which we were unable to provide financing due to the COVID-19 pandemic that emerged in 2020. During thistime, the Company focused on strengthening its systems. Naturally, the high growth potential of India itself, with its GDP growthrate in the 7% range and an average age of around 28 years, is also a factor in business expansion. I feel that vitality firsthandevery time I go there. On one hand, having worked to strengthen our human resources in areas such as governance, financial
accounting, and risk management, which form our business foundation, we were able to lay the groundwork for accelerating
the growth of our Indian business once the COVID-19 pandemic came to an end. On the other hand, risk management uniqueto emerging countries is also important. Credit Saison’s human resources in India stood at approximately 700 as of the end of8

Interview with the COO

September 2023, and operations are overseen by people who are familiar with local business practices and have experience in providing
loans at other non-banks and financial institutions. Our great strength lies in our talented local human resources, who have a keen sense of
the local risks and are able to make management decisions and put strategies into effect on the spot.

Q

The consolidated final profit target is expected to be achieved, and your new Medium-term Management Plan isscheduled to be announced in May 2024.
Please tell us about your key initiatives, pending issues from the current Medium-term Management Plan that need
to be addressed, and your thoughts on the future business portfolio.

To assist in formulating the new Medium-term Management Plan, I personally visited workplaces and on around 50 occasions had theopportunity to speak directly with many employees.
Since the completion of associated core systems in 2018, the Payment Business has steadily resolved one issue at a time, and wewill further promote the fusion of the Payment Business and the Finance Business, which is currently under way, and the expansion andupgrade of our corporate sales structure. As a result of having allocated a large number of human resources to corporate sales, suchas multitasking, which handles finance products in addition to credit cards, the transaction volume of corporate cards has grown toabout 20% of the total business. While continuing to promote structural reforms in the Payment Business, including measures to reskill
human resources and improve productivity per person, we will enhance our efforts to, for example, acquire new small and medium-sizedenterprise (SME) customers.
In the Finance Business, after having announced our capital and business alliance with Suruga Bank in May 2023, we begancollaboration in the mortgage guarantee business in October. Further promoting collaboration with Suruga Bank, we will work on businessexpansion with a sense of urgency, focusing, for example, on the development of products for wealthy individuals and SMEs.
In the Global Business, we will obtain local credit ratings in India while leveraging the creditworthiness of Credit Saison in Japan, which
has a solid financial base. Through this process, we are developing a strategic capital policy to raise funds from local financial institutions.
In addition, we began full-scale operations in Mexico and Brazil from October 2023. By horizontally deploying the Indian business modeland know-how, we can expect an early start-up in both countries. In both markets, where there are almost no non-banks, the sense of
security that stems from being a Japanese brand will be an effective tool, so I would like to establish a unique position.
Last year, I presented a graphic of our medium- to long-term business portfolio with a 3:3:3:1 ratio structure for the Payment, Finance,
global and new businesses, respectively. From the size of the market and its speed of growth, I feel that the Global Business has thepotential to expand by up to 50% over the long term, such as 10 years from now. There is also the potential for a 3:3:3:3 ratio structure due
to growth in new businesses, including those of affiliated companies. As far as business profit is concerned, I would like to grow the Groupto the ¥100 billion scale as soon as possible.

Q

In terms of the basic “Innovative,” “Digital,” and “Global” concepts, are there any changes in the direction of theCompany toward the realization of “transforming into a comprehensive life services group”?

We recognize that our “transformation into a comprehensive life services group” and the three concepts are only at the halfway stage, andthus there are no plans to change. We believe the key to evolving into a Version 2.0 lies in the “Digital” concept. In addition to reaching
the stage of being able to allocate human resources more to the strengthening of sales capabilities by labor-saving operations through9Interview with the COO

digitalization, shifting to in-house systems development will also lead to reduced depreciation costs in the years to come. While working
toward our human resources target of creating 1,000 people with digital technology backgrounds, which was identified under our CSDXStrategy announced in November 2022, management, and myself included, will take the lead in raising digital literacy while working toboost morale throughout the organization.
With regard to the “Innovative” concept, in addition to actively promoting partnerships and M&A with an eye on fields other thanfinance, we will continue to foster a culture that facilitates the occurrence of innovation, such as creating opportunities to propose new
business development within the Company.
The “Global” concept is developed in both the lending and investment businesses. The investment business not only aims forcapital gains but also serves a radar function in discovering the new seeds of innovation. While selecting areas for expansion based on
viewpoints that include demographic trends, local digitalization status, and deregulation, we will keep an eye on cost balance as we work
to expand our business. As we look beyond Central and South America to, for example, Africa in the years to come, the optimization of
our overall management system will become an issue for consideration. Also, the funds from our lending business are directed toward
individual as well as micro, small, and medium enterprises (MSMEs) that lend to the underserved strata of society and those below that.
Operating at the forefront of financial inclusion, our lending business is one that is making a major contribution to the attainment of the
SDGs. In addition to being able to better monitor a company’s structure and decision-making processes as well as perform effective risk
management, by carrying out both investment and financing I feel that there is greater significance in developing the business along twoaxes, as this will also serve to boost the speed of growth.

Q

Please tell us about your efforts and results to date for each business, as well as what you see as challenges forthe future.

In the Payment Business, we are focusing on Generation Z and wealthy people as we work to improve spending per person and lifetime value(LTV). The AMEX brand accounts for approximately 40% of the entire Payment Business’s transaction volume, and we are aiming for the top
share in the BtoB market by leveraging this brand awareness, focusing more on corporate sales, and exercising firm credit controls.
In the Finance Business, we will strengthen our collaboration with Suruga Bank in the areas of real estate finance and the housing
loan business. Digitalization continues to lag in these areas, not only in our company but also in the industry as a whole. Under the next
Medium-term Management Plan, I would therefore like to drive this business to become the No. 1 digital company in the industry and use
this as a tool by which to strengthen sales.
I recognize that the current business environment for the Lease Business, which focuses on small-lot leases, is such that credit
management remains important, as evidenced by the increasing number of bankruptcies of businesses that used so-called zero-zerofinancing. In contrast, as our transaction volume has increased to an all-time high and our competitiveness has improved, we will consider
developing medium- to large-scale lease products. By way of example, we are considering products related to environmental needs, suchas office equipment, drones, electric scooters, and even solar power and storage batteries. In this process, I believe that collaborating witha specialist leasing company could be one option.
In the Real Estate–Related Business, centered on Saison Realty, we are making steady progress with a business model transformationthat will make renovation and rental residences its mainstay businesses. Also taking on the challenges of procuring new resources using
digital technology, I would first like the Real Estate–Related Business, to build up a solid track record.
10Interview with the COO

The Entertainment Business is developing its hall business centered on Concerto, but the market is facing a decline in the number ofplayers. We will continue to sow the seeds for the next pillars of earnings, such as game centers, renovating vacant houses, and even cloud
kitchens (kitchen store facilities specializing in delivery services), as we work to change the business model.

Q

What are your thoughts on sustainability?

We are honored to have received high praise for our sustainability efforts. Climate change countermeasures, in particular, are importantto our customers, especially Generation Zers, when choosing a company, and I would like to advance our efforts on an ongoing basis.
In addition, once a relationship begins in our business, especially in payment businesses such as credit cards, the relationship with thecustomer continues over a long period. Because safety, security, and stability are essential to deepening relationships of trust and as thefoundation of our business, we also actively invest in IT to strengthen security.
With regard to initiatives designed to fully utilize and develop our human resources, who are essential for our medium- to longterm growth, we are promoting the provision of opportunities to enable young employees, in particular, to actively take on challenges.
Including the setting up of forums for new business proposals and relaxing the qualification requirements for taking promotion exams
that are now by a show of hands, we have introduced a system that broadens promotion opportunities for motivated employees. In thefiscal year under review, we also expanded and upgraded our employee benefits, including financial bonuses and phantom stock. Within
the Company, human resources who possess advanced skills are playing active roles in a variety of fields, not only in digital technology
but also in real estate and structured finance. At the same time, we are also working on instructing and training the next generation, andprogress is being made with human resources and skill diversification.

Q

In closing, what message do you have for stakeholders?

I am committed to working toward equality for all our stakeholders. While continuing to respond sincerely to our customers andbusiness partners, I would like to increase employee engagement through financial bonuses, promotions, and the expansion of training
programs. We recently reached the stage at which more than half of our employees have joined the stock ownership plan, and I feelthat our employees’ expectations for our company are higher as a result of these efforts. To assist employees in building assets, we are
actively discussing PBR, ROE, shareholder returns, and other matters within the Company to further improve our stock price level while
endeavoring to disclose information and deepen dialogue with investors.
For our shareholders, we announced plans to increase dividends for the third consecutive year in our FY2022 financial results. I havelearned a great deal through dialogue with investors who have long-term perspectives, and my feeling is that even the markets are evaluating
our growth expectations favorably. While continuing to strive to improve capital efficiency, I believe that we will raise our ROE target fromthe current 8% to the 10% level under the next Medium-term Management Plan and, as we get within range, that will be reflected in our
PBR.
Our opportunities for growth, including global opportunities, are increasing considerably. I would like all our stakeholders to haveexpectations of Credit Saison’s future growth from a long-term perspective.
11

Value Creation Strategy

Value Creation Process

Contributing to the creation of a sustainable society that is even more convenientand prosperous than today’s by resolving social and environmental issues
Management Philosophy

Main Management Resources

Awareness toward co-creation withall stakeholders

Human resources
with vitality

Transforming existing values andcreating new values in response
to various problems

Entertainment
Business

Credit know-how nurtured
over the 70-plus years since
the Company’s founding

By promoting digital conversion
in combination with real life,change the customer/
employee experience

System infrastructure capable ofresponding ﬂexibly to changeRock-solid
sales platform

Diverse ﬁnancing based on highcreditworthiness

15.4%(equity ratio attributable to owners of parent)Group business proﬁt(previous ﬁscal year: 15.6%)¥60.9 billion(previous ﬁscal year: ¥52.3 billion)¥10.9 billion

Total dividends(previous ﬁscal year: ¥8.6 billion)

111.0%

Total shareholder return (consolidated)(previous ﬁscal year: 85.5%)

Realization of a resilient organization

Progress in social and environmental initiatives led
mainly by the Sustainability Promotion Committee
Number of committee meetings/
working groups held
28 in total

Finance BusinessCommittee: Nine times; WG: Climate change 10 times; DE&I: Nine times

Number of dialogues heldwith shareholders/investors

214
0

Number of security incidents

Fostering motivation and diverse values
74.5%
24.9%

Ratio of female employees

Use ﬁnancial services as a method
to take on the challengeof ﬁnancial inclusion

Ratio of female managers*1

Real Estate–related
Business

G lo b al

Lease Business

Customer base with an industry-leading
number of members

Sound ﬁnancial base

7.5%

(previous ﬁscal year: 6.5%)

Shareholders’ equity ratio

Professional human resources
well-versed in the payment/ﬁnance ﬁelds
Service development track recordin the ﬁnance ﬁeld

Regions/ Shareholders Employees
communities

Financial results

Providing a wide rangeof advanced security
services with the strengths
of creditworthinessand a wide customer baseInnovation creation
capabilities

Partners

Return on equity (ROE)

Payment Businessive

Customers

P5

l
gita
Di

Human resources that are active under
our common system for all employees

The Six Businesses

Inno
va
t

An organizational culture that allows
creative destruction and failure

Value Created in Collaboration with Stakeholders

Transforming ourselves into a comprehensive life
services group centered on ﬁnancial services

Corporate culture thathas been handed downin continuous succession
Meritocracy free from age, gender,or educational attainment bias

leading-edge service company

Number of human resources withdigital technology backgrounds

New business/Product development

Global Business

Number of new product releases

Creating humanresources andan organization where
each person can fulﬁll
an active role in theirown way

Enriching ourcustomers’ lives
and enablingthem to live happily andtrue to themselves

Approx. 40

Number of SWITCH SAISON*2 proposals andnumber of commercialization projects

Approx.1,000 proposals; four commercialization projects

Materialities for Sustainability
Achieving sustainablegrowth and improving
corporate value throughsound corporate
management

Approx. 260

86.3%

Paid leave take-up rate

Creating a better
society throughco-creation withpartners

Strengthening ability to resolve socialand environmental issues

Protecting the richnatural environmentand culture thatenriches life, andenergizing people in theregion and community

Business alliances aimed at building a carbon-neutral
and recycling-oriented society
Environmental protection activities(operation of Akagi Nature Park)

About 65,000 visitors

Reducing paper consumption by digitizing the ﬂow
of operations

Highest level of creditworthinessfor an independent non-bankFinancial inclusion for the underserved classworldwide, beyond Asia

Declining birthrate, aging population

Requests from the market environment/society

Climate change

Digitalization

Promoting conversion to cashless operations

12

Growing needs for asset formation*1 General manager and manager*2 Internal venture program

For details, please see page P35

Value Creation Strategy

Retrospective Overviews of Past Medium-term Management Plans
FY2016–FY2018

FY2019–FY2021

To FY2022

Further acceleration of efforts to revise the card business and transformation to a general non-bank

Transformation and Renewed Growth Neo Finance Company in Asia

Building a Foundation

Payment Business*1

FY2021Business Proﬁt(IFRS)FY2018Business Proﬁt(IFRS)

52.2 billion

Finance Business*1

FY2021 business profit(excluding the impact of provision for loss on interest repayment)

52.3 billion¥

650億円超¥FY2021Business Proﬁt

FY2018 Results
EPS¥186.8

Shareholders’Equity Ratio

15.3%

EPS

6.2%

¥226.4

Basic Policy
Realize innovation and changing business models

Face the challenge of new business models

Expand the stock business and the fee business

Full migration to the Associated Core System

Completed a foundation capable of allianceexpansion and product development

Responsive to diverse customer needs

Expanded the Global Business into more countries

Shareholders’Equity Ratio

15.6%

ROE

6.5%

Basic Policy
Become a finance company advancing with customers
for 50 years

Provide peace of mind anddiscover the potential in money

Results

Payment platform enhancement/
Finance Business expansion

65 billion¥

FY2021 Results
ROE

Results
Achieved a certain degree of progress toward businessdiversification
Payment Business

Recovery under way due to the effects of shortened
business hours and people having refrained from going out

Finance Business

Steady expansion as the second pillar

Global Business(IFRS)
More thanAbout the impact of provision for loss oninterest repayment
In addition to carefully examining such factors
as its past reimbursement record, the Company
has posted the necessary allowance required toaddress future uncertainties, including changes in
economic conditions and taken preparatory steps
to account for unexpected events with respect totrends in interest reimbursement claims.
In FY2021, the Company recorded a provision
for loss on interest repayment of ¥13.6 billion after
taking into account the projected future trend ofinterest repayment claims, etc.
The level of business profit was more than
¥65.0 billion, exceeding the initial target of ¥60.0
billion after excluding this impact.

Prospect of increased profit contribution as a third pillar*1 The Payment Business includes the Entertainment Business; the Finance Business includes the Lease and Real Estate-related businesses

13Value Creation Strategy

Overview of the Current Medium-term Management Plan
FY2022

FY2024

Transformation into a comprehensive life services group

New Medium-termManagement Plan from FY2024

Business profit(initial target)¥53 billion

FY2022Business Proﬁt(IFRS)

60.9 billion¥

FY2022 Results
EPS¥278.9
Shareholders’Equity Ratio

15.4%
ROE

7.5%
Payment Business*1

Finance Business*1¥70 billion
Both growth in consolidated contribution including the
Global Business and growth in each non-consolidated
business trending firmly.

Portfolio transformation

Projected to achieve the Company’s consolidated
business profit target of ¥70 billion for FY2024, one year
ahead of schedule.
The next Medium-term Management Plan will startanew from FY2024.

Aim for more than¥100 billion in business profit
as a medium-term goal
Muscularization of
the business structure

Re-growth phase

Global Business*2*1 The Payment Business includes the Entertainment Business; the Finance Business includes the Lease and Real Estate–Related businesses*2 From the first quarter of FY2023, the Global Business, which was included in the Payment Business up to FY2022, has been changed to an independent reporting segment

Basic Policy

Basic Concept

Transformation into a comprehensive life services groupContinue and penetrate the three concepts andaccelerate the drive of each business.

Achieving customer success through the fusion of the real and digital worlds

DigitalWith transformation into a comprehensive life services group as its medium-term management
vision, Credit Saison formulated the Medium-term Management Plan for the FY2022 to FY2024
period with the core concepts of innovative, digital, and global, and achieving customer
success through the fusion of the real and digital worlds as its mission statement.

Innovative

GlobalGrowth Strategy Framework

Vision under the Medium-term Management Plan
1 Establish the Saison Partner Economic Zone and Reinforce Cooperation among theSales expansion

Group‘s Companies

2 Revitalize the Payment Business
3 Promote Healthy Growth and Expansion into New Fields for the Finance Business
4 Accelerate Global Business Development and Further Growth Expansion

GlobalP21

Payment
P27

Finance
P29

Reinforcement of Business Foundation

CSDX Human Resource Financial Capital
Strategy
Strategy
Strategy
P31
P38
P41

14

Improved
proﬁtability

Value Creation Strategy

Achieving sustainable growthand improving corporate
value through soundcorporate management

Mainly related materialities

Creating human resources
and an organization where
each person can fulﬁll an
active role in their own way

Enriching our customers’ lives
and enabling them to live
happily and true to themselves

Protecting the rich naturalenvironment and culture thatenriches life, and energizing people
in the region and community

Creating a better society
through co-creation
with partners

Establishment of the Saison Partner Economic Zone andReinforcement of Cooperation among the Group’s Companies
Establish the Saison Partner Economic Zone
In transforming ourselves into a comprehensive life services group, our goal is to establish the Saison partner economic zone. We will pursue synergies with Group companies in addition to
our existing business partners with the aim of becoming a non-bank with a strong presence in each of the Payment, Finance, and Real Estate–related businesses. Specifically, we will actively
promote initiatives that allow our existing alliance partners to utilize the Group’s base of approximately 35 million customers and expand our share of corporate transactions through Group
collaboration. In addition to developing new products in the fields of payment, asset management, and real estate, we will create value suited to individual customers by combining resourcesof Saison partners through the diversification of coordinated relationships and services.
Partners

ymPa

新社名ロゴタイプデザイン案

セゾンビジネスサポート

BUSINESS SUPPORTManagement
consulting

Credit Saison
Group Services

Individuals

Business
success

Problems

Ofﬁce automation(OA)
communicationequipment sales/
maintenance

Credit guarantee

Intend toincrease/
prepareRich
lifestyleceInter-corporation
payment services

ExpenseC
management

Real estateGroup companies

n
na

Banks

Credit unions

Fi

en
t

Department stores

Lease

Type A

Financial services

カラー 4C

Safety/security

BUSINESSSUPPORT

Securities

Convenience/
good value

Want toknow/learn

CMYK：C 100
RGB ：R 29#1D4293

Y0

B 147

K0

CMYK：C 100
RGB ：R 0

M0

G 151

Y 100

K0

B 75

＃00974B

Sustainable
society

Telecommunications

Investment

Corporations

Crowdfunding

15

HR training services

bu
ew

Web3

N

Lendingsi

Online advertising

l

ba

lo

G

Payment services

nessFintechM 80
G 66

Establishment of the Saison Partner Economic Zone and Reinforcement of Cooperation
among the Group‘s Companies: Interview with the Executive Officer in Charge
Taking on the challenge of establishing the Saison Partner Economic Zone with all Group
employees working in unison

Q

Hironao Wakamei

Executive Officer
In charge of Group Strategic
Management Dept.
General Manager, Group
Strategic Management Dept.

Please tell us about the new initiatives launched as partof Credit Saison’s integrated Group management with
its affiliated companies and the resulting synergy
toward transforming into a comprehensive life services
group as raised in the Medium-term Management Planfrom FY2022.

We have engaged in Group management that aims to enhance
corporate value while respecting the independence of each of ouraffiliated companies and maintaining a sense of friendly competition.
As a result, we have started to form a corporate Group that stays true
to Credit Saison with its rich diversity and engagement in a wide rangeof businesses. Under the current Medium-term Management Plan, we
have put forth the basic goal of transforming into a comprehensive life
services group, and aim to build the Saison Partner Economic Zone with
an awareness of integrated Group management.
As an example, as we recognize that communication is the mostimportant aspect of business cooperation, the Credit Saison Chairman andPresident visit each affiliated company in person in addition to receiving
explanations of initial business plans and progress reports from affiliatedcompanies. This approach provides a forum for them to cooperate directlywith our affiliated companies in their short-, medium-, and long-termbusiness strategies and progress updates, as well as to exchange opinions,
thereby serving to create opportunities to think about managing theGroup as an integrated whole. As part of our efforts to deepen information
sharing at the front lines, we established a new Group intranet, introduced
a common-use Slack environment, and made other improvements tothe information sharing infrastructure used by Group companies. At thesame time, we are advancing initiatives to share information in face-to-facesettings, including sales representative exchange meetings.
Moreover, we introduced shared services (outsourcing of accounting
and other back-office operations to Credit Saison) for some affiliatedcompanies in an effort to improve the efficiency of operations and have also
begun building a framework to reinforce and rationalize sales. Currently,
we are working to expand the number of eligible companies by launching
Group-wide task forces, which include members from both Credit Saisonand our affiliated companies as part of ongoing investigations.
16

We are also implementing branding strategies and are working tofoster a more unified image for the Group by naming our companies,
products, and services after “Saison.”*Q

How are these initiatives progressing? Please tell us about
the major outcomes and any challenges that have arisen.

We have seen a tendency for the Group as a whole, including Credit
Saison, to focus on customer satisfaction and profit generation fromits own perspective. Although I do not intend to deny the marketingstrengths that we have developed in a way that stays true to Saison in
their entirety, this approach tends to lead to discussions and actions
regarding partial optimization. Yet, to realize integrated Groupmanagement, each employee of the Group must think and act fromthe perspective of overall optimization. As I see it, the most important
aspect for achieving this perspective is for Credit Saison and eachaffiliated company to possess an interest in and attempt to learn about
the businesses of the other members. We will therefore advance related
initiatives with a focus on building frameworks and mechanisms, as wellas on strengthening communication, for this purpose.

Q

To achieve the goal of transforming into acomprehensive life services group, what do you think theGroup must do in particular going forward?

Each Group employee must undergo a further change in his or her
mindset. Starting next spring, we will accelerate personnel exchanges
between Group companies via internal recruitment along with efforts tostrengthen communication, and will begin considering rationalization
through the consolidation of branches. Moreover, I feel that we must
reinforce the personnel system in a way that links contributions to theGroup with employee evaluations, as well as strengthen management
and accounting systems that help visualize the degree of contribution
by our affiliated companies. There are many things left to do. And asa member of the Group, I will place our customers first as I act with anawareness of optimization for the entire Group.
* Atrium Co., Ltd., was renamed Saison Realty Co., Ltd. (April 2023), and JPN COLLECTION SERVICE
CO., LTD., was renamed SAISON COLLECTION SERVICE CO., LTD. (July 2023)

Establish the Saison Partner Economic Zone and Reinforce Cooperation among the Group’s Companies

The management style taken by each Group company has focused on the independence of each company, without being hemmed in by brands or capital relationships. Moreover, we will
maintain the independence of each company into the future as we aim to differentiate ourselves from our competitors and establish a comprehensive life services group that offers thegreatest convenience to our customers. To achieve these aims, we will further strengthen Group product coordination with respect to each customer in a customer-oriented manner within the
Saison Partner Economic Zone, a loose network of horizontal connections.

Outcomes of integrated Group management

Case study

Contributions to profits by Saison Fundex Corporation and Saison Realty Co., Ltd.

Saison Fundex and Saison Realty have exhibited remarkable outcomes amid efforts to advance integrated Groupmanagement.
In particular, Saison Fundex is undergoing a business model change, transitioning from its conventional businessportfolio centered on unsecured loans to one centered on real estate finance.
Saison Fundex

Shift from unsecured loans (credit card loans) to a business portfolio
centered on real estate ﬁnanceUnsecured loan

Trend in composition of assets balance

LeasebackCredit guarantee

7%

10%

PJ LoanMortgage-backed loan

25%

Unsecured loan

FY2012

25%

2%

39%

About ¥90 billion(including off-balance
sheet assets)

Credit guarantee

49%

FY2022

About ¥420 billion(including off-balance
sheet assets)

PJ Loan17%

Mortgage-backed loan

¥ 0.66 billion

Proﬁt contribution (Japan standard)26%¥ 7.83 billion

Changed its focal business to the development and leasing businesses;
the assets of the liquidation business are on a downtrend

Saison Realty

Other

Trend in composition of assets balance
Other

Real estate trading business

20%

25%

FY2012

About ¥240 billion

Hotel businessProﬁt contribution (Japan standard)

2%

11%

Liquidation business8%

Hotel business

6%

Real estate
trading business

Development business

About ¥220 billion

Real estate revitalization
business

Leasing business¥ 0.25 billion

17%

36%

FY202215%

Liquidation business

53%

Proﬁt contribution (IFRS standard)

We are working to generate synergy at the frontline
level by holding exchange meetings attended
by corporate sales representatives from eachGroup company, which provide opportunities forparticipants to get to know each other.
This effort promotes the exchange of opinions
toward generating ideas that help utilize the Group’s
resources in an integrated manner with the aim oftransitioning to a comprehensive life services groupand provide value to our customers.
In FY2023, we held these meetings two times,
during which we advanced efforts to strengthen
coordination toward establishing relationships
between the Group and our customers througha total of 30 presentation proposals, including
complex proposals that combine the functions ofeach company.
Moreover, this effort expanded communication
channels between Group companies and served tobroaden the Group’s integrated profits by forming
relationships that connect each company in a direct,even-footed, and timely manner.

Proﬁt contribution (IFRS standard)

17¥ 8.28 billion

7%

Corporate sales representative exchange meetingEstablish the Saison Partner Economic Zone and Reinforce Cooperation among the Group‘s Companies

SAISON ASSET MANAGEMENT CO., LTD.

Broad-minded Co., Ltd.

Enabling periodic monthly investments through Credit Saison–issued credit cards

Launch of Saison Money Navi

Since its founding in 2006, SAISON ASSET MANAGEMENT has held the philosophy ofaiding asset formation in a way that supports well-being for the valuable future of each of ourcustomers. Under this philosophy, it has provided long-term asset growth funds that havereceived the support of many of our customers, with more than 150,000 contracts totaling
approximately ¥700 billion in assets under management (as of November 30, 2023).
With the start of the New NISA system in January 2024, Credit Saison–issued Saison
Card and UC Card members are now able to use their credit
cards to make periodic monthly investments in the three
investment trusts that can be purchased using SAISON ASSETMANAGEMENT general transaction accounts.
Percentage of customers by investment trust proﬁt/loss(other businesses)

1 99.5%No.

Percentage of customers

In August 2022, Credit Saison and Broad-minded Co., Ltd., entered into a capital andbusiness alliance in aims of further expanding and growing the financial service domainsof both companies. As part of our efforts to strengthen coordination involving financial
advisory (planning) services, in July 2023 we launched Saison Money Navi, an online
financial planning service that allows users to designate a financial planner and reserve
meeting times online. This service allows users to receive free consultations regarding
a wide range of financial issues, including insurance, investment trusts, bonds, stocks,
mortgages, and real estate transactions.

January 2024
SAISON ASSET MANAGEMENT
launches the new“Saison-to-tsuzuku”
Internet transaction service

Wait-free reservations

99.5%
CompanyA
Company
B
Company
C

96.3%
91.3%

CompanyD

More than -10%
Less than 0%

All steps from reservation making tomeetings are completed online.

97.7%

88.5%
0% or more
Less than 10%

10% or more
Less than 30%

30% or more
Less than 50%

Enables “Invest by Card” for up to¥100,000 per month using
Credit Saison–issued credit cards

50% or more

Features of Saison Money Navi

* Source: Prepared by Credit Saison based on “Analysis on the Common KPIs Comparable AcrossInvestment Trust Distributors,” Financial Services Agency (as of March 31, 2023)* R&I Fund Award
Shisan Keisei Tatsujin Fund “10-year Investment Trusts/Foreign Stock Core Superior Fund Award”
The R&I Fund Award is presented to provide reference information based on the past data R&I believes tobe reliable (however, its accuracy and completeness are not guaranteed by R&I) and is not intended torecommend the purchase, sale or holding of particular products or guarantee their future performance. The Award is not the Credit Rating Business, but one of the Other Lines ofBusiness (businesses excluding Credit Rating Business and also excluding the Ancillary Businesses) as set forth in Article 299, paragraph (1), item (xxviii) of the Cabinet Ofﬁce
Ordinance on Financial Instruments Business, etc. With respect to such business, relevant laws and regulations require measures to be implemented so that activities pertaining tosuch business would not unreasonably affect the Credit Rating Activities. Intellectual property rights including copyright and all other rights in this Award are the sole property of R&I,
and any unauthorized copying, reproduction and so forth are prohibited.
* Reﬁnitiv Lipper Fund Awards Japan 2023
Shisan Keisei Tatsujin Fund “Investestment Trusts/Mixed-asset Japanese Yen-backed Flexible/10-year Assessment Period/Best Fund Award”
The Reﬁnitiv Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months.
The fund with the highest Lipper Leader for Consistent Return (Effective Return) value in each eligible classiﬁcation wins the Reﬁnitiv Lipper Fund Award. For more information, seelipperfundawards.com.
Although Reﬁnitiv Lipper makes reasonable efforts to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Reﬁnitiv Lipper.
* This content is prepared for the information purpose only, and not a legal disclosure document under the Financial Instruments and Exchange Law of Japan. Investment trusts invest in
securities that ﬂuctuate in price, so their base value will ﬂuctuate. As a result, the price may be lower than the purchase price. Additionally, investment trusts incur fees such as trust fees
set for each issue. The risks and expenses of each investment trust are detailed in the prospectus. Therefore, please make sure to check all contents of prospectus of each fundprovided by the distributors before applying for subscriptions.
Trade name: SAISON ASSET MANAGEMENT CO., LTD.
Financial instruments business operator: Kanto Local Finance Bureau (FIBO) No. 349
Member association: The Investment Trusts Association, Japan

Financial planner designation

Consultation on all manner ofﬁnancial issues

Customers can designate a speciﬁc
individual from among nearly
100 ﬁnancial planners.

Users can consult regarding a wide range ofﬁnancial issues, including life insurance,
investment trusts, bonds, stocks, mortgages,
and real estate transactions, entirely online.

Nearly 100 ﬁnancial
planners available

18

Insurance
consultations

Mortgageconsultations

Asset
management

Achieving sustainable growthand improving corporate
value through soundcorporate management

Value Creation Strategy

Capital and Business Alliance with Suruga Bank Ltd.:Creating human resources
and an organization where
each person can fulﬁll an
active role in their own way

Enriching our customers’ lives
and enabling them to live
happily and true to themselves

Creating a better society
through co-creation
with partners

Protecting the rich naturalenvironment and culture thatenriches life, and energizing people
in the region and community

Creating a Neo Finance Solution Company
Credit Saison entered into a business alliance with Suruga Bank Ltd. in May 2023. In recent years, the business environment surrounding the Company has become competitive, requiring it todifferentiate itself from a wide variety of players because more competitors such as banks, securities companies, and insurance agencies are offering comprehensive financial services, whilebanking services have expanded through the use of BaaS. The business environment surrounding Suruga Bank is also changing beyond the traditional boundaries of the banking industry,
with general business companies now offering banking services and Fintech companies diversifying their payment services. Credit Saison and Suruga Bank will closely and rapidly collaborate
in order to create a new business model that combines the strengths of both banks and non-banks, with the aim of enhancing the medium- to long-term corporate value of both companies.
• Card loans• Credit cards• Housing loans• Asset formation loans• Speciﬁc-purpose loans• Flat 35• Investment real estate loans• Reform loans• Testamentary trusts

Individuals• Insurance• Business targeting foreign nationals• Real estate mortgage loans• Banking agency services• Real estate trust beneﬁciary rights sales• Guarantee(e.g., rent/loans on deeds/housing loans)

Suruga Bank

Bank

October 2023

November 2023

Collaboration in themortgage business

Collaborative development of
the real estate ﬁnance business

Commence handling of mortgages
with Credit Saison guarantees
at Suruga Bank

Commence joint provisionof “collaboration loans”

Suruga Bank

Neo Finance Solution
Company

Non-BankBank

Non-Bank• Ability to interact directlywith customers• Custom-made credit assessment/
credit screening capabilities

Provide solutions to address various problems
in the ﬁnancial ﬁeld and to eliminate AID*
* Anxiety, inconvenience,dissatisfaction• Extensive customer base
• Credit assessment/credit screening
capabilities developed throughimmediate credit granting,setting credit limits, andtransactions granting/setting

Total of all business ﬁelds over the next ﬁve years (FY2023 to FY2027)

Corporations• Business loans• Business matching (e.g., management issue support)• Advisory services (business succession, M&A support)• Structured ﬁnanceAim for ¥• Corporate cards• Real estate mortgage loans• Condominium management association loans• Medical fee factoring• Structured ﬁnance• Leasing19

350 billion or more in new loans

Summer 2024 (Planned)

Spring 2024 (Planned)

Establishment of Saison Branch
by Suruga Bank

Co-commercialization of
Saison Platinum Business
AMEX Card

Capital and Business Alliance with Suruga Bank Ltd.: Create a Neo Finance Solution Company

The ideal partner for
driving innovation

Katsumi Mizuno

Credit Saison Co., Ltd.
Representative,
Executive President and COO

Growing together andcreating new added value

Banking functions are essential in both enhancing theservices Credit Saison provides to its customers andtransforming into a comprehensive life services group,a key goal identified in its Medium-term Management
Plan. Recognizing each other as a partner that is capableof maximizing corporate value, Credit Saison, as a
non-bank service provider with strengths in the retailbusiness, and Suruga Bank, as a banking institution,entered into a capital and business alliance by engaging
in seamless collaboration. Moreover, the corporate
culture of Suruga Bank, which has conceived of many
innovative services even as it functions as a regionalbank, has much in common with that of Credit Saison,
which I believe will enable the two entities to create newservices that do not currently exist in the market.
I believe that mutual understanding, respect, anddisclosure are essential to a successful capital andbusiness alliance. As both Credit Saison and Suruga
Bank move toward a common goal, I feel it is importantfor us to maintain a closeness that allows us to speakhonestly and in a way that transcends our respective
positions. This includes respecting our particular
corporate cultures based on a clear understanding of
our unique situations, and by constantly communicating
to ensure we maintain the same level of information as
the business environment changes moment by moment.
We have already initiated steps to exchange humanresources not only at the executive officer and generalmanager levels but also at the staff level. I believe thatfurther energizing communication and deepening
relationships will serve to generate true synergy.

To realize our corporate philosophy of “I’m glad you’rehere...I’m glad we met,” we raised the management
strategy of evolving the retail and solution businesses.
By seamlessly combining the broad range of functions
developed by Credit Saison in its quest to become
a comprehensive life services group with our retailbanking functions, I felt we would be able to create abusiness model that was better able to eliminate thedisadvantages faced by our customers over a broader
range of their everyday lives. Another reason I decided toform the alliance was because I was certain that working
Kosuke Kato
together would allow us to provide new added value to
Suruga Bank Ltd.
both our own customers and those of Credit Saison, and Representative Director and President
that Credit Saison would serve as a partner in aiming toachieve growth for both companies.
The most important aspect to succeed with thisnew business model that combines a bank and a nonbank is building a relationship of trust between the twocompanies. I also feel it is important to facilitate open
communication at different levels and between different
fields, not just at the executive officer level, as is typical.
We have already initiated steps to dispatch employees
between the companies and to engage in personnel
exchanges between departments for this reason. And I
have heard from our employees that they have found it
easy to discuss matters because the two companies have
similar corporate cultures, that they have been stimulated
in a positive manner, and that new ideas will likely
emerge. I therefore intend to continue creating forums
where employees can speak informally and openly witheach other and to deepen this relationship so that we canstimulate each other, grow together, and provide new
added value to our customers.
20

Value Creation Strategy

Global Business:
Interview with the Director in Charge

Achieving sustainable growthand improving corporate
value through soundcorporate management

Creating human resources
and an organization where
each person can fulﬁll an
active role in their own way

Enriching our customers’ lives
and enabling them to live
happily and true to themselves

Creating a better society
through co-creation
with partners

Protecting the rich naturalenvironment and culture thatenriches life, and energizing people
in the region and community

Focusing on the global rollout of the successful business model we createdin India, growing profits and ensuring financial inclusion for all

Q

Kosuke Mori

Director, Senior Managing
Executive Officer
Overall Global Business execution
Head of Global Business Division

How is the progress of the growth strategy “Accelerate
Global Business Development”?

In April 2022, we established our International Headquarters (IHQ) in
Singapore., FY2022 was a year in which we took a big step forward,
particularly in the globalization of our core lending business. In
addition to Vietnam, which has always driven our contributions to
profits, we have seen surging growth in our post-pandemic business inIndia. Given the successes in India, we leveraged the business model
we built and established our presence in Brazil and Mexico where,
similar to India, there are large Fintech ecosystems. In Indonesia,
we acquired JULO, a company specializing in digital lending, as anaffiliate company to grow our lending business in the market.
As far as our core investment business is concerned, theinvestments we made at an early stage approximately ten years ago
have appeared as a major gain on investment valuation. However, thecurrent global business environment for venture
investment has cooled due in part to uncertainty about the macro
environment, including rising interest rates. Based on this, we are
currently taking a more selective focus to our venture investments
but continue to be committed to our focus of backing founders in theseed and early stage who are solving important problems. We remain
on lookout for businesses which are synergistic with our lending
business and building networks in each market.

21

Q

Tell us about the initiatives being undertaken for
operations in India, which is experiencing rapid growth.

Upon first entering the Indian market our business model was BtoB
or BtoBtoC. By focusing on lending to underserved individuals andmicro, small, and medium enterprises (MSMEs) through partner
Fintech players and emerging lenders, we have kept risks associatedwith credit and collection to a minimum. As a result of having raised
our local presence, we accumulated a vast amount of data andknowledge, and this has led to more business opportunities thanever before. Therefore, in FY2023, in order to scale up the business,
the B-to-C model was launched, taking the existing risk-diversified
business model to the next level. For individual customers, we offer
an embedded finance* service in partnership with non-financial
companies with a big customer base. Our lending products areembedded in their app, and we built our capability in managing
credit and collections in-house.. In addition, we are also developing
lending for MSMEs. In order to effectively communicate with MSMEs,
we have implemented a ‘phygital’ strategy since FY2022, which
integrates both digital and physical domains. This strategy leverages
our extensive network of approximately 40 branch offices establishedthroughout India. We are confident that this approach will allow us tobetter serve our clients and meet their needs.
* A system in which a company’s financial services are embedded within the services provided by
non-financial businesses and offered to end users; also known as “plug-in finance.”Global Business: Interview with the Director in Charge

Q

What are your thoughts on the factors behind growthin the global business?

Our lending business has grown even while responding to the risingcost of funding amidst escalating interest rates and regulatory changes
related to Fintech. The main reason for this is the strength of the local
team, which is able to think and act on its own, and IHQ and Credit
Saison that support it. Talented young professionals in the local teams
are actively engaged in the business with a sense of ownership, as if
they themselves were business entrepreneurs. Enabling us to achieve
the maximum potential of such our people is the existence of ourunique DNA and culture, which encourages people to think whilemoving forward without fear of failure. Moreover, the IHQ and Credit
Saison both work together like two sides of the same coin, providing
a strong foundation to support the business in areas such as financeand accounting, legal affairs, business development, and governance.
In addition, one of our strengths is the nimble decision making of ourmanagement team, which was able to give the go-ahead to enter Brazil
and Mexico a mere half year after commencing a full-scale market
survey, and despite us making initial inroads into India.
Even though we consider the expansion of our global business inthe face of high interest rates and rising geopolitical risks as a major
step forward, we cannot rest on our laurels and must continue to strive
for success. Whether we can scale up our business with BtoB and BtoC
business models, and whether we can expand it globally will be judged
after FY2023.

22

Q

Please tell us about your business strategy going forward.

We are confident that our global business will significantly grow, boththrough lending and investment business. We will pursue businessexpansion through our subsidiaries in India, Brazil, Mexico, andIndonesia. In our lending business, there are few synergies expectedby operating in geographical proximity to each other. This is because
each country has a completely different business environment. In
Southeast Asia, for example, languages, cultures and ethnic groups
are diverse, and the level of development of regulations, businesslicenses and infrastructure, including digital infrastructure, varies
from country to country and region to region. Therefore, we focus
on selecting regions to enter based on the scale of their Fintech
ecosystem rather than geographic conditions. We will continue toexamine potential countries to expand our business all over the world,
including Africa, Latin America, Central Asia, and Eastern Europe. In
addition, the most valuable resource needed to expand the global
business is human resource. Going forward, we will continue striving
to retain outstanding human resource.

Q

Please tell us your thoughts on contributing to the
SDGs through financial inclusion.

Our business contributes directly to financial inclusion and creating
employment opportunities, which are themes under the SDGs. As a
non-bank company, we are different from typical impact investment
funds in that we are an operating company with local roots,
committed to the market from a long-term perspective and engaged
in investment and lending. In the fall of 2023, we published our first
Impact Report from our IHQ to broadly inform the public about ourefforts. We continue to contribute to society by further promoting
financial inclusion.

Value Creation Strategy

Accelerating Global Business Expansion
Accelerating Global Business expansion
Credit Saison is expanding its global businesses mainly in Southeast Asia and India, focusing on core enterprises are lending
and investment. In addition, we established lending subsidiaries in Brazil and Mexico in FY2022, bringing the total numberof countries where we operate to seven. In the lending business, we work on realizing financial inclusion through lending to
the underserved*, and in the investment business, we pursue returns while at the same time creating synergies with existing
businesses through investments in startups by our corporate venture capital (CVC) in Singapore.
We keep contributing to the company’s growth by accelerating the expansion of global business driven by our IHQ in Singapore.
* Individuals and enterprises with insufficient access to financial services from banks and other traditional financial institutions

India

ThailandINNOVATION
Investment business(Fin)Tech-led INCLUSION and INNOVATION¥9 billion* Of which the lending businessaccounted for ¥3.2 billion

MexicoSiam Saison Co., Ltd.
Lending business forbusiness operators

Vietnam

INCLUSION
Lending business

FY2022
Segment business proﬁt

Kisetsu Saison Finance (India) Pvt. Ltd.
(hereafter, Credit Saison India)
Lending business for individuals and MSMEs(Fin)Tech

Credit Saison Mexico S.A. DE C.V., SOFOM E.N.R.
Lending business for individuals and MSMEs

HD SAISON Finance Co., Ltd.
Lending business for individuals
Saison International Pte. Ltd.
International Headquarters (IHQ)

Singapore

Saison Investment Management Pte. Ltd.
Offshore lending business centeredon emerging economies
Saison Capital Pte. Ltd.
Overseas corporate venture capitalIndonesia

PT. Saison Modern Finance
Lending business for individuals and MSMEs

BrazilJulo Holdings Pte. Ltd.
Digital lending business for individuals

23

Credit Saison Brazil Participações Ltda.
Lending business for individuals and MSMEs

Acceleration of Global Business Expansion

Accelerating India businessToward a further leap
Business strategy

Kisetsu Saison Finance (India) Pvt. Ltd.
(hereafter, Credit Saison India) engages in
the lending business for the underserved inIndia and has achieved remarkable growthsince the launch of its operation in 2019.

Through lending based on partnerships with Fintech players and others, Credit Saison
India has been building its business foundation while acquiring data and knowledge.
In 2021, it launched direct lending services based on this experience, and has sinceoffered strategic initiatives such as embedded finance and branch-led lending tailoredto customer types.
And it continues to differentiate itself from its competitors by diversifying its
businesses and to take on the challenge of high profitability business models.

Deploying multifaceted businesses through four business models

Credit Saison India is rolling out multi-product, multi-vertical strategies based on four businessmodels. As of September 30, 2023, it saw its balance of receivables grow to approximately¥150 billion and its consolidated contribution to profit in the first half of the fiscal year steadily
expand to ¥910 million, making it the primary growth driver for the global business.
• Wholesale
Lending to Fintech players, emerging
lenders, and other non-banks.
They are in charge of whole processof lending to end-borrowers, fromacquiring end-borrowers to collecting.
• Partnership lending
Lending through partnerships with
fintech players. Credit Saison India
provides loans to end customers andholds credit balance.

• Embedded finance (for individuals)
Lending through partnerships with nonfinancial companies. Credit Saison India
services are embedded in apps offered bycompanies who have a big customer basesuch as mobile telecom carriers, etc.
• Branch-led (primarily for MSMEs)
Direct lending, primarily to MSMEs.
Utilizes branches throughout India assales offices.

Stepped strategy from BtoBtoC to BtoC
Entry barrier

Direct lending
to customers

Changes in the balance of receivables
held by Credit Saison India
WholesalePartnership lending
Embedded ﬁnance (for individuals)
Branch-led (primarily for MSMEs)

Joint lending
with Fintech(Billions of yen)
250

Capital strategy

Credit Saison India has opened 40 branches
throughout India

200

Lending
to Fintech

150

Capital strategy

100

Credit Saison India raises strategic financing in order to support rapidly expanding businessand to ensure advantageous interest rates.
Credit Saison India received a AAA rating from Care Ratings, an Indian rating agency, in
March 2022, and a AAA rating from CRISIL Rating, one of the largest ratings in March 2023.
To date, it has borrowed from 28 financial institutions, including top local banks. Moreover,
it issued Credit Saison’s overseas subsidiaries’ first bond(Non-Convertible Debentures) lastAugust, and it has steadily been growing while gaining the trust of local markets.

50

02019 2020 2021 2022 2023

2023 (FY)(ﬁrst half) (forecast)24

Acceleration of Global Business Expansion

Beyond Asia to Latin America

Credit Saison India CEO’s interview

Credit Saison established subsidiaries in Brazil in February
2023 and in Mexico in March 2023, thereby marking our
successful entry into Latin America. Both countries havethe underserved who lack sufficient access to financial
services. while both have recently experienced rapid development in infrastructure (Fintech
ecosystem), partly due to government support. Based on the knowledge and experienceacquired through our business in India, Credit Saison will provide financial services tailored to
the local needs with the aim of realizing financial inclusion in Latin America.

Becoming a lending powerhouse in India

What are some of the initiatives and secrets that Credit Saison India
Q hasadopted to achieve its goals since its establishment?
We think “Execution” is a key in company’s operations and business. With this inmind, putting together a core team that can execute the planned roadmap is one
major factor in our success. At the senior management level, we have a great team
who have been able to work together to operationalize all areas that are needed
for a regulated NBFC to operate in India and scale up the lending business whileambitious but in a resilient manner.
Now coming down to how we have been able to execute this, I believe OKRs
(Objective and Key Results) have played a very critical role here to enable this.
OKRs serve as a method to set specific objectives to be achieved over a certain
time period, present and measure quantitative results. We have streamlined our
OKR process a lot over the years and we now have it in a state whereby it's a veryclear structure on what we need to do across all of our business verticals quarter onquarter and helps align various teams across all functions and verticals. OKRs haveallowed us to have cross collaboration across teams with a clear visibility of what
each function needs to do in order to enable our goals. In a nutshell, Execution is
King! But using OKRs to Execute is God!

Actively promote local talented resource

Investment Business: CVC
Saison Capital Pte. Ltd., Singapore-based CVC entity, have continued to actively invest
in early-stage startups in India and Indonesia. Saison Capital has led and participated ininvestments across fintech, business-to-business commerce and e-commerce. Moreover,in September 2022 we established Saison Crypto Pte. Ltd.. which has also led andparticipated in investments across real world assets, decentralized finance and web3
developer tooling.

Q What is your strategy for future growth?

The vision of the business as we got started was to build out a neo-lending
conglomerate in India. While many of other new age NBFCs are a mono line
lending company, we see ourselves asa multi-product, multi-vertical company.
We have ensured continued growth bycommitting to building a business withthe right foundation. With the right andoptimal capital strategy both from anequity (eg IPO) and debt perspective,
our aim now is to go beyond justbuilding out a neo lending conglomerate
and become a diversified lending
Presha Paragash CEO (left)
powerhouse here in India.
Kisetsu Saison Finance (India) Pvt. Ltd.

Web3 domain investments(examples)

Saison Capital member speaking on a panel for the Asia
PE-VC Summit 2023

25

Acceleration of Global Business Expansion

Publishing the Group’s first Impact Report
In November 2023, we published our first Impact Report for the Group by Saison
International Pte. Ltd. Saison International formed a dedicated team led by members who
have experience and knowledge of impact, and instilled the concepts of ESG and impact
across the global business to maximize the generation of positive impact.

On Publishing the Impact Report
First of all, we are pleased to publish our first Impact
Report and to be a part of this integrated report toshare our progress to the stakeholders. This year,
the focus has been on defining a relevant ESG and
Impact framework for the global business, to date
we have been able to implement this for some of our
subsidiaries. In the medium term, we wish to complete
this process by fully developing and integrating the
ESG and Impact lens in all subsidiaries to achievefinancial inclusion, that has been at the core of ourimpact strategy.
In impact investing, it is essential to 'measure'Marie Anna Bénard
to visualize how much impact has been generated.
Head of Impact
But some of our counterparties do not necessarily
Saison International Pte. Ltd.
have the data we request them to report. This means
we constantly need to raise awareness and adapt to
the reality of our business, and we try to improve impact data collection efficiency,
hopefully in more automated way. Besides, measurement is not all. Once we get thenecessary data, one critical aspect of our job is to increase our impact and incentivize
our partners to do a better job, e.g. in putting in place the necessary policies andprocedures to mitigate their negative impact on the environment or to better
protect their customers. Other than Financial inclusion, Climate has been a hot andemerging topic over the past years, and we believe there is room to increase ourcontribution and demonstrate our sense of innovation in this area as well.
Last but not least, Saison International has expanded its mandate, geographicalfootprint and team over the past years. Our assumption is that this should translate
into increasing positive impact, however, if we are not careful it could also
potentially increase vulnerability to environmental and social risks. Today, we aretrying to strengthen our capacity to measure and demonstrate our contribution topositive impact but also our internal capacity to manage and mitigate our potential
negative impact. By strengthening both capacities, we hope it will contribute to
Credit Saison’s growth and strategic positioning in Japan, and globally.

Impact investment goals and business models

Credit Saison provides loans to theunderserved in emerging countries throughSingapore-based Saison Investment
Management Pte. Ltd. as well as other lending
subsidiaries.
Major data
Number of borrowers

707,344

Number of loans disbursed

1,080,911* Excerpt from the Impact Report, all figures are from theend of FY2022

Improve the livelihoodsof historicallyunderserved individuals
and households

GOAL
02

Japan

Unlock MSMEs’
growth potentialand economic
opportunities

Credit Saison
Credit Saison
Group
Local lending company

Local area

GOAL
01

Loans
Borrower/Partner

Loans

Non-bank/Fintech
Loans

End customer

MSMEs and individuals

Feedback from service users
The mother of two children, Ms. Sophanaren opened aclothing and accessory shop five years ago.
“Although I had applied for loans at various financial
institutions in the past, I never passed the screening
process. So, the loan I received from MAXIMA Microfinance(a borrower of Saison Investment Management) was myfirst, which allowed me to increase my purchases.”

Phat Sophanaren (resident of
Cambodia)

Click here for the Impact Report (English version) visit:26

https://saison-international.com/impact/

Achieving sustainable growthand improving corporate
value through soundcorporate management

Value Creation Strategy

Revitalization of the Payment Business

Enriching our customers’ lives
and enabling them to live
happily and true to themselves

Creating a better society
through co-creation
with partners

Payment Business strategy basic concepts
The Payment Business is developing strategies aimed at expanding the wealthydemographic and corporate markets, shifting to premium cards, and increasing fee income.
We are making steady progress in the “New GOLD Card Strategy” and “AMEX Strategy”
in the current Medium-term Management Plan, cultivating high-unit-price/high-utilization
customers, strengthening sales structures, and reducing costs through DX.

To accelerate this growth, we will first strive to “create an exhilarating experience” and“provide a comfortable cashless lifestyle” for customers in their daily lives, thus retaining
new customers and turning them into active users. At the same time, we will work to expand
fee businesses such as shopping revolving credit and cash advances.
We are working to maximize revenues and profits by establishing a stable earnings
base that will serve as a foundation for growth, leveraging the abundant know-how,creditworthiness, and sales abilities we have cultivated to date.

1

Three Payment Businessstrategy pillars

Maximize revenues, proﬁts

Measures that will accelerate
growth in the future

Expansion from mass markets(individuals) to wealthydemographic and corporate
markets (sole proprietors, SMEs)

Promote use by
established customers
Ongoing foundation
reinforcement

Target strategy

Increase fee income

2

Strengthen thefee business

Establish a stable earnings base
Membership
structure reform

Pursue Group synergies

Organizational
capability, DX

Measures that will create afoundation for future growth

Shift from general cards
to premium cards

Create high-unit-price/
high-utilization customers

Wealthydemographics,
corporate3

Increase fee income
Shopping revolving credit
Cash advances

Strengthen sales structures

Abundant know-how,creditworthiness, sales abilities

Individuals

Other fees
(annual membership fees)

Reduce costs, increase
speed by pursuing DX

27

Revitalization of the Payment Business

Payment Business strategy in the current Medium-term Management Plan
To revitalize the Payment Business, we are acquiring customers such as individuals, SMEs, and those in wealthy demographics through the AMEX Strategy and promoting the use of premium
cards as their main cards through the New GOLD Card Strategy. We are encouraging a wide range of individual customers gained through cards with no annual fees to upgrade to premium
cards, with the aim of them adopting premium cards as their main cards to increase the per-customer spend and annual spending. In the corporate field, we are developing cards for SMEs
and wealthy demographics.

Establish a new model centered on the “AMEX Strategy”
and the “New GOLD Card Strategy”

AMEX Strategy

Individuals
Top-ranking cards

Credit Saison up until now

PEARL AMEX

Concept Card

COBALT
BUSINESSAMEXPartner Card

“Making customers
feel special”
First card in Japan to use “METALSURFACE CARD™” materials
Main beneﬁts• 1.4 million special offers, including ¥1,000 movie fares• Up to 5% points rewarded at convenience stores,
cafes, and McDonald’s• Complimentary airport lounge access,travel accident insurance• Bonus points awarded for every ¥500,000 spent annually

Expansion of wealthy demographic and corporate (sole proprietors, SMEs) markets

Shift to premium cards

Shopping spend per customer

Unit price around the switch
to premium cards

New issuance breakdown share

Corporate market
approx. 3.5x larger than
individual market

20182022 (FY)
Wealthy demographic (premium)approx. 12 pt rise
Corporate share approx. 5 pt rise

Approx. 20% rise

Approx. 8%
Approx. 8%
Corporate

Approx. 20%

Approx. 13%

Corporate

2022

(FY)

2018

2022 Medium-term (FY)targets

Unit price around the switch(annual average)
approx. 40% rise

20182022 (FY)
Wealthy demographic shareapprox. 5 pt rise

Corporate share approx. 10 pt rise

¥4.78
trillion¥5.28
trillion

Approx. 15% Approx. 20%
Approx. 10% Approx. 20%

Individuals

Individuals

2018

Premium

Shopping transaction value
breakdown share

SAISON GOLD Premium

Invitation

Proper Card

PLATINUM
BUSINESS
AMEX

Combining the special feeling of gold + beneﬁts thatmake you want to use it day-to-day to create a productcustomers will choose for their main card.

=

ROSE
GOLD
AMEX

The future of Credit Saison

Approach wide-ranging customer
demographics throughvarious alliances

SME

BUSINESSPro AMEX

PLATINUM AMEX
GOLD
AMEX

Promote cards to be used as a main card with the new royalty service SAISON GOLD Premium Card

*SAISON GOLD
Premium

Cardholder composition ratio

Share of members who spend
more than ¥1 million annually(individuals, SMEs)

2018

Premium card shareapprox.10 pt rise2022 (FY)approx. 30% rise

Premium

approx. 5%

FY2022

Corporate
FY2018

Individuals
2018

Premium cards
approx. 15%2022 Medium-termtargets

Before switch topremium cards(general cards)

(FY)

28

After switch topremium cards

20182022 Medium-termtargets(FY)

approx. 90%

General cards
approx. 75%

Achieving sustainable growthand improving corporate
value through soundcorporate management

Value Creation Strategy

Promotion of Healthy Growth andExpansion into New Fields for the Finance Business
Key initiatives in the Finance Business

Expansion of the Guarantee Business in the Secured Area

Joint sales

1st Expand the non-secured guarantee business
Step

2nd

IndividualSoleproprietors

Expansion of products in the real estate ﬁnance business(non-secured personal loan guarantees)

2013

Step

(e.g., payment product referrals)3• Partner ﬁnancial institutions:rdApproaching approx. 400 ﬁnancial institutions
Step• Suruga Bank commencing handlingof mortgages with Credit Saison guarantees

2003

Expand into the secured
guarantee businessEntered the mortgage
guarantee business (April 2022)

1994

2010
Commenced For ﬁnancial
institutions
operations

2016

Changes in the balance of the real estateﬁnance business

Expansion of products for business people, seniors,and corporations; Transition to operations basedon both “balance expansion” and “asset efﬁciency”(Billions of yen)

1,200

Expansion of the “secured” guarantee business

Aging society
Era of 100-year life span
¥20 million retirement fund issue(real estate mortgage loan guarantees)(Billions of yen)

1,000

Saison Asset Formation Loan Premiere

Mortgage loans Leaseback

PJ Loan

16 partners
Partner ﬁnancial institutions
Approx. 40

2023

Asset Formation Loan

Upgrade relationships withpartner ﬁnancial institutions

Changes in the balance of guarantees
CreditGuarantee

500

Saison Fundex
Corporation

600(Cumulative total ¥110.0 billion)

Credit Saison0

CreditGuarantee
2020

2021

2022

2023
1H

2023
(Plan)

Medium-term goal

0

(FY)

29

PJ LoanMortgageloans

Increase in the balance of receivables
through expansion of productsin the real estate ﬁnance business
FY2021–2022
Sales of asset formationloan receivables

Housing-loan
Guarantee

LeasebackSaison Fundex
Corporation

1985
Commenced
operations

We are steadily expanding the real estate finance business by implementing a variety
of measures, including efforts to expand products for business people, seniors, andcorporations. We are working toward further growth together with Saison Fundex.

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2023
1H (Plan)

Assetformation
loans

Credit Saison

Approx. 400

Creating a better society
through co-creation
with partners

Growth of the real estate finance business

While focusing largely on the unsecured area to date, the Company is working to expand
its business domain and bring it to a further growth phase by entering the secured market.
Building on our collaboration with Saison Fundex Corporation, a company that entered
the credit guarantee business in 2010, we will expand guarantee business activities in the
secured field.

Partner ﬁnancial institutions

Enriching our customers’ lives
and enabling them to live
happily and true to themselves

Medium-term (FY)goal

Value Creation Strategy

Integrating the Finance Business and the Payment Business
Growth of the rent guarantee business
In FY2022, younger age groups in their 20s and 30s accounted for a large part of enrollees,with approximately 55% of customers being in their 20s. By creating a route through which
credit card rent payments serve as the trigger for transitioning to use as a primary card, thiseffort helps to attract customers with high Life Time Value (LTV).
To further promote this initiative, we revised the organization in October 2022 toreposition the Rent Guarantee Department as part of the Payment Business Division insteadof the Finance Division.

Rent guarantee as an effective channel for attracting new customers
Centered on young customers
in their 20s and 30s

Attract members with high LTV
Retention of young people

30s and older

20s and under

40s and older

About 55%

Composition of
credit card members
enrolled via rent
guarantee
by age group

Because Credit Saison advanced DX for the rent guarantee business at an earlystage, we have been able to roll out this business through a combination of paperless
operations and automation, thereby allowing us to deploy it without investing humanresources even as operational volumes have expanded.

20s and under

About 30%

(Reference)
Composition of
credit card
members of theCompany
by age group

Application of DX to the rent guarantee business
Improve business efﬁciency through integrating rent
guarantee screening into credit card screening andthe shift of business processes to DX.

30s and older*Data for FY2022

Become the primary card

Grow them into primary cards leveraging card payment of rents.

Increase the use of card
shopping revolving payment

Contract for rent
guarantee
Sign up for a credit Increase the use ofcard of the Company
cash advancesat the same time.

Need for a considerable
amount of cash forpaying initial expenses
and cost of moving

Purchase of large
items such as
furniture andhome appliances

Long-term engagement
through transition
to a primary card

Growth of the rent guarantee business and DX promotion

The ratio of those in their 20s and younger enrolled
for our credit cards via rent guarantee is about double
those enrolled for our credit cards.

40s and older

Attract a younger
customer base

Start card
payment of rent

LTV

Become theprimary card

The average spending
per member who pays
rent through their credit cards isabout three times as high asthat of the Company.

30

Integration into
credit card screening

Shift to paperless
operation

Digitization ofmanual work

Speed up screening

Improve operational
efﬁciency

Reduce labor costs

Expand the numberof new customers

Increase processing
volume per person

Optimize the numberof personnel

Achieving sustainable growthand improving corporate
value through soundcorporate management

Value Creation Strategy

Human Resource Strategy:
Interview with the Executive Officer in Charge

Creating human resources
and an organization where
each person can fulﬁll an
active role in their own way

Protecting the rich naturalenvironment and culture thatenriches life, and energizing people
in the region and community

While taking advantage of each and every person’s individuality and strengths, realizing“a sustainable society that is even more convenient and prosperous than today’s”

Q

Kazue Yasumori

Managing Executive Officer
Head of Strategic Human
Resources Dept., Processing
Business Division,
General Manager,
Processing Business Division

Credit Saison has adopted the goal of strengthening
the capabilities of the human resource responsible forbusiness growth under its current Medium-termManagement Plan. What is the Company’s definitionof “professional human resources”?

The term “professional human resources” refers to employees who deeply
cultivate areas of specialization and employees who newly cultivate
areas covering a wide variety of the business. While refining existingproducts and services based on global trends and customer feedback,those employees who can deeply cultivate areas of specialization play animportant role that can grow one into 10, 10 into 100, and can sometimes
lead 100 to 0. In contrast, those employees who can newly cultivate areas
while experiencing a wide variety of business fields are playing a valuablerole in creating one from zero, regardless of the form of existing products
and services. In both cases, it is necessary to cultivate a high level ofperspective and broad outlook that enables the employees to achieve
the results required by management strategies while being aware of theirstrengths, aspirations, and social conditions.

Q

Please tell us about the main goals under the current
Medium-term Management Plan that are geared toward
the Company’s transformation into a comprehensive life
services group as well as the progress made, the degreeof achievement, and the challenges you are facing inthat transformation.

To play a part in “a sustainable society that is even more convenientand prosperous than today’s,” we need employees from diverse
backgrounds with a variety of experiences, ways of thinking, and work
styles to play active roles. Employees with a sales mindset who realize
digital thinking based on logic and a focus on customer satisfaction
are essential for creating a new Credit Saison. With the goal of creating
1,000 human resources who possess digital IT skills by FY2024, we will
have trained a total of 260 core and business human resources with31

digital IT skills at the Technology Center by FY2022, and will focus ondeveloping human resources skilled in digital IT through collaboration
between the Technology Center and each business division in FY2023.
I also believe that it is necessary to promote female employees andmid-career employees to management positions so that diverse humanresource possess the ability to make decisions. In FY2022, the percentage offemale managers (i.e., general managers and managers) was 24.9%, which
is not low by any means. However, because the ratio of female managers
is insufficient compared to the overall ratio of female employees in the
Company, I would like to take new initiatives to give all employees theopportunity to take on positions with decision-making authority.

Q

What is the particular focus of your human resources
strategy under the new Medium-term Management
Plan to be announced in May 2024?

There are three ideas that we are focusing on for our human resources
strategy under the new Medium-term Management Plan. The first is“strengthening the creation of professional human resources for deepand new business cultivation.“ Next, in collaboration with businessdivisions, comes “Human Resource Business Assist,” the building of
personnel functions by means of specific initiatives based on thecharacteristics and issues of the business divisions. Finally, there is“diversity based on work-life fullness.“
We will continue to address the creation of professional humanresources—for example, by expanding opportunities for dialogue in theselection process for our internal open recruitment system, which werefer to as open challenge, revising the assessment program with anemphasis on diversity, and strengthening the mid-career recruitment of
human resources who possess specialized knowledge—while revising
our operations and standards.
In the building of business division personnel functions, we willassign human resources to concurrently serve in the Strategic Human
Resources Department and at business divisions. This comes in response

Human Resource Strategy

to the situation where issues such as recruitment, training, labor,
organizational revitalization, and reassignment vary depending on thebusiness division, and responding with uniform operations and systems
is beset with difficulties. By understanding the actual situation in moredetail and attempting to resolve issues, we aim to become an entity thatcan ultimately assist in the growth of the business division from a humanresources perspective.
The term “work-life fullness” means bringing about fulfillment bothfor the Company and yourself, at work and at home, rather than justone or the other. We design systems and create environments to not
only accommodate diversity in terms of attributes, such as gender, age,disability, and nationality, but also to bring about fulfillment in a variety oflife stages as individual people. For example, employees have periods oftime away from work for reasons such as childbirth, childcare, and nursing
care, and the Company has put in place leave systems for these purposes.
If, however, employees wanted to leave the Company to acquire skills or
expand their knowledge, their only option was to quit. We are thinking of asystem that will change this common practice and allow them to return as
valuable assets to Credit Saison.

Q

Following on from 2017 and 2022, the Company madefurther revisions to the personnel system in April 2023.
Please tell us about the aims of those revisions andabout any initiatives that have been particularly
successful.

With the aim of enabling every employee to utilize their individuality
and strengths to take on challenges without fear of failure and to allow
failure as an organization to lead to growth, we have renewed our humanresource systems on two occasions. We unified employee categories,
organized grade categories, introduced an assessment program,and created a new career path called a specialist position, which isequivalent to a manager. The number of people being promoted to
specialist positions is increasing, probably because they have beenable to recognize their own areas of strength after having attended theassessment program and demonstrated results.
As career paths were previously limited to manager positions
primarily in the management field, I think this was a great source of32

anxiety for employees who were unable to envision their future careers
even after having cultivated their specialist fields. It is my belief thathaving achievements in their own areas of expertise recognized andthen having them proceed to the next step will produce significant
results for both our employees and the Company.
In April 2023, we expanded the eligibility conditions for taking theassessment program and made revisions that required applicants toapply voluntarily. Because autonomous career development is essential
for utilizing the diverse career paths provided by the human resource
system, we have revised the course with the aim of encouraging
participants to take on challenges on their own initiative and, even if they
fail, they can understand the important points and aim for the next step.
Initiatives such as study sessions androundtable discussions with experienced
people have expanded in FY2023 to encourage
participants in each business division, and I feelthat the vertical and horizontal connections that
go beyond work have become stronger.
A photo taken when participating in the “SAISON CAMPUS” company cafeteria renewal
project that led to the creation of opportunities for dialogue.

Q

As the strengthening of human resource gains inimportance, what kind of initiatives do you have in mind
for Credit Saison going forward? Also, please tell us
what you expect from your employees.

I would like them to have many conversations with people they havenever had contact with before, both inside and outside the Company.
Nowadays, this or that effect, such as time or cost performance, is being
talked about, but I would like them to have the opportunity to come into
contact with and understand many values without being limited to shortterm effects. To build “a sustainable society that is even more convenientand prosperous than today’s,” we will need the ability to discern the true
nature of things and the ability to think of ways to satisfy diverse values.
I would like to create a new Credit Saison together with employees who
are able to learn things they didn’t know, think for themselves, come up
with answers, and take action without being confined within individual
team, or company boundaries.

Value Creation Strategy

Human Resource

Strengtheningof mid-career
recruitment

Diversehuman resource

Meritocracy
free from age,gender,or educational
attainment bias

Transforming ourselves into a comprehensive life services groupDNA of facing
challenges
and initiatingreforms

Implementing effective, engagement
survey-based human resource policies

Supporting education forhuman resource who learn/
grow independently

1 Career advancement of

2 Corporate culture to

3 Proactive learning/• Strengthening of mid-career recruitment• Creating environments that make the mostof individuals• Work styles unconstrained by age orcompany careercom• Gender equality• Hiring of people with disabilities• Global synergies• Open challenge(Group-wide recruitment system)• FOC promotion meetings• NEXT SAISON• SWITCH SAISON• Fostering a willingness
to take on challenges• Assessment programs• Diverse training programs• Support for gaining qualiﬁcations• Support for career self-direction

diverse human resource

embrace challenges

Commonpersonnel
system for all
employees

growthPromotion of
DE&I

Corporate
culture toembracechallenges

3

4

Fostering awillingness toembracechallenges

FY2022 Actual

Targets

Mid-career recruitment

110 people up 59.4% YoY
No. of human resource withdigital technology backgrounds

260 up 73.3% YoY

FY2024

1,000

Ratio of female managers

FY2024

Ratio of eligible employees
taking childcare leave

FY2024
Males taking
childcare leave*
50%

24.9% up 1.6 pt YoY

Female 100% Male 58.5%

25%

180 people

Appointees 55 people
NEXT SAISON Results

10 projects in progress,

5 projects under consideration
Educationsystemrestructuring/
reskilling
Mental healthmeasures

Healthmanagement

Value Creation
OUTCOMEFY2022 Initiative Results
OUTPUTInternal recruitment entrants

Proactive
learning/growthThree points of focus

Recruitment
training of digital
savvy humanresource

Diversework styles

2

A group of professionals who continue to create new value

Creating environments
Fostering an
in which diverse human resource
organizational climate thatare able to leverage their individual enables the taking on ofstrengths and play active role.
challenges and allows failure

1

Careeradvancementof diverse
human resource

A sustainable society that is even more convenient and prosperous than today’s

Setting human resource KPIs,
measuring the level of awareness andeffectiveness of human resource policies

Points of Focus/Main Initiatives
INPUT/ACTIONCountermeasures
to lifestyle-relateddiseases

Amount invested in humanresource development¥137,000/person
up 8.4% YoY

Ratio of employees who
have undergone a stress test

FY2023

Ratio of employees who received
regular health checkups

FY2023

89.9%
100%

90%

100%

Ideal Vision

A comprehensive life services group thathelps to resolve the world’s problems

Credit Saison’s
Human Resource
and Culture
RESOURCE

Leading-edge service company

Since its establishment, Credit Saison has, in the face of various difficulties, continued toview people as the source of its value creation while taking on challenges as a leadingedge service company. Aiming for a “sustainable society that is even more convenient andprosperous than today’s,” for the very reason that we have now adopted “transforming
ourselves into a comprehensive life services group” in our medium-term management
vision, we are making active investments in human resource. These investments are basedon the idea that “career advancement and a willingness to face challenges on the part ofprofessional human resource who continue to create new value” are what drives value
creation to realize management strategies centered on the three points of focus of ourhuman resource strategy. That three-point strategy—management, business, and humanresources—forms a whole, and we will continue to create value that is unique to Credit Saison.

Initiatives designed to realize corporate value creation

Activities of and challenges facing diverse professional human resource who continue to create value

Human resource strategy designed to realize management and business strategies* Planning to quickly achieve targets set under the action plan (FY2022–2024) and to set new target values

TOPICS

Introduction of engagement survey

With the aim of each organization making self-directed organizational improvements
and implementing effective human resource measures, we introduced an
engagement survey for all employees in December 2023. We will continue to review
and implement effective measures to revitalize the organization and human resource
while closely monitoring employee engagement.

Workplace environments that
4 Health management
support the success of employees
Employees Materialities for sustainability

Creating human resource and an organization where
each person can fulﬁll an active role in their own way
33

Human Resource

Work styles unconstrained by age or company career

Career advancement of diverse human resource

In 2017, we introduced a common personnel system for all employees and thereby realized
equal pay for equal work. This has eliminated disparities in wages and systems based on
employee classification and age, while providing compensation based on the role played.
We are continually creating a culture and environments in which each individual, regardlessof age or career history, can fulfill an active role in their own way and create new value.

We believe that innovation is brought about by bringing together human resource who
possess diverse personalities, strengths, and values, including in terms of age, gender,
disability, nationality, lifestyle, career, and work style. Valuing the spirit of DE&I, we areworking to create environments in which everyone can fulfill an active role in their own way.

Strengthening of mid-career recruitment

Gender equality

Having respected diversity since the 1980s, Credit Saison has introduced a personnel
system that maximizes the abilities of each and every employee. With regard to promoting
women‘s empowerment, we believe that one of our key strategies is for female employees,
who account for more than 70% of our employees, to play roles in which they can have a
say and contribute to the Company, and we aim for the ratio of female managers to reach
25% by FY2024. To achieve this, we are implementing a variety of initiatives, including
holding seminars to support the balance between childcare and work. We are also working
to increase the number of male employees taking childcare leave, such as by holding
roundtable discussions for male employees involved in childcare. In addition to fostering aworkplace culture in which everyone can participate in childcare regardless of gender, we areencouraging women to continue working by sharing the balance of childcare and houseworkwith their partners while promoting work-style reforms across the Company as a whole.

To achieve our Medium-term Management Plan, we are mainly promoting the mid-career
recruitment of professional human resource to ensure diversity in knowledge and experience
as well as to break the mold of homogeneity. To accelerate the realization of our businessstrategies, we are creating synergies with members with different abilities. We have also put inplace a rework entry system that allows members who, due to various reasons, were unable tocontinue working and left to rejoin the Company under the same conditions as when they left,subject to certain conditions. In response to changes in the labor market, we aim to secure
ready-to-work human resources who can play active roles in our company.
Homogeneousorganization

Group of diverse professionals

Ratio of mid-career
personnel inmanagement positions

Innovation

Male Female

34.8%

Stable corporate
cultureFemale25.5% 16.5%

Generalmanagerequivalent

Employeegender ratios

Corporate culture toembrace challenges

Female Male
74.5% 83.5%

Creating environments that make the most of diverse individuals

To provide comfortable working environments for human resource who possess diverse
experiences, skills, and values, we have put in place systems that enable flexible work
styles, such as side jobs, telework, and flextime. Having also revised the compensation
system for specialized human resource, we are creating a multi-track career path, suchas creating a new career path called specialist position that is equivalent to a section
manager position, and promoting the creation of environments in which employees canmake the best use of their individual strengths and skills. We have also introduced a peerbonus system that allows employees to express their gratitude and foster a culture ofrecognizing each other’s achievements.

Male

27.8%

28.8%
Managerequivalent

Section chiefequivalent

Male

72.2%

Employment of people with disabilities and environment creation

Female71.2%

Data for FY2022

So that employees with disabilities can continue to be active in their own unique ways,
we provide a variety of work locations (e.g., assignment to various divisions, ubiquitous
office teams that cut out and consolidate administrative tasks, Saison Farm indoor farms)
tailored to individual characteristics and skills, and are working to improve such work
environments. We are also strengthening initiatives to support their retention, including
workshops to deepen the understanding of disabilities and interviews with employeeswith disabilities, the employees working with them, and their supporters.
34

Human Resource

Creation of global synergies

NEXT SAISONThis initiative aims to have executives exhibit leadership and consider the future of Credit
Saison together with employees to achieve management strategies. Executives themselves
take the lead in promoting a new Credit Saison, including creating new businesses
and expanding existing businesses, while involving our employees. This has led to new
initiatives, such as the launch of ReSAISON Co., Ltd., which was established in August2022 and aims to realize a recycling-oriented economy. Through interactions with top
management, employees also learn how to think from the perspective of managers.

At our overseas bases, we recruit members of various nationalities with a focus on local
hiring and are promoting local business operations under the leadership of local talent
by appointing local talent to our management teams. In addition, holding the SAISONGLOBAL SUMMIT once a year and providing opportunities to exchange diverse values, we
are working to promote DE&I through, for example, the sharing of details about businessactivities, religious understanding, and language support.

Corporate culture to embrace challenges
To provide new value to society as a leading-edge service company, we are fostering achallenge-oriented culture across the organization based on two underpinning factors: awillingness to take on challenges without being afraid of making mistakes and a climate ofcooperation with greater psychological safety. The challenges we face in further expanding
a corporate culture to provide added backup to employees as they themselves facechallenges will continue.

Open challenge (Group-wide recruitment system)

Based on our management strategies, we are recruiting employees for our focus businessfields, new businesses, and Group companies. In FY2022, 30.6% of those employees
who volunteered for recruitment postings were transferred to their desired departments,
where they are now taking on challenges and playing active roles in new fields, including
at Group companies.

Scene from a NEXT SAISON activity

SWITCH SAISON

We have been holding this program since 2019 as an internal venture program to help
employees bring their ideas to fruition in a speedy fashion. This program aims to foster aculture in which employees can spontaneously come up with ideas on their own initiative
and to improve their skills, encouraging employees to take on challenges. Four out of acumulative total of approximately 1,000 proposals have been commercialized, and a variety
of initiatives created, including SAISON TEACHER corporate lessons financial education
program and on-site lessons and employee YouTuber SAISON KAZUYA.

FOC promotion meetings

Giving rise to a flood of communication within and outside the Company, including Group
companies, we launched FOC (Full of Communication) promotion meetings in April 2023 topromote activities designed to increase the number of employees we know both inside andoutside the Company and to break down barriers to communication. Through four projects, weare aiming to increase speed toward business development by conducting activities centeredon all types of communication.

Initiatives designed to foster a willingness to take on challenges

The Company aims to create an environment in which all employees can take on challenges
with enthusiasm and contribute to the organization. Therefore, in April 2023, we reviewed
the eligibility requirements for the assessment program, expanded the eligibility, andchanged to a candidacy system. We are hoping that this will allow employees to take on
the challenges of advancing their careers on their own initiative, thereby leading to further
corporate growth.

FOC promotion meeting projects
DonGreen
Employee interaction
utilizing Akagi Nature Park

Interceding
Creating work environments
through interceding

TGIF
Interactions outside of workthat expand the community

Tarekomyu
Smooth internal
communication system

35

Human Resource

2. Specialized skill training

Proactive learning/growth

Each division conducts skill improvement training that combines training and practice in its
own specialized area, such as sales, finance, digital technology, and customer support, as
well as study sessions aimed at gaining qualifications.

As the transformation of our business portfolio continues, it will be necessary for employees
to transform themselves and to establish a culture of self-learning to realize management
strategies. Our company supports the learning of each and every employee who is oriented
toward self-growth and continuous development.

3. Training for managers

To facilitate the skill development of every employee, it is important for them to havesupport and encouragement from their superiors. Aiming to provide management withthe ability to produce results in difficult circumstances, the Company is providing its
employees with opportunities to learn management and ways of thinking to create newvalue.

Assessment program

In FY2022, we introduced assessment programs for promotions to manager equivalent andsection chief equivalent grades. By means of this program, employees clarify those of theirown strengths and abilities that need to be developed by visualizing individual abilities,
such as problem discovery and interpersonal collaboration, from a variety of aspects. We
aim to bring about improvements in the accuracy of skill development and for proactive
learning to be encouraged.

4. Optional training

We are providing systems that allow every employee to freely choose and attend training
programs commensurate with the level of competency they wish to acquire. While making
self-learning a habit, we are supporting behavior that promotes the growth of employees
and of the Company.

Diverse training programs

Tiered androle-basedskillsJunior employees

Mid-level employees

Initial orientation training

Promotion training

Follow-up training(New graduates)

Demonstrated skill
measurement program

Skill improvement training
SpecializedskillsManagers

Management

5. Saison learning

Resilience training

We launched this in-house tutoring system, which was developed based on a suggestion(NEXT SAISON) from an officer, in June 2022. Designed to invigorate exchanges between
employees and spur self-development, employees playing the role of instructor provide
in-house classes on various themes including business skills and operational knowledge. To
convey gratitude to the instructors, Eikyufumetsu Points can be gifted using a peer-to-peerbonus system.

Management update training
Harassment training
Training for newly appointed managers

Specialized skill improvement training
Support for acquiring work-related qualifications

Support for acquiring qualifications

Optional training
Selfdevelopment

In addition to qualifications that are essential for business operations, we also provide
support for gaining qualifications that are judged necessary for improving work
performance. We help turn employees into professionals by subsidizing the costs ofadvance learning and examinations to gain qualifications.

Saison learning
DE&I-related training
FP literacy improvement training

1. Tiered skill training

Examples of subsidized qualifications

We provide training for employees to acquire role-appropriate abilities and skills. Used asopportunities for employee proactive learning and career reskilling, we aim for this training
to lead to the growth of employees and the Company alike.

Money lending business specialist, Personal information handling specialist, IT passport,
Securities sales representative, AML/CFT standard, Financial planner, etc.

36

Human Resource

Support for employee self-directed career development

officers set examples worth following; make ahabit of enhancing the four vital forces of physical,
emotional, cognitive, and spiritual strength; andspread throughout the organization, we aim tohave employees continue to work with vigor andhappiness.

Centered on the career development sheet, a support mechanism is in place that allows
employees to think about their careers and take the initiative regarding their future. In
addition, supervisors at the department manager level and above gather once a year
and hold human resource development meetings to discuss in detail every employee’s
performance status, aptitude, and training methods, while also taking the wishes ofindividual employees into account. This has been ongoing since 2019, and we areformulating effective and systematic development plans from a multifaceted perspective
and building an organizational structure to support and develop our employees.

Independent consideration of one’s
career with a clear understanding ofstructural changes in a company’sbusinesses and shifts in the social
environment

Career development sheet(once a year)

Thinking about
the employee’s careerSelf-education

Examination of the training
and development planby the manager

Fully understanding employees’ traits
and characteristics while discussing
and formulating plans for thedevelopment of the employee andthe growth of the organization

Human resource development
meetings held by thedivisions and departments

Two-way communication
To create an environment in whichchallenges can be faced with peaceof mind, making rules covering
opportunities for employee tomanager consultations

One-on-one meetings(once a year)(once a month)

Employee growth tostrengthen organizational
capabilities

The forming of a career planby the individual

Activities to address women’s health issues

So that female employees, who constitute more than 70% of all employees, can continue towork in good health, we are implementing initiatives in response to their life-stage changes.
In parallel with the development of Femtech (a product and service that uses technology tosolve women’s health issues), which was proposed by female employees as a new business,
we are conducting seminars and internal awareness-raising activities based on the conceptof aiming to create workplaces where women can work in a healthy manner both mentallyand physically.

Career development sheet

Considering more speciﬁcally the employee‘s current
self-understanding, what they want to be, and the support andaction plan needed to achieve thisOptional training (OFFJT)Support from a variety of programs to assist employees to learn
on their own

Helping employees to continue working while receiving treatment

Through our Self-Management Assistance Program, we support employees who have been
forced to take a leave of absence due to health issues, be they mental or physical, so thatthey can continue working independently after they have returned to work. The goals andhealth condition of each such employee are checked at each phase, and their supervisor, anindustrial physician, a public health nurse, and the Strategic Human Resources Department
work together while supporting the employee during the leave of absence, when returning
to work, and after they have returned to work.

Professional training (OJT) Acquiring work skills from on-the-job training with the goal of
improving performance

Taking on
new challenges

Dream challenge
Open challenge(Group-wide recruitment system)

Creating opportunities to enable employees to declare their
desire to transfer to another department, supporting
independent career development

Initiatives to optimize working hours and promote a work-life balanceWith the aim of optimizing working hours, employees and their supervisors monitor
holidays and leave usage as well as the status of overtime work on a daily basis, while theTime Management Committee, including labor and management, advances initiatives toimprove working hours. Having established systems that support flexible work styles, suchas hourly paid leave, half-day paid leave, full flex-time, and telework, we aim to enhance andupgrade our employees’ work-life balance.

Health management
In the belief that that the realization of our management strategies is based on the health of ouremployees and healthy work environments, we are striving to create workplace environments
in which employees can continue to thrive and are thus promoting a variety of initiatives.

Resilience Program as an approach to top management

Average monthly overtime hours worked

To develop people and organizations that are strong in the face of change in the lead-up
to our third founding, we focused on the ability to powerfully lead an organization in timesof adversity (resilience) and implemented the Resilience Program for officers. By having

Total annual hours worked

Average paid holidays usage rate (%)
Average paid holidays used (days)

37

FY2020

FY2021

FY2022

1,797.2

1,787.4

1,768.8

13.1

14.0

15.2

9.3

72.4

10.1
73.5

11.4
86.3

Achieving sustainable growthand improving corporate
value through soundcorporate management

Value Creation Strategy

CSDX Strategy: Interview with the Director in Charge
Significant progress regarding in-house development
and other aspects of the CSDX Strategy

Kazutoshi Ono

Director, Senior Managing
Executive Officer and CDO, CTO
Group-wide DX Strategy,
Why SAISON Strategy
Head of CSDX Development Dept.,
Customer Success Division

In FY2022, we made significant progress in our CSDX strategy. Although theoriginal scope of our shift to in-house development was centered on software,data analysis, and design, we also recently launched an in-house development
team in the area of IT infrastructure. This expansion is allowing us to rebuild
our mobile device, network, security, and other systems into modern iterations
that are more robust and that offer greater flexibility and convenience. In otherwords, this past year saw the scope of our in-house development expand
beyond the application layer to include the infrastructure layer. In terms ofcustomer experience, we also developed several of our own systems related
to SAISON GOLD Premium that are currently in use by many of our customers.
And we have made frequent improvements to these following their release.
Another major example of progress was our successful in-house developmentof a new ID platform called SAISON ID, which enables customers with multiple
credit cards to log in using one ID.
Until recently, Credit Saison recruited and trained human resources witha focus on digital professionals hired from outside the Company (core digital
human resources) and on reskilled human resources that transferred throughin-house recruitment programs (business digital human resources). Startingin the current fiscal year, however, we have begun promoting digital literacy
acquisition for all employees. In this way, employees from business divisions
besides those involved in digital technologies and IT will, in accordance withthe characteristics of their duties, successively acquire no-code and low-code
tools that they will use to automate their own duties. Some business divisions
have already produced results through these initiatives. Similarly, in March 2023
we held an event during which the management team participated in no-codeand low-code boot camps of their own accord to show what it looked like totake action, thereby serving as a good example for this effort.
On the other hand, in FY2023 Credit Saison welcomed its 74th year inbusiness. And given this long history, we still see room for improvement in the
many manual operations and paper-based operations among those duties thathave continued unchanged throughout our history. Although we managed toautomate a total of 790,000 hours’ worth of work from FY2019 to FY2022, wewill accelerate the shift to paperless operations using those systems we havereleased since FY2019 and those systems that are currently under development.
Shifting to in-house system development will also do more than simply enable
automation and efficiency improvements, however. It will also allow us toaddress the rapid changes in the market and to make more frequent service
improvements, thereby serving as a powerful tool in continuously maintaining
our competitive advantages in today‘s rapidly changing environment.
38

Creating human resources
and an organization where
each person can fulﬁll an
active role in their own way

Enriching our customers’ lives
and enabling them to live
happily and true to themselves

Group-wide DX
The Technology Center, which as CTO I worked with two career-track
employees to launch in March 2019, has now been functioning for a full
four years, and as of September 2023 had grown into an organizationconsisting of 117 members. Today, the Center promotes in-housedevelopment and data use over a wide range of areas, from softwaredevelopment to data analysis and system design.
As the first phase of our efforts to establish an environment forGroup-wide DX, we launched in-house development teams fromscratch and implemented additional functions for our Saison Portal
smartphone mobile app while recruiting engineers and system designers.
We also advanced in-house development for the area of customer
experience (CX). In Phase 2, we further expanded the scale of these
efforts and conducted in-house recruitment programs for career-track
employees aiming to reskill themselves. In addition to CX, we aimed to
improve employee experience (EX). Specifically, we advanced in-housedevelopment of internal systems used by our employees and constructeda system that bundles together those business divisions involved in IT
and in-house development into a single business division so that theirrespective strengths mutually complement each other.
We will advance Phase 3 under the concept of DX by all Group
employees with the aim of creating an environment that will enablebusiness divisions to develop their own systems as a third option in
addition to in-house development and development by IT vendors. In
this way, we will not rely on efforts in which IT-related departments alone
advance digitalization but also construct an internal training system forno-code and low-code tools that will enable individual employees at theirrespective business divisions to effectively utilize digital technologies.
System development domains
Challenge

Phase 2
Achieved

Phase 1

Phase 3All employees digitalize their own duties

Shift to DX by all Group employees

In addition to in-house development and IT vendor
development, aim to create a system that enables
business divisions to develop their own systems.

Formulate CSDX and shift to Group-wide DX

In addition to CX, aim for improved EX and promote
cooperative in-house development of internal systems.

Small start of in-house development teams
Launch the Technology Center where in-house development
teams promote in-house development for CX purposes.

CSDX Strategy

Promoting in-house development through CSDX
Our in-house development efforts that initially began with the release of the new Saison’s
Otsukidama campaign have successfully gone on to develop more than 50 projects,
including mobile apps for SAISON GOLD Premium, internal API platform systems, improved
fraud detection accuracy, and our official LINE account. Similarly, these efforts have alsoenabled data use.

In-house development case study [1]: Customer service manual system
In August 2021, through an in-house development we converted our roughly 20,000
pages of customer service manuals into a knowledge system for the communicators
at our call centers, thereby enabling them to immediately search the required items
when talking with customers over the phone. We also reviewed the business process
for reflecting feedback from the front lines, and equipped the knowledge system witha function that feeds back the contents of these manuals. This effort has allowed ourstaff to respond to inquiries that they were unable to resolve on their own previously
and successfully reduced approximately 80,000 hours’ worth of work. We havecontinued to add new functions that improve this system’s accuracy since its releasewith the aim of raising the quality of customer service.

3 members
Launched SAISON ID

Opened the ofﬁcial LINE accountEstablished a workﬂow system

Launched a visualization dashboard

Issued SAISON GOLD Premium

Built an internal API platform system

Renewed the mobile portal app

Built an internal FAQ system

Introduced new fraudulent transaction measures

Established a data analysis teamPromoted no-code and low-code use

2023

2022
Built a knowledge system

Established the CSDX Development Department

2021
Started business digital humanresources recruitment
Established business division in-housedevelopment teams
Issued SAISONCARD Digital

2020
Launched Saison’s Otsukidama

Representative projects

Established the Technology Center2019

117 members
Began full-scale engineer recruitment

Members

History of the Technology Center

Releaseprojects

EX issue

53 projects

Improve overall
self-resolution skills

Share information
with a team easily

Updates to existing systems/Operational problems in business divisions/
Use of digital technologies, etc.

Search manuals while
talking with a customer
over the phone

Knowledge system

Add a bookmark tofrequently used manuals

As communicators use the knowledge system,
self-resolution skills are continuously
enhanced at the organizational level

Knowledge
improvement cycle
Revise manuals basedon workers’ opinions

Working hour reduction
effect -80,000 hours

Provide feedbackon the manuals

Review feedback
on a regular basis

Revising manuals in a timely mannercontinuously enhances knowledge
accuracy and improvement speed

In-house development case study [2]: Visualization dashboards

In August 2022, we began full-scale development of visualization dashboards using
Tableau, a BI tool*. Departments involved in digital technology have taken chargeof developing the dashboards for the primary sales coefficients for each businessdivision, sales performance at collaborating commercial facilities, and survey results,
and are working to develop these dashboards in cooperation with the businessdepartments. This effort has allowed us to replace the Excel-basedmanual data aggregation work and data processing work thatvaried by worker with a flow that updates this data in real time,
which is accelerating the speed of data-based decision-making.

Developer side and requesting sidedevelop systems in a fully combined mannerBusiness departments

Confusing manuals are not revised

Search manuals while
talking with a customer
over the phone

Self-resolving
cycle

Keeping the development of internal systems in-house aims to enable digital human resources
and business side human resources to “accompany” each other as we develop these systems.
Specifically, digital human resources travel to the front lines of the business departments todirectly experience the issues faced there as they work to develop systems intended to help
solve these challenges. This approach realizes a development system that creates simple
prototypes in-house and makes improvements as feedback is received from the business side.

Digital departments

EX issueUnable to solve an issue while talking
with a customer over the phone

Development
ﬂexibility
Development
cost reductions* Business Intelligence tool
Software that analyzes and visualizes different types of data held by companies, and aids in management strategy
decision-making and operations

39

CSDX Strategy

the issues faced by their own divisions. To enable all employees to acquire and utilize
no-code and low-code tools in the future, we are developing and have begun recruiting
participants for our own training programs in the current fiscal year. As part of these training
programs, we have prepared teaching materials that utilize the Company’s data, as well asverification tests that identify the status of knowledge acquisition, in support of knowledge
acquisition by participants. After acquiring this knowledge, those who have participatedin this training program are expected to develop and use dashboards that solve problems
faced by their own divisions.

Digital human resources
We categorize our digital human resources into three layers, where core digital humanresources possessing digital skills, business digital human resources possessing businessknowledge, and digital IT human resources who have acquired knowledge on digitaltechnology through reskilling engage in joint development as they advance digitalization
Group-wide.
Layer 1

Layer 2

Layer 3

Core digital human resources

Human resources who possess deep knowledge
and experience regarding digital technology anddata utilization and lead Group-wide digitalization• Engineers• Data scientists• Cybersecurity• Designers

Generative AI use

Business digital human resources

Human resources who not only possess businessknowledge and experience but also reskill
themselves on digital technology and datautilization, and promote Group-wide digitalization

Digital IT human resources

Human resources who possess knowledge
regarding digital technology and data utilization
and use such knowledge in their work

• Generalists +core technologies

In today’s business environment, we expect the use of generative AI to emerge as animportant element that produces competitive advantages. For this reason, we have raised
the promotion of generative AI use as one of the core challenges in the current fiscal year’s
CSDX. As of November 2023, we had developed our own ChatGPT specifically for internal
purposes, which is already starting to be used by every employee. Moreover, as a new systemdesigned to improve the efficiency of internal operations, we have begun developing ourown system that converts voice data from meetings at and outside the Company into text, andthat uses generative AI to prepare meeting summaries and minutes. We will continue to utilize
generative AI to drive innovation in new services and existing systems that serves to improvethe efficiency of our business and enhances the satisfaction of our customers.

• Citizen developers• Citizen data scientists• Digital marketers• Domain experts

No-code and low-code tool use
To expand the use of no-code and low-code tools, Credit Saison promotes reskillingfor all of its employees. The management team has taken the initiative in participating
in boot-camp training programs to gain actual experience in what can be achieved withno-code and low-code development. We have also issued concurrent posts for businessdivisions and digital divisions, where the individuals assigned to these posts acquire
knowledge on these tools as they promote the development of hybrid systems that solve

Underdevelopment

1. Voice data

6. Minutes andsummaryacquisition

MinutesrecordingsystemAdditional learning

5. Summary
generation
4. Text link

Regular sales meeting

2. Voice link

3. Text
generation

Are there any other topics?
Speaker A: Regarding target figure achievements,
Area A achieved 90% and Area B achieved 120%. Regarding

40

Text

Summary

Report on theRegularSpeaker A current month’s
sales meeting
sales status.

Thank you. Today’s agenda includes "XXXX" and "XXXX."

this difference, holding campaigns...

Speaker

LLM

Voicesynthesis

Speaker B

Additional
information

Topic xxx

Achieving sustainable growthand improving corporate
value through soundcorporate management

Value Creation Strategy

Financial Capital Strategy:
Interview with the Executive Officer in Charge
Rapidly executing investments that directly
connect to growth

Masaki Negishi

Managing Executive Officer
and CFO
Head of Treasury &Accounting Dept.,
General Manager, Global
Business Division,
In charge of Corporate
Planning Dept.

Although we are still engaged in ongoing discussions regarding the new
Medium-term Management Plan, one of the major themes is actualizing
initiatives that enhance corporate value in a way that goes beyond expanding
profit scale, while also holding medium- and long-term perspectives.
As an independent non-bank, Credit Saison achieves growth by deploying
businesses with localized characteristics both in Japan and abroad. In particular,
we are focused on creating business opportunities abroad and will therefore
continue to execute sufficient growth investments. And by enhancing the earning
power of the businesses operated by each company in Japan, we intend to
produce investment capacity and to enhance capital efficiency on a consolidated
basis. Similarly, we intend to advance these initiatives along the axes of profit
growth, capital efficiency enhancement, and capital cost optimization while also
combining short-, medium-, and long-term initiative time frames.
As part of the financial capital strategy, we must find a way to safely achieve
major growth as soon as possible amid the differing growth paces, asset scales,
and risks experienced by each business. For this reason, we are also seeing
a growing importance in discussions by the ALM Committee and Board of
Directors regarding management resources, and in particular their allocation
with an awareness that includes capital productivity. Moreover, because
strategies involving finance and capital are part and parcel with management
strategies (growth strategies), we are also seeing greater relevance for the
departments in charge of our management strategies, financial strategies, andIR to engage with the Company and the outside world in a unified manner.
In particular, to advance initiatives intended to realize management with anawareness of capital costs and the share price, we believe it is critical to holddialogue within markets as part of the story for the overall strategy.
To increase shareholder value, we must take action that strengthens our
corporate structure and that continues to expand our business. In addition, we
will strive to enhance internal reserves that will enable us to undertake these
initiatives, even as we look to return profits to our shareholders by making
suitable, stable, and continuous dividend payments to them in light of the factthat we are starting to make progress in establishing a foundation for profit
growth over the medium to long term. In this respect, taking into account thegain on negative goodwill coinciding with the transition of Suruga Bank to anaffiliated company accounted for by the equity method during the second
quarter of FY2023, we intend to offer a normal dividend of ¥80 and a special
dividend of ¥20, for a total year-end dividend of ¥100 in FY2023.
41

Enriching our customers’ lives
and enabling them to live
happily and true to themselves

Creating a better society
through co-creation
with partners

Approaches to realizing management with awareness ofcapital costs and the share priceWe will focus on the following three points as priority measures aimed
at enhancing corporate value and at achieving a PBR of 1 or more aspart of our efforts to realize management with an awareness of capitalcosts and the share price.

Components in enhancement of corporate value
Enhancement of corporate value Aim for a PBR of 1 or more

More than¥100.0 billion inbusiness profit

Profit growth

Improvement of capitalefficiency

Capital cost
optimization

Priority measures for enhancing corporate value
Improve the “earning
power” of existing
businesses

Business operations
with an awareness ofraising productivity

Stable and consistentdividend policy

Expand global
business

Reducecross-shareholdings

Flexible sharebuybacks

Boost “earning power”
through growthinvestment

CSDX strategy andhuman resources
development andactive participation

Strengthen investor
relations

Note: Details will be announced in the new Medium-term Management Plan (May 2024)

Level of surplus capital
Level of surplus capital factoring in future organic growth:Approx. ¥50.0 billion

Status of share buybacks
There is no change to the policy of implementing share buybacks,
which will be resolved separately by the Company’s Board of Directors
once there is a clearer outlook on the surrounding environment

Financial Capital Strategy

Medium- to long-term management goals

Shareholder returns and dividends
The Company believes taking action that strengthens its corporate structure and that
continues to expand business is important for increasing shareholder value. Meanwhile,in regard to returning profits to shareholders, we intend to enhance internal reserves forenabling these actions, even as we endeavor to make suitable, stable, and continuous
dividend payments to our shareholders.
We have not made any changes to our policy on returning profits to our shareholders,
and we plan to maintain a stable, continuous dividend policy as well as to continue toflexibly implement our share buyback policy at the proper timing.

With the aim of enhancing corporate value, the Group has raised maintaining andimproving financial soundness as a priority issue, and considers the shareholders’ equity
ratio (equity ratio attributable to owners of parent) and ROE (return on equity attributableto owners of the parent) as the most important indicators among the primary indicatorsthat are seen as important for management. As an independent non-bank company,
securing a specific shareholders’ equity ratio stands as a crucial aspect when considering
the Company’s credit rating and transactions with the financial institutions that serve as
our creditors.
Amid concerns of higher interest rates in the future, stable financial operations andmore robust risk capital management that supports such will become even more relevant.

Basic policy on dividends

Stable, continuous dividend

Medium- to Long-term Management Goals
Shareholders’ equity ratio(equity ratio attributable to owners of parent)

About 15%

Progress in linewith benchmark

ROE(return on equity attributable to owners of the parent)

Above 10%

Aiming to achieve in the next
medium-term plan or later

Shareholders’ equity

Shareholders’ equity ratio(Billions of yen)
700

Aiming to achieve in
the next medium-termplan or later
598.3

600

500

15.3%
490.9

15.6%
14.4%
484.6

Payout ratio
(Yen)
100

ROE
(%)
25

20

300

2018

4.7%

2019

6.5%

15

2021

¥45
¥35

20

7.5%

2022

¥70

40

5

2020

75

¥80

60

10

6.2%

(%)

FY-start

50

¥55

15.4%

530.9

7.1%

¥100

Special dividend
+¥20

80

562.3
15.6%

400

0

Dividend
per share

FY2022 around 8%

Due to the outlook for achieving the Medium-term Management Plan
target of ¥70.0 billion in business proﬁt a year ahead of schedule, theSuruga Bank becoming an afﬁliated company accounted for by the equity
method (July 3, 2023), and the revising upward of the full-year businessresults forecast, including the recording of a ¥20.0 billion equivalent togain on negative goodwill as share of proﬁt on investments accounted forusing the equity method, we will implement a special dividend.

0

31.4%

24.1%

19.5%

14.9%

2017

2018

25

2019

2020

24.3%

25.1%

25.5%

2021

2022

2023

Proﬁt attributable to owners of parent

0
Next medium-term (FY)¥38.3 billion ¥30.5 billion ¥22.8 billion ¥36.1 billion ¥35.3 billion ¥43.5 billion

plan or later

42(Revised forecast)¥64.0 billion

0(FY)Financial Capital Strategy

Basic approach to risk capital management

Major revisions in FY2022• ALM is introduced to measure risk and allocate risk capital for each business.
• Profit and loss fluctuation risks are measured by aiming at a confidence level of
99.75% using an Earnings at Risk (EaR) model to maintain an A+ rating.
• Remeasurement is performed regularly to reflect track record updates and changes
on the balance sheet.
Assets categorized by businessTop priority

Background to review of the Risk Capital Allocation Model

As a non-bank with interest-bearing
debt of approximately ¥2.5 trillion,
the Company will have sufficient
risk capital to maintain an A+ credit
rating from R&I.

Implement a review of the surplus risk capital allocation model
considering changes in the Company’s business environment,
including the outlook for contribution to business profit of the
Finance Business, which has grown into the second pillar, and
the Global Business to become the third pillar in a shift from thebusiness model based on the existing payment business.

Risk factors

Payment
Business

Lease Business

Credit guarantee
Business

FinanceBusiness

Real–related
Business

GlobalBusiness

Interest rate

Results of review of major items

Bad debt

Confidence level,
including EaR
required to maintain A+
credit rating

Price fluctuation

Basic policy of fund procurement
Basic policy

We will place importance on stability and cost when
diversifying our procurement methods and will maintainour conservative approach to financial operations as we
shift to long-term, fixed interest rate fund procurement in
preparation for interest rate increases.

Initiatives for reducing risks and procurement costs

Indirect financing:
Strengthen relationships with existing business partners,
cultivate new business partners, diversify procurement
sources, continue the basic policy on interest-bearing debt
Direct funding:Diversify funding methods, maintain a rating that indicatesa sound financial base

As of the end of March 2023, consolidated interest-bearing
debt (including lease debt of ¥13.9 billion):¥2,805.1 billion (debt accounted for 55.4%, corporate
bonds for 18.9%, CP for 17.5%, and securitizations for 8.2%)

No change

99.75%

etc.

Percentage of consolidated
shareholders’ equity to
be secured as minimum
required capital

20%

Revised to 15%

Sound financial base
• Credit Rating• Issuance ofJune 2017
April 2018
April 2019

R&I

¥10 billion¥15 billion¥12 billion

January 2021
October 2021

¥8 billion¥13 billion

Average interest rate
for fund procurement

Short-term borrowings
Bonds payable
CP
Liquidation of receivables

2,000

1,000

0

0.48

0.47

2,201.1

2,391.9

20.0
511.0

46.7
550.0

0.49

0.47

2,411.6 2,535.2
93.5
482.0

156.0
466.0

415.0

467.0

505.0

533.0

1,255.1

1,328.2

1,331.1

1,380.1

2018• Almost 70% of the interest-bearing debt iscomposed of long-term funds• Fixed interest rate procurement accounts forabout 60% of the total• A committed credit line, etc. of ¥ 480 billion issecured in terms of liquidity facilityA+

20-year bonds, first among card companies(Billions of yen)2019

Non-consolidated: finance-related business
Consolidated: review of Real Estate–related
Business/Global Business, etc.

Structure of interest-bearing debt

Balance of interest-bearing debt (non-consolidated)

3,000

Risk allocation model for each business

2020

43

2021

0.48

(%)

2,712.9
216.6
490.0
533.0

0.5
0.4

2022

Long-term ratio

(%)

0.1
0
(FY)

Fixed interest borrowing ratio

80
60

0.3
0.2

1,473.2

Long-term/fixed borrowing ratio (non-consolidated)

65.9

66.1

60.3

59.2

2018

2019

40
0

69.8

71.9

72.7

64.4

65.2

67.8

2020

2021

2022

(FY)

Sustainability

Sustainability of the Credit Saison Group

Achieving sustainable growthand improving corporate
value through soundcorporate management

Creating human resources
and an organization where
each person can fulﬁll an
active role in their own way

Enriching our customers’ lives
and enabling them to live
happily and true to themselves

Creating a better society
through co-creation
with partners

Protecting the rich naturalenvironment and culture thatenriches life, and energizing people
in the region and community

Click here for details of the Sustainability of the Credit Saison Group.
https://corporate.saisoncard.co.jp/en/sustainability/esg/

Basic Approach

Based on our “leading-edge service company” management philosophy, we contribute though the everyday operation of our businesses to resolve
problems and move society forward in ways only Credit Saison can by leveraging our unique know-how, management resources, and the experiences ofeach of our employees. We will create a sustainable society that is even more convenient and prosperous than today’s.

Value co-creation with stakeholders

Representative, Executive President and COO

To remain as a company on which society depends, it is important to understand whatstakeholders demand and to reflect these demands in our services and business activities.
We will always seriously consider the opinions of our stakeholders and use those opinions
to improve our corporate value and achieve sustainable growth.

Katsumi Mizuno

Representative
Directors
Director and Senior
Managing Executive Ofﬁcer

Sustainability promotion system
In August 2021, we established the Sustainability Promotion Committee with theunderstanding that addressing issues involving sustainability, including consideration of
global environmental issues, respect for human rights, and the health of our employees,
is an important management theme that will both reduce risk and lead to earnings
opportunities. To realize a sustainable society, this Committee is strengthening efforts
throughout the Group to solve social and environmental issues through its business.

Kosuke MoriManaging
Executive Ofﬁcer

Kazue Yasumori

Human
Resources

Structure of the Sustainability Promotion Committee
Board of Directors

AdviceRepresentative Directors

Digital

Reply

Sustainability Promotion Committee
Instructions Reporting

Climate Change Strategy WG•Discusses disclosure
policy/content based on the TCFD
disclosure framework•Discusses concrete measures tosolve environmental problems
such as climate change•Other content related toenvironmental conservation•Develops an environment andcultivates a culture that enables
diverse activities•Invests in human resources forsustainable growth•Cultivates good citizens who are
active members of society•Responds to various disclosures

Outside Director Nana Otsuki

Sustainability Promotion Committee

Engages in the exchange of opinions
by members, including both men
and women, coming from bothwithin and outside the Company,
and with diverse backgrounds suchas global perspectives

Solutions to Sustainability Issues

Executive Ofﬁcer

Yuichi Kawahara
Diversity, Equity,and Inclusion WG

Outside Director

GlobalSocial Impact WG•Drives social impact bypromoting impact strategies in
the Global Business andcarrying out Group-wide
information coordination•Other content incidental tosocial impact strategies

Integrated
Group
Management

Customer
Satisfaction
Development
Branding

General Manager, Advertising Management Ofﬁce,
Branding Strategy Dept.

Satoko Takeda

44

Corporate
Planning
Executive Ofﬁcer

Yoshiyuki Kimura

Treasury &Accounting

Executive Ofﬁcer

Hironao Wakamei

Sustainability of the Credit Saison GroupA sustainable society that is even more convenientand prosperous than today’s

Response to Climate Change
P48
Environment
P50
Human Rights
P52
Coexistence with Local Communities

Contribution to achieving the SDGs

Corporate Governance

Human Resource
Strategy

P55

P59

P31

Expectations and needs of stakeholders

Efforts to address important issues

Customers
Contributing to a Safe, Secure,
and Convenient Cashless Society
Information/Cybersecurity

P54

P53

Employees

Partners

Global Business

Materialities for sustainability

Shareholders

Achieving sustainablegrowth and improving
corporate value throughsound corporate
management

Creating humanresources and anorganization where each
person can fulﬁll an
active role in their own way

Enriching our customers
lives, and enabling themto live happily and true
to themselves

Regions/communities

Creating a better society
through co-creation
with partners

Sustainability Promotion Committee

Declining birthrate,
aging population

Climate change

Digitalization

Promoting conversion
to cashless operations

Changing society/Global environment

45

P21

Growing needs
for asset formation

Protecting the richnatural environment andculture that enriches life,and energizing people in
the region and community

Sustainability

Response to Risk/Opportunities
Materialities for sustainability and initiatives

The Credit Saison Group’s businesses carry with them several risks, including risks related to the external environment as wellas financial and business aspects. In this context, in addition to continuing to strengthen our response to the risks common to
the industry that we have been dealing with so far, there remains the necessity to evaluate any risks that have emerged due tochanges in the external environment from a medium- to long-term perspective and to take countermeasures. Some of the risks
that could significantly influence investor decisions are listed below.

Risks common to the industry
Materialities

Risks

Details

Achieving sustainable growth and improving corporate value
through sound corporate management
Creating human resources and an organization where each
person can fulfill an active role in their own way
Enriching our customers lives, and enabling them to live happily
and true to themselves
Creating a better society through co-creation with partners
Protecting the rich natural environment and culture that enriches
life, and energizing people in the region and community
Responses

P41

Financial Capital Strategy

Economic Conditions• Decrease in transaction volumes of credit cards, loans, credit guarantees, and real estate mortgage
loans provided by the Group, and decline in the loan collection rate due to deterioration of thedomestic and overseas economic environment (employment environment, household disposable
income, personal consumption, etc., due to recession)• Decrease in capital investment by SMEs, which are the main customers of the Lease Business, anddeterioration in corporate earnings• Recorded loss on valuation of real estate for sale, etc., due to falling real estate prices in the Real
Estate–related Business• Calculation by risk capital management (RCM) of the risk capital required by our business tomaintain ratings and maximize returns within the scope of the risk capital surplus

Fund Procurement• Among fund procurement methods, such as borrowing from financial institutions and the issuing ofcorporate bonds and CP, liquidity risk due to the considerable amount of funding with a procurement
period of less than one year

• In fund procurement, maintaining a certain percentage of long-term and fixed financing; the settingof liquidity enhancement limits, such as commitment lines; and the reduction of liquidity risk bypromoting diversification by executing direct procurement, such as corporate bonds and theliquidation of receivables• Risk of falling prices of investment assets, such as stocks of listed and unlisted companies, venture
investment funds, bonds, real estate, and real estate funds• Rise in funding interest rates when interest rates rise

• Appropriate management of market risk by introduction and utilization of RCM and ALM

Market Risk

Impairment of• Risk of non-repayment of receivables by large numbers of customers due to changes in the domestic
Financial Instruments and overseas economic environment (employment environment, household disposable income,(Allowance for Doubtful
Accounts)

Provision for Loss on
Interest Payment

personal consumption, etc., due to recession)• Ongoing soundness of claims and appropriate allowance for doubtful accounts by strengthening
credit management systems, such as establishment and operation of credit management systems
relating to credit limits, credit information management, and internal ratings, as well as monitoringof credit status• Risk of increase in the amount of reimbursement claims from customers regarding the portion of• The amount of allowance required at the present time is recorded in consideration of the pastinterest that was higher than the interest rate ceiling set by the Interest Rate Restriction Act, interest thatreimbursement record and trends in interest reimbursement claims
within the Group in Japan was repaid before the revision of the Act• Risk of ongoing impairment into the future when goodwill is not amortized on a regular basis withrespect to IFRS to which the Group is subject• Negative impacts on financial results and financial standing when impairment is declared due to acontinuous increase in the balance of goodwill in the event that new goodwill arises following M&As, etc.

• Investment limits based on RCM are set in order to establish mechanisms for avoiding excessive risk
• Deliberations by supervisory divisions and specialized departments are conducted regarding the
propriety of acquisition prices at the investment stage• Follow up and regular monitoring of the business environment are implemented to achieve theincome and expenditure plan at the time of acquisition once financing is complete• Revisions, changes in interpretation, and increasing strictness of general laws and regulations
pertaining to company management, and adoption of new legal regulations• Risk of having to cease certain services due to regulatory changes, etc.

• Internal systems, rules, and operations are reviewed, maintained, etc., in accordance with thechanges• While complying with laws and regulations, prompt responses to service developments inaccordance with new regulations

Anti-Money
Laundering• Risk of violations to laws and regulations when money laundering and terrorism financing measures(hereafter, money laundering measures) fail to function effectively• Deterioration in the business operations, financial results, and financial standing of the Company
and the Group due to business suspensions, penalties, and other administrative actions, and due todamage to reputation, etc.

• Preparations are made for complying with various laws and regulations in Japan and abroad as aresult of being subject to various laws and regulations in Japan and abroad, and of falling under thesupervision of supervisory authorities in Japan and abroad based on these• Further strengthening of money laundering measures is ongoing

Compliance• Risk of negative impacts on the business operations, financial results, and financial standing of theGroup due to administrative actions or damage to reputation following the occurrence of legal or
regulatory violations• Employee training, monitoring of training implementation status, and other preventive measures arepromoted by constructing a compliance framework and by strengthening internal control systems• Early detection and prompt response are enabled through the preparation of an internal reporting
system for violations of legal and regulatory compliance, acts of wrongdoing by managers andemployees, scandals, and potential conflicts of interest, etc.

Impairment ofGoodwill

Various Regulatory
and Legal System
Changes46

Risks and opportunities that need to be addressed over the medium to long term
Materialities

Risks
Occurrences ofLarge-Scale
Disasters

Impact of the
COVID-19
Pandemic

Details
Risks

Responses• Physical damage to owned assets and human damage to employees due to large-scale natural disasters (e.g.,
earthquakes) in various regions in Japan and overseas

Opportunities• Securing human resources through BCP plan formulation and education, building trust with other corporations, andimproving corporate value• Continuously developing services as social infrastructure by preparing for unexpected circumstances

Risks• Economic downturn, corporate bankruptcies, and prolonged decline in personal consumption due to continued
uncertain future restrictions on behavior and pandemic trends• Decreasing acquisition of new members due to intensifying competition caused by factors such as diversification of
payment methods through promotion of cashless payment and entry from companies in other industries

Opportunities• Improving customer satisfaction through Group-wide efforts to appropriately and quickly resolve all kinds of problems
that arise in a mature society• Initiated business structure transformation based on changes in customer psychology and behavior caused by the
COVID-19 pandemic

Risks• Decreasing transaction volume and increasing financing cost associated with deterioration of Group creditworthinessand brand due to factors such as a delay in responding to climate change and serious impact on the global
environment and economy resulting from factors such as intensification of natural disasters and changes in ecosystems
associated with climate change• Increasing bad debt costs due to deterioration of customers’ household finances and business performance caused byabnormal weather such as typhoons and heavy rains

Impact of Climate
Change• Improving corporate value through recognition of climate change countermeasures and CO2 reduction activities

Opportunities • Securing human resources by improving corporate value and name recognition, improving employee motivation, andgaining the trust of various stakeholders by increasing recognition from investors who have a high interest in ESG

Risks

Competitive
Environment
Opportunities

Overseas Business
Development• Intensifying competition due to new entrants from other industries into the payment industry as the result of
deregulation and technological advancement• Presenting favorable transaction conditions and services to customers without regard to profitability by competitors in
the real estate finance market• Developing new business domains and new products/services through collaboration with other industries• Expanding market share by improving convenience and strengthening relationships with affiliated companies

Risks• Market trends in the countries in which the Company develops its business, the presence of competitors, politics, theeconomy, law, culture, religion, customs, foreign exchange rates, and various other country risks

Opportunities• Development of existing and new services in countries/regions where there are many people who do not possess abank account and are unable to receive financial services• Formulating a BCP plan and regularly confirming its effectiveness; implementing BCP education and training• Improving the credit card usage environment by decentralizing authorization systems to the Kanto and Kansai regions

P48 Response to Climate Change• Response to changes in the business environment by transforming the business portfolio from management based on the
Payment Business to a comprehensive life services group• Expand services targeting new customer segments by building new remote-type member capture models using SAISONCARD Digital• Thoroughly implement employee health management and infection countermeasures• In August 2021, we established the Sustainability Promotion Committee (attended by the Representative, Executive President
and COO) to strengthen initiatives for sustainable business operations• Express support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and promote
information disclosure on governance, strategy, risk management, and indicators/targets related to responding to climatechange• Promote CO2 reduction by reducing paper consumption by changing to online statements and applications, reducing theissuance of plastic cards through SAISON CARD Digital, and use of recyclable materials in the envelope windows of statements* Online statements: As of March 2022, 50% reduction compared to total members/Reduction of 500 grams of CO2 perenvelope* Online applications: 95% of face-to-face card applications are accepted on tablet devices• Switched all electricity used at Credit Saison’s Ubiquitous Building data centers to electricity derived from 100% virtually
renewable energy using non-fossil certificates with tracking
P48 Response to Climate Change* CO2 emissions reduced among the Company’s business activities
August 2023: Approximately 38% annually (approximately 1,433 t-CO2) after introducing at Tokyo Ubiquitous Building
December 2023: Approximately 58% annually (approximately 2,200 t-CO2) after introducing at Kansai Ubiquitous Building• In addition to issuing credit cards, prepaid cards, and other plastic cards, working to provide a wide variety of payment
platforms aimed at improving customer convenience in a bid to realize a cashless society, including smartphone payments, QR
code payments linked to partner apps, and the smartphone-exclusive payment service “SAISON CARD Digital.”
P38 CSDX Business• Increasing screening speed for the purpose of improving customer convenience, strengthening relationships with real estate–
related companies, and achieving differentiation by providing products and services unavailable from other companies• Dispersing country risks by expanding into multiple countries/regions; reducing risks through regular risk analysis of thecountries where we are located; establishment of a detailed monitoring system for local affiliates
P21 Global Business• System failures due to malfunction of computer systems, communication line disruptions, etc.
System Risk and
Risks• Decreasing reliability due to the emergence of risks and leakage/unauthorized use of personal information (member
Cyberattack Risk
information) or confidential information due to cyberattacks, etc.
(including leaks of• External sales of core systems in which the Company has been accumulating know-how for many years
personal
information, etc.) Opportunities • In collaboration with external partners, external sales of secure payment systems in which use is made of fraud
prevention technology• Development of contingency plans, such as ensuring the backup of important systems• Improving employee awareness of information security and developing countermeasures against cyberattacks, such as
minimizing damage through the introduction of systems capable of detecting advanced cyberattacks• Appropriate protection measures and system development of personal information, as stipulated Opportunities under
Opportunities the Personal Information Protection Law, acquisition of Privacy MarkP54 Information/Cybersecurity

Risks• Risk of negligence and inappropriate handling of administrative tasks due to a large amount of manual paperwork
Actualization of
Administrative Risks Opportunities • Expanding demand for administrative process agencies at affiliated cards and partners• Creating an administrative work manual, regular inspection of administrative work status, prevention of employee errors andfraud, development and operation of a whistleblowing system for early detection of any illegal activity• Promoting automation of administrative work by the systematization and introduction of robotic process automation (RPA)

Risks

Reputation Risk

Relationships withMajor Partners

Securing andDeveloping Human
Resources• Risks affecting business operations, financial results, and financial standing in the event negative reviews or rumors are
spread regarding the Company and the Group, regardless of the veracity of such

• Building of relationships with stakeholders through reputation management
Opportunities• New customers and greater earnings due to consumer need identification and service improvements• Striving for early detection of gossip and rumors• Implementing countermeasures that respond in a timely, appropriate fashion according to the degree of impact and extent ofdissemination in order to minimize impacts• Deterioration of business performance of business alliances that form important strategies and business partners with• Strengthening relationships with existing partners
whom we have a capital relationship, changes of business alliance conditions, and cancellation of alliances with partners • Building a business model that does not depend on a specific partner by promoting new alliances with partners in diverse
industries and sectors• Business development utilizing the acquisition of memberships through alliances with partner companies andOpportunities
P15 Establish the Saison Partner Economic Zone and Reinforce Cooperation among the Group‘s Companies
organizations, expansion and diversification of services, product sales channels, and customer bases of both parties
Risks

Risks

• Risk of being unable to secure diverse, talented human resources to provide high-level services to customers anddevelop advanced products and services; risk of human resources leaving the Company

Opportunities • New service/product development by securing talent with expertise in digital technology

47• Providing equal opportunities by developing work systems and common employment patterns that meet employees’ needs,
the securing of excellent human resources by adopting personnel systems that can utilize the abilities and characteristics of
employees, such as the executive officer and specialist/expert systems• Introducing support systems such as a new business proposal system, a voluntary selective training program, and careerdevelopment seminars by age group; creating a culture of taking on challenges through the development of an environmentthat allows for long-term/multifaceted training and career development, for example, personnel
P33 Human Resource
allocation based on employee requests centered on open recruitment

Achieving sustainable growthand improving corporate
value through soundcorporate management

Sustainability

Response to Climate Change(Information Disclosure Based on the TCFD Recommendations)Protecting the rich naturalenvironment and culture thatenriches life, and energizing people
in the region and community

Creating a better society
through co-creation
with partners

Click here for details of Information Disclosure Based on the TCFD Recommendations
https://corporate.saisoncard.co.jp/en/sustainability/environment/tcfd/

The Company expressed its support for the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations in 2022 and is involved in the TCFD consortium,
a discussion forum for the companies and financial institutions supporting therecommendations. With respect to disclosures of governance, strategy, risk management,
metric, and target information as recommended by the TCFD, we listed the FY2021 results
for these on our website in June 2023.

Risk management
For climate change risks, the Sustainability Promotion Committee leads the formulationof policies and strategies for minimizing risks and seizing opportunities and structurally
monitors related efforts.

Metrics and targets
Credit Saison included the six companies that are collectively responsible for more than
95% of net revenue within the scope of measurement. These companies are working to
reduce GHG emissions through efforts including the introduction of renewable energy andthe reduction of paper use.

Governance
Credit Saison established the Sustainability Promotion Committee in August 2021 as anorganization for discussing the direction of its activities to achieve its sustainability-related
strategies and to respond to inquiries from the representative director. The Committee isalso attended by the Representative, Executive President and COO. We also set up threeworking groups—the Climate Change Strategy Promotion Working Group (WG), the DE&I
(Diversity, Equity, & Inclusion) Promotion WG, and the Social Impact WG—under the purview
of this Committee. These meet regularly to deepen discussions on each theme.

Consolidated Group companies within the scope of measurement

Scope 1 and 2 reduction targets and trends

Please refer to page 44 for details.

(t-CO2)

Reduction fromthe base year:

Strategy

Approx. -2%

We predict changes in the external environment and analyze the future impacts of climatechange on our operations in accordance with the TCFD framework and by using a scenario
analysis method. It is important for us to pursue sustainable growth by mitigating climatechange and adapting to it through our business activities. Based on this understanding, we
believe that actions to address climate change are important in the management of ourbusiness. We identify and assess its impact on us by forecasting changes in the external
environment and our operating environment accompanying the manifestation of climaterelated risks and by identifying risk events. In the scenario analysis, we referenced multiple
existing scenarios published by organizations such as the International Energy Agency (IEA)
and the Intergovernmental Panel on Climate Change (IPCC).

18,563

Note: Market standard

The introduction of renewable energy for the Tokyo andKansai Ubiquitous buildings is expected to reduce emissions
for FY2023 to a level equivalent to the target.

18,235

17,783

Approx.
18,000Approx. -14%
17,003

Approx.
16,000

Reduction measures for achieving
the FY2025 and FY2030 targets
are under way
For details, please see page 49.

16,224

Reduction of 4.2% each year
compared with the base year
(Target)Results

2020(base year)

48

4.2%
reduction
Target2021

Forecast

8.4%
reduction
Target2022

14,665

10,767
12.6%
Forecast reduction
Target2023(current year)

2025

2030

(target year [1]) (target year [2])(FY)Response to Climate Change (Information Disclosure Based on the TCFD Recommendations)

Received a score of B for our first response to the CDP Climate Change
Questionnaire in 2022

Switching to renewable energy for 100% of the electricity used at Credit
Saison’s Tokyo Ubiquitous Building and Kansai Ubiquitous Building

Credit Saison responded to the CDP* Climate Change Questionnaire for the first time in
2022, for which we received a score of B. We will continue to engage in climate change
action through product and service developments, the introduction of renewable energy,
and other areas, and will strive to disclose the sustainability
information demanded globally.

Credit Saison switched all electricity used at the Tokyo Ubiquitous Building and Kansai
Ubiquitous Building, which consist of call center functions and operations for the customersof our card business, etc., to electricity derived from 100% virtually renewable energy using
non-fossil certificates with tracking. The Tokyo Ubiquitous Building, for which conversion
was completed in August 2023, is estimated to have reduced CO2 emissions from ourbusiness activities* by approximately 38% annually (approximately 1,435 t-CO2). Together
with the Kansai Ubiquitous Building, for which conversion was completed in December
2023, in total these two properties are expected to reduce CO2 emissions from our businessactivities by approximately 58% annually (approximately 2,193 t-CO2). As a result, the ratioof renewable energy electricity as part of Credit Saison’s total electricity consumption is
expected to reach approximately 61%.

* CDP is a non-governmental organization (NGO) administered by a U.K. based charity
organization. CDP operates a global information disclosure system that allows
investors, corporations, states, regions, and cities to manage their own environmental
impacts. The CDP was formerly known as the Carbon Disclosure Project.

Climate change related assessment (excerpt from the CDP report)
A

Leadership (A/A-):
Implementing current best practices
Management (B/B-):
Taking coordinated action on climate issues
Awareness (C/C-):
Knowledge of impacts on, and of, climate issues
Disclosure (D/D-):Transparent about climate issues

AB
BC
C-

* Total for Scope 1 andScope 2D
DTokyo Ubiquitous Building

CO2 reductions through DX and paperless operations

Promoting the use of online statements and environmentally friendly materials

With its responsibility for operations, the Operation DX Department is advancing efforts toimprove the efficiency of operations through DX. The number of new credit card accounts
opened online has increased threefold over the past three years following improvements
to the user interface for the withdrawal account registration and update page, expansionof online direct debit financial institutions, and other measures. Of the roughly 9 million
operations made per year, as of October 2023 approximately 60% had been automatedas part of the Department’s DX efforts. Moreover, the Department introduced a work flow
system for payment and refund operations to eliminate the need for voucher printing. Thissystem is expected to reduce paper use by approximately 500,000 sheets per year and CO2
emissions by approximately 4.7 tons per year.

Credit Saison is promoting the use of online applications for credit
cards and financial commodities, online credit card statements, andenvironmentally friendly materials. In FY2022, the online statement
ratio increased to approximately 54%, with online statements being
received by approximately 13 million customers.
Moreover, we are also working to reduce plastic waste, where
our use of a new envelope material for the Tento-mushi (ladybug)
Express card member magazine is expected to reduce plastic waste
by approximately 17 tons per year.
49

Achieving sustainable growthand improving corporate
value through soundcorporate management

Sustainability

Environment

Enriching our customers’ lives
and enabling them to live
happily and true to themselves

Creating a better society
through co-creation
with partners

Protecting the rich naturalenvironment and culture thatenriches life, and energizing people
in the region and community

Click here for details on Environment
https://corporate.saisoncard.co.jp/en/sustainability/environment/

Basic Approach

Corporations around the world are responsible for taking action to solve environmental problems. We will strive to reduce the environmental impact ofour business and actively work to reduce the environmental impact of society through means such as financial products. We also promote environmental
conservation activities through the management of Akagi Nature Park.

“SAISON CARD Digital for becoz” received grand prizes in two external awards
visualize CO2 emissions through daily purchasing activities aimed at raising user awareness ofenvironmental issues. The card has been well received by those who have a strong awarenessof sustainability. Credit Saison is working to enhance its services, launching an initiative ayear after the becoz card was issued in June 2023 that enables customers to participate
in environmental conservation activities at the Akagi Nature Park (Shibukawa City, Gunma
Prefecture), operated by Credit Saison, depending on the amount spent using the becoz card.

We have partnered with Datafluct, Inc. to launch SAISON CARD Digital for becoz (“becozcard”) from June 2022. This is the first credit card in Japan* that can visualize CO2 emissions
based on payment data to counter climate change. In March 2023, the becoz (=be CO2 zero)card received grand prizes of the NIKKEI Decarbonization Award 2022 (project category)sponsored by Nikkei Inc. and the Japan Financial Innovation Award 2023, which recognizes
financial innovation, sponsored by FINOLAB. The Company was recognized for its efforts to* According to research by Credit Saison.

Raise awareness through environmental events
Through our active participation in events that promotesustainable products and services, the becoz card helps
to raise awareness of climate change and contributes toenvironmental conservation activities. In 2023, we participatedin GOOD LIFE Fair 2023, which showcases goods and services
from all around Japan that brighten people’s lifestyles,
and in Environment Day Nagoya 2023 (Nagoya City, Aichi
Prefecture), where citizens, businesses, and government
collaborate to learn about the environment and take action.

50

Environment

Initiatives for Akagi Nature Park
With the theme of “coexistence of humanity and nature” and the concept of providing
lush natural scenery to pass on to future children, Credit Saison has been operating Akagi
Nature Park in Shibukawa City, Gunma Prefecture since 2010. The devastation of forests
destroys ecosystems and significantly impacts our lives by limiting our water supply,
increasing the risk of mudslides and other disasters, and reducing the Earth‘s ability tosequester CO2. Through our reforestation project, we strive to increase the amount of CO2
sequestered and protect biodiversity. At the same time, we focus on balancing the Akagi

Nature Park’s function as a natural environment conservation area with its exhibition andtourism facility functions by providing hands-on environmental learning opportunities suchas tree transplanting to “create a forest where people and nature can coexist.”
As a result, survey results show that the Satoyama ecosystem is well maintained mainly interms of the illumination level of the Quercus serrata forests and the growth status and numberof species of forest floor plants, indicating that the park’s focus not only on management forconservation but also on park maintenance is contributing to biodiversity conservation.

Migratory butterfly/Asagimadara(chestnut tiger butterfly)

Summer vacation scienceclassroom

Hands-on tree transplanting activities
to learn about the relationshipbetween disasters and forests

Summer vacation workshops

Initiatives by ReSAISON
We established ReSAISON Co., Ltd. in August 2022 as a joint venture with
the Cyclers Group, which has comprehensive recycling functions. The
Company contributes to developing secondary distribution markets byrecycling and engaging in resource recovery through the salvage, resale,and material recycling of office equipment with expired leases, particularly
office automation equipment. In September 2023, we held an event to collectunwanted items at Mitsui Residential for resale and material recycling, with theaim of reducing waste and realizing a circular economy.

Recycling center

51

Achieving sustainable growthand improving corporate
value through soundcorporate management

Sustainability

Human Rights

Creating human resources
and an organization where
each person can fulﬁll an
active role in their own way

Enriching our customers’ lives
and enabling them to live
happily and true to themselves

Protecting the rich naturalenvironment and culture thatenriches life, and energizing people
in the region and community

Creating a better society
through co-creation
with partners

Click here for details on Human rights: Policy/main initiatives
https://corporate.saisoncard.co.jp/en/sustainability/esg2/esg_policy.html
簡略版

TYPE ー A

Basic ApproachTo embody our management philosophy of being a leading-edge service company, together with our stakeholders, we will create asustainable society that respects human rights through our “Action Declaration” and “Behavioral Standards,” which are the values andconduct policy that we expect all officers and employees to share.

Human rights policy

Respect for human rights in business activities

We respect basic human rights by complying with various relevant laws and regulations
related to human rights in each of the countries where we operate, and by understanding
and supporting international norms such as the Universal Declaration of Human Rights,
the International Bill of Human Rights, and the International Labor Organization (ILO)
Declaration on Fundamental Principles and Rights at Work. Furthermore, we conduct ourbusiness activities based on the UN Guiding Principles on Business and Human Rights.

We respect basic human rights by understanding and supporting various international
norms related to human rights in each of the countries where we operate. We strive torespect human rights by establishing policies such as prohibition of discrimination, respect
for freedom of association and collective bargaining rights, prohibition of harassment,prohibition of child labor and forced labor, and payment of wages.

Initiatives for respecting human rights
Prohibition of harassment

Universal Manners Test/LGBT Manners Training

We have defined harassment items (subject to disciplinary action) in our rules of employment.
We also conduct harassment education in compliance training tailored to different levels of
the organization, including executive employees including general managers, managers, andnewly appointed managers. Furthermore, we appoint compliance officers in each department
and carry out education programs led by the departments themselves.

We encourage employees to take the Universal Manners Test to learn the ways of thinking
and behaviors that enable them to act from the perspective of someone different fromthemselves, such as the elderly and people with disabilities. Our employees also participate
in LGBT Manners Training to learn how to interact with diverse people.
Universal Manners Test/LGBT Manners Training
https://corporate.saisoncard.co.jp/en/sustainability/csr/

Respect for human rights in tune with our human resource strategy

Initiatives on children’s rights

We believe that innovation is born out of diversity, by bringing together people with theirindividual personalities, strengths, and values that come with age, gender, handicap,
nationality, lifestyle, career, and work style. Our endeavors focus on the creation of anenvironment where all can flourish in their own way, and we promote initiatives forthe active participation of all employees while valuing the spirit of DE&I, such as theintroduction of the COMMON PERSONNEL SYSTEM for all employees to realize equal pay
for equal work, the strengthening of mid-career recruitment and ways of working without
regard to age or company history, including reskilling, the hiring of people with disabilities
and creating environments that suit them, and hiring locally at our overseas offices.
Click here for details on human resource Strategy
P33 Human Resource

In addition to eliminating child labor in Japan and other countries, we take initiatives toaddress problems faced by children in the aspects of education, the environment, andothers. To create a prosperous future for the next generation, we respect and support
children’s rights through initiatives such as the “School Visit: SAISON TEACHER” financial
education program and nature education through hands-on classes for parents andchildren at Akagi Nature Park (certified for forest therapy).
School Visit: SAISON TEACHER
https://corporate.saisoncard.co.jp/sustainability/csr/teacher/(Japanese only)

Click here for details on Initiatives for DE&I
https://corporate.saisoncard.co.jp/en/sustainability/
diversity/gender/

Akagi Nature Parkhttps://corporate.saisoncard.co.jp/en/sustainability/environment/

52

TYPE ー BAchieving sustainable growthand improving corporate
value through soundcorporate management

Sustainability

Contributing to a Safe, Secure, andConvenient Cashless Society
Basic Approach

Saison leases
Credit guarantee
Flat 35

Small companies

Real estate ﬁnanceSole proprietors

SAISON ID
https://www.saisoncard.co.jp/customer-support/saison-id/(Japanese only)

Expansion of services offered

BtoB
Credit cards
Major
companies

Smartphonesettlement

Midsized
companies

Wealthy

Middle class

SAISON ID makes credit card usage safer, more secure, and convenient
We have launched SAISON ID, a new service that canmanage multiple IDs for our Net Answer members’site. Customers who hold multiple partner cards will
no longer need to log in with separate IDs for eachcard, making it easier to manage spending amounts
and membership information. It can also be used tolog into one‘s Saison Card LINE official account orother companies’ services that use Net Answer IDs
to link information. As we work toward the creationof our Saison Partner Economic Zone that enhances
convenience for our card members, we continuously
strive to improve our service.

BtoC

Moderately wealthy

Creating a better society
through co-creation
with partners

Cashless payments in Japan are progressing significantly in conjunction with the growth of digitalization and the spread of COVID-19. As a company thatprovides financial services such as credit cards, we aim to create a safe, secure, and convenient cashless society. We are working to manage personal
information and build security infrastructure against new forms of unauthorized use.

Credit Saison’s aim is to become a leading-edge service company by providing services
that enable our customers to realize high-quality and affluent lifestyles, centered on
financial services. In our pursuit of a sustainable society that is even more convenient andprosperous than today’s, our offerings have expanded from the provision of financial
services, primarily credit cards, to a wide range of services.

Ultrawealthy

Enriching our customers’ lives
and enabling them to live
happily and true to themselves

Saison Card LINE official accounthttps://www.saisoncard.co.jp/service/line/(Japanese only)

Realizing a safe, secure, and convenient cashless society
As cashless payments become increasingly
commonplace, we are working to develop
environments, such as for the constructionof diverse payment schemes, proper
management of personal information,
support for multiple loans, improved
accuracy of detecting unauthorized use, andothers, so that customers can use their credit
cards safely, securely, and with convenience.
Contributions to Society
https://corporate.saisoncard.co.jp/en/sustainability/csr/

Construction ofdiverse payment
schemes

Early resolution of problems by opening a Web-based unauthorized use
investigation desk

Proper managementof personal
information

Information/
cybersecurity

Given the recent rising number of instances of unauthorized credit card use that threaten
peace of mind when making cashless payments, in September 2023 we launched the “NetAnswer Investigation Desk Function” to put customers at ease in the unlikely case that they
are charged for usage they did not authorize. By enabling Net Answer to accept queries forfraudulent use investigations, previously only accepted by telephone from the Information
Center, it is now possible that customers can find prompt solutions in as
little as five minutes.

Support for
multiple loans
Improved accuracyof detecting
unauthorized use

Net Answer Investigation Desk Function
https://www.saisoncard.co.jp/topic/entry/voice_51/(Japanese only)

Payment Business (BtoC)
https://corporate.saisoncard.co.jp/en/business/payment/53

Achieving sustainable growthand improving corporate
value through soundcorporate management

Sustainability

Information/Cybersecurity

Basic Approach

Creating a better society
through co-creation
with partners

We have positioned cybersecurity measures as a management theme to respond to threats such as cyberattacks that have become increasingly advanced
and sophisticated in recent years.
As a company that provides financial services, we have established the Information Security Policy and strive to conduct appropriate information
management. We also work to appropriately protect and manage information assets such as hardware and software, and continuously maintain andimprove information security.

PolicyAudits and training

Based on our understanding that the appropriate management of information assets
we own is an important task for businesses, we have established basic policies that our
directors, executive officers, and employees should observe.

To ensure information security, regular audits are conducted by our internal audit department
or external auditors, and security items are covered in audits conducted by Deloitte Touche
Tohmatsu LLC. We also provide our directors, executive officers, and employees withinformation security training continually through various compliance training programs. There
were no serious incidents in FY2022 or FY2023 (as of the end of September 2023).

Management systems
We maintain and comply with various regulations related to information security, including
information management regulations, and are continuously reviewing our internal regulations
to heighten our security level. Furthermore, we appoint the head of each department as acompliance officer and build and promote a system for promoting information security.
We have also set up the Cybersecurity Response Team as an organization within the Crisis
Management Committee, which is under the supervision of the Board of Directors. Collecting
information on security vulnerabilities, monitoring cyberattacks and other forms of trouble,
and formulating response policies and procedures, the Team is working to establish systems
that minimize the damage caused by an incident and then restore the situation. Responsibility
for overseeing these initiatives rests with the CIO (and CISO), positions established within the
CSDX Development Department that promotes cybersecurity measures, and with the director
and senior managing executive officer responsible for the CSDX Development Department,
who concurrently serves as CDO (and CTO ).

Information/Cybersecurity initiatives
To respond to recent cyberattacks, including targeted attacks, we believe that rather thanextensions of the past more specialized and specific measures are needed. To implement
a drastic response for the IT infrastructure area, which represents a constraint on security
measures, in FY2023 we are proceeding with a gradual and speedy response. Specifically,
with regard to areas from where threats originate, we are addressing, for example, security
strengthening and network improvements as well as a preparedness system while keeping
risk countermeasures in mind.
Theme 1

Theme 2

Board of Directors*1

Representative Director

Appointment/delegation/supervision
Advice, etc.

Delegation/supervision

Crisis Management Committee
Cybersecurity Response Team
Validity guarantee

Network improvements

In conjunction with modernizing and optimizing network routes on the premise of high speed and expansion of cloudusage, we are working to strengthen security measures against recent cyberattacks.

Timely reporting ofmanagement risks andﬁnancial conditions

Appointment/delegation/supervision

Security strengthening

To improve security measures, we are promoting the replacement of in-house terminals. In addition to further
strengthening security by carrying out these replacements, consolidating the devices will also improve operational
efﬁciency for employees who use multiple devices to perform their business duties.

Cybersecurity diagram

Departments

Enriching our customers’ lives
and enabling them to live
happily and true to themselves

Theme 3

Preparedness system

We are building a security posture in conjunction with our CSDX strategy initiatives, such as creating a specializedorganization and in-house system development through the recruitment and training of digital human resources.
We also periodically conduct system risk assessments to detect and improve system vulnerabilities. To develop aGroup-wide preparedness system, we are working to foster awareness through in-house education activities such as
regular compliance education in the Corporate Risk Management Department. As a response to cyberattacks such as
targeted attack e-mails, we also continuously take measures to prepare for cyberattacks, such as regularly conducting
simulated e-mail drills to improve employee awareness of information security.

General Affairs Dept., CSDX Development Dept., etc. *2*1 Head of CSDX Development Dept.: Director, Senior Managing Executive Officer and CDO, CTO*2 General Manager of CSDX Development Dept.: concurrently CIO and CISO

54

Achieving sustainable growthand improving corporate
value through soundcorporate management

Sustainability

Coexistence with Local Communities

Creating a better society
through co-creation
with partners

Protecting the rich naturalenvironment and culture thatenriches life, and energizing people
in the region and community

Click here for details on Contributions to Society
https://corporate.saisoncard.co.jp/en/sustainability/csr/

Basic Approach

We conduct social contribution activities based on the following approach: “A corporation should not only fulfill its responsibilities as a social entity, suchas compliance with laws and regulations and contribution to profits, but also develop its business using methods and contents that satisfy or exceed theactual and latent demands of citizens, communities, and society.”

Next-generation education and financial education that will lead to regional
economic revitalization and human resource development

JFA Major Partner agreement and start of SAMURAI BLUE Card Saison issuanceStarting from 2023, Credit Saison has signed an eight-year JFA Major Partner agreementwith the Japan Football Association (JFA). Our support for the Japan national soccer
team has been ongoing for 22 years, ever since we signed an initial supporting company
agreement with the JFA in 2001. In addition to the Japan national men’s team, we will
support a wide range of JFA projects, including the 47 prefectural soccer associations,nurturing the next generation, and promoting the active participation of women. Also, in
November 2023, we will begin issuing the SAMURAI BLUE Card Saison, which provides
benefits based on the amount spent, such as exclusive benefits for card members andinvitations to exclusive events. In the years ahead, we will continue to engage in support
activities that connect soccer culture and supporters.

In January 2023, as part of the Hiroike Institute‘s educational partnership agreement with
Reitaku University, we began accepting applications for the Reitaku University original credit
card, a service developed mainly by students with the support of our employees.
Through KASSAI, a cloud-based support payment service that collects application feesfor Fintertech Co., Ltd., which promotes
the creation of next-generation financial
services using cutting-edge technology, in
December 2023 we also sought support
for the student-led Kashiwa Firework
Festival Project (Kashiwa City, Chiba
Prefecture). Since the agreement was
signed, industry-academia collaboration
efforts have been progressing.

Regional revitalization through Furusato tax payment service

Credit Saison is a major partnerof Japan’s national soccer team.

In April 2023, the number of local governments that could
use Saison’s Furusato tax payment service, which had
been launched in October 2020, as a donation destination
had increased significantly to more than 1,500, and thenumber of return gifts had increased significantly to morethan 550,000 items. Connecting donors, including Saison
Card and UC Card members, with local governments
across the country, we are working to revitalize local
communities by providing a system that makes it easy for
all donors to use the Furusato tax payment service. We
are also supporting donations for disaster recovery efforts
and carrying out recovery support activities that do notincur processing charges from local governments.

Contributing to local communities through business
In November 2022, the Ikebukuro Area Platform was established for companies,
organizations, schools, and government agencies to collaborate in the Ikebukuro areaof Tokyo, where the Credit Saison head office is located. As a member of the Platform,
our company is participating in initiatives that contribute to “improving the value andattractiveness of Ikebukuro. ”We have also established Saison Business Support, which
provides solutions to local business operators, in Kagoshima Prefecture. Our company isthus contributing to local communities through its business.

55

Sustainability

Roundtable Discussion between Outside Directors
Strengthening governance for “offense” and “defense” as we look
to be a game-changer in a transitioning financial industry

Q

Naoki Togashi
Outside Director(Independent)

Nana Otsuki

Outside Director(Independent)

Eiji Sakaguchi
Outside Director(Independent)

What are your assessments of the Company’s governance structure,
and what challenges does it face?

Togashi: Compared to when I was appointed in 2017, I feel that the Company has madegreat strides in strengthening internal auditing, risk management, and other “defensive”
governance. Our tasks going forward, I believe, are to firmly build and bolster audit andmanagement structures established under local holding companies in our fast-growing
global business and to deepen discussions on our ideal vision for the future in our financebusiness with respect to issues such as credit screening, reserves, screening criteria, andreturns on a risk-capital basis.
Yokokura: I was appointed as an outside director in 2020. Even within these past three
years I have seen dramatic changes to the situation, including surging growth in the Global
Business, an increased presence in the Finance Business, and recovery in the Payment
Business, among other developments. Under such circumstances, the role of outside
directors is to support management so that the Company can make decisions aboutmaintaining and increasing our corporate value while engaging in sound risk-taking. The
Company’s Board of Directors’ meetings are the scene of lively discussions and are well
documented. The ratio of outside directors has increased from this fiscal year, and diversity
has further risen in the ranks. I feel that we have a system that has evolved to enable eachindividual to demonstrate their respective skills and personalities in a multifaceted manner.
Sakaguchi: I have been serving as an outside director from the current fiscal year. Prior to myappointment, my belief was that there was a structure in which Chairman Rinno usually led
the discussion, but that is not really the case. We have a very open Board of Directors where
members can freely and frankly express their opinions. My feeling is that the transparency of
information sharing and the operational structure of the Board of Directors are at a very highstandard, even compared to that required by the Corporate Governance Code.
Otsuki: I was appointed in 2017, and from the beginning I had the impression thatthe Board was extremely open, giving maximum opportunity for people outside theCompany to express their opinions. Many of the directors are also from outside theCompany, giving the impression that management oversight is provided from a broad
perspective. Subsequently, the Company changed itself in major ways, such as with systemdevelopment, overseas expansion, new M&A, and other activities. I can clearly recall that
there were quite heated discussions at every step along the way.

Hitoshi Yokokura
Outside Director(Independent)

56

Roundtable Discussion between Outside Directors

Q

point in Japan’s financial policy, and as the Tokyo Stock Exchange’s market reform set inmotion from 2023 progresses, we will be under even more intense scrutiny from the market.
As a company engaged in the financial industry, which is hugely affected by these factors,
we must brace ourselves and stand firm.
Togashi: In Japan, we are one of the few players to be engaged in various financial
businesses beyond the framework of credit cards, consumer credit, personal finance, andother areas. To remain independent and continue to exist in the future, it is essential for us
to constantly keep abreast of changes in the market and customer needs. As part of this,I think that an issue for the next Medium-term Management Plan will be for the various
businesses in the Group to create mutual synergies. In the domestic market as well, we will
sow the seeds of revenue by seizing upon synergies, and there are many opportunities for
growth. On the other hand, investors might call it a conglomerate discount if you simply
expand your reach. So how do you create synergies? Of course, that means working towardhorizontal cooperation within the Group. To this end, I believe that, first of all, the executiveside should be more energetic in discussions at Board meetings, speaking up without
hesitation about businesses that are outside their own jurisdiction.
Yokokura: As an attorney, I sometimes handle corporate misconduct cases. In companies thatare involved in such incidents, there seems to be a tendency for Board members to take nointerest in matters outside their jurisdiction or to reject opinions on matters within their own
sphere of responsibility. At the Company’s Board of Directors, while there is an atmosphereconducive to open discussion on all sorts of matters, I believe that thinking from theperspective of “offense” about what direction the Company as a whole should take, regardlessof area of responsibility, will lead to sound governance in terms of “defense” as well.
Sakaguchi: I totally agree. We need to take a more attentive stance concerning our internalbusiness. What’s more, the Company talks about being “comprehensive,” but I believe that

What are your thoughts on the accomplishments and issues regarding
the current Medium-term Management Plan?

Yokokura: I believe we have achieved our goals as evidenced by our businessperformance. The point we need to watch closely now is how capital allocation will be madefrom the next Medium-term Management Plan onward.
Togashi: Having achieved the goals of the plan a year ahead of schedule, we had theoption of continuing the current plan as is. However, I appreciate that it is in the natureof the current management team to tackle the challenges of formulating a new Mediumterm Management Plan. The prospect of lifting an unprecedented monetary easing policy
is increasing, and if that becomes a reality, there will likely be an enormous impact on
the Company in terms of procurement availability, cost, and other factors. The fact thatmanagement is trying to come up with their next growth strategy amid this situation, I
feel, demonstrates their unyielding determination, or in other words, “unless we can comethrough this, there will be no break-away future for non-banks.”
Sakaguchi: In light of the expectations and demands placed on us by the stock market,
some may have thought it necessary to formulate a new Medium-term Management Plan
and work to issue a steady stream of messaging.
Yokokura: I agree. The business and economic environment has changed considerably since
the current Medium-term Management Plan was formulated, and going forward we need tohave a robust discussion on just how to achieve our high goals under such circumstances.
Otsuki: The current Medium-term Management Plan started during the unimaginable
COVID-19 pandemic, and it was within this environment, where we could not even see
our hand in front of our faces, that we formulated the plan. Nonetheless, I think that weachieved results. It is highly likely that 2024 will be the year that we see a major turning

57

Roundtable Discussion between Outside Directors

Yokokura: As a lawyer and accountant by profession, what I have come to value in reachinga decision is to always be conscious of the important facts, whether there is anything wrong
with the logic, if the conclusion has been reached through a proper process, and whether
the argument itself is ethical. I would like to support appropriate risk-taking by keeping
these “facts,” “logic,” “processes,” and “ethics” in mind during Board discussions.
Otsuki: The Company has taken a big step up from “defensive DX” to “offensive DX,” based
on updates to core systems completed with the previous Medium-term Management
Plan. Under the next plan, by making this into a sharp tool we will further promote our“transformation into a comprehensive life services group” as set forth in the current Mediumterm Management Plan, and together with expanding our business capacity in Japan, we lookforward to taking a great leap forward on a global scale in Asia and Central and South America.
Togashi: Credit Saison has now come to a crossroads in terms of just how to transform
its credit card business, our founding business. While settlement makes available only two
functions, either “immediate” or “deferred payment,” driven by a history of technologicalinnovation, there are now a diverse array of payment products in Japan, from cards to code
payments, far exceeding options offered in other countries. On the other hand, we are now
in an age where technologically, one method can offer two functions. Outside of Japan, in
India, Thailand, and other countries, technological innovation has enabled them to achieve
leapfrog-type development. So, considering that what changes at overseas locations will
also eventually arrive in Japan, whether that is credit cards fading away or transformation to asettlement style, payment systems will depend on precisely what steps we take in the future.
As we formulated the new Medium-term Management Plan ahead of schedule, I would
like to make every effort to ensure that when we look back a decade from now, we will be acompany that is said to have been a game changer at a major turning point.

there will always be situations where a more specific focus on a particular business or field
will lead to synergies.
Togashi: That is an interesting point. While the Company is also taking on the challengeof non-financial areas, considering strategies that link these to finance might lead to thecreation of synergies. Well, how would you go about generating synergies? Of course, wewill find the answer in human resources. It is critical that we increase the number of people
within the Company who can illustrate the story of our overall corporate strategy.
Yokokura: That would be people who not only connect the dots but also draw the picture. It
might also be good for personnel departments to aim for solutions that find and bring together
human resources with the necessary skills, based on a recognition of management issues.
Otsuki: We do not have any large-scale facilities like factories or for logistics, and almost all
our assets that generate revenue are human resources. The Company should be commended
for its pioneering efforts in motivating all employees to become full-time employees. Female
CEOs in our overseas subsidiaries, which are an area of growth, are also putting their skills touse. However, in FY2022, the ratio of female officers at the Company stood at 24.9%, which is
at an underdeveloped level, and an issue also exists in terms of diversity.

Q

Please tell us about the role you yourself would like to perform and yourexpectations of the Company.

Sakaguchi: As you can see from this group of outside directors, we have a lineup of risk
management experts. That is why, I believe, we need to play a role that encourages risktaking. We would like to support the Company, such as by somehow prioritizing the manythings that need to be done in management so that we can better bring form to the content
of the “comprehensive” issues espoused by the Company.

58

Creating human resources
and an organization where
each person can fulﬁll an
active role in their own way

Achieving sustainable growthand improving corporate
value through soundcorporate management

Sustainability

Corporate Governance

Enriching our customers’ lives
and enabling them to live
happily and true to themselves

Protecting the rich naturalenvironment and culture thatenriches life, and energizing people
in the region and community

Creating a better society
through co-creation
with partners

Our basic view on corporate governance
The Credit Saison Group is implementing
a variety of initiatives to improve andstrengthen our corporate governance inrecognition of the enormous importancethat bolstering management supervisory
functions intended to attain businessobjectives and to enhance managementtransparency holds for sustainably growing
corporate value. We will continue to study
approaches to management that best
suit the Credit Saison Group considering
global trends in corporate governance andour basic policies for ensuring the proper
functioning of internal controls.

Matters Concerning Composition ofGoverning Bodies and Organization
Management
Organization Form
Number of directors stipulated by
the Articles

Company with
Audit & Supervisory
Board Members
25

Term of office for directors stipulatedby the Articles

1 yearChairman of the Board of Directors

President

Number of Directors (of which are
Outside Directors)

12 (4)

Appointment status of Outside
Directors

4

Number of Audit & Supervisory Board
members stipulated by the Articles

5

Number of Audit & Supervisory Board
members (of which are outside Audit& Supervisory Board members)

3 (2)Supervisory Board members

General Meeting of Shareholders
Appointment and dismissal

Appointment and dismissal

Accounting
Auditor

Audit

Cooperation

Appointment and dismissal

Audit &
Audit
Supervisory Board

Cooperation

Board of Directors
Election/
Delegation/
Supervision

Audit

Audit

Guidance

Representative Directors

ReportAppointed

Number of Independent Directors
designated among Outside Directors

Click here for details of our Corporate Governance Report.
https://corporate.saisoncard.co.jp/en/sustainability/
Number of Independent Directors
designated among Audit &governance/pdf/governance_report_202209EG.pdf

Corporate Governance Structure

Consultation

Internal Audit Ofﬁce

Report etc.

Report/Advice

Nomination &Remuneration Committee

Consultation, etc.

ReportSustainability Promotion Committee

Appointment/
Consultation

Election/
Delegation/
Supervision

Important Committees

Delegation/Supervision
Timely report ofmanagement risk
and ﬁnancial condition

Departments

Audit

Corporate Planning Dept., Corporate Risk Management Dept., etc.

Monitoring

Report(Risk Management Committee,
Compliance Committee,
Business Strategy Committee, etc.)

Guarantee of effectiveness2

Management/Executive system
Credit Saison (the Company) has adopted the Audit & Supervisory Board (ASB) model, with ASB
members, for its corporate governance system. To ensure that we retain the confidence of ourshareholders and other investors, we strive to improve and strengthen corporate governance bynominating outside directors and outside ASB members. The Board of Directors and Nomination& Remuneration Committee receive advice and recommendations from outside directors toensure the appropriateness of business decision-making. This is intended to enable directors, who
are well versed in business matters, to maintain and improve management efficiency.
We have introduced an executive officer system to strengthen our corporate governancesystem through separation between operational execution and management supervision. As of
October 2023, the Board of Directors consists of 12 members, four of whom are independent
outside directors. The term of office for Directors is set at one year to ensure the Board can
respond flexibly to changes in the business environment and to ensure that shareholders can haveconfidence in the Company’s management. Going forward, we aim to exercise more appropriate
management supervision functions while developing an efficient business execution system.
59

Changes in the Governance Structure

2006 Enforcement of the Companies Act

2014 Formulation of the Stewardship Code2015 Application of the Corporate Governance CodeSeparation ofmanagement andexecution
Nomination &Remuneration
Committee

2006

2015

2016

2018

2019

2020

Introduction of an executive ofﬁcer system(reduced number of directors from June 2020)

Assurance of transparency for appointment/dismissalof directors and for ofﬁcer remuneration

Outside Directors
Outside Audit &Supervisory Board
Effectivenessevaluations for the
Board of Directors

2017

Improvement anddisclosure of Board of
Directors functions

2021

2022

2023

Corporate Governance

Composition of the Directors (As of September 30, 2023)

Effectiveness of the Board of Directors

The Board of Directors consists of members, some of whom were hired through periodic
recruitment and others through mid-career recruitment, from a wide range of careerbackgrounds, including finance, retail, real estate, and digital technology.
Internal directors

8Outside directors

Ratio of
OutsideDirectors

33%

4

40s

60s and older

2

3

Male

50s

7

58.7

With the goal of improving the effectiveness of the Board of Directors, the Company implements a self-evaluation–
based annual assessment and analysis for all directors and Audit & Supervisory Board members (including retirees
before the expiration of their term of office) elected in the previous year.
A questionnaire is given to each director and Audit & Supervisory Board member covering the following items, with
the Board of Directors conducting discussions based on feedback from the results.

Female3

23

Average ageof Directors

Implementation Summary

Assessment Items

Ratio of female
executives*

1) Composition of the Board of Directors
2) Management of the Board of Directors
3) Roles and Responsibilities of the Board of Directors

12%

Summary of Assessment Results
We have confirmed that the Board of Directors is operating at a generally proper level and that the effectiveness of theBoard of Directors has been secured.
Based on the opinion that the criteria for the selection and submission of proposals for the Board of Directors meetingsneed to be improved in order to allocate more time to the deliberation of important management issues, such as thestrategies and capital policies, etc., of the Company and the Group as a whole, the Company reviewed the criteria forsubmission of proposals to the Board of Directors and delegated authority for business execution to the business strategy
committee, the Directors in charge, and the Executive Officers, in April 2023. This review is expected to not only reduce thenumber of proposals on the Board of Directors, allowing more time for discussion of each item, but also to improve thespeed of business execution and create opportunities for training successors by expanding the authority andresponsibility of decision-makers by the delegation of authority.
The Company will continue to examine the effectiveness through the evaluation of the effectiveness of the Board of
Directors to see if the review contributes to improvement of the effectiveness of the Board of Directors, and based on
the recognition of issues to further revitalize discussions at Board of Directors meetings aimed at enhancing corporate
value, the Company will continue to improve operations to further improve the effectiveness of the Board of Directors.

* Total of directors, executive officers, and ASB members

Board of Directors
Year ended March 31, 2023,
The Company reviewed the criteria for submission
Board of Directorsof proposals to the Board of Directors and
20 meetings 94 discussion items
delegated authority for business execution to
the business strategy committee, the Directors in
Major discussion topics/Number ofcharge, and the Executive Officers, in April 2023.
discussion items
This review is expected to not only reduce the6Internal control and compliancenumber of proposals on the Board of Directors,
7
Financial results and financial standing
allowing more time for discussion of each item, but Management strategies and management
12
planning
also to improve the speed of business execution
19
Human resources
and create opportunities for training successors
20
Other individual mattersby expanding the authority and responsibility ofSubsidiary, associate, and Group governance 30
decision-makers by the delegation of authority.

About Director remuneration

Basic policy on Director remuneration

As the Credit Saison policy for determining the amount for director remuneration, etc., andthe calculation method thereof, at its meeting on February 25, 2021, the Board of Directors
deliberated the policy for determining the content of Individual Directors’ Compensation
following consultation and a report by the Nomination & Remuneration Committee regarding
the details to be deliberated in advance. This policy is intended to ensure that remuneration
sufficiently functions as an incentive for Directors to sustainably improve corporate value
and to build a remuneration structure that is linked to shareholder profits. At the Boardof Directors meeting held on June 21, 2023, we revised part of the policy regarding thedetermination of the content of Individual Directors’ Compensation for those Directors
posted overseas. The basic policy for determining the individual remuneration packageof directors, etc., is to consider the level of companies/industries of similar size and thebalance with employee remuneration for the system of director remuneration and individual
remuneration. At the same time, we set the remuneration level according to position,
presence, or absence of representation rights, etc.

Nomination & Remuneration Committee
Year ended March 31, 2023,
The Nomination & Remuneration
Nomination & Remuneration Committee
Committee is made up of Directors
elected by resolution of the Board of
5meetings* 9 discussion items
Directors, and is currently composed ofMajor discussion topics/Number of discussion items
five members, the majority of whom are
2
Election and assessment process for Directors, etc.
independent outside directors and which Election of Directors, etc., and General Meeting of2
include the Representative Chairman and Shareholders’ election proposal deliberations
4
Directors’
remuneration
system,etc.
CEO as the chairperson. The Committee
1
Skillmatrixfor
Directors,
etc.
meets at least once a year.
* Including one meeting held in writing

60

Corporate Governance

Remuneration structure

In calculating the planned amount of performance-based remuneration (bonuses) for
FY2022, we comprehensively considered the impact of factors such as COVID-19 and set the
expected performance-based coefficient for quantitative indicators at 105% and the expected
performance-based coefficient for qualitative indicators of each director to 80%–120%.
The amount of remuneration for each individual can be entrusted to the Chairman of
the Board based on a resolution of the Board of Directors. The scope or remuneration is theamount of basic remuneration for each director, the evaluation allocation of performancebased remuneration (bonuses) for each director, and the allocated amount of monetary
remuneration claims related to the acquisition of restricted shares. As a measure for the
Chairman of the Board to properly exercise this authority, the Nomination & Remuneration
Committee has established standards for the remuneration received by directors. Based onthese standards, the Chairman of the Board makes decisions within the scope delegated by
the Board of Directors.
In determining the actual issued amount of remuneration for individual directors in
FY2022, Representative, Chairman and CEO Hiroshi Rinno will be entrusted with thedetermination of the amount of basic remuneration for each director and the allocation
amount of monetary remuneration claims related to the acquisition of restricted stock. He
will also be entrusted with the evaluation allocation of performance-based remuneration(bonuses) for each director.

The remuneration structure is composed of basic remuneration, performance-based
remuneration (bonus), and non-monetary remuneration including restricted stockcompensation. For outside directors and Audit & Supervisory Board members, remuneration
is basic remuneration only. Furthermore, the Nomination & Remuneration Committee
considers the ratio of remuneration by type for executive directors based on the remunerationlevels of companies, industries, etc., of similar size to Credit Saison. The ratio of eachtype of remuneration, etc., is based on a 7:2:1 ratio of basic remuneration: performancebased remuneration, etc. (bonuses): non-monetary remuneration, etc. (restricted stockcompensation). For Directors posted overseas, the ratio for each type of remuneration, etc., isbased on remuneration excluding fringe benefits. However, Restricted Stock Compensation
might not be paid to Directors posted overseas, and in such cases, the approximate
ratio of each type of remuneration is as follows: basic remuneration: performance-based
remuneration (bonus) = 8:2 (however, excluding fringe benefits).
Basic remuneration(monetary remuneration)

Performance-based remuneration, etc.
(bonuses)Non-monetary remuneration, etc.

Amount calculated as fixedmonthly remuneration after
setting annual remunerationlevels for each position andconsidering the presence orabsence of representationrights, etc.*1

Amount calculated by multiplying theamount of the basic bonus by position,etc., considering the retention rate, etc.,
by the performance-based coefficient*3
for quantitative indicators*2 and theperformance-based coefficient for
qualitative evaluation*4

Amount calculated as restricted
stock compensation*5 after
setting annual remunerationlevels for each position andconsidering the presence orabsence of representation rights,
etc.*6

Outside directors

Fixed remuneration only––

ASB members*7

Fixed remuneration only––

Eligible officers

Executive
directors

Total amount of remuneration, etc., for each officer category, total amount of
remuneration, etc., by type, and number of eligible officers
The total amount of remuneration, etc., for each officer category of the Company, the total
amount of remuneration, etc., by type, and the number of eligible officers in FY2022 are
as follows.

*1 Fringe benefits such as housing allowance, child allowance, and temporary return allowance, etc., might be paid to Directors posted overseas.
*2 Quantitative indicators: Non-consolidated ordinary income (excluding temporary factors, etc.) growth rate and plan achievement rate.
*3 Performance-based coefficient: Based on a 50:50 ratio between the quantitative performance indicator growth rate and the plan achievement rate, while
comprehensively considering the occurrence of large-scale disasters, pandemics, etc.
*4 Qualitative evaluation: This is the result of evaluating each degree of contribution to improving the Company’s business performance and corporate valueby all directors, including the relevant director.
*5 Restricted stock compensation: Please refer to the Securities Report for details of the conditions.
*6 Fringe benefits such as insurance premiums, etc., might be covered by the Company for Directors posted overseas as non-monetary compensation.
*7 Audit & Supervisory Board member remuneration: The amount of remuneration for each Audit & Supervisory Board member is determined throughdeliberations by the Audit & Supervisory Board within the total amount resolved at the General Meeting of Shareholders.

Classification

Remuneration structure of executive directors
Remuneration coefficient of executive directors

Non-monetary remuneration, etc. [approx. 10%]
Performance-based remuneration, etc. (bonus) [approx. 20%]

Directors(excluding outside directors)

332

228

77

27

7

ASB members(excluding outside ASB
members)

16

16

–

–

1

Outside directors

24

24

–

–

3

Outside ASB members

36

36

–

–

3

Notes: 1. The total amount of remuneration paid to directors does not include employee salaries in the case of employees who serve concurrently as executive directors.
2. Performance-based remuneration, etc., lists the planned payment amount of performance-based remuneration (bonuses) for FY2022.
3. The content of non-monetary remuneration, etc., is the common stock of the Company, and the conditions for allotment are as described in the
remuneration structure and calculation section of the Company's 73rd business term Securities Report.
4. The numbers above include one director who retired.
5. As of the end of FY2022, there were nine directors and four Audit & Supervisory Board members.
6. Since there are no Directors whose total amount of consolidated remuneration exceeds ¥100 million, the names, classifications, total consolidated
remuneration, and amount of consolidated remuneration by type for each Director have been omitted.

Basic remuneration [approx. 70%]
Set according to position andmanagement responsibility level

Total amount of remuneration by type (Millions of yen)
Total
Number of
remuneration
Performance-basedNon-monetary
peopleBasicremuneration(Millions of yen)remuneration, etc. remuneration, etc.

Business performance for the ﬁscal year anddegree of contribution to business performance
Restricted Stock Compensation

61

Corporate Governance

Strategic shareholding sharesStrengthening the risk management and compliance systems

Regarding strategic shareholding shares, Credit Saison only holds shares of companies thatare transaction (investment) partners necessary for our Group’s business strategy and that are
rational to hold. When verifying the rationality of holdings, we properly ascertain the risks andcosts associated with holdings and the returns
Consolidated net assets ratio forfrom holdings, including from a medium- to
strategic shareholding shareslong-term perspective, and comprehensively(%)
verify profitability and other matters at the
20 20.0
16.6
Board of Directors and the ALM Committee.
As a result of verification, while considering
10.0 11.6 10.4
9.2
10factors such as the impact of the market, we
promptly sell stocks that are judged to have0little rationality to hold.

To achieve sustainable improvement of corporate value, we position the enhancement of corporate
governance as a key management initiative. To this end, we are improving internal control systems,
strengthening risk management systems, ensuring thorough compliance, and creating mechanisms
based on diversity, equity, and inclusion.
In establishing internal control systems, the Board of Directors decides on basic policies for
such, with the aim of building systems that ensure appropriate and efficient operations mainly in the
Corporate Planning Department, which is the unit responsible for overseeing internal controls. As
for internal controls on financial reports, the Corporate Risk Management Department leads the way
in promoting the establishment of internal controls in the Company and at our consolidated Group
companies, while the Internal Audit Office carries out independent monitoring.
Regarding risk management, the Risk Management Committee and the Corporate Risk
Management Department lead the way in preventing risks from materializing and in working tominimize the effects on the Company when they do arise. Accordingly, we strive to maintain our risk
management framework by holding regular internal training sessions for employees in accordancewith “risk management rules,” “rules concerning loss risk management,” and “crisis management rules.”In addition to the above, with regard to matters inherent in our Company Group or control mattersthat involve serious risks, for domestic subsidiaries, the Group Strategic Management Department
establishes and controls the matters, and for overseas subsidiaries, the Global Management
Department, which is responsible for overall management of overseas affiliate subsidiaries, gathers
information. As such, the Company oversees the status of business execution at each Group company
and shares information with the departments in charge of each Group company.
As for our compliance system, we have established the Compliance Committee to ensure
legal compliance, fairness, and ethical standards in our corporate activities. In addition to assigningcompliance responsibilities to employees in each department, we issued a declaration on how the
Company should conduct its activities and organized the ways in which officers and employees should
conduct themselves as standards of conduct. As a further means of strengthening our compliancesystem, we have disclosed this declaration and standards of conduct on the Company’s employee
website, inform employees about our compliance help desk, and hold compliance training sessions toensure rigorous adherence to these standards.

2017

2018

2019

2020

2021

2022

(FY)

Dialogue with shareholders and investors (IR activities)
Credit Saison endeavors to convey corporate information to all shareholders and investors in a
prompt, fair, and easy-to-understand manner, and actively discloses business results, financial
conditions, strategies, and other matters that the Company believes to be effective in providing
a better understanding of the Company. We also actively disclose sustainability initiatives thatcan only be implemented by Credit Saison aimed at achieving a sustainable society. In addition
to continuing to participate in results briefings, conferences hosted by securities companies,
and briefings for individual investors, we are actively engaging in dialogue with shareholders
and investors, such as by holding businessIndividual meetings with sell-sidestrategy briefings on our global business andanalysts/institutional investors
CSDX strategy, which attracted a lot of attention
during discussions. The Company will continue
2018
2019
2020
2021
2022
to promote IR activities with an awareness of
190 times 158 times 176 times 196 times 214 times
shareholder and investor needs.

Risk management system/compliance system
Board of Directors
Delegation

Overall

Determination of basic policy

Risk Management Committee/Compliance Committee
ReportOverall

Preventive
measures

Drafting/proposal of basic policy
Monitoring of response status
Identiﬁcation of risk
Analysis/evaluation
Review of measures
Implementation/monitoring

ReportGuidance
ReportIn regard to the opinions and requests acquired from shareholders and investors throughdialogue, and to the analyst reports that are occasionally issued, as the department in charge ofinvestor relations, the Public Relations Office takes the lead in appropriately providing feedback
to the Company’s executives and making reports regarding dialogue at the Board of Directors
meetings and management meetings, etc., in order to apply these opinions and requests indiscussions for enhancing corporate value.

Guidance

Departments in charge of risk
(general manager of each department)
ReportFeedback regarding the details of dialogue with shareholders and investors

Guidance

Corporate Risk Management Department(Committee Secretariat)

Guidance

Departments(general manager of each department)

Cooperation

Cooperation

Group companies

62

Sustainability

Board of Directors/Audit & Supervisory Board Members/Executive Officers (As of October 1, 2023)
Credit Saison visualizes the management skills of its directors, Audit & Supervisory Board members, and executive officers as a skill matrix. To conduct flexible management in uncertain times,
management composes members with diverse skills and expertise.

Representative,
Chairman andCEO

Hiroshi Rinno

Born in 1942

Representative,
Executive
President and
COO

Katsumi Mizuno

Born in 1969

Representative,
Director, Senior
Executive Vice
Managing
President and CHO Executive Officer

Naoki Takahashi

Born in 1950

Yoshiaki Miura

Born in 1966

Director, Senior
Managing
Executive Officer
and CDO, CTO

Kazutoshi Ono

Born in 1976

Director, Senior
Managing
Executive Officer

Kosuke Mori

Born in 1977

Director, Managing Director
Executive Officer(Non-executive)

Naoki Nakayama
Newly appointed

Born in 1965

Kosuke Kato

Director

Naoki Togashi

Director

Nana Otsuki

Hitoshi Yokokura

Newly appointed

Born in 1966

Director

Eiji Sakaguchi
Newly appointed

Outside/Independent

Outside/Independent

Outside/Independent

Outside/Independent

Born in 1960

Born in 1964

Born in 1969

Born in 1966

Board ofDirectors: Chairman: MemberNomination &Remuneration
Committee: Chairman: Member
Skill matrix
Corporate
management
GlobalFinancialaffairs/
Accounting
Humanresources/
Labor affairs
Legal affairs/
Riskmanagement
Sales/
Marketing
Digital/IT
M&A/Newbusiness
Real estate
Finance/
Loans
ESG
Notes: 1. The data presented in this table do not reflect all the skills possessed by the Board of Directors, Audit & Supervisory Board members, and executive officers. Up to seven of the major skills and other attributes are marked.
2. To transform into a comprehensive life services group, we are placing particular focus on global, digital/IT, and M&A/new business skills for our business strategy.

63

Director

Board of Directors/Audit & Supervisory Board Members/Executive Officers

Standing Audit& Supervisory
Board Member

Hideo Suzuki

Standing Audit& Supervisory
Board Member

Audit &
Supervisory
Board Member

Outside/Independent

Outside/Independent

Born in 1958

Born in 1968

Hiroaki Igawa

Chie Kasahara

Managing
Executive Officer

Shunji
Ashikaga

Managing
Executive Officer

Managing
Executive Officer
Kazue Yasumori and CFO

Masaki Negishi

Managing
Executive Officer

Ryuki Tabata

Executive Officer

Yasuyuki Isobe

Executive Officer

YuichiKawahara

Executive Officer

Naoki Misaka

Newly appointed

Born in 1956

Born in 1971

Born in 1973

Born in 1972

Born in 1967

Audit &
Supervisory
Board: Chairman: Member
Skill matrix
Corporate
management
GlobalFinancialaffairs/
Accounting
Humanresources/
Labor affairs
Legal affairs/
Riskmanagement
Sales/
Marketing
Digital/IT
M&A/Newbusiness
Real estate
Finance/
Loans
ESG

64

Born in 1969

Born in 1975

Born in 1975

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Newly appointed

Newly appointed

Newly appointed

Newly appointed

Born in 1970

Born in 1973

Born in 1979

Born in 1971

Hironao
WakameiRyo Kihara

Koji Sugahara

Yoshiyuki
KimuraData Section

11-Year Summary of Selected Financial Data (As of March 31, 2023)
JGAAP*1/IFRS*2(Millions of yen)

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Operating revenues/Net revenue

244,405

247,577

259,076

269,919

278,944

292,183

304,855

311,410282,625

299,017322,638

Selling, general and administrative expenses

187,170

197,852

206,192

221,553

236,661

241,740

220,974

236,910202,380

222,541

229,322

–

–

–

–

–

–

34,08839,376

31,867

24,57534,611

Financial costs

14,922

13,38812,722

11,772

11,069

9,671

9,878

10,471

11,266

11,461

15,257

Operating income

42,31236,33640,161

36,59331,213

40,771

–

–

–

–

–

Ordinary income/Business profit

53,214

44,40843,68743,80253,06556,71752,23336,18448,352

52,33660,977

Financial Data
Consolidated

Impairment losses on financial assets
For the year

At year-end

Per share data(yen)
Key financial
ratios (%)

Net income attributable to owners of the parent/
Profit attributable to owners of the parent

32,77025,552

12,62826,16342,25338,32930,51722,86336,13235,37543,599Total equity

394,868

422,829447,082

418,988446,882

480,669

491,741

485,476

532,057

563,738

600,041

Total assets

2,141,802

2,285,943

2,373,299

2,550,990

2,720,051

2,940,022

3,212,465

3,357,229

3,409,247

3,610,778

3,896,105

Interest-bearing debt

1,359,856

1,468,740

1,557,836

1,729,066

1,857,477

1,957,244

2,203,818

2,413,565

2,429,488

2,569,040

2,805,175

Net income per share/Basic net income per share

178

139

69

147

259

235

187

143

231

226

278

Equity per share/Equity attributable to owners of theparent per share

2,132

2,283

2,424

2,564

2,725

2,933

3,006

3,102

3,397

3,598

3,827

Return on equity (ROE)

8.8

6.3

2.9

6.1

9.8

8.3

6.2

4.7

7.1

6.5

7.5

Return on assets (ROA)

1.5

1.2

0.5

1.1

1.6

1.4

1.0

0.7

1.1

1.0

1.2

Equity ratio

18.3

18.3

18.8

16.4

16.4

16.3

15.3

14.4

15.6

15.6

15.4

Operating revenues

204,121205,873219,336

228,713238,637

249,865

259,018

268,020

251,307

252,416

266,103

Selling, general and administrative expenses

149,844

160,927

169,899

186,492

203,038

207,093

215,726

235,794

208,269

219,371

221,512Financial costs

16,882

15,11914,066

12,62011,282

9,872

9,748

10,535

11,53011,381

11,923Operating income

37,39429,82635,37029,59924,31632,90033,543

21,69031,507

21,66332,668

Ordinary income

41,52934,87238,44932,61428,21038,871

39,634

28,34838,02630,421

43,424

Net income

24,147

18,637

11,31525,57021,04522,19025,87533,391

29,931

21,90934,220Total equity

349,202367,808

388,470

359,428

374,477

396,831407,533

404,809441,683

456,739

483,683

Total assets

2,051,908

2,200,459

2,287,986

2,468,797

2,623,644

2,831,296

3,107,284

3,210,925

3,280,302

3,444,915

3,665,162

Interest-bearing debt

1,337,201

1,457,001

1,551,189

1,725,891

1,852,551

1,953,740

2,202,839

2,378,701

2,413,154

2,536,247

2,713,246

Return on equity (ROE)

7.2

5.2

3.0

6.8

5.7

5.8

6.4

8.2

7.1

4.9

7.3

Return on assets (ROA)

1.2

0.9

0.5

1.1

0.8

0.8

0.9

1.1

0.9

0.7

1.0

Equity ratio

17.0

16.7

17.0

14.6

14.3

14.0

13.1

12.6

13.5

13.3

13.2

3,547,050

3,852,980

4,089,389

4,258,284

4,476,608

4,683,038

4,788,537

4,946,908

4,500,366

4,823,174

5,287,073

260,089

264,092

277,025

267,723

253,837

248,156

242,980

237,555

155,004

160,622

164,720

2,166,062

2,303,998

2,434,824

2,522,242

2,671,710

2,873,183

3,014,831

2,985,255

2,609,412

2,737,512

2,894,900

Lease business total

105,356

114,694

106,801

106,000

108,101

114,569

115,589

127,178

114,885

113,159

126,631

Credit guarantee

115,297

126,281

137,335

150,101

159,914

131,922

114,277

101,51070,28384,586

98,914

Real estate mortgage loans

11,571

46,78050,45982,420125,629

160,762

207,779

175,621

141,698

124,417

122,539

Other (Finance Business)

48,20175,96980,633

114,043

180,286

241,949

287,830

341,131322,366

252,894

218,676

Other

28,04033,63337,73737,90735,88332,11927,35130,26026,696

106,075

152,840

6,281,666

6,818,427

7,214,203

7,538,720

8,011,968

8,485,698

8,799,174

8,945,420

7,940,715

8,402,442

9,066,297

Non-Consolidated

For the year

At year-end

Key financial
ratios (%)

Credit card business
Credit card cash advanceBusiness agency
Transaction
volume*3

Total volume of new contracts*1 Japanese standards were applied until FY2017.

*2 International Financial Reporting Standards (IFRS) are applied from FY2018 onward.

*3 Certain Other (Finance Business) and Other transaction volumes for FY2021 have been reclassified owing to a change in the rent guarantee business from the Finance Business to the Payment Business in the third quarter of FY2022.

65

Data Section

Segment Highlights/5-Year Non-financial Data (As of March 31, 2023)(Millions of yen)

IFRS*1*2

FY2018FY2019FY2020

FY2021

FY2022

Payment Segment*3

228,518

232,441

209,130

213,148

231,590

Lease Segment

12,586

12,26912,29011,837

12,049Finance Segment*3

39,231

43,112

43,412

47,14450,754

Real Estate–related Business
Segment

18,113

17,227

14,59522,704

24,177

Net revenue

Entertainment Business Segment

8,761

8,822

5,536

6,407

6,214

Adjustment(2,357)(2,462)(2,340)(2,224)(2,148)304,855

311,410282,625

299,017322,638

Payment Segment*3

16,915

6,297

22,332

14,166

19,969Lease Segment

5,720

2,951

4,706

5,800

5,018

Finance Segment*3

19,20918,004

17,664

19,77722,056

Real Estate–related Business
Segment

8,305

6,957

5,390

12,35012,595Entertainment Business Segment

2,078

1,969

(1,745)

237

719

3

3

3

3

618

52,23336,18448,352

52,33660,977

Total net revenue
Business profit

Adjustment
Total business profit

Breakdown of income from payment business segment
Card shopping

136,464

140,579

131,029

132,081

143,024

Cash advances

33,08432,932

28,882

26,106

24,741Loans on deeds

1,071

844

654

517

412

Processing/transactions handled
on behalf of other companies’
cards

28,22731,01427,402

27,437

27,213

Agency services

15,896

12,491

5,069

5,061

5,306

Payment-related income*3

11,507

12,297

13,684

19,573

28,638

852

767

1,024

987

876

1,415

1,512

1,384

1,383

1,377

228,518

232,441

209,130

213,148

231,590

Finance income
Intersegment revenue or transfers
Total credit service businessincome*3
Main card indices (non-consolidated)
New cards issued (thousands)

211

180

125

152

170

Total membership(thousands of members)

2,679

2,639

2,570

2,540

2,503

Active membership(thousands of members)

1,490

1,496

1,395

1,389

1,381

Transaction volume(100 million yen)

50,31551,84446,55349,83754,517

Shopping

47,88549,46945,003

48,231

52,870Cashing

2,429

2,375

1,550

1,606

1,647

6,405

6,457

5,730

5,573

5,818

Card shopping revolving credit
balance

4,225

4,268

3,888

3,833

4,090

Cashing

2,180

2,188

1,842

1,739

1,728

Balance (100 million yen)

E: Environment
Total CO2 emissions (tons of CO2)
Subtotal of Scope 1 + Scope 2 (market base)
Subtotal of Scope 1 + Scope 2 (location base)
Scope 3
Energy usage amount (power consumption) (kWh)Paper usage (CSDX Strategy Index)
Water resource input (for own buildings only) (thousand m3)
S: Society
Number of employees (persons)(number of women)(number of men)
Ratio of female managers (%, department head positions)
Number of overseas employees*4
Employment ratio of persons with disabilities
Average length of service (years, total of men and women)(length of service by women)(length of service by men)
Ratio of men taking childcare leave (%)
Number of people taking long-term care leave (persons, totalof men and women)(number of women taking long-term care leave)(number of men taking long-term care leave)
Average annual salary (thousands of yen, total)(for managers)(for non-managers)(for women)(for men)
Monthly average overtime working hours (hours)
Amount invested in human resource development (thousandsof yen)Training/challenge system
LGBT Manners Training

Universal Manners Training

Number of people/
number of times
Number of people/
number of times

Number of projects
SWITCH SAISONDementia Supporter Training
Number of people/
number of times
Workshop
Average days of paid leave taken (days)
Acquisition rate (%)
Turnover (%)(by women)(by men)
Number of visitors to Akagi Nature Park (persons)Total amount of point donations (thousands of yen)
G: Governance
Number of meetings of the Board of Directors
Attendance rate of outside directors (%)
Number of directors(number/ratio of outside directors)(number/ratio of independent outside directors)(number/ratio of female directors)
Number of executive officers(number/ratio of female executive officers)
Number of Audit & Supervisory Board members(number/ratio of female Audit & Supervisory Board
members)
Number of serious legal violations
Expenditures for preventing corruption

FY2018FY2019FY2020

FY2021

FY2022

–
–
–
–
–
–

–
–
–
8,807,000––

18,563
18,879730,6458,557,000
160,368,120
38.6

18,235
18,334
724,168
8,296,000
138,400,569
37.1

Currently being calculated

3,239
2,424
815
20.8
39
2.04
10.9
10.6
11.7
3.0

2,981
2,169
812
21.0
89
2.16
11.8
11.6
12.2
0.0

4,319
3,250
1,069
24.3
126
2.33
12.4
12.1
13.4
57.8

4,084
3,058
1,026
24.5
272
2.31
13.3
13.1
14.0
48.7

3,966
2,956
1,010
24.9
563
2.32
14.0
13.8
14.3
58.5

27

24

36

26

53

26
1
518
1,056
481
457
722
10.2

23
1
534
1,051
487
467
728
10.8

35
1
517
1,026
472
457
709
9.3

23
3
519
1,016
477
458
707
10.1

52
1
547
1,068
497
484
737
11.4

46,061

44,55648,33051,41354,128

–

–

12/4

19/4

13/3

–

13/4

26/7

25/5

27/5

–

–

496/15307/14238/16

13.4
75.7
7.6
8.0
6.4
89,78057,523

15.0
82.5
3.3
5.6
5.9
70,34537,312

13.1
72.4
3.6
4.4
3.3
59,17337,782

14.0
73.5
7.8
7.4
6.6
74,161
18,673

15.2
86.3
6.8
6.5
7.0
65,74861,652

1890.7
15
3/20.03/20.02/13.3
–
–
4

19
98.2
9
3/33.3
3/33.3
1/11.110
2/20.0
4

19
100.0
9
3/33.3
3/33.3
1/11.110
2/20.0
4

19
100.0
9
3/33.3
3/33.3
1/11.111
2/18.2
4

20
100.0
9
3/33.3
3/33.3
1/11.111
2/18.2
4

1/25.01/25.01/25.01/25.01/25.0

0
0

0
0

0
0

0
0

0
0

–

308

*1 International Financial Reporting Standards (IFRS) are applied from FY2018 onward. *2 Figures for net revenue and business profit represent the amounts before appropriation of inter-segment transactions.
*3 Segment highlights for FY2021 have been reclassified owing to a change in the rent guarantee business from the Finance Business to the Payment Business in the third quarter of FY2022.
*4 Total of six consolidated subsidiaries

66

489

182

Currently being calculated
Currently being calculated

7,800,000
125,196,720
22.9

47

Data Section

Corporate Information/Investor Relations Information (As of September 30, 2023)
Stock information

Shareholders memo

Common Stock Authorized

300,000 thousand shares

Common Stock Outstanding

185,444 thousand shares

Number of Shareholders

18,310

1.28%

4.21%

Other Corporations

9.23%

Period beginning on April 1 and endingon March 31 of the following year

Name

Credit Saison Co., Ltd.

Ordinary General
Meeting of Shareholders

Convened each year in June

Incorporated

May 1, 1951

Record Date

Ordinary general meeting ofshareholders and year-end dividend
payments - March 31
Should any other record date berequired, a public notice will be issued
in advance.

Head Office

52F, Sunshine 60 Bldg., 1-1 Higashi-Ikebukuro
3-chome, Toshima-ku, Tokyo 170-6073, Japan

Transfer Agent andAdministrator ofSpecial Accounts

Sumitomo Mitsui Trust Bank Limited,
1-4-1, Marunouchi, Chiyoda-ku, Tokyo,
Japan

Representative

Administrative Office ofTransfer Agent

Stock Transfer Agency Business
Department, Sumitomo Mitsui Trust
Bank Limited, 1-4-1, Marunouchi,
Chiyoda-ku, Tokyo, Japan

Hiroshi Rinno, Representative, Chairman andCEO
Katsumi Mizuno, Representative, Executive
President and COO
Naoki Takahashi, Representative, Executive
Vice President and CHO

Mailing Address

Stock Transfer Agency Business
Department, Sumitomo Mitsui Trust
Bank Limited, 2-8-4, Izumi, Suginami-ku,
Tokyo 168-0063, Japan

Business

Telephone Inquiries

0120-782-031(9 a.m.–5 p.m. excluding weekends andholidays)

1. Payment Business2. Lease Business
3. Finance Business
4. Real Estate–related Business5. Global Business
6. Entertainment Business

Paid-in Capital¥75,929 million

URL

https://www.smtb.jp/personal/
procedure/agency/

Numberof Regular
Employees

3,957

Method of Public
NoticeElectronic notice(Credit Saison website)
https://corporate.saisoncard.co.jp/en/
public_announcement/

Stock Listing

Tokyo Stock Exchange (Prime)

Securities Code8253

Financial Institutions

Treasury Stock

11.21%

Fiscal Year

Individual Investors, others

Securities Companies

37.32%

Compositionof Shareholders

Foreign Investors

36.74%

Major shareholders (Top 10)
Equity stake
Number ofshares(thousands)

Ownership
percentage (%)

36,419

22.12

Custody Bank of Japan, Ltd. (trust account)

15,346

9.32

Suruga Bank Ltd.

8,224

5.00

Daiwa Securities Group Inc.

8,050

4.89

BNYMSANV AS AGENT/CLIENTS LUX UCITSNON TREATY 1

6,911

4.20

HSBC BANK PLC A/C M AND G(ACS) VALUEPARTNERS CHINA EQUITY FUND

6,592

4.00

STATE STREET LONDON CARE OF STATESTREET BANK AND TRUST, BOSTON SSBTC
A/C UK LONDON BRANCH CLIENTS- UNITED
KINGDOM

4,840

2.94

JP MORGAN CHASE BANK 385632

3,192

1.94

Mizuho Bank, Ltd.

3,000

1.82

SSBTC CLIENT OMNIBUS ACCOUNT

2,802

1.70

Institution
The Master Trust Bank of Japan Ltd.
(trust account)Notes: 1. The 20,789,140 treasury shares held by Credit Saison are not included in
the above list of major shareholders.
2. Ownership percentages are based on the number of outstanding shares
excluding treasury shares.

Corporate profile

Note: In addition to our regular employees, we employ temporary and part-time
employees, with the average number of non-regular employees per term at
1,733 (based on conversion to a 7.5-hour workday).

[Notice of Address Change, etc., and Inquiries Relating to Shares]
Shareholders who have an account with a securities company are asked to contact the relevant securities company regarding address change and other notices, as well as
inquiries. Shareholders who do not have an account with a securities company are asked to call the number indicated above for telephone inquiries.

[Special Accounts]
For shareholders who were not using the “Hofuri” system (Japan Securities Depository Center, Inc.) prior to the introduction of the electronic share certificate system, an account(special account) has been opened at Sumitomo Mitsui Trust Bank Limited above as the transfer agent. Inquiries on special accounts should be directed to the transfer agent at
the number indicated above for telephone inquiries.
[Information on Additional Purchase System/Buy Back System for Shares Less Than One Unit]
Our Company has established a system in which shareholders who own shares less than one unit (100 shares) can purchase additional shares at the market price (Additional
Purchase System) and a system in which shareholders can sell shares less than one unit back to our Company (Buy Back System). For shares less than one unit recorded in a
special account, please contact the telephone inquiry number listed above. For shares less than one unit deposited with a financial securities firm, please contact the financial
securities firm where you have an account.

67

Data Section

Major External Awards/Editor’s Postscript
Major external awards
Status of ESG Index incorporation

ESG index adopted by the GPIF consisting ofJapanese companies that excel in ESG responses ineach sector.

ESG index used by GPIF the selects
companies that excel in terms of gender
diversity

ESG index used by GPIF
that evaluates companies'
commitment to genderequality

ESG index used by GPIF basedon companies' disclosure ofenvironmental information andcarbon efficiency

Product- and service-related assessments

SAISON CARD Digital won the highest award
Nikkei Excellent Products and Service Awards 2021
Organized by Nikkei Inc.

Credit Saison discloses various types of information for
its shareholders, investors, and all other stakeholders on
its website.
Corporate
Information

Business

Sustainability

IR Information

https://corporate.
saisoncard.co.jp/en/company/

https://corporate.
saisoncard.co.jp/en/
sustainability/

https://corporate.
saisoncard.co.jp/en/
business/

https://corporate.
saisoncard.co.jp/en/ir/

DX-related assessments

CDP Climate Change
Questionnaire 2022
Certified as “B Rating”

SLACK SPOTLIGHT
AWARDS 2022
Won the Digital HQ
Excellent award bycountry (Japan)

シンボルマーク ＋ DX 認定

Certification system of the
Ministry of Economy, Trade andIndustry based on the Act on
Facilitation of Information
Processing

Selects companies that developinternal mechanisms for promoting
DX that lead to the enhancement ofcorporate value and an excellent
track record in the use of digitaltechnology.

DE&I and health management–related assessments

The SAISON CARD Digital for becoz won the grandprize
Project category, NIKKEI Decarbonization Awards 2022

Information disclosure tools

Environmentrelated
assessments

The SAISON CARD Digital for becoz won the grand prize
Japan Financial Innovation Award 2023
Organized by FINOLAB Inc.

Certified as Health & Productivity
Management Outstanding Organization
2023 by the Ministry of Economy, Trade andIndustry and Nippon Kenko Kaigi.

We won gold at the Cancer Ally Awards
2023, a private project that commends
companies committed to addressing thecancer and employment issue.

In 2022, we acquired the Silver
certification under the National
Federation of Health Insurance Societies
program to recognize companies withexcellent health management initiatives.

Editor’s postscript
Thank you for reading Credit Saison Integrated Report 2023 to the end.
This, the fifth edition of our integrated report, summarizes the future growth potential of the Group in its efforts to advance
new initiatives as a comprehensive life services group in an easy-to-understand manner. Specifically, along with outlining theCredit Saison Growth Story published in the Financial Results Briefing for the First Half of FY2023 (November 2023), it describes
the approach to achieving ¥70 billion in consolidated business profit as the target for the final fiscal year of the current Mediumterm Management Plan (FY2022–FY2024) one year earlier than planned, the capital and business alliance with Suruga Bank Ltd.,and other changes in the business model and business portfolio. Moreover, this report maintains anawareness and uses language that focuses on the associations between materialities for sustainability
and business strategies, and on how each business connects to value delivery. The Public Relations
Office has taken the lead in cooperating with a wide range of related departments at Credit Saison
to prepare this report. To further deepen communications with our stakeholders in the years tocome, we will continue to accept frank opinions from our readers, strive to disclose information in an
appropriate manner, and commit to further enhancements to the report’s content.
Public Relations Office
Production Team Members

68Credit Saison Co., Ltd.
52F, Sunshine 60 Bldg., 1-1 Higashi-Ikebukuro 3-chome,
Toshima-ku, Tokyo 170-6073, Japan
https://corporate.saisoncard.co.jp/en/

CREDIT SAISONFINANCIAL SECTION 2023
For the Year Ended March 31, 2023

Basis of Presentation
The consolidated financial statements are stated in Japanese yen, the currency of the country inwhich Credit Saison Co.,Ltd. (the “Company”) is incorporated and operates. The translations ofJapanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers
outside Japan and have been made at the rate of ¥133.54 to $1, the approximate rate of exchange at
March 31, 2023. Such translations should not be construed as representations that the Japanese yenamounts could be converted into U.S. dollars at that or any other rate.

The accompanying consolidated financial statements expressed in Japanese yen are the translationof those issued domestically. The amounts expressed in U.S. dollars are not included in the original
audited consolidated financial statements. Such U.S. dollar amounts are translated in accordancewith the basis stated in "Basis of Presentation" on the next page and are additionally presented
herein solely for the convenience of readers outside Japan, and are not subject to audit.

-1-

-2-

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AssetsCash and cash equivalents
Trade and other receivables
Inventories
Operational investment securities
Investment securities
Other financial assets
Property, plant, and equipment
Right-of-use assets
Intangible assets
Investment property
Investments accounted for using equity
methodDeferred tax assets
Other assets
Assets held for sale
Total assets

FY2022(As of March 31, 2023)
Thousands ofMillions of yen
U.S. dollars¥159,671
2,990,519
133,247
62,521
74,394
20,34628,753
11,044150,458
116,612
89,176$1,195,681
22,394,182
997,810468,181557,098
152,359
215,319
82,706
1,126,688
873,236
667,785

41,615
16,714
1,030¥3,896,105

311,636
125,165
7,713$29,175,566-3-Liabilities and equity
Liabilities
Trade and other payables
Financial guarantee liabilities
Bonds and borrowings
Other financial liabilities
Income taxes payable
Provision for point card certificates
Provision for loss on interest repayments
Other provisions
Deferred tax liabilities
Other liabilities
Total liabilities
EquityEquity attributable to owners of parent
Share capital
Capital surplus
Retained earnings
Treasury shares
Other components of equity
Non-controlling interests
Total equity
Total liabilities and equity

FY2022(As of March 31, 2023)
Thousands ofMillions of yen
U.S. dollars¥253,329
7,875
2,805,175
19,606
10,385126,023
18,0911,437
86
54,051
3,296,063$1,897,029
58,97621,006,256
146,823
77,767
943,717
135,479
10,766647
404,757
24,682,220

598,301
75,92983,560481,163

4,480,317
568,588625,7313,603,138△ 62,668△469,286

20,3171,739
600,041¥3,896,105

152,145
13,0284,493,345$29,175,566-4-

CONSOLIDATED STATEMENT OF INCOME

RECONCILIATION FROM PROFIT BEFORE TAX TO BUSINESS PROFITFY2022(April 1, 2022 toMarch 31, 2023)
Thousands ofMillions of yen
U.S. dollars

Revenues
Income from the payment business
Income from the lease business
Income from the finance business
Revenue from the real estate-related business
Revenue from the entertainment business
Finance income

FY2022(April 1, 2022 toMarch 31, 2023)
Thousands ofMillions of yen
U.S. dollars¥61,044$457,128

Profit before tax

Total
Of which, interest income
Cost of sales
Cost of sales for the real estate-related business
Cost of sales for the entertainment business
Total
Net revenue
Selling, general, and administrative expenses
Impairment losses on financial assets
Finance costs
Gain arising from the derecognition of financial assets measured atamortized cost
Share of profit of investments accounted for using equity method
Other income
Other expenses
Profit before tax
Income tax expense
ProfitProfit attributable to
Owners of parent
Non-controlling interests
Profit-5-¥229,336
12,04850,75458,71530,807877
382,540
118,520$1,717,364
90,223380,070439,683
230,702
6,571
2,864,615
887,526

35,30924,59359,902
322,638
229,322
34,611
15,25743

264,407
184,165448,573
2,416,042
1,717,256
259,187
114,255
326

5,982
12,5901,017
61,044
17,183¥43,861

44,801
94,2797,621
457,128
128,677$328,451¥43,599261¥43,861$326,493
1,957$328,451

Reconciliations (Other income)△616

Reconciliations (Other expenses)
Adjustments for the application of the effective interest method tofinancial assets
SubtotalBusiness profit-6-△4,614

825

6,180

△276

△2,070△67¥60,977△503$456,624

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FY2022 (April 1, 2022 to March 31, 2023)

SharecapitalBalance as of April 1,
2022¥75,929(Notes on important matters forming the basis for preparation of consolidated financial statements)

Millions of yen
Equity attributable to owners of parent
Other
CapitalRetained
Treasurycomponents
surplusearnings
sharesof equity¥85,152¥442,550¥△62,737

Other comprehensive
incomeComprehensive income－

Purchase of treasury
sharesShare-based paymenttransactions－－

43,599182

Dividends

2,442

43,599
2,442

261
22

43,861
2,464

2,442

46,041

283

46,325

△1

△1

70

253

3,612

¥1,351 ¥563,738

0

254△8,600

－

－

－

100

100

△4

△1,7793△1,775

Total transactions withowners－△1,591△4,98769△3,617△10,127

104 △10,022

Balance as of March 31,
2023¥75,929¥83,560¥481,163¥△62,668¥20,317¥598,301¥1,739 ¥600,041

SharecapitalBalance as of April 1,
2022

Thousands of U.S. dollars
Equity attributable to owners of parent
Other
CapitalRetained
Treasurycomponents
surplusearnings
sharesof equity$568,588 $637,651 $3,313,993 $△469,804

Other comprehensive
incomeComprehensive income
Purchase of treasury
sharesShare-based paymenttransactions－－

Total transactions withownersBalance as of March 31,
2023

－

1,369

328,451
18,452

18,286

344,780

2,123

346,903△8
1,896△27,055△37,349518$568,588 $625,731 $3,603,138 $△469,286

-7-

△8
6

1,902

△64,404△64,404－－－－ △11,920$10,119 $4,221,496
1,957
165

526

△13,290

Total

326,493
18,286△64,404
27,055

Total

18,286△8

Dividends
Transfer from othercomponents of equity toretained earnings
Obtaining of control ofsubsidiaries
Changes in ownershipinterest in subsidiaries

326,493

2. SCOPE OF CONSOLIDATION
Number of consolidated
subsidiaries
Names of principal consolidated
subsidiary

41
・SAISON FUNDEX CORPORATION
・JPN COLLECTION SERVICE CO.,LTD.
・SAISON ASSET MANAGEMENT CO., LTD.
・Atrium Servicing Co., Ltd.
・Saison Personalplus Co., Ltd.
・Atrium Co., Ltd.
・Concerto Inc.
・Saison Partners CO., LTD.

Noncontrollinginterests$160,947 $4,211,377

326,493

Profit

The consolidated financial statements of Credit Saison Co., Ltd. (the “Company”) and its subsidiaries (the“Group”) are prepared in accordance with International Financial Reporting Standards (IFRS) pursuant to
the provisions of Article 120-1 of Regulations for Companies Accounting Regulation. In accordance withthe second sentence of the same paragraph, some of the disclosure items required by IFRS have been
omitted from the consolidated financial statements. Statements of comprehensive income and cash flows
are not required as a part of the basic financial statements under the Companies Act of Japan and applicableregulations and, accordingly, are not presented herein.

△1△8,600△3,612△1,774

Total¥562,387△8,600Transfer from othercomponents of equity toretained earnings
Obtaining of control ofsubsidiaries
Changes in ownershipinterest in subsidiaries

Total¥21,492

43,599Profit

1. BASIS FOR PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
Noncontrollinginterests

754

754

△33

△13,323

23 △13,299△27,088△75,840785 △75,055$152,145 $4,480,317$13,028 $4,493,345

・L-BLUE・Saison International Pte. Ltd.
・Kisetsu Saison Finance(India)Pvt. Ltd.

・Saison Capital Pte. Ltd.
・PT. Saison Modern Finance3. ACCOUNTED FOR USING EQUITY METHOD
Number of companies accounted 41
for using equity method
Names of principal companies
・Saison Information Systems Co., Ltd.
・IDEMITSU CREDIT CO., LTD.
・Resona Card Co., Ltd.
・Shizugin Saison Card Co., Ltd.
・Daiwa House Financial Co., Ltd.
・Takashimaya Financial Partners Co., Ltd.
・Seven CS Card Service Co., Ltd.
・eplus inc.
・HD SAISON Finance Company Limited-8-

comprehensive income is reclassified to profit or loss.

4. FISCAL YEAR OF CONSOLIDATED SUBSIDIARIESWhen the reporting date of a subsidiary is different from that of the Company, the subsidiary prepares,
for consolidation purposes, additional financial information as of the reporting date of the consolidated
financial statements.

(iii) Financial assets measured at fair value through profit or loss
A gain or loss on financial assets measured at fair value through profit or loss is recognized in
profit or loss.
(iv) Equity instruments measured at fair value through other comprehensive income

5. ACCOUNTING POLICIES⑴ Valuation standards and methods for financial assets(a)Financial assets

1)

Initial recognition and measurement

A gain or loss on equity instruments designated as those measured at fair value through othercomprehensive income is recognized in other comprehensive income.
Dividends received from such financial assets are recorded in profit or loss under “Other income.”

The Group classifies financial assets into financial assets measured at amortized cost, at fair value
through profit or loss, or at fair value through other comprehensive income. The Group determinessuch classification at the time of initial recognition.
The Group recognizes financial assets on the transaction date when it becomes a party to thecontract on such financial instruments.
All financial assets are measured at fair value plus any transaction costs, except for those classified
as financial assets measured at fair value through profit or loss.

3)

Financial assets are derecognized if the contractual rights to receive cash flows from the financial
assets expire or if the Group has transferred substantially all the risks and rewards of ownership ofthe financial assets. If the Group retains control of a transferred asset, the asset and any liability
associated with the asset are recognized to the extent of their continuing involvement.
4)

If the credit risk on financial assets at the end of the reporting period has not increased significantly
since initial recognition, allowance for doubtful accounts is measured at an amount equal to theamount of expected credit losses from possible defaults in the next 12 months after the end of thereporting period (12-month expected credit losses). In this case, 12-month expected credit losses
are collectively estimated to measure the allowance for doubtful accounts based on informationsuch as the probability of default, subsequent collection rates, and other reasonable and supportable
information, including forward-looking data.

・ The assets are held within a business model whose objective is to hold the assets in order tocollect contractual cash flows.
・ The contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.
Financial assets other than those measured at amortized cost are classified as financial assets
measured at fair value.

Conversely, if the credit risk on financial assets at the end of the reporting period has increased
significantly since initial recognition, allowance for doubtful accounts is measured at an amountequal to the expected credit losses that result from all possible default events over the expected lifeof such financial assets (lifetime expected credit losses). In this case, allowance for doubtful
accounts is determined by estimating the lifetime expected credit losses related to the collection ofsuch financial assets based on information such as the probability of default, future recoverable
amounts, and other reasonable and supportable information, including forward-looking data. In
principle, it is presumed that the credit risk on financial assets has increased significantly whencontractual payments are more than 30 days past due. In assessing whether the credit risk has
increased significantly, the Group considers reasonably available and supportable information in
addition to past due information.

Equity instruments measured at fair value are individually designated as measured at fair value
through profit or loss or at fair value through other comprehensive income, and such designation isapplied consistently after the initial recognition.
Debt instruments measured at fair value that meet both of the following conditions are classified as
debt instruments measured at fair value through other comprehensive income:・ The financial assets are held within a business model whose objective is achieved by bothcollecting contractual cash flows and selling financial assets.
・ The contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.

However, for trade receivables that result from transactions that are within the scope of IFRS 15,“Revenue from Contracts with Customers” (IFRS 15) and that do not contain a significant financing
component, allowance for doubtful accounts is always recognized at an amount equal to the lifetime
expected credit losses, regardless of whether or not the credit risk has increased significantly sinceinitial recognition.

Operational investment securities include stocks, investment trusts, and investments in partnerships,
which are held solely for the purpose of investment. Investment securities include stocks,
investment trusts, investments in partnerships held for the purpose of promoting business primarily
through business, and capital alliances.
Subsequent measurement

As a general rule, the Group determines that a default has occurred when the contractual paymentof a receivable is 90 days or more past due. When it is determined that there is a default of areceivable, such receivable is deemed to be a credit-impaired receivable.

After initial recognition, financial assets are measured as follows, depending on their classifications:(i) Financial assets measured at amortized cost

The Group directly reduces the gross carrying amount of a financial asset when it has no reasonable
expectations of recovering a financial asset in its entirety or a portion thereof.

Financial assets are measured at amortized cost using the effective interest method.
(ii) Debt instruments measured at fair value through other comprehensive income
A gain or loss on debt instruments measured at fair value through other comprehensive income
is recognized in other comprehensive income, except for impairment gains or losses and foreignexchange gains and losses, until the debt instrument is derecognized or reclassified. When thefinancial asset is derecognized, cumulative gain or loss previously recognized in other-9-

Impairment of financial assets
Allowance for doubtful accounts is recognized for expected credit losses on financial assets
measured at amortized cost and debt instruments measured at fair value through othercomprehensive income.

Financial assets that meet both of the following conditions are classified as financial assets
measured at amortized cost:2)

Derecognition of financial assets(b) Financial liabilities
1)

Initial recognition and measurement
The Group classifies financial liabilities as subsequently measured at amortized cost, except forderivatives and financial guarantee liabilities. The classification is made at the time of initial- 10 -

recognition.

1)

Debt securities issued by the Group are initially recognized at the date of issuance. All otherfinancial liabilities are recognized on the transaction date when the Group becomes a party to thecontract of such financial liabilities.

Fair value changes on derivatives are recognized in profit or loss of the consolidated statement ofincome. Fair value changes on hedged items attributable to hedged risks are recognized in profit orloss in the consolidated statement of income with the carrying amounts of the hedged items being
adjusted.

Financial liabilities measured at amortized cost are recognized at an amount after deducting
transaction costs directly attributable to the issuance of the liabilities.
2)

2)

Amortization using the effective interest method as well as gains and losses arising from
derecognition are recognized as “Finance costs” in profit or loss of the period.

The amount posted in other comprehensive income is reclassified to profit or loss when the hedgedtransaction affects profit or loss.

Derecognition of financial liabilities

If a forecast transaction or a firm commitment is no longer expected to occur, cumulative gains orlosses previously recognized in equity through other comprehensive income are reclassified to
profit or loss. If a hedged future cash flow is still expected to occur, the amount previously
recognized in equity through other comprehensive income remains in equity until the future cash
flow occurs.

The Group derecognizes financial liabilities when they are extinguished (i.e., when the obligation
specified in the contract is discharged), canceled, or expired.
(c)Presentation of financial assets and financial liabilities
Financial assets and financial liabilities offset each other with the net amount presented in the
consolidated statement of financial position only if the Group has a legal right to offset and has theintention to either settle amounts on a net basis or realize the assets and settle the liabilities
simultaneously.

(e)

The Group utilizes derivatives, such as interest rate swaps, for the purpose of hedging interest raterisk and foreign currency risk. These derivatives are initially recognized at fair value at the date when
the contracts are entered into and subsequently remeasured at fair value.

Financial guarantee liability is measured at fair value when the contract is initially signed. Afterinitial recognition, the amount is measured at the higher of the following:
1)

The amount of allowance for doubtful accounts calculated in accordance with the section above
titled “Impairment of financial assets”

2)

The initially measured amount, less the cumulative amount of revenue recognized in accordancewith IFRS 15⑵

A hedging relationship is considered to be effective when it meets all the following requirements:

・ The hedge ratio of the hedging relationship is the same as that resulting from the quantity of thehedged item that the Group actually hedges and the quantity of the hedging instrument that theGroup actually uses to hedge that quantity of hedged item.
The Group prospectively assesses whether the hedging relationships will be effective on an ongoingbasis. Hedge ineffectiveness may arise when the fair value change on the hedging instrument exceeds
or falls below that of the hedged item.
Hedge ratio is appropriately determined based on an economic relationship between the hedged itemand hedging instrument, as well as the Group’s risk management strategies.
If a hedging relationship ceases to meet the hedging effectiveness requirement, but the risk
management objective remains the same, the Group adjusts the hedge ratio so that the hedging
relationship becomes effective again. The Group terminates the hedge accounting if the risk
management objective for the designated hedge relationship is changed.
Hedges that qualify for hedge accounting are classified and accounted for as follows:- 11 -

Valuation standards and methods for inventories
Inventories are measured at the lower of cost or net realizable value. Net realizable value isdetermined at the estimated selling price in the ordinary course of business, less estimated costs forcompletion and estimated selling expenses. Cost is calculated mainly based on the specificidentification method.

・ There is an economic relationship between the hedged item and the hedging instrument.
・ The effect of credit risk does not dominate the value changes that result from that economic
relationship.

Financial guarantee liabilities
A financial guarantee contract is a contract that requires a contract issuer to make specified payments
to reimburse the holder of a guarantee contract for a loss it incurs because a specified debtor fails to
make payment when due in accordance with the original or modified terms of a debt instrument.
Revenue is recognized by multiplying the balance of guarantee by the guarantee fee rate.

(d) Derivatives and hedge accounting

At the inception of the hedging relationship, there is formal designation and documentation of thehedging relationship to which the Group plans to apply hedge accounting as well as the Group’s risk
management objective and strategy for undertaking the hedge. That documentation includes
identification of the hedging instrument, the hedged item or transaction, the nature of the risk being
hedged, and the description of how the Group will assess the effectiveness of changes in fair valueof the hedging instruments used in offsetting its exposures to changes in the fair value or cash flowsof the hedged items arising from the hedged risk.

Cash flow hedges
The effective portion of gains or losses on hedging instruments is recognized in othercomprehensive income in the consolidated statement of comprehensive income, while theineffective portion is immediately recognized in profit or loss in the consolidated statement ofincome.

Subsequent measurement
After initial recognition, financial liabilities are measured at amortized cost using the effective
interest method, except for derivatives and financial guarantee liabilities.

3)

Fair value hedges⑶(a)Valuation standards and methods for property, plant, equipment and depreciation methods
Recognition and measurement
Property, plant, and equipment are measured by using the cost model and are stated at acquisition
cost less accumulated depreciation and accumulated impairment losses. Acquisition cost includes
costs directly attributable to the acquisition of assets and costs involved in dismantling, removing
and restoring. Gain or loss on disposal of an item of property, plant and equipment represents the net
amount of proceeds from disposal less carrying amount, which is recognized in profit or loss.

(b) Depreciation
Depreciation is calculated based on the depreciable amount. The depreciable amount is calculated bydeducting the residual value from the acquisition cost of the asset. Depreciation is recognized in
profit or loss by mainly using the straight-line method over the estimated useful life of eachcomponent of property, plant and equipment. Land and construction in progress are not subject todepreciation.
- 12 -

Lease payments are allocated to finance costs and repayments of lease liabilities based on the interest
method. Finance costs are recognized in the consolidated statement of income.

The estimated useful lives of main assets are as follows:
Buildings

39 to 50 years

Other

5 to 6 years

However, for short-term leases within a lease term of 12 months or leases for which the underlying
asset is of low value, the right-of-use asset and lease liability are not recognized. The lease payments
are recognized as expenses over the lease term under the straight-line method.

Depreciation methods, estimated useful lives, and residual values are reviewed at the end of eachreporting period. Any change is applied prospectively as a change in accounting estimates.
⑷

Depreciation method for investment property
Investment property is property (including property under construction) held to earn rental income orcapital gains, or both. Investment property is measured under the cost model and is measured at costless accumulated depreciation and accumulated impairment losses.

(b) Leases as a lessor
The Group classifies each of its leases as either an operating lease or a finance lease. A lease isclassified as a finance lease if it transfers substantially all the risks and rewards incidental toownership of an underlying asset. A lease is classified as an operating lease if it does not transfer
substantially all the risks and rewards incidental to ownership of an underlying asset.

Depreciation is calculated based on the depreciable amount. The depreciable amount is calculated bydeducting the residual value from the acquisition cost or the amount equivalent to the acquisition cost.
Depreciation is recognized in profit or loss over the estimated useful life of each asset, other than land,by mainly using the straight-line method.

For the finance lease, the Group recognizes assets held under a finance lease in its consolidated
statement of financial position at the commencement date and presents them as receivable at an
amount equal to the net investment in the lease.

The estimated useful lives of main assets are as follows:
Investment property

An investment property is derecognized on disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from its disposal. Gains or losses
arising from the derecognition are calculated as the difference between the net disposal proceeds andthe carrying amount of the asset and are recognized in profit or loss at the time of derecognition.
⑸

For the operating lease, the Group presents assets subject to operating leases in its consolidated
statement of financial position and recognizes lease payments to be received as income over the leaseterm under the straight-line method in the consolidated statement of income.

15 to 50 years⑺

The Group measures goodwill as the excess of the aggregate of the consideration transferred and theamount of any non-controlling interests in the acquiree measured at the acquisition date over the netof acquisition-date amounts of identifiable assets acquired and liabilities assumed (ordinarily in theirfair value).

Valuation standards and methods for intangible assets (excluding goodwill) and amortization methods
Intangible assets acquired individually are measured under the cost model. Intangible assets are statedat cost, less accumulated amortization and accumulated impairment losses. These intangible assets
include borrowing costs to be capitalized.

Goodwill is not amortized but is tested for impairment in each reporting period or each time when
there is an indication of impairment.
Impairment losses of goodwill are recognized in the consolidated statement of income and not reversed
subsequently.

After initial recognition, intangible assets other than goodwill and software in progress are amortizedover their estimated useful lives under the straight-line method and are recognized in profit or loss,
except for intangible assets with indefinite useful lives.

Goodwill is stated at cost less accumulated impairment losses in the consolidated statement offinancial position.

The estimated useful lives of main assets are as follows:
Software5 to 15 years

Other

5 to 10 years

Amortization methods, estimated useful lives, and residual values are reviewed at the end of eachreporting period, and any change is applied prospectively as a change in accounting estimates.
⑹(a)LeasesLeases as a lessee
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contractis, or contains, a lease if the contract conveys the right to control the use of an identified asset for aperiod of time in exchange for consideration.
If a contract is, or contains, a lease, the Group recognizes a right-of-use asset and a lease liability at
the commencement date. The lease liability is measured at the present value of the lease paymentsthat are not paid at the commencement date. The right-of-use asset is measured at cost, which is theamount of the initial measurement of the lease liability, adjusted for any lease payments made at or
before the commencement date, any initial direct costs incurred by the lessee, and any other costs
such as obligations to restore the leased assets to their original condition as required under leaseagreements.
After initial recognition, the right-of-use asset is depreciated over the shorter of the useful life or thelease term under the straight-line method.
- 13 -

Goodwill⑻

Impairment of non-financial assets
At the end of each reporting period, the Group reviews the carrying amount of non-financial assets todetermine whether there is any indication of impairment. If any such indication exists, the recoverable
amount of the asset is estimated. Recoverable amounts of goodwill and intangible assets withindefinite useful lives or those not yet available for use are estimated at the same time each year,
regardless of whether or not there is an indication of impairment.
The recoverable amount of an asset or a cash-generating unit is the higher of value in use or fair valueless costs of disposal. In calculating the value in use, the estimated future cash flows are discounted
to their present value by using a pretax discount rate that reflects the time value of money and risks
specific to the asset. Assets that are not tested individually for impairment are integrated into thesmallest cash-generating unit that generates cash inflows through continuing use that are largely
independent of those from other assets or groups of assets. At the time of goodwill impairment testing,cash-generating units to which goodwill is allocated are integrated so that impairment testing is
conducted in a manner that reflects the smallest unit with which goodwill can be associated. Goodwill
acquired in a business combination is allocated to each cash-generating unit that is expected to benefit
from synergies of the combination.
Impairment losses are recognized in profit or loss when the carrying amount of an asset or a cashgenerating unit exceeds its recoverable amount. Impairment loss recognized for a cash-generating unit
is first allocated to reduce the carrying amount of goodwill allocated to the unit and subsequently
allocated to reduce other assets of the unit on a pro -rata basis, based on the carrying amount of each
asset in the unit.
- 14 -

Impairment losses recognized for goodwill are not reversed. Impairment loss recognized in priorperiods for other assets is assessed at the end of each reporting period to determine whether there is
any indication that such impairment losses may no longer exist or may have decreased. If any change
has been made to the estimate used to determine the recoverable amount of an asset, an impairment
loss for the asset is reversed up to the carrying amount of the asset that would have been determined
had no impairment loss been recognized for the asset in prior years (net of any associated depreciation
and amortization expenses).
⑼

(a)

1)

Revenue is recognized at the time when a credit card is used, which is when service is completed
and the performance obligation is satisfied under the contracts with affiliated stores, who are
customers of the Group.
(ⅱ) Customer fees
Customer fees mainly represent fees received from cardholders for using revolving payments
and other services. As stated in Note “5. ACCOUNTING POLICIES, (1) Valuation standards
and methods for financial assets, (a) Financial assets, 2) Subsequent measurement,” revenue isrecognized under IFRS 9, “Financial Instruments” (“IFRS 9”), using the effective interest
method.

Provision for point card certificates
The Group offers a rewards program to its card holders (members) as the major benefit of holding acredit card. Under the program, card holders can exchange points earned based on the amount ofcredit card purchases for a variety of items. Points granted to members have no expiry date.
The Group recognizes a provision for point card certificates as a liability by estimating costs to be
incurred through the exchange of points in the future. To measure liability, the Group determines
the estimated points to be exchanged in the future out of the outstanding number of points at theend of the period, which is multiplied by a point unit value. The use of points by members involves
uncertainty.

(iii) Annual membership fees, etc.
Revenue is recognized over a certain period determined under the contracts with cardholders towhich performance obligation is satisfied for the membership fees received.
2)

(c)

3)

(a)

Employee benefits
4)

Defined contribution pension plans

Processing/agency for other companies’ credit cards and business agencies
Processing/agency for other companies’ credit cards is a service provided on a contractual basis forprocessing and use of the Company’s ATMs, for which the Company receives fees from its partnercompanies. Business agencies refers to receivables collection businesses and temporary staffing
businesses, which receive fees from their partner companies. Revenue is recognized when service
is rendered, and the performance obligation is satisfied on a contractual basis.

The Group adopts defined contribution pension plans. Defined contribution pension plans are postemployment benefit plans under which an employer pays fixed contributions to an independent entity
and has no legal or constructive obligation to pay further contributions. Contributions under thedefined contribution pension plans are recognized in profit or loss in the period in which employees
render the related services.

(b) Lease business(b) Short-term employee benefits

Revenue is recognized under IFRS 16, “Leases.” (“IFRS 16”). For details, see Note “5.
ACCOUNTING POLICIES, (6) Leases, (b) Leases as a lessor.”

Undiscounted amount of short-term employee benefits is recognized as an expense in the period inwhich the employees render related services.
Expenses for bonuses and paid absences are recognized as a liability at an amount estimated to be
paid based on applicable policies for the bonuses and paid absences when the Group has a legal orconstructive obligation for the payment and a reliable estimate can be made for the amount.
⑾

Term loans
Revenue from term loan services represents fees received from cardholders or customers who
obtain loans directly from the Group in forms other than credit card cash advance. As stated in Note
“5. ACCOUNTING POLICIES, (1) Valuation standards and methods for financial assets, (a)Financial assets, 2) Subsequent measurement,” revenue is recognized under IFRS 9 using theeffective interest method.

Other provisions
Other provisions include asset retirement obligations, and provision for loss on collecting gift tickets,
all of which are individually immaterial.

⑽

Credit card cash advance
Revenue from cash advance services represents fees received from cardholders for using credit card
cash advance via credit cards or loan cards issued by the Group. As stated in Note “5.
ACCOUNTING POLICIES, (1) Valuation standards and methods for financial assets, (a) Financial
assets, 2) Subsequent measurement,” revenue is recognized under IFRS 9 using the effective interest
method.

(b) Provision for loss on interest repayments
The Group recognizes a provision for loss on interest repayments at an amount required in
preparation for future claims for interest repayments, considering historical data on repayments andother information.

Credit card shopping(i) Affiliated store fees

Accounting policy for significant provisions
A provision is recognized when the Group has a present legal or constructive obligation as a result ofa past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation, and a reliable estimate can be made of the amount of the obligation. When thetime value of money is significant, the estimated future cash flows are discounted to their present value
by using a pretax discount rate that reflects the time value of money and risks specific to the liability.
Unwinding of the discounted amount arising from the passage of time is recognized in profit or loss.

(a)

Payment business
The payment business provides services such as credit card shopping, credit card cash advance, termloans, and processing/agency for other companies’ credit cards and business agencies. Revenue
recognition criteria by service are as follows:(c)

Finance business

1)

Credit guarantees
Fees are received when the Group guarantee loans provided by their partner financial institutions.
Revenue is recognized under IFRS 9. For details, see Note “5 ACCOUNTING POLICIES, (1)Valuation standards and methods for financial assets, (e) Financial guarantee liabilities .”Revenue
Centering on the card business, the Group engages in multiple business domains, such as the Internet
business, lease business, and finance business. For the purpose of segment reporting, the Group’sbusinesses are divided into five reportable segments: Payment business, Lease business, Financebusiness, Real estate-related business, and Entertainment business. Revenue recognition criteria bysegment are as follows:- 15 -

2)

Finance-related business
Fees are directly received from customers who obtain loans directly from the Group. As stated in
Note “5. ACCOUNTING POLICIES, (1) Valuation standards and methods for financial assets, (a)- 16 -

Financial assets, 2) Subsequent measurement,” revenue is recognized under IFRS 9 using theeffective interest method.
(d) Real estate-related businessFor real estate sales, revenue is recognized when property is delivered to customers, which is whena performance obligation is satisfied. For real estate rentals, revenue is recognized under IFRS 16.
(e)Entertainment business
Revenue is recognized primarily when services are rendered at stores engaged in amusement business,
which is when a performance obligation is satisfied.
Revenues from the above businesses are recognized at an amount reflecting the amount ofconsideration to which the Group expects to be entitled in exchange for transferring the goods orservices to the customer based on the following five-step approach in accordance with IFRS 15,
except for interest and dividend income received under IFRS 9 and income from lease arrangements
under IFRS 16:
Step 1:

Identify contract(s) with a customer

Step 2:

Identify the performance obligations in the contract

Step 3:

Determine the transaction price

Step 4:

Allocate the transaction price to performance obligations in the contract

Step 5:

Recognize revenue when (or as) the performance obligation is satisfied

Revenue recognized under IFRS 15 is based on contracts with customers, and the amount of revenue
containing variable consideration is immaterial. No significant financing component is included in
the amount of promised consideration.
⑿(a)"Finance business segment," has been changed to the "Payment business segment" in accordance with thereorganization that was conducted in October 2022. In order to reflect this change in presentation, the income
from the rent guarantee business has been transferred from "income from the finance business" to "income
from the payment business" in the consolidated statements of income. As a result, for the current fiscal year,"income from the payment business" increased by ¥1,745 million (U.S. $13,068 thousand) and "income fromthe finance business" decreased by the same amount.

Foreign currency translation
Foreign currency transactions
Foreign currency transactions are translated into functional currency of each entity of the Group by
using the spot exchange rate at the date of the transaction.
Foreign currency monetary assets and liabilities at the end of the reporting period are translated intofunctional currency using the spot exchange rate at the end of the reporting period.
Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated
into functional currency using the exchange rate at the date when the fair value was measured.
Exchange differences arising from translations or settlements are recognized in profit or loss.
Exchange differences arising from the translation of equity instruments measured at fair value
through other comprehensive income are recognized in other comprehensive income.

(b) Foreign operations
Assets and liabilities of foreign operations, including any goodwill arising on the acquisition of aforeign operation and any fair value adjustments, are translated into Japanese yen using the spot
exchange rate at the end of the reporting period, while income and expenses are translated into
Japanese yen using average exchange rates during the period.
Exchange differences arising from the translation of financial statements of foreign operations arerecognized in other comprehensive income.
Upon the disposal of a foreign operation, exchange differences relating to the foreign operation arereclassified to profit or loss as part of the gain or loss on disposal.

(Notes regarding changes in presentation)
Effective from the current fiscal year, the rent guarantee business, which was originally grouped to the- 17 -(Notes on accounting estimates)
The items that are included in the consolidated financial statements for the current fiscal year as a resultof accounting estimates and which may have a significant impact on the consolidated financial statements
for the following fiscal year are as follows:
Millions of yen¥2,990,519
12,31228,753
11,044150,458
116,61241,6157,875
2,616
126,023

Trade and other receivables
Other financial assets
Property, plant, and equipment
Right-of-use assets
Intangible assets
Investment property
Deferred tax assets
Financial guarantee liabilities
Other financial liabilities
Provision for point card certificates
Provision for loss on interest repayments¥18,091

Thousands of U.S. dollars$22,394,182
92,197215,319
82,706
1,126,688
873,236
311,636
58,976
19,590943,717$135,479

The above amounts for "Trade and other receivables" and "Other financial assets" are net of theallowance for doubtful debts; the amounts are ¥71,498 million (U.S. $535,408 thousand) and ¥18 million(U.S. $140 thousand), respectively.
SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONSThe Group makes estimates and assumptions on future events in preparing the consolidated financial
statements in compliance with IFRS. Results of accounting estimates may differ from the related actual
results by nature. Estimates and assumptions with risks of significantly affecting the carrying amountsof assets and liabilities in the following fiscal year are as follows:
With regard to the impact of the coronavirus disease (COVID-19) infection, although the economy isexpected to continue to pick up as people learn to coexist with COVID-19, it is considered that theuncertainty remains. COVID-19 has various impacts, but particularly with regard to the credit risk onreceivables held by the Group, due to the repayment of effectively interest-free and unsecured loans
provided as a countermeasure against COVID-19 has started, the deterioration in cash flow was expected.
To appropriately reflect the impact on the collection rate, the Group calculates the expected negative
impacts on its operating performance under such scenarios. The Group adjusts accounting estimates,
such as the allowance for doubtful accounts, if the expected negative impacts relate to those estimates.
Although the Group believes that these estimates are best available at the time of preparation of theconsolidated financial statements, there is a high degree of uncertainty in the assumptions used in theestimates. In the event that COVID-19 accompanying changes in the economic situation occur in the
future, the estimates may be reviewed in the consolidated financial statements from the next fiscal year.
(a)

Impairment of financial assets measured at amortized cost and debt instruments measured at fairvalue through other comprehensive income (Allowance for doubtful accounts and financial guarantee
liabilities)
The Group recognizes expected credit losses for financial assets measured at amortized cost and debt
instruments measured at fair value through other comprehensive income as the present value ofdifferences between contractual future cash flows that it will receive in accordance with the contractand future cash flows that it expects to receive.
- 18 -

In estimating future cash flows, the Group takes into account not only historical information, such as
the possibility of default and the collection rate of receivables after default, but also reasonably
expected future events and other factors. Specifically, when various macroeconomic variables are
expected to deteriorate in the future and the probability of default of the Group's receivables is
expected to increase, the Group adjusts the probability of default by using macroeconomic variables,such as GDP and unemployment rate, which are correlated with expected credit losses. At eachreporting date, the Group obtains the most recent future forecast values for macroeconomic variables
and considers whether the estimate needs to be changed.
Regarding the probability of default, collection rate of receivables after default, forecast of economic
environment using macroeconomic variables, evaluation of correlation between macroeconomic
variables and expected credit losses, and the amount of impairment losses recognized for the financial
assets may substantially differ if assumed circumstances change.

(f)

Recoverability of deferred tax assets
Deferred tax assets and liabilities are recognized for temporary differences between the carrying
amounts of assets and liabilities in the consolidated statement of financial position and their tax bases.
Deferred tax assets and deferred tax liabilities are calculated using the tax rates expected to be
applicable at the time when the relevant deferred tax assets are realized or deferred tax liabilities aresettled in accordance with laws and regulations enacted or substantially enacted at the end of thereporting period. Deferred tax assets are recognized for all of the deductible temporary differences,
unused tax losses, and unused tax credits to the extent that it is probable that the Group will earnsufficient future taxable profit. Estimates of future taxable profit are based on subjective judgments
and assumptions made by the Group’s management, which are supported primarily by business plansapproved by management. The changes in assumed circumstances or amendment to tax laws in the
future may significantly affect the amounts of deferred tax assets and deferred tax liabilities.

(b) Provision for point card certificates
The Group offers a rewards program to its card holders (members) as the major benefit of holding acredit card. Under the program, card holders can exchange points earned based on the amount ofcredit card purchases for a variety of items. Points granted to members have no expiry date.
The Group recognizes a provision for point card certificates as a liability by estimating costs to be
incurred through the exchange of points in the future. To measure liability, the Group determines theestimated points to be exchanged in the future out of the outstanding number of points at the end of
the period, which is multiplied by a point unit value. The use of points by members involves
uncertainty. These estimates and assumptions may significantly affect provision amounts if assumed
circumstances change.
(c)Provision for loss on interest repayments
The Group recognizes a provision for loss on interest repayments at an amount required for future
claims by considering historical data on interest repayments. If such claims for interest repayments
unexpectedly increase or decrease due to a change in legal regulations or other reasons, the actual
amount of repayments may differ from the initial estimate, resulting in the over- or understatementof provision for loss on interest repayments.

(d) Impairment of non-financial assets
The Group conducts impairment testing for property, plant and equipment, intangible assets
including goodwill and investment property. In determining recoverable amounts through the
impairment test, the Group makes certain assumptions on useful lives of assets, future cash flows,
pretax discount rate, long-term growth rate, and other factors. These assumptions are determinedbased on management’s best estimates and judgments; however, the assumptions may be affected byresults of changes in uncertain economic conditions in the future. If the assumptions need to bereviewed, this may significantly affect amounts recognized in consolidated financial statements inthe following fiscal years.
(e)Financial instruments measured at fair value, including derivatives
The Group determines the value of financial assets and liabilities measured at fair value, including
derivatives, using the following: quoted prices in an active market for identical assets or liabilities;
fair values determined by using inputs other than the abovementioned quoted prices that are
observable for the assets and liabilities, either directly or indirectly; or fair values determined byusing valuation techniques that incorporate unobservable inputs. Among others, fair values
determined using valuation techniques that incorporate unobservable inputs are based on
management judgments and assumptions, including appropriate actuarial assumptions andcalculation models. These estimates and assumptions may significantly affect the fair values offinancial instruments if assumed circumstances change.
The details and amounts of fair values of financial instruments are stated in the note of financial
instruments.

- 19 -- 20 -

6. COMMITMENTS(NOTES TO CONSOLIDATED FINANCIAL STATEMENTS）
1. ACCUMULATED DEPRECIATION AND ACCUMULATED IMPAIRMENT LOSSES OF
PROPERTY, PLANT, AND EQUIPMENT
30,959Millions of yen

231,836
Thousands of U.S. dollars

2. ALLOWANCE FOR DOUBTFUL ACCOUNTS DEDUCTED DIRECTLY FROM ASSETS
Trade and other receivables

71,498Millions of yen
18
Millions of yen

Other financial assets

Trade and other receivables(Accounts receivable –installment)(Finance lease receivables)

304,148 Millions of yen

535,408
Thousands of U.S. dollars
140
Thousands of U.S. dollars

2,277,579 Thousands of
U.S. dollars
1,511 Millions of yen

Other financial assets(Guarantee deposits)

11,314 Thousands of
U.S. dollars

296,756 Millions of yen
2,222,232 Thousands of
U.S. dollars
603 Millions of yen

Other financial liabilities(Deposits received)

4,515 Thousands of
U.S. dollars
80 Millions of yen

Other financial liabilities(Advances received)

599 Thousands of
U.S. dollars
297,439 Millions of yen

305,659 Millions of yen
Total

2,288,894 Thousands of
U.S. dollars

Total

2,227,347 Thousands of
U.S. dollars"Long-term loans payable under securitized borrowings" are liabilities arising from the securitization of
instalment receivables and finance lease receivables.
"Guarantee deposits" are deposited as guarantee money for issuance, etc., in accordance with Article 141 of the Law Concerning Funds Settlement.
4. INVESTMENT SECURITIESInvestment securities of ¥1,504 million (U.S. $11,262 thousand) are subject to stock lending agreements.
5. CONTINGENCIES
Debt guarantee
Customers related to retail loans provided by partner financial
institutions
Customers related to loans with pictures pledged as collateral provided
by partner financial institutions
Customers related to rent guarantee business
Customers related to mortgage loans provided by partner financial
institutions
Customers related to housing loans provided by partner financial
institutions
Total- 21 -

Thousands of U.S. dollars$29,831,222
1,352,436$28,478,785

Regarding the contracts equivalent to loan commitments above, the majority are for cash advance
services that accompany credit card services furnished to the Company’s cardholders, and thus, not all
loan commitments will be taken out.

Liabilities related to collateral
Type
Ending Balance
Bonds and borrowings(Long-term borrowings)(Long-term loans payable
under securitizedborrowings)

Millions of yen¥3,983,661
180,604¥3,803,057

Total loan commitments
Balance of loans taken out
Net amount

3. ASSETS PLEDGED AS COLLATERAL AND LIABILITIES RELATED TO COLLATERAL
Assets pledged as collateral
Type
Ending Balance（Lender）
The Group provide cash advance and card loan services that accompany its credit card operations in
the Payment business. The amount of undrawn loans equivalent to loan commitments in the line ofcredit facility for the operations as well as for unconsolidated subsidiaries and associates is as follows:

Millions of yen

Thousands of
U.S. dollars¥215,751$1,615,634

26

196

226,669

1,697,393

196,895

1,474,431

7,176

53,736¥646,519$4,841,393(Borrower)
The Company enters into loan commitment contracts with five banks to finance working capitalefficiently.
The unused portion of the loan commitment under these contracts is as follows:
Millions of yen

Thousands of U.S. dollars$2,246,517－－$2,246,517¥300,000

Total amount of commitments
Borrowings made under the commitment¥300,000

Net amount(NOTES TO CONSOLIDATED STATEMENT OF INCOME）
BUSINESS PROFIT
Business profit is determined by adding or subtracting certain reconciliation items to or from profit before
tax.
Given the nature and frequency of income and expenses, reconciliations are determined based on ajudgement of whether they can help provide effective comparative information on the Group’s
performance and appropriately reflect how the businesses are managed.
The breakdown of reconciliations is as follows:
Reconciliations (Other income)Gain on valuation of investment securities (stocks,
etc.)
Gain on sale of fixed assets

Millions of yen

Thousands of U.S. dollars¥△616$△4,614△530△3,971△23△177

Gain on change in equity

△1

△8

Other

△60

△456

825
649
170
6

6,180
4,861
1,273
45

△276

△2,070

¥△67

$△503

Reconciliations (Other expenses)

Impairment losses on non-financial assets
Loss on disposal of fixed assets
Other
Adjustments for the application of the effective interest
method to financial assets(*)
Total* Mainly reversal of effective interest rate adjustments, such as loan administration fees and transaction costs.

(NOTES TO CONSOLIDATED STATEMENT OF CHANGES IN EQUITY）
1. TYPE AND NUMBER OF SHARES ISSUED AS OF MARCH 31, 2023
Common stock

185,444,772 shares- 22 -

2. DIVIDENDS⑴⑶

Dividends paid
Resolution

Class ofsharesOrdinary general
meeting of shareholders
held on June 22, 2022

Commonstock⑵

Total amount of dividends(Millions of yen)*Thousands of U.S. dollars¥8,600*$64,404

Dividends per
Recordshare (Yen)
Effective date
date
*U.S. dollars¥55*$0.41 March 31, 2022 June 23, 2022

Dividends with an effective date falling in the following fiscal year are as follows:

Resolution (planned)

Class ofsharesOrdinary general
meeting of shareholders
held on June 21, 2023

Total amount ofdividends
Resource of(Millions of yen)
dividends*Thousands ofU.S.
dollars

Commonstock

Retainedearnings¥10,948*$81,986

Dividends per
share (Yen)*U.S. dollars

Record date

Effective date¥70 March 31, 2023 June 22, 2023*$0.52(NOTES TO FINANCIAL INSTRUMENTS)
1. STATUS OF FINANCIAL INSTRUMENTS⑴

Policy on financial instruments
The Group is engaged in the Payment business, Lease business, Finance business, Real estate-related
business, and Entertainment business. While considering market forces and the balance of short-termand long-term borrowings, the Group utilizes both indirect financing through bank borrowings anddirect financing through the issuance of bonds and commercial papers as well as securitization ofreceivables to operate businesses in each segment. As the Group is significantly affected by interest
rate fluctuations, the Group mitigates interest rate risks by promoting the use of Asset-Liability
Management(ALM), which is the practice of managing assets and liabilities in a comprehensive
manner. For the same purpose, the Group also enters into derivative transactions, such as interest rate
swaps.

⑵

Description of financial instruments and risks
Financial assets of the Group are mainly composed of accounts receivable – installment from its card
members. The Group is exposed to credit risks mainly when the repayment ability of credit card
members deteriorates. The majority of accounts receivable – installment as of March 31, 2023,
resulted from the Payment business. Changes in economic environment surrounding the business,such as labor conditions, household disposable income, and consumer spending due to recession,
may hinder card members from fulfilling their obligations in accordance with contract terms andconditions.
The Group’s (operational) investment securities mainly consist of stocks, investment trusts, andinvestments in partnerships, which are held for the purpose of pure investment and businesspromotion.
The Group is exposed to liquidity risk, which represents the risk that it cannot fulfil the repayment
obligation when due for interest-bearing debts, such as borrowings, bonds and commercial papers,
under certain circumstances. For example, a greater-than-expected change might be seen in financial
markets or the Group might not be able to participate in markets due to a downgrade of the Group’s
credit rating. In addition, the Group has borrowings with floating interest rates, which expose it to
the risk of interest rate fluctuations, but some of these borrowings are hedged against this risk byinterest rate swap transactions.
Derivative transactions include interest rate swap transactions conducted as a part of ALM. The
Group applies hedge accounting to these hedging instruments for interest rate fluctuation risks
associated with borrowings that are hedged items.

- 23 -

Risk management system for financial instruments① Credit risk management
The Group strives for continuous improvement in the quality of receivables and develops andoperates a system related to credit control, such as credit limits, credit information control, andinternal ratings, in accordance with the Company’s internal rules for credit risk management. The
Group periodically holds Board of Directors and other relevant meetings to discuss and report thestatus of credit controls. The ALM Committee is responsible for the management of (operational)
investment securities by regularly obtaining credit and fair value information. Long-term loans
receivable are regularly monitored at the level of each department for borrowers’ credit risk andother risks. In dealing with counterparty risk in derivative transactions, in order to avoid credit
risk that arises from default, the Group contracts with domestic and foreign banks and securities
companies with high creditworthiness.
② Market risks management(i) Interest rate risk management
The Group manages interest rate fluctuation risks through ALM. Methods and procedures for risk
management are stated under internal rules for ALM. Based on the policy determined by the
ALM Committee, the Board of Directors understands the implementation status and discusses
matters to be addressed. The relevant departments regularly review the overall status of interest
rates and terms of financial assets and liabilities and monitor them through sensitivity (gap)analysis and other measures. Through ALM, the Group also enters into derivative transactions forinterest rate swaps to hedge interest rate fluctuation risks.
(ⅱ) Price fluctuation risk management
Based on the ALM policy, the Group mitigates price fluctuation risks of investment products,
including (operational)investment securities by implementing preliminary investigations, setting
a cap on investment amounts, and also implementing ongoing monitoring for potential
investments. Additionally, stocks held for the purpose of promoting business through business orcapital alliances are monitored by relevant departments of the Group for issuers’ market
environments, financial conditions, and other risk factors.
Relevant departments are responsible for regularly reporting to the ALM Committee and othermanagement.
(iii) Derivative transactions
Regarding the derivative transactions, relevant departments are responsible for executing
derivative transactions in accordance with procedures specified in internal control regulations
stipulated by the Board of Directors, and the total transaction limit and the range of the hedge
ratios are authorized by the Board of Directors in advance. The status of major derivativetransactions is reported to the Board of Directors on a quarterly basis.
Consolidated subsidiaries enter into derivative transactions in accordance with control
regulations stipulated by each subsidiary. Subsidiaries are required to report to the Company on aquarterly basis regarding the hedging relationships between derivatives and corresponding
receivables/payables, counterparties, transaction amounts, remaining periods, and the fair valuesof transactions.
(iv) Quantitative information about market risk
Financial instruments affected by interest rate risk, the main risk variable of the Group, mainly
consist of trade and other receivables, bonds and borrowings, and interest rate swap transactions.
Quantitative analysis for the management of interest rate fluctuation risks for such financial
assets and liabilities is conducted by reasonably estimating changes in interest rates over the next
year or so after the end of the reporting period and the effect on profit or loss for the year due tothe change. To determine the effect on profit or loss, the Group classifies financial assets andliabilities into those with fixed interest rates and those with floating interest rates and takes thedifference between floating rate assets and floating rate liabilities to calculate an interest rate gap.
Assuming that all risk variables other than interest rates remain constant, when the benchmark
interest rate as of March 31, 2023, rises by one basis point (0.01%), profit before tax for the fiscal
year ended March 31, 2023, would increase by ¥7 million (U.S. $51 thousand), and conversely,
when the benchmark interest rate falls by one basis point (0.01%), profit before tax for the fiscal- 24 -

year ended March 31, 2023, would decrease by ¥7 million (U.S. $51 thousand). The effectassumes that risk variables other than interest rates remain constant and that there are nocorrelations between interest rates and other risk variables. When actual interest rates go beyond
the reasonably estimated range, it could have a greater impact on profit or loss compared to theestimated amount.
③ Liquidity risk management related to financing
The Group manages liquidity risks through ALM to implement timely cash management,
diversify financing methods, obtain commitment lines from multiple financial institutions, andbalance short-term and long-term borrowings in consideration of market forces.
⑷

Supplementary explanation of matters concerning fair value of financial instruments
The fair values of financial instruments include values based on quoted market prices and also
include reasonably estimated values in case there are no quoted market prices. Since certain
assumptions are used in the calculation of such values, the values may differ if different
assumptions are used. In addition, the contract amounts of derivative transactions in "2. Fair Valueof Financial Instruments" do not indicate the market risk associated with derivative transactions.

2. MATTERS RELATED TO THE FAIR VALUE OF FINANCIAL INSTRUMENTS
Classification based on fair value hierarchy
The Group analyses financial assets and financial liabilities measured at fair value or those whose
fair value is disclosed in the notes. The following shows the classification of fair value from Level
1 to Level 3 based on the fair value hierarchy.

The fair value calculation does not incorporate future interest repayments.
(b) Finance lease receivables
The fair value of finance lease receivables is determined by estimating future cash flows of theprincipal and interests arising from respective lease periods and subtracting debtor’s credit risk,
which is then discounted using a risk-free market rate.
3) Operational investment securities and investment securities
The fair value of operational investment securities and investment securities is determined as follows:
listed stocks are valued at prices on the stock exchanges; bonds are valued at prices on the exchange
markets or information provided by counterpart financial institutions, or at prices that are reasonably
calculated based on the value of underlying assets; and investment trusts are based on the disclosed
net asset value. The fair value of investments in limited liability investment partnerships and similar
partnerships is deemed to be the amount proportionate to the Group’s share of equity interests, which
is determined based on the fair value of assets belonging to the partnership as long as they can be fairvalued. The fair value of unlisted stocks is calculated by using valuation techniques based on
discounted cash flow, transactions and the market price of comparable companies. When determining
the fair value of unlisted stocks, unobservable inputs, such as weighted-average cost of capital, priceearnings ratio, and price-book value ratio, are used.

Level 1:

Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2:

Fair value, other than Level 1, that is determined by directly or indirectly using theobservable price4) Other financial assets
Derivatives and short-term investments, as financial assets or liabilities measured at fair value throughprofit or loss, are calculated based on prices quoted by counterparty financial institutions. Financial
assets other than derivatives and short-term investments are stated at that carrying amount since theseare settled in a short period of time and the carrying amount approximates the fair value.

Level 3:

Fair value determined by using valuation techniques that incorporate unobservable
inputsLiabilities

The levels under the fair value hierarchy are defined as follows:⑴ Fair Value Calculation Methodology
The fair value of financial instruments is calculated as follows:
Assets1)that the carrying amount approximates the fair value based on expected repayment periods andinterest rate terms.

Cash and cash equivalents
As cash and cash equivalents have short maturities, and the carrying amount approximates the fairvalue, the amounts are stated at that carrying amount.

2) Trade and other receivables(a) Accounts receivable – installment
Accounts receivable – installment with variable interest rates reflect market interest rates in the
short term and are stated at carrying amount given that the carrying amount approximates the fairvalue, unless the credit status of debtors changes significantly in later periods. In contrast, the fairvalue is determined for accounts receivable – installment with fixed interest rates by discounting
credit risk-adjusted future cash flows from the group of financial assets classified by the type ofloans and maturity terms, using a risk-free market interest rate. The fair value of certain delinquent
receivables is measured by deducting the estimated amount of loss allowance from the carrying
amount of receivables at the end of the reporting period, assuming that the calculated amountapproximates the fair value.
The fair value of certain receivables without a due date but with other limitations, such as limiting
the loan amount to the value of collateralized asset, is measured at the carrying amount, assuming- 25 -

1) Trade and other payables
Trade and other payables are stated at carrying amount as the carrying amount approximates the fairvalue due to the short settlement period.
2) Bonds and borrowings(a) Short-term loans payable
Short-term loans payable are stated at the carrying amount as the carrying amount approximates thefair value due to the short settlement period.
(b) Commercial papers
Commercial papers are stated at the carrying amount as the carrying amount approximates the fairvalue due to the short settlement period.
(c) Long-term loans payable
Long-term loans payable with variable interest rates only take a change in credit spread into accountas variable interest rates reflect market interest rates in a short period. The current credit spread isdetermined by referring to a credit spread that would be offered by financial institutions if the Group
were to newly obtain finance with similar terms and conditions for the average remaining maturity
for the outstanding borrowings. To calculate the difference between the carrying amount and thefair value, the Group calculates the fair value by first compartmentalizing the differences of interest
arising from fluctuation of the credit spread by certain period of time, and then discounting them at
risk-free market interest rates corresponding to each period of time. The fair value of long-termloans payable with fixed interest rates is determined by discounting the aggregate amount ofprincipal and interest of the long-term loans compartmentalized by certain periods of time at interest- 26 -

rates that would be offered for similar borrowings.

(2)

Financial instruments measured at fair value
Financial instruments measured at fair value and the breakdown by level of the fair value hierarchy are
as follows:(d) Bonds
The fair value of public offering bonds issued by the Company is measured based on the market
price, which is the Reference Statistical Prices (Yields) for Over-the-Counter Bond Transactions
issued by the Japan Securities Dealers Association. As private placement bonds issued by theCompany are those subscribed privately by its main banks, the fair value is calculated in the same
way as described in “(c) Long-term loans payable.”

AssetsMeasured at fair value throughprofit or loss
Trade and other receivables
Operational investment
securities
Investment securities
Other financial assets
Equity instruments measured atfair value through othercomprehensive income
Investment securities
Debt instruments measured atfair value through othercomprehensive income
Trade and other receivables
Total
Liabilities
Measured at fair value throughprofit or loss
Other financial liabilities
Total(e) Long-term loans payable under securitized borrowings
Long-term loans payable under securitized borrowings will not be affected by ups and downs in the
Company’s creditworthiness; therefore, the fair value measurement of such payables only takes into
account changes in market interest rates. The fair value of Long-term loans payable under
securitized borrowings is determined by discounting the aggregate amount of principal and interestsof the borrowings compartmentalized by certain periods of time at interest rates that would beoffered for similar borrowings.
3) Other financial liabilities
In regard to derivatives, they are stated in "Assets 4) Other financial assets". For liabilities other thanderivatives, since these are settled in a short period of time, the carrying amount approximates thefair value, and is therefore stated at that carrying amount.
4) Financial guarantee liabilities
The fair value of financial guarantee liabilities is determined by discounting future cash outflows forguarantees to be provided under financial guarantee contracts, which is adjusted by debtor’s credit
risk.
The amount of financial guarantee contracts classified as contingent liabilities is ¥654,395 million(U.S. $4,900,369 thousand). The liability amount recognized in the consolidated statement offinancial position is ¥7,875 million (U.S. $58,976 thousand) and the fair value is ¥23,257 million(U.S. $174,161 thousand) (asset).

AssetsMeasured at fair value throughprofit or loss
Trade and other receivables
Operational investment
securities
Investment securities
Other financial assets
Equity instruments measured atfair value through othercomprehensive income
Investment securities
Debt instruments measured atfair value through othercomprehensive income
Trade and other receivables
Total
Liabilities
Measured at fair value throughprofit or loss
Other financial liabilities
Total

(3)

Level 1

Level 2

(Millions of yen)
Total

Level 3¥–

¥15,171¥–¥15,171–70

62,45062,521

–
–

4,047
3,250

20,910–24,9573,250

42,6586,029

749

49,437–42,658–28,5692,656
86,766

2,656
157,995

–
¥–

2,616
¥2,616–¥–2,616¥2,616

Level 1

Level 2$–

Level 3(Thousands of U.S. dollars)
Total$113,610
530$–
467,651$113,610
468,181––30,30624,344

156,584–

186,890
24,344319,445

45,1505,612

370,208–
319,445–
213,942

19,894
649,742

19,894
1,183,130–$–

19,590$19,590–$–

19,590$19,590–

Quantitative information on financial instruments classified as Level 3
Significant unobservable inputs used to measure the fair value of financial instruments classified as
Level 3 are as follows:- 27 -- 28 -

Measured at fair value throughprofit or loss
Operational investment
securities

Investment securities

Fair value(Millions ofyen)

Fair value(Thousands of
U.S. dollars)¥56,090$420,028

19,968

149,530

2,656

19,894

Measured at fair value throughother comprehensive income
Trade and other receivables

Valuationtechniques

Unobservable
inputsCapitalization
3.2% – 5.2%
rate––
weighted
3.65% –
Discounted cash
average cost of
10.31%
flow
capital (WACC)
price-earnings
10.6 – 23.6
ratio (PER)
Market prices ofcomparable
price bookcompanies
value ratio
0.9 – 2.2
(PBR)
Net asset value––
Discounted cashflow
Net asset value

2.98% –
12.17%–

Discount rate

(5)

Reconciliation of financial instruments classified as Level 3 from the beginning to the end of the period(Millions of yen)Total
¥72,935
8,933
8,934
△1
19,896△15,365△96
462
86,766

Total

Valuation processes
Valuations and procedures to determine the fair value of financial instruments classified as Level 3
are undertaken by the Group’s independent administrative division, which is responsible forregularly checking the details of investees’ businesses, the availability of their business plans, andcomparable listed companies to determine whether fair value measurements, including valuation
models, are appropriate.

The reconciliation of financial instruments measured at fair value classified as Level 3 is as follows:
Financial assets measured Financial assets measured
at fair value through profit at fair value through otheror loss
comprehensive income
Balance at beginning of period¥69,495¥3,439Total gains and losses
8,915
18
Profit or loss (Note 1)
8,915
19
Other comprehensive income–△1
Purchases
19,746150△15,163△201
Sales
Transfer from Level 3 (Note 2)△96–
Others462–
Balance at end of period
83,3603,406
Change in unrealized gains orlosses for the period included in
△169
5,347
profit or loss for assets held at
the end of the reporting period(Note 1)(Thousands of U.S. dollars)

Balance at beginning of$520,410$25,755$546,165
periodTotal gains and losses
66,760138
66,898
Profit or loss (Note 1)
66,760148
66,908Other comprehensive△9△9–
incomePurchases
147,871
1,123
148,994
Sales△113,548△1,510△115,059
Transfer from Level 3
△723
–
△723
(Note 2)
Other
3,465
–
3,465
Balance at end of period
624,235
25,506
649,742
Change in unrealized gains
or losses for the period
40,045△1,27038,775included in profit or loss for
assets held at the end of thereporting period (Note 1)(Notes) 1. The amounts are included in “Revenue from the payment business,” “Revenue from the financebusiness,” “Revenue from the real estate-related business,” “Other income,” as well as “Impairment
losses on financial assets” and “Other expenses” per the consolidated statement of income.
2. The transfer from Level 3 is due to the availability of observable data as a result of the listing.

Capitalization
methodNet asset value

Investment securities
749
5,612
–
Total
¥79,465$595,065(Notes) 1. Operational investment securities are mainly composed of investments in funds for real estate.
2. Investment securities are mainly composed of unlisted stocks and investments in funds for unlisted
stocks.
3. In addition to the valuation techniques in the table above, some issues are measured by the transaction
case method, etc.

(4)Financial assets measured Financial assets measured at
at fair value through profit
fair value through otheror loss
comprehensive income

Range

(6)

Sensitivity analysis of fair value measurement classified as Level 3
Fair value measurements classified as Level 3 are conducted using valuation techniques based on
inputs, such as prices and rates, whose fair values are not observable in the market. The following
sensitivity analysis shows the effect on profit or loss and other comprehensive income for changes
in unobservable inputs within a reasonably possible range, which are used to measure the fair valueof financial assets classified as Level 3 in the consolidated statement of financial position.
Sensitivity analysis is conducted by taking into account the type of financial instruments and market
conditions at the time of analysis. Changes in significant assumptions for each valuation technique
are set as follows:
・ Capitalization method: Capitalization rate changes within the range of plus/minus 0.5%
・ Discounted cash flow method: WACC changes within the range of plus/minus 1%

5,178

・ Market price of comparable companies: PBR and PER change within the range of plus/minus 0.1
and plus/minus 1.0, respectively
When fair values of operational investment securities, investment securities, and trade and otherreceivables classified as Level 3 are measured through a valuation technique other than the above
using reasonably possible alternative assumptions for unobservable inputs, such fair values would not
be included in the table below if the change in fair value is not material.

- 29 -- 30 -

Total fair value
Measured at fair value
through profit or loss
Operational investment
securities
Investment securities

Impact on profit or loss
FavorablechangesUnfavorable
changes(Millions of yen)
Impact on other comprehensive
incomeFavorable
Unfavorable
changeschanges¥6,503¥2,387¥ △1,867

¥–

¥–

7,815

1,374

△1,035––(NOTES TO INVESTMENT PROPERTY)
1. STATUS OF INVESTMENT PROPERTYThe Company and some of its consolidated subsidiaries have investment property in Tokyo and otherareas.
2. FAIR VALUE OF INVESTMENT PROPERTY
Millions of yen

Total fair value
Measured at fair value
through profit or loss
Operational investment
securities
Investment securities(7)

Impact on profit or loss
FavorablechangesUnfavorable
changes(Thousands of U.S. dollars)
Impact on other comprehensive
incomeFavorable
Unfavorable
changeschangesThousands of U.S. dollars¥116,612¥150,146

Carrying amount
Fair value（Note）⒈The carrying amount recorded in the consolidated statement of financial position is acquisition cost lessaccumulated depreciation and accumulated impairment losses.

⒉Fair value at the end of the period is mainly determined by the Group, which refers to the Real Estate Appraisal

Standard (and the appraisal value is adjusted using indicators as necessary).

$48,700$17,878$△13,981$–$–

58,525

10,295△7,751––(NOTES TO REVENUE RECOGNITION)
1. BREAKDOWN OF REVENUE
The breakdown of revenue recognized from contracts with customers and other sources is as follows:

Financial instruments that are not measured at fair value
Fair value of financial instruments that are not measured at fair value and the fair value hierarchy bylevel is as follows. Financial instruments whose carrying amounts approximate fair value are notincluded in the table below.

Level 1

Level 2

Fair value
Level 3

Total

(Millions of yen)
Total carrying
amountAssetsTrade and other receivables¥–¥1,926,471¥1,102,371¥3,028,843¥2,972,690

Total

–

1,926,471

1,102,371

3,028,843

2,972,690

Liabilities(Millions of yen)

Income from the payment business

Revenue recognizedfrom contracts withcustomers

Revenue recognizedfrom other sources–

Bonds and borrowings
Total

–

△23,257△23,257¥139,770¥89,566¥229,336–

12,04812,048

Income from the finance business
Revenue from the real estate-related
business
Revenue from the entertainment business–

50,75450,75452,492

6,222

58,71530,807–30,807

–

877

877

¥223,070¥159,470¥382,540

Revenue recognizedfrom contracts withcustomers

Revenue recognizedfrom other sources–

2,796,043–

2,796,043

2,805,175¥2,796,043¥ △23,257¥2,772,785¥2,813,051(Thousands of U.S. dollars)
Total carrying
amountTotal

Fair value
Level 2
Level 3

Level 1

Total

7,875

¥–

AssetsTrade and other receivables$–$14,426,179$8,254,992$22,681,172$22,260,677

Total

–

14,426,179

8,254,992

22,681,172

22,260,677(Thousands of U.S. dollars)

Income from the payment business

Financial guarantee
liabilities (assets)–

Bonds and borrowings

–
$–

–

△174,161△174,161

58,976

20,937,870–

20,937,870

21,006,256$20,937,870$△174,161$20,763,709$21,065,232- 31 -

Total$1,046,652$670,711

Income from the lease business–

90,22390,223

Income from the finance business
Revenue from the real estate-related
business
Revenue from the entertainment business–

380,070

380,070

393,085

46,597

439,683

230,702–230,702

–

6,571

6,571

$1,670,441$1,194,174$2,864,615

Finance income

Liabilities

Total

Income from the lease business

Finance income

Financial guarantee
liabilities (assets)

Total$873,236$1,124,353

Total$1,717,364

Revenue recognized from other sources includes interest and dividend income based on IFRS 9 andlease income based on IFRS 16.

- 32 -

Interest and dividend income is recognized as revenue in accordance with IFRS 9, and income from theLease business, and also from real estate rentals in the Real estate-related business, is recognized asrevenue in accordance with IFRS 16. Revenue recognized in accordance with IFRS 9 amounted to¥144,282 million (U.S. $1,080,447 thousand) for FY2022. Revenue recognized in accordance with IFRS
16 amounted to ¥15,187 million (U.S. $113,727 thousand) for FY2022.
2. CONTRACT BALANCE
The breakdown of contract balances is as follows:
Thousands of
U.S. dollars

Millions of yen
Beginning of
period(April 1, 2022)

End ofperiod(March 31, 2023)

Beginning of
period(April 1, 2022)

End ofperiod(March 31, 2023)¥103,824¥110,342$777,475$826,286

8,437

8,651

63,18464,784

Receivables arising fromcontracts with customers
Trade and other receivables
Contract liabilities

Contract liabilities mainly represent a deferred portion of annual membership fees. The amounts ofrevenue recognized in FY2022 that was included in the beginning balance of contract liabilities were
¥6,342 million (U.S. $47,495 thousand).
None of the revenue recognized in FY2022 arose from performance obligations satisfied (or partiallysatisfied) in previous periods.
3.

TRANSACTION PRICE ALLOCATED TO REMAINING PERFORMANCE OBLIGATIONSThe Group has adopted a practical expedient and omitted information on remaining performanceobligations, given that there were no significant transactions for which an individual estimatedcontract period exceeds one year.

(NOTES TO EARNINGS PER SHARE)⒈ EQUITY ATTRIBUTABLE TO OWNERS (Yen)
OF PARENT PER SHARE*U.S. dollars⒉ BASIC EARNINGS PER SHARE(Yen)*U.S. dollars¥3,827.22$28.66¥278.92$2.09(NOTES TO SIGNIFICANT SUBSEQUENT EVENTS)
On April 17, 2023, the Group sold its interest in a silent partnership, which was included in "Assets held
for sale" in the consolidated statement of financial position for the fiscal year ended March 31, 2023. It is
expected to have a gain of ¥3,920 million (U.S. $29,354 thousand) from this sale and will be recorded asother income in the consolidated statement of income for the fiscal year ending March 2024.

- 33 -

(TRANSLATION)(TRANSLATION)
INDEPENDENT AUDITOR'S REPORTMay 12, 2023

In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.

To the Board of Directors of
Credit Saison Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Engagement Partner,
Certified Public Accountant:
Mitsuo Kimura
Designated Engagement Partner,
Certified Public Accountant:
Takahisa Kudo
OpinionPursuant to the fourth paragraph of Article 444 of the Companies Act, we have audited the consolidated
financial statements of Credit Saison Co., Ltd. and its consolidated subsidiaries (the "Group"), namely, theconsolidated statement of financial position as of March 31, 2023, and the consolidated statement ofincome and consolidated statement of changes in equity for the fiscal year from April 1, 2022 to March 31,
2023, and the related notes.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as of March 31, 2023, and its consolidated financial
performance for the year then ended in accordance with accounting standards prescribed pursuant to theprovisions of the second sentence of the first paragraph of Article 120 of the Ordinance on Company
Accounting that omit a part of the disclosures required under International Financial Reporting Standards.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our otherethical responsibilities as auditors. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Other Information
Management is responsible for the other information. Audit & Supervisory Board members and the Audit &Supervisory Board are responsible for overseeing the Directors' execution of duties relating to the designand operating effectiveness of the controls over the other information. The other information comprises theinformation included in the Business Report and the accompanying supplemental schedules.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.

-1-

Responsibilities of Management and Audit & Supervisory Board Members and the Audit &Supervisory Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting standards prescribed pursuant to the provisions of the second
sentence of the first paragraph of Article 120 of the Ordinance on Company Accounting that omit a part ofthe disclosures required under International Financial Reporting Standards, and for such internal control as
management determines is necessary to enable the preparation of consolidated financial statements thatare free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting standards prescribed pursuant to the provisions of the second sentence of thefirst paragraph of Article 120 of the Ordinance on Company Accounting that omit a part of the disclosuresrequired under International Financial Reporting Standards.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the
Directors' execution of duties relating to the design and operating effectiveness of the controls over theGroup's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's reportthat includes our opinion. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks. The procedures
selected depend on the auditor's judgment. In addition, we obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion.
• Obtain, when performing risk assessment procedures, an understanding of internal control relevant tothe audit in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group's ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor's report to therelated disclosures in the consolidated financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However, future events or conditions may cause the Group to cease to continue as agoing concern.

-2-

(TRANSLATION)• Evaluate whether the overall presentation and disclosures of the consolidated financial statements are inaccordance with accounting standards prescribed pursuant to the provisions of the second sentence ofthe first paragraph of Article 120 of the Ordinance on Company Accounting that omit a part of thedisclosures required under International Financial Reporting Standards, as well as the overall
presentation, structure and content of the consolidated financial statements, including the disclosures,and whether the consolidated financial statements represent the underlying transactions and events in amanner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We areresponsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding,among other matters, the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statementthat we have complied with relevant ethical requirements regarding independence, and communicate withthem all relationships and other matters that may reasonably be thought to bear on our independence, andwhere applicable, related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required tobe disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Readers of Independent Auditor's Report
This is an English translation of the independent auditor's report as required by the Companies Act ofJapan for the conveniences of the reader. The other information in "the Business Report and theaccompanying supplemental schedules" referred to in the "Other Information" section of this English
translation is not translated.

-3-