CREDIT SAISONINTEGRATEDREPORT 2021

Creating a Culture

Creating Lifestyles

It has always been the case.

Credit Saison has developed innovative services in thecredit card industry, such as Japan’s ﬁrst signature-lesspayments and Eikyufumetsu Points.
We are living in an era of rapid change in which
everything changes in 30 years.
Conversely, we do not know where the potential lies. It isnecessary to have an attitude of dreaming big and taking
on challenges.
Companies that are unable to continue to innovate willstop growing and eventually decline.
We have continued to grow, to the point
we can now rely on 36 million cardholders,
due to the thorough pursuit ofcustomer convenience andconvention-shattering innovation.

A disadvantaged business environment,a variety of constraints, adversity, crises

Representative, Chairman and CEO

Hiroshi Rinno
Surpass our competition

Staying ahead of the times

Response to change

No. 1 in the industry in terms offour card indicators
Humanism

Creative destruction
Saison Group founder

Seiji Tsutsumi

Innovation

Diverse human resources
Equal pay for equal work

Having adopted a policy of exiting mass culture, Tsutsumi
succeeded in developing retail, hotel, and resort businesses.
He created a new consumer culture by popularizing the DC brand.
In the meantime, he was also active as a writer and poet under the
pen name Takashi Tsujii.
1Management
Philosophy

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

Creating a future

Digital

And Now,
Ushering in Our Second Foundation

Promoting digitalization, while valuing
the real services that are our strength;achieving customer success by providing
services that are close to the customer.

Transforming Ourselves
into a Comprehensive Life Service
Corporate Group

Director,
Senior Managing Executive Ofﬁcer and CTO, CIO
Company-wide promotions of DX strategies
Head of Digital Innovation Division,
In charge of IT Strategy Dept., Strategic Planning Dept.,
General Manager, IT Strategy Dept., Technology Center

The impact of the COVID-19 pandemic on society has
been severe, but, looking at the current situation from amanagement perspective, we see a great opportunity tointroduce big changes. All our current practices and ideas
are rooted in the past, and organizations that are unable
to reinvent themselves are doomed to a fast decline.
It is because these are difﬁcult times that the switch toaggressive business management must come soon.
Companies with a single business model tend to have aweak management base. To diversify our businessmodels to overcome the current situation, we aretargeting our own transformation from a corporate
entity centered on the payment business to acomprehensive life services corporate group by
leveraging the strengths of the entire group.

Kazutoshi Ono

GlobalUnder the themes of FinTech andﬁnancial inclusion, we will accelerate businessdevelopment from Southeast and South Asia
to other parts of the world.

Representative, Executive President and COO
Head of Public Relations Ofﬁce,
Branding Strategy Dept.,
Payment Business Division,
Sales Development Division,
General Manager, Payment Business Division

Senior Managing Executive Ofﬁcer
Head of Global Business Division,
General Manager, Global Business Division,
In charge of India business,being assigned to Credit Saison Asia Paciﬁc Pte. Ltd.

Katsumi Mizuno

Innovative

Kosuke Mori
2

Neo Finance
Company in Asia
Creating new value through innovation

The concept behind our logo
About the Company’s corporate colors
Saison Blue
Symbolizing people’s happinessand aspirations
Saison Green
Symbolizing trust, peace of mind,
culture and innovation

3

Creating a Culture

Creating Lifestyles

4 Contents/Editorial Policy
5 A History of Reforms andChallenges

Creating a Future

7 Message from the CEO

39 Responses to Risks/Opportunities

11 Message from the COO

41 Credit Saison’s ESG Management

64 Corporate Information/Investor
Relations Information

15 Value Creation Stories

42 Human Resources

65 11-Year Summary of Selected
Financial Data

19 Progress of the Vision andMedium-term Management Plans

47 Environment

66 Segment Highlights

48 Partnerships

67 Major Business Sales Bases

50 Regional Development

68 Organization Chart

51 Social Contribution

69 List of Affiliated Companies

52 Message from the Outside
Directors

70 Responsible Officer’s
Guarantee/Editor’s Postscript

21 Management Strategy
22 Business Strategy
24 CSDX Strategy

Message from the Director in charge

CONTENTS

Data Section

27 Customer Strategy
28 Global Strategy

Message from the Executive Officer
in charge

32 Group Strategy
33 Human Resource Strategy

Message from the Executive Officer
in charge

56 Corporate Governance
61 Board of Directors/Audit &Supervisory Board Members/
Executive Officers
63 Skills and Signature Strengthsof Directors, Audit &Supervisory Board Members,
and Executive Officers

35 Financial Capital Strategy

Message from 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 , the Credit Saison Integrated Report 2021 contains non-financial information thatcovers a wide range of environmental, social, and governance (ESG), as well as other fields. This report is intended to help our many stakeholders to better understand theCompany’s efforts to create value over the medium and long term and ensure its sustainable growth.

Forward-looking
Statements

This report contains information including details of the Company’s management plans, projections, strategies, and estimates that are not historical facts. This information reflects thebeliefs 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 business environment, and other forward-looking estimates might differ materially from actual results.

Reporting Period

This Report covers the 2020 fiscal year (FY2020: April 1, 2020, to March 31, 2021). Some activities in FY2021 are described as well.

4

A History of Reforms and Challenges

Creating Culture

Since its establishment as a department store that sold products on a monthly installment basis,
Credit Saison has provided a variety of services tailored to the changing times while expanding its business.

Acceleration of digitalization

2021

CSDX strategy announced

Finance business begun in earnest

Operating revenues

2009(Billions of yen)

400

Started handling “Flat 35 Loans”

2013

Released a comprehensive living service portalsite to transform ourselves into a comprehensive
life service corporate group

Started handling Saison Asset Formation Loans

2002

Started Eikyufumetsu Points, which never expire

300

2017

200

Acceleration of global business

Abolished employee
classiﬁcations; introduced
a common HR system underwhich all employees are
on indeﬁnite-term contracts

2014

Global business begun in earnest
Singapore base commences operations

Conversion to payment businessStarted Point Investment
Service for long-term
investment using
Eikyufumetsu Points

1982

Started the issuance of the no annual membership fee Seibu Card
Started instant credit screening, instant card issuance

100

2016

Started a nationwide network of Saison Counters
Started the lease business

1990

1951

Company establishedas Midoriya Co., Ltd.

1985

Introduced Japan’sﬁrst signature-less payments

Started the credit guarantee business

0
1951

1980

1997

Started the issuance of the SAISON American Express® Card

1990

2000

2010

2020

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

5

A History of Reforms and Challenges

From Establishment to the Early

2000s

Period of Business Expansion
Established membership base

The company that is today Credit Saison wasestablished in May 1951 as Midoriya Co., Ltd., adepartment store that sold products on a monthly
installment basis. Having joined the Seibu
Distribution Group (later the Saison Group) due toa deterioration in its management in the 1970s, theCompany shifted to being a credit card company.
Since changing the company name to Seibu
Credit Co., Ltd., in 1980, and later to Credit Saison
Co., Ltd., in 1989, the Company has launched asuccession of customer-oriented services thathave broken with generally accepted industry
practices and traditions, including instant credit
screening, instant card issuance, signatureless payments, and Eikyufumetsu Points thatnever expire. In 2002, Credit Saison achieved
the top position in the industry in terms offour indicators: the number of cards issued
annually, total cardholding membership, thenumber of cards in operation annually, andannual card transaction volume.
From a period of high economic
growth to the bubble economy

From the Early

2000s to 2010

From

Shift in Business Composition

Global Business Begun in Earnest

Expanded the fee business as a newrevenue stream

Shift to new business model

Aiming to be the No. 1 company in the
cashless payment market, we are promoting
collaboration management with our own
products and services and alliance partners.
At the same time, we are positioning the
global business as a future revenue baseand entering the retail financial business inline with each country, centered on ASEAN.
Using these products and services as tools,
we have established a complex sales systemthat turns corporations and individuals
into customers. As a non-bank capable ofresponding to changes, we are shifting to abusiness model that addresses the various
payment and financial needs of companies
and provides cashless functions for all
individuals and corporations in Japan andelsewhere in Asia.

Since 2002, in accordance with the active
reorganization of the credit card industry,
we have been aggressively forming
strategic alliances, strengthening marketingfrom both card development and usage
activation aspects, and promoting efforts
to improve added value for cards. In 2006,
the Company merged with UC Card Co.,
Ltd. (UC member operating company),
and maximized the utilization of the
management resources cultivated in its
card business. In addition to strengthening
each business, such as in leasing, credit
guarantee, and finance, we worked to
expand the fee business as a new revenue
stream, for example, by establishing theindustry’s first card processing company.

Collapse of the bubble economy/
Heisei era recession

2011

Global financial crisis

Abenomics

Historical Context

6

From

2019

Intensification to Become a
Leading-edge Service Company

Facing challenges toward thecreation of new value

We are promoting a Medium-termManagement Plan that has becoming
a Neo Finance Company in Asia as its
management vision. By developing
solutions that cover the life cycles ofindividuals and corporations, we are facing
challenges as a finance company advancing
with customers for 50 years. By means of1) a payment business growth strategy andstructural reform, 2) further expansion of
the finance business as a non-bank, and 3)
expansion of our global business revenue
base with a view to the future, the Company
is working on sustainable growth as a
general non-bank.

Tokyo Olympics

Message from the CEO

Creating Lifestyles

Giving young employees
a chance and tirelessly
driving innovation

Hiroshi Rinno

Representative, Chairman and CEO

7

Message from the CEO

Introduction
We can probably now say that the COVID-19 pandemic as
driven by the Delta variant is rapidly approaching its end
here in Japan. In 2020, I mentioned that the significant
impact on society brought about by the pandemic
was also a superb opportunity for companies to drive
innovation. Even now that we have lived with COVID-19
for more than a year, I still believe that, as driven by
the pandemic, society has had a great opportunity tocompletely transform itself from where it stood in 2020.
Of course, we also face many impasses during such majortransformations. The question remains, however, how will
we seize upon even greater opportunities and the chance
to succeed. As far as Credit Saison is concerned, I feel that
we are now embarking upon a second founding.

The source of growth is the power to drive innovation
Looking back over the years since our initial founding,it seems to me that Credit Saison has primarily grownbecause of our tireless drive to innovate in ways that help
improve convenience for our customers. During this time,
we have released countless new concepts that have received
the backing of our customers and that have attracted many
card members centered on women, who make up thecore of shoppers, including credit cards for which credit
screening, issuance, and use are instantaneous, and that are
free from annual membership fees, and later Eikyufumetsu
Points, which never expire, and signature-less payments.
The ability to drive this kind of innovation without being
concerned about breaking some taboo of the industry is,even to this day, a major strength of Credit Saison.
During the years between joining Seibu Department
Stores in 1965 and my transfer to Credit Saison in 1982,

I observed the management style of Seiji Tsutsumi, whobuilt up Seibu Department Stores to become the No. 1 store
of its kind in Japan, from up close. One of the things I will
never forget are the details of the talks that Mr. Tsutsumi
often made during the executive meetings a few years after
I joined the company. Giving off an overwhelming energy
like that of the sun, the words that would emerge from his
mouth described the management idea of “customer-first,”
the organizational concept of “management republicanism,”and the organizational culture of “humanism.” He would
then go on to espouse the philosophies of “genderequality,” “the uselessness of educational backgrounds,”“meritocracy,” and “not implementing a seniority system.”
For those of you who are familiar with the environment atthat time, you can probably imagine just how progressive
Mr. Tsutsumi’s speeches were and the vivid impression theyleft upon me. Despite launching Seibu Department Storesin Ikebukuro, a disadvantageous location for this businessat the time, Mr. Tsutsumi transformed this experience ofadversity into an advantage, and later went on to drive
innovations that formed the core of a “culture,” to create a
new “culture” in Ikebukuro, and to significantly change theworld. Even before the term “creative destruction” cameinto being, Mr. Tsutsumi served as a manager who took the
initiative in putting this concept into practice. I have learned
much from this management style of Mr. Tsutsumi, and as amanager, I have pioneered a path that has enabled Credit
Saison to grow while replaying this process of creative
destruction in the credit card industry.

As just one of many members of society, companies
must maintain a sense of impending crisis
As part of our second founding, Credit Saison must
continue to achieve growth by leveraging our ability todrive innovation. To do so, we will continue to hold a sense8

of impending crisis and not become bound by the manysuccessful experiences of our past. Lacking a sense ofimpending crisis weakens the competitive fervor that is
critical for companies and drains them of their strength todrive innovation. What waits beyond is only defeat, causedby overlooking those opportunities and the chance to be
victorious that were before their very eyes. Coming out on
top is the essence of a company, so defeat is something we
can never accept.
The world is now starting to shift its way of thinking
from “shareholder capitalism” to “stakeholder capitalism.”
In other words, the very essence of competition—for whomand how we compete—is changing. One might want to thinkthat in the pursuit of economic gains, corporations are themost important presence in society. But society is made upof many different organizations beyond just corporations,
including educational institutions and local governments,
and we must never forget that corporations are not somekind of special presence among these. As a memberof society, an organization must fulfill its responsibilities
and obligations in the same way as other entities. Basedon this way of thinking, it is clear that it is a mistake forcorporations to prioritize greater profits for shareholders
and to be satisfied with simply triumphingin profit competition and pleasing theirshareholders and investors. Whatabout their customers, partners, andemployees? Corporations mustalso drive innovation to create
value for these stakeholders
and thereby contribute tosociety. And only in doing

Message from the CEO

so should they bring profits to shareholders. I believe thisis the form for which corporations should aspire, and wehave therefore stated our Management Philosophy as: “Wewill fulfill our corporate social responsibility by striving tomeet the expectations of all of our customers, shareholders,and business partners. We will compete successfully in themarket by promoting our three shared values: practicalimplementation of the principles of customer satisfaction
as a leading-edge service company; mutual respect forour interests and those of our business partners; anddeveloping a corporate culture of creative innovation.”for the remaining 80%. It is unlikely that people can fully
enjoy themselves by only shopping in the virtual world.
Credit Saison has beat out our competition by expanding
membership centered on house cards for large-scale allied
retailers and banks, so in terms of real versus virtual, ourstrengths currently lie in the real world. Going forward,
however, we intend to strengthen our position in the virtualworld beyond what it is today, and thereby further expand
the economic sphere of the Credit Saison Group.

Toward transforming ourselves into a comprehensive
life service corporate group

To achieve the vision for our second founding, the threebasic concepts of “Innovative,” “Digital,” and “Global”
will become important. We no longer can tell whether
innovation will arise from employees, partners, or
customers. Which is why we must collect ideas, opinions,and data from as wide a range as possible and makemanagement decisions based on these. In other words,
everyone must be a participant. And all these participants
must be flush with diversity. This diversity is so importantthat you could even say it controls the fate of the Company.
For example, those of our employees who enter theCompany through regular recruitment and who are trained
within the Company establish a strong sense of loyalty to
the Company, yet it is difficult for those who have only everbeen part of one organization to emerge as mavericks.
Therefore, Credit Saison aggressively recruits mid-career
professionals who have accumulated experience outside
the Company to breathe fresh air into the organization.
When these human resources mix with dyed-in-the-wool
employees, the organization maintains its potential to easily
drive innovation. This is one of the specific ways in which werealize diversity.
In terms of digital, we formulated the “CSDX Strategy”
in September 2021. Under the direction of Kazutoshi Ono

As part of our second founding that we will soon welcome,we have set a new vision of “transforming ourselves into
a comprehensive life service corporate group: Achieving
customer success through the fusion of the real and digitalworlds.” Under this vision, the entire Group will work toraise the level of customer satisfaction by responding
more thoughtfully, appropriately, and swiftly than any othercompany to every problem faced by consumers as partof their lives. This is our vision for the comprehensive life
service corporate group to which we aspire.
Amid the COVID-19 pandemic, the shift to e-commerce,delivery services, and other areas of the virtual world
accelerated, just as department stores and other real-world
businesses struggled. E-commerceis expected to continue growing
and could eventually expand toaccount for 20% of all consumer
spending. Looking at things froma different perspective, however,this also means that the realworld will, of course, still accountThree basic concepts led by young employees

9as CTO, we are leveraging digital technologies to reform
and transform our business and to provide exhilarating
experiences that exceed the expectations of our customers
and employees. This move is intended to build a company
that can lead in the digital era. Moreover, we are turning oursights from Japan, with its unceasing low growth, to the restof the world, and are placing our energies into expansion
in global markets such as Southeast Asia with its young
population and high growth potential. In this area, we will
focus our efforts under the leadership of Kosuke Mori,senior managing executive officer and person in charge ofthe overall global business, from our base in Singapore.
This era of low growth for Japan is unlike its higheconomic growth period, when growth could be expected
as long as one applied the right strategies. In addition
to the right strategies, today personnel who can act
as leaders to implement these strategies possess an
extremely important key to growth. Although it is thepower of younger employees in their early 40s that willlead these digital and global strategies, we have instilled a
meritocracy that does not concern itself with age or lengthof service in order to expand diversity. Mid-career recruits
are also effective in imparting an impending sense of crisis
upon management in that we do not know when they will
leave for another employer. This is important because an
impending sense of crisis is an element that strengthens
competitiveness and drives innovation.

Developing human resources and expanding the
economic sphere through incubation
In working to expand the Group’s economic sphere, oneof the key words is incubation. In the future, we will build
more than 100 companies and increasingly leave their
management up to young employees who volunteer to takethe reins through open recruitment. Even when it is difficult

Message from the CEO

to launch businesses from scratch, we still have the optionof birthing new companies from affiliated companies within
the Credit Saison Group, joint ventures, alliances, and M&As
as a means of developing young employees throughout
the world and expanding our economic sphere. As such, I
hope we can be a company that is supportive in enabling
employees to choose what they do and where they work
entirely on their own and to plan out their own lives. Given
that everyone only has the chance to live their life once, we
intend to nurture a set of values within them that includes
the desire to venture out within a slightly more permissible
range. This is another goal of incubation.
Looking back, I forfeited my vacations to transform themonthly installment sales retailer Midoriya into a credit
card company and spent my days endlessly thinking about
and writing up my ideas for the rebirth of Credit Saison.
I believe the “power of dreams” that is exerted when weare totally absorbed with something gives rise to creativity,
which ultimately drives innovation and can even evolve
us as individuals. This is true whether we are talking about
work, study, or play. The source for the “power of dreams”
is a curiosity that maintains an interest in different things.
Once fully absorbed, studying, working, and playing fuse
together and become nearly equal. And this leads to afulfilling life. It is my hope that those young employees
who raise their hands and volunteer will demonstrate this“power of dreams.”
As one of our new businesses, KURASHINO SAISON
is a company that emerged with its name change in
April 2021 to solve all home-related problems, fromhouse cleaning to building management services andcountermeasures against infectious diseases. Anotherone is the brain health diagnosis test business, in which
we invested in 2019. This business offers approaches tothe problems of the older generations who are familiar
with Saison. This endeavor is already starting to develop
in an impressive direction for a new business, including

receiving interest in an alliance from an overseas company,
something that was completely unexpected during the
COVID-19 pandemic. The success rate of new businesses
is not necessarily high, which is why it is okay to fail. If
the decision to withdraw can be made with confidence,
we can challenge various possibilities through repeatedtrial-and-error. As a company with this capability, we intend
to establish an economic sphere as a comprehensive life
service corporate group around which all manner of life
industries orbit. At the dawn following the establishmentof this economic sphere, we might be able to remove“Credit” from the “Credit Saison Group” name. This
would essentially be the revival of the Saison Group
that collapsed just 10 years after it was first built by Mr.
Tsutsumi. And as the core company of the Saison Group,
Credit Saison will provide financial products to the rest of
the Group. Perhaps it is my intention to try and achieve
what Mr. Tsutsumi was unable to by creating the ultimate
ideal that he had in mind. And then our customers would
feel they could come to our site for help whenever they
have challenges in their lives. It is my hope to emerge asa Group that has earned this kind of backing. To realize
this vision—five or 10 years in the future—we will first makerepeated improvements based on the portal site that welaunched in September 2021.

Producing human resources that can see the true
nature with their own eyes
One area on which I have recently focused is U.S.-China
friction and other international political movements.
Although global is one of the basic concepts for realizing
the vision of our second founding, for the younger
generations to increasingly play a role on the global stage
in the future, I feel it is extremely important for them to go
beyond economics and deepen their understanding of
10political, cultural, philosophical,
and religious affairs on the
ground in countries aroundthe world. They must be able
to face the truth of the different
events now occurring aroundthe world, without being swayedby the overwhelming amounts
of information. They must go todirectly understand, experience,and live local cultures and customs, and seek a fitting
approach under which they can push forward. This is thepath I hope they travel.
In our 2020 integrated report, I mentioned theprofessional shogi player Sota Fujii, and expressed how
excited and impressed I am with the limitless potential
possessed by the younger generation. Over the past year,
Mr. Fujii became the youngest person in history to capture
the shogi triple crown after sweeping the Kisei, Oi, and Eio
titles in succession. Even looking abroad, Shohei Ohtani
has exhibited remarkable success in the United States as a
baseball player. In business, it is difficult to display records
in a visualized format, as can be done for shogi players andathletes. At Credit Saison, however, we intend to continue
providing opportunities for our younger employees toundertake challenges with the aims of producing the Sota
Fujiis and Shohei Ohtanis of the business world.
International society is now being pressured to solve
the three major issues of human rights, disparity, and theenvironment, yet these problems stem from the fact thatsomewhere along the line democratic nations and capitalist
economies became warped. Therefore, we must continuallyquestion the true nature, correct distorted value systems,
and share the right sets of values. In our second founding
and beyond, Credit Saison aims to continue serving as acompany that forever travels this path.
September 2021

Message from the COO

Creating Lifestyles

Promoting digitalization thatleverages the Company’s real
strengths toward becoming a“leading-edge service company
2.0” with a flat organization

Katsumi Mizuno

Representative, Executive President and COO

11

Message from the COO

Q

You were appointed executive president and
COO in March 2021. First, please tell us youraspirations upon taking the position.

When the general public hears the name Credit Saison,
I think that the impression they have of us as a credit cardcompany remains strong. In fact, the Company’s Payment
Business has a history dating back more than 30 years,
but the same business model will not work for decades.
Some 20 years have passed since 2000, when we adopted“a leading-edge service company” in our management
philosophy, and now two new waves, called digitalizationand globalization, are under way in the Company. Looking
at the lifestyles of our customers, they have smartphones
on hand, and their lifestyles have changed to the extent
that they can now receive a variety of services via thosesmartphones. Also, the movement of society toward
digitalization has been further accelerated since last yearby the pandemic.
At a time when both society and the Company
are experiencing major changes, I was appointed tothe post of president. Regarding from now as Credit
Saison’s second founding period, I would like toreview the ways that companies should be, including
their business models, and take on the challenges ofchanging everything. It is, so to speak, “leading-edge
service company 2.0.” With the increasing number ofsenior citizens who possess a high level of digital literacy,

we will further fine tune the strengths of Credit Saison,
which has been providing heartfelt services with a humantouch, while building a range of new, digital technology–
based services during the second founding period. I willbring about major reforms at Credit Saison in the next 5–10
years so that we can reach the stage at which people will
say that “Credit Saison used to be a card company.”Q

How do you view the industry environment inwhich Credit Saison operates?

The movement toward cashless payments is being
accelerated by the COVID-19 pandemic. In addition to the
traditional credit card companies, QR code payments andelectronic money payment providers, and more recently,
deferred payment business operators have appeared, andthe industry is in a state of intense rivalry. In terms of thescale of transaction volume, however, the approximately¥60 trillion of domestic credit card transactions holds
an overwhelming lead over the other forms of cashless
payment. For example, even in the case of QR code
payments, the scale of domestic transactions is said to be¥4 trillion, but if you look at the other side of the payments,
about half of them are tied to credit cards aligned withbank accounts. In that sense, Credit Saison’s primary
competitors have not changed significantly.

Q

Please tell us your retrospective views on
FY2020.

FY2020 was a difficult year for making predictions due tothe repeated issuances of state-of-emergency declarations
during the COVID-19 pandemic. Under such circumstancesat Credit Saison, the Payment Business especially felt theeffects of the pandemic, and the top line in COO messages
12

decreased. In terms of having to wait for the recovery of
the flow of people for the Payment Business to improve, I
recognize that the weakness of the current business modelis that it is easily influenced by the flow of people.
In contrast, in addition to the factors that reduced
operations-related expenses, credit costs decreased
due to the portion suppressed by low consumption, theprogress made with bad debt costs, and cashing andrevolving payments. Although we recorded a special
allowance to prepare for future increases in credit costs, in
FY2020 overall revenue decreased and income increased.
In the coming months, judging from the trends in Europe
and the United States, consumption will likely kick-startif vaccinations progress and behavioral restrictions arerelaxed to some extent. I therefore see a high possibility ofreactionary consumption also occurring.
Globally, business in the three countries that form
the focus of the Company’s efforts—India, Indonesia, andVietnam—was significantly affected by the fourth wave of
COVID-19, albeit at different times. Having been affectedby the fourth wave ahead of the others, stability is already
returning to India. Although there are concerns that thecountry is heading for a fifth wave of COVID-19, if thebusiness environment improves there, I believe that we will
be able to steadily expand our global business.
Amid the pandemic, the value of utilizing digitaltechnology has changed significantly on the customer
side as well. Naturally, these changes will accelerate thepace of the Company’s digitalization process, but at thesame time, we have also worked on a review of our sales
structure to respond swiftly to changes in the market. To
strengthen corporate sales targeting, for example, small
and medium-sized enterprises (SMEs), we promoted theconsolidation of branches, reviewed the organizational
structure under the jurisdiction of the conventional
branch offices, and changed to a nationwide network
system by which the whole of Japan was divided into

Message from the COO

three parts: eastern and western Japan, and Kyushu.
For our employees, this has facilitated the promoting ofwork styles that are not tied to a work system or office,and while increasing the number of business sales bases
deeply rooted in each region on a nationwide basis, wehave also put in place a system that enables efficient sales
activities through horizontal communication.

Q

Please tell us about the management reforms
and strategies in FY2021.

As the second founding period, in FY2021 we will promote
the management reforms stated in our management
vision of “transforming ourselves into a comprehensive
life service corporate group: Achieving customer successthrough the fusion of the real and digital worlds.”
Regarding digital technology, we will work to fusechannels centered on SAISON CARD Digital. In August
2021, we formed an alliance with Jupiter Shop Channel
Co., Ltd. (hereinafter Shop Channel), which is engaged in
TV shopping. While utilizing digital technology to realize
faster payments, we will devise ways to evolve the qualityof services in the new TV media venue for shopping.
In terms of the real world, at points of contact where wecan maximize exciting experiences for our customers, wewill further improve customer convenience, that is, achievecustomer success, by fusing the human touch services inwhich we have confidence with the digital.

Q

To realize your vision, you have adopted threebasic concepts: “Innovative,” “Digital,” and“Global.” Please outline your innovative strategy.

The mainstay of our innovative strategy is the Payment
Business. Previously, the Payment Business has brought
about various innovations that have broken with industry

convention, such as instant credit screening, instant card
issuance, and Eikyufumetsu Points. Although there weretimes when we were affected by, for example, the revisionof the Money Lending Business Act, we have finishedrebuilding our core system and are now working to utilize
digital technology while further evolving our services. The
previously mentioned Shop Channel is one example, but
we will continue to create innovative services centered on
digital technology and promote the shift to digital cards,
including cards affiliated with existing issuers. And while
creating inspirational experiences for customers with
innovative new services, we will also create inspirational
experiences for employees by utilizing digital technology
to streamline operations.

Q

Please give us an overview of your digitalstrategy.

In September 2021, we announced details of our“CSDX Strategy.” We are devising ways to improve theexperiences of both our customers and employees byinternalizing systems. Specifically, as a financial services
provider, we will ensure the stability appropriate for areas
where system failures are not an option, while at the sametime engaging in parallel developments that emphasize
the speed of responding quickly to changes in the times.
One of the purposes of in-house production is totrain talented human resources with digital technology
expertise in-house. In the process of rebuilding the coresystem, which was launched in 2018, we have alreadyexpanded to about 150 digital technology personnel,
but we would like to increase their number to 1,000 by
2024. The Company breaks down the human resources
who possess digital technology expertise into three levels
according to their knowledge and skills related to digitaltechnology and data. We will develop human resources by
13

utilizing not only external human resources, including corehuman resources with digital expertise positioned in theupper echelons, but also in-house recruitment.
Having already overcome what is a rigorous training
program, the first batch of internally recruited participants
have graduated. In this manner, successful steps have beentaken to build a mechanism that started operating from
September. Recruitment for a second course attracted nearly
100 applicants, and I feel that a good cycle is under way.

Q

And how about your global strategy?

Globally, with Singapore serving as a regional
headquarters, we have expanded into eight countries,
mainly in Southeast Asia, including India, Indonesia, thePhilippines, Vietnam, and Thailand. We consider theformat through which to pursue entry and the businessto be developed in each market, including the financial
inclusivity of each market. We then enter the business thatis most likely to be commercially viable. As the personnel
composition is multinational, the global business is averitable mass of diversity.
In India, for example, the Company provides financial
backing for the small-sum financial needs required forMessage from the COO

the construction of school buildings and for the weaving
machines to make sari, the native costume. Having aschool population of 400 million and a shortage of schoolbuildings, in India many children use huts made of piled-up
blocks instead of classrooms. The current situation is thatbank loans are not available for the construction cost ofa school building, which is equivalent to about ¥700,000.
The same applies to a new loom required to weave a sari,which would cost the equivalent of about ¥400,000. Our
local employees find financial needs that can provide a clue
to solving these social issues in each region, then devise
and advance schemes that contribute to the lives of local
people. We have experienced some mistakes overseas in
the past, but tolerating some mistakes is important. The
question is how a failure informs the next project. Thinking
about failures in a thorough manner will lead to success.
To grow our global business into one of our revenue
bases, we are strengthening our business foundation andcontinuing to take on the challenges of new businesses.

nothing will grow. Even if there are shoots that witherand die in the process, I hope in some small way to growbusinesses that go on to make large-flowered blooms fromthe seeds that I have sown. In the years to come, I would
like to continue to cherish a corporate culture of taking onchallenges without fear of failure.
Five to 10 years from now, I would like Credit Saison,
when viewed from a global perspective, to have become afinance company that has a strong presence particularly in
Asia. Ideally, I think the business portfolio should be 30%
each for payment, finance, and global, and the remaining
10% should come from the next business for which weare now sowing the seeds. The element that will bring that
portfolio to fruition is digital capability. As the numberof people who feel a sense of antipathy toward digital
devices steadily diminishes, we will provide human-touch
services, which are our strength in communicating withcustomers, and which at the same time will lead to ourcustomers being excited and amazed.

Q

Q

How will the structure of your businessportfolio change in the years to come byadvancing these strategies?

Our business portfolio used to be just the Payment
Business, but the Finance Business has been growing as
the second pillar. In terms of the ratio to business profit in
FY2020 (IFRS basis), the Finance Business, which includes
the leasing and credit guarantee business, accounted
for more than half of the total, followed by the Payment
Business. Although it is not segmented at this time andwill take some time over the years to come, the global
business will grow as the third pillar. Looking even further
ahead, as a comprehensive life service corporate group weplan to give rise to many innovative role models throughincubation to create the next businesses that will follow
on from the global business. If we do not sow the seeds,

Please tell us about your sustainability efforts.

In terms of how to balance social and environmental
issues with economic value, the most importantcomponent in the years to come will be climate change
countermeasures. Extreme weather, which is describedas once every 50-year events, is occurring with greater
frequency, and climate change is something that concerns
me personally. Even novel coronavirus pandemics might
continue to occur as frequently as climate change in theyears to come. As a company, if we do not build up ourbusiness on the premise of dealing with pandemics andclimate change, business risks will manifest themselves.
The balancing of our dealings regarding business withsocial and environmental issues is the sustainability that14

we at Credit Saison strive for and something that the
Sustainability Committee discusses in a focused manner.

Q

Finally, please provide a message to thestakeholders.

The overall control of the entire Credit Saison Group,
including its basic strategies and policies, rests with
Chairman and CEO Hiroshi Rinno. While working hard as
the person in charge of the specific implementation of ourstrategies and policies, I will be doing my utmost to carryout my duties. From the perspective of younger employees,
I think it is easier for me, who is closer than Chairman
Rinno to them in age, to express my opinion without
hesitation. I would like to lead a flat, open, and free form oforganizational management, in which the safety of mental
health is guaranteed and that each person is entitled tovoice his or her own opinions and ideas are not dismissed.
While taking on the challenges of meeting the
expectations of our customers, shareholders, and all ourbusiness partners, Credit Saison will continue to operate
as a company that maintains win-win relationships withall its stakeholders, including society, communities,
and employees. We look gratefully forward to yourcontinued support.
September 2021

Value Creation Stories

Creating Lifestyles

Our Image of Society

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

Approach to resolving social issues

Transforming ourselves into a comprehensive
life service corporate group centeredon ﬁnancial services

Social issues that Credit Saison should especially help resolve

Realization of ﬁnancial inclusion
Changing society/Global environment
Declining birthrate,
aging population

Climate change

Digitalization

Promoting conversion
to cashless operations

Growing needs for
asset formation

Established in 1951 as Midoriya Co., Ltd., a department store
that sold products on a monthly installment basis, Credit Saison has, in the face ofvarious difﬁculties, continued to take on challenges as a leading-edge service company.
As we have in the past, we will continue to contribute to the realization of a“sustainable society that is even more convenient and prosperous than today’s”
by resolving social and environmental issues in ways that only Credit Saison can.
15

September 2021

Value Creation Stories
Contributing to the creation of a sustainable societythat is even more convenient and prosperous than
today’s by resolving social and environmental issues
Value Created in Collaboration
with Stakeholders

Main Management Resources
Corporate culture that has been handed
down in continuous succession

Management Philosophy

Leading-edge service company

Awareness toward co-creation
with all stakeholders

Meritocracy free from any age, gender,or educational attainment bias

An organizational culture that allows creative
destruction and failures“CS Style” action guidelines

Human resources with vitality

Shareholders Customers

Progress in social and environmental initiatives by
establishing the Sustainability Promotion Committee(August 2021)

Number of committee meetings/
11 in total
working groups held:
Committee: Three times /WG: Climate change ﬁve times; DE&I: Three times

Environmental preservation activities(operation of Akagi Nature Park)

5,623
Non-consolidated no. of employees 4,319
Consolidated no. of employees

Five Businesses(of whom 3,250 are women)Innovative*Excluding part-time employees

Innovation creation capabilities

approx.

DbRock-solid sales platform

Industry-leading customer base
Number of individual members:lalFostering motivation and diverse values

Lease Business

P22

it a

System infrastructure capable of responding
ﬂexibly to changeFor
corporations

P17

36 million

Real Estate–Related
Business
Entertainment
Business

More thanInterest-bearing debt

¥2,429.4 billion

Highest level of creditworthinessfor independent non-bank
High credit rating

Rating and Investment Information, Inc. (R&I)(Continuously for 25 years since October 1996)

A+

No. of human resources with digitaltechnology backgrounds

150
72.4%

approx.

Paid leave take-up rate

New business/Product development
Number of new product releases:

approx.

20*2

Number of SWITCH SAISON proposals and number ofcommercialization projects:

900 proposals, two commercialization projects

0Strengthening ability to resolve social issues

Contributing to a safe, secure, andconvenient cashless society
Important issues (management base)Sound ﬁnancial base

Diverse ﬁnancing based on highcreditworthiness
Consolidated total assets ¥3,409.2 billion

Ratio of female managers*3

approx.

50,000companies

Overseas branches(centered on ASEAN) in eight countries

75.2%
52.0%

Ratio of female employees

Number of security incidents

Number of corporate card issuers:

Global base network
Domestic:Three sales departments

60,000 visitors

Reduction in paper consumption fromthe digitalization of recruitment procedures

Number of dialogues held with shareholders/investors:
176

Payment Business

Basic Concepts

Glo

Service development track record in theﬁnance ﬁeld

Providing a wide rangeof advanced security
For
services with the strengths
individualsof creditworthiness
P22
and a wide customer base

Approx.

P18

Finance Businessig

Professional human resources well-versedin the payment/ﬁnance ﬁelds

Employees Administrative Regional
agencies communities

Realization of a resilient organization

Transforming ourselves into a comprehensive
life service corporate group centeredon ﬁnancial services

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

Credit know-how nurtured over the 71 years
since the Company’s founding

Business
partners

Promoting diversity
Social issues to be resolved by Credit Saison

Alliance through LP investment in domestic andoverseas venture funds

Social contributions

Investment in domestic and overseas seed/
early-stage companies through CVC subsidiaries

Eco-friendliness(Saison Ventures, Saison Capital)

Financial results

Strengthening corporate governanceContribution to economic development by realizing ﬁnancial inclusion

Return on equity (ROE)
Shareholders’ equity ratio

7.1%(previous ﬁscal year: 4.7%)

15.6%(equity ratio attributable to owners of parent) (previous ﬁscal year 14.4%)

Improvement of Group business proﬁt¥ 48.3 billion(33.6% increase from the previous ﬁscal year)

Total dividends
Total shareholder return

Requests from the market environment/society
Declining birthrate,
aging population

Climate change

Digitalization

16

Promoting conversion
to cashless operations

Growing needs
for asset formationetc.

(non-consolidated)¥ 7.0 billion(¥7.0 billion in the previous ﬁscal year)

78.3%(72.3% in the previous ﬁscal year)

Notes: *1 The standard is as of the end of March 2021, but some as of November 2021 also included.
*2 Total aggregated number of products and services from April 2020 to March 2021
*3 General manager, manager, and section manager positions

Basic Concepts
Transforming ourselves into a comprehensive life service corporate group
In FY2020, the spread of COVID-19 had amajor impact on society and the economy,
and we were forced to change our existing
business model centered on physicallocations, which had until then been ourstrength. On the other hand, given that
our lifestyles and values are undergoingsuch a drastic change, we are eager to takeadvantage of this opportune moment toswitch to a management style that goes on
the offense. In FY2021, we will accelerate ourtransformation by establishing the themes ofInnovative, Digital, and Global as the basic
concepts of our management strategy.

Using M&A, capital participation, business alliances, and other means tocreate new businesses and expand upon existing businesses• Developing new products and increasing sales of the AMEX brand as a
strategic weapon• Challenging new markets by developing new products and new businesses• Providing services that match market needsva
Inno tive

Glo

it a lThe Basic Conceptsof Credit Saison

ig

al

b

D

Promoting digitalization, while valuing real services
Achieving customer success by providing services that areclose to the customer

Bolstering the foundation of the global business by promoting
financial inclusion in emerging markets• Establishing a business foundation for dramatic performance• Promoting a proper card strategy utilizing the smartphone self-contained
service “SAISON CARD Digital”• Concentrated investing of management resources in businesses that
contribute to profits• Creating and diversifying businesses• Expanding the issuer business and the processing business throughdigitalization and channel diversification(Implementation of the CVC business and the impact business by Saison Capital Pte. Ltd.)• Utilizing digitalization to fuse the Payment Business and the Finance Business

17

The Five Businesses
Net revenue by segment
Lease BusinessEntertainment Business¥5,536 million¥12,290 million(4.3%)

Adjustment(¥2,340 million)(2.0%)

Payment
Business

In addition to credit cards, we offer a variety of payment services,
including prepaid cards and smartphone-based payments, with an eye
to bringing about a cashless society. To better meet the needs of ourcustomers, we also engage in a processing business outsourced to us bycredit card companies.

Lease
Business

We offer “finance leases” and “business-use installment sales” based on
office automation (OA) communication equipment tailored to the capital
investment plans of business operators.
Besides supporting business trends such as the POS cash register
peripherals market, which facilitates cashless payments, we are taking on
new challenges in fields such as environmental products.

FinanceBusiness

Including the credit guarantee business and the finance business, wedevelop lifestyle creation financial services ranging from home purchases
to rentals, with a focus on Flat 35 and Saison Asset Formation Loans.

Real Estate–Related Business¥14,595 million(5.2%)

Finance Business¥43,412 million(15.4%)

Consolidated
net revenue¥ 282,625
million

Payment Business¥209,130 million(74.0%)(FY2020)

Business profit by segment
Real Estate–Related BusinessEntertainment Business(¥1,745 million)¥5,390 million(11.1 %)

Adjustment¥3 million

Real Estate–
RelatedBusiness

Real estate business, real estate leasing business, and servicing (loancollection agency) business, etc.

Entertainment
Business

Including the amusement business, etc.

Lease Business¥5,455 million(11.3%)

Consolidated
business proﬁt¥ 48,352
million

Payment Business(FY2020)

Finance Business¥21,279 million(44.0%)¥17,968 million(37.2%)*Share in parentheses

18

Progress of the Vision and Medium-term Management Plans

Creating Lifestyles

Transformation andRenewed Growth
Construction of Foundations FY2016–FY2018

Initiatives Prior to FY2016

Previous Medium-term Management Plan

Change the business model to one thatcombines five businesses via stronger
corporate marketing
Face the challenge of becoming “a peerless
new finance company in Asia” able tooverwhelm the competition

Realize innovation and changing business models

Face the challenge of new business models
Expand the stock business and the fee businessNumerical Targets
Consolidated business profit for FY2018¥60.0 billion(JGAAP)

Measures

Basic Management Policy for FY2014

1 Face the challenge of changing the card business model

Face the challenge of changing the businessmodel by strengthening corporate marketing

3 Enter multilateral alliances centered on the finance business

Evolve into a “non-bank capable ofresponding to change”

Basic Management Policy for FY2013
Establish a multiple core earnings source
structure through “collaboration
management using strategic resources” tobecome the No. 1 consolidated issuer,
accelerate the shift to non-banking, andcrystallize Asian strategies

Medium-term Management Plan

Neo Finance Company in Asia
MISSION STATEMENT

Basic Policy

Basic Management Policy for FY2015

FY2019–FY2021

2 Collaborate strategically via open innovation
4 Develop diverse business throughout Asia

Become a finance company advancing withcustomers for 50 years

Provide peace of mind anddiscover the potential in money

Provide house card functions integrated
with alliance partners’ customer strategies,
expand the customer base throughsettlement services
Utilize know-how from Japan, expand
financial services in high-potential
emerging markets in Asia
Management Targets

Results
Consolidated ordinary
income FY2015¥43.8 billion(JGAAP)

Consolidated ordinary
income FY2018¥54.1 billion(JGAAP)

Full migration to the Associated Core System

Completed a foundation capable of alliance expansion
and product development

Responsive to diverse customer needs
Payment platform enhancement/
Finance business expansion

Expand the Global Business into more countries
FY2015: Five countries

FY2018: Eight countries

Regarding FY2019 (consolidated businessprofit target ¥36.1 billion) as the lowest
point, work toward returning to a growthtrajectory over the next three years
Consolidated business profit(consolidated ordinary income)
FY2018¥52.5 billion（IFRS）FY2021¥52.0 billion*（IFRS）*Revised given the impact of COVID-19

19

Progress of the Medium-term Management Plan

Creating Lifestyles

Under the Medium-term Management Plan, our vision is to become a Neo Finance Company in Asia, and we are forging ahead on various measures, namely, the three key pointsof having a growth strategy and structural reform in the Payment Business, the further expansion of the Finance Business as a non-bank, and expanding the revenue base of Credit
Saison’s global business with a view to the future.
While the spread of COVID-19, which we initially had not anticipated, caused us to revise business profit to ¥52.0 billion, we are making steady progress toward revival of our
payment business and transformation to a general non-bank.

Further acceleration of “revival of the card business” and“transformation to a general non-bank”

Our Aims for the New Medium-term Management Plan and Key Points

Growth strategies and structural reformin the Payment Business

Payment Business

1 Expand shopping transaction volume (BtoC ﬁeld)

Payment Business/
Solution Business

2 Expand shopping transaction volume (BtoB ﬁeld)

3 Expand the card shopping revolving balance/cash advance business
4 Create new businesses and enhance digital marketing

Asset Management Business/
Digital Marketing

Further expand the Finance Business as a non-bank
1 Strengthen relationships with partners and expand new alliances

Expand the earnings base of the Global Businesswith a view to the future

1 Transition from the “sowing stage” to the “harvesting stage” in countries
where we have operations

FY2008Operating Revenue

FY2018Business Proﬁt

FY2021Business Proﬁt¥34.5billion¥52.2billion¥48.3billion(JGAAP)

Lease & Finance Segments(IFRS)(IFRS) projection

Finance Business
Global Business
Global Business

Turning adversity into opportunity — Confronting a new normal —Payment

Amid a “new normal” brought about by the spread of COVID-19, we launched SAISON CARD Digital
Main services
in November 2020 with the intention of turning adversity into opportunity. In the past, we issued plastic
affiliate cards for each respective business operator, but through SAISON CARD Digital, a smartphonebased cardless scheme, we are promoting a proprietary card strategy that enables alliances with multiple
business operators using a single proprietary card pattern. By leveraging SAISON CARD Digital’s advantage
of delivering a card number to a customer’s smartphone in as little as five minutes after an application has
been made, we have secured alliances with more than 150 companies. In addition, from March 2021, we
commenced Credit Saison’s prepaid service for medical and nursing care fees, etc. (factoring), to support
the cash flow of healthcare and nursing care providers, dispensing pharmacies, and others for whichbusiness operations have been affected by the decline in outpatient numbers due to coronavirus infections.
Within the Group, KURASHINO SAISON Co., Ltd. (formerly AIR Co., Ltd.), is capturing demand for measures
to counter pandemic infections and is offering services pertaining to a range of housing troubles, including
house cleaning and other disinfecting operations. These and other initiatives represent the strategy wehave put in place to seize upon opportunities revealed by changes in the environment.
20

GlobalLease

Finance

Real estate-related

Entertainment

Management Strategy

Creating Lifestyles

CSDX Strategy

P24

Global Strategy

P28

P33

• Reconstruct the domestic
network• Strengthen approach to Generation Z,
women, seniors, and affluent segments• Strategically utilize the AMEX brand• Strengthen solutions for SMEs
• Strengthen the global businessBusiness
Strategy• Integrate the operations of
the digital/IT departments• Innovate our personnel
strategy

P22

Transforming ourselves
into a comprehensive life
service corporate group
Customer
Strategy

Create new businesses(e.g., M&A, capital participation,business alliances)

Financial Capital
Strategy
P35

Human Resource
Strategy

Achieve customer successby combining the real anddigital worlds

P27

CSDX Strategy

Group Strategy

P24

P32

• Group companies fulfill arole in services and provide
comprehensive life services• Improve customer convenienceand management efficiency bypromoting digitalization• Expand business throughventure investment, capitalalliances, and M&A• Maximize the real strengths of
our Company at the point ofcontact with customers
21

Business Strategy

Creating Lifestyles

Background and Policy

Individuals

As a business strategy, we are focusing on strengthening three areas: our approaches to
the Generation Z, women, seniors, and affluent segments; our active utilization of the AMEX
brand and our solutions for SMEs; and our global business. For individuals, we have beenissuing concept-type cards, which are clearly designed to target women, the affluent, young
people, and Generation Z, since November 2020. For corporations, in addition to individual,
credit-type business cards, we have started offering corporate credit-type business cards
and are taking on the challenges of reforming the credit model.

Issue concept-type credit cards with clear targets
ローズゴールド券面テスト 2020.11.06 再校
ハイマッキンレー・マットエレガンス 46/180kg

Female segment

Affluent segment

Saison Rose Gold
American Express®
Card

Daiwa Securities
Saison Platinum
American Express®
Card(From November 2020)(From November 2020)
C5

M36

Y15

Issues and Initiatives
In the BtoC field, we issued the Saison Gaming Card for the young segment and Generation
Z in 2020 and the Likeme♡ by saison card in 2021. For women, we adopted the rose goldcolor as the first of its kind in Japan in November 2020, and the Saison Rose Gold American
Express® Card, which can only be applied for within a limited time, has been well received.
For the affluent class, we began offering the Daiwa Securities Saison Platinum American
Express® Card in November 2020.
In the BtoB field, we introduced the Saison Business Pro Card, a corporate card featuring
up to 1% cash back and a credit line setting that enables card payment of business
expenses, as a solution for SMEs in May 2021. Even amid the COVID-19 pandemic, theresults for SMEs have been steadily increasing, and we expect the digital transformation(DX) of corporate procedures for SMEs to be further promoted in the years to come. For
the AMEX brand, which boasts high status and customer loyalty, we will promote a brandstrategy so that when people speak of AMEX it will be recognized as being equal to“Saison.” Tailored to the travel business that has declined due to the COVID-19 pandemic,
we are also advancing a review of our product lineup in accordance with changes in theenvironment, such as updating to a new service based on a change to the incidental use of
travel accident insurance.

Saison Gaming Card

Indicator

FY2018FY2019FY202026.79 million

26.39 million

25.70 million

Number of active card members

14.90 million

14.96 million

13.95 million

Card shopping transaction value¥4,788.5 billion¥4,946.9 billion¥4,500.3 billion

Cash advances transaction volume¥242.9 billion¥237.5 billion¥155.0 billion

Likeme♡ by saison
card(From December 2020)(From March 2021)

Corporate Customers

Challenge to innovate the credit modelStart provision of new corporate credit–type business credit cards in addition toindividual credit–type business credit cards(Scheduled for May 2021)

Large
corporations

Corporate credit–type business credit cards

Medium-sizedcorporations

Key Performance Indicators (KPIs)
Total number of credit cardholders

Generation Z
segment

Young segment

Small corporations

Sole proprietorships

22

Business Strategy

Main Services

Expansion of Issuer Business and Processing Business through Digitalization
and Channel Diversification

Utilizing Digitalization to Fuse the Payment Business and the Finance BusinessWith Credit Saison‘s Flat 35, Loans, we are promoting the digitalization of the application
process, including the launch of an electronic contract service and a tablet pre-screening
application system. Rent Quick Credit Saison‘s Rent Guarantee service encourages users to join
and use SAISON CARD Digital. We will promote the fusion of both businesses by expanding
sales of payment-related products to individual and corporate customers in the FinanceBusiness, such as promoting combined sales of payment products and Group products with
Writeup Co., Ltd.’s consulting services for small and medium-sized business owners.

By utilizing the SAISON CARD Digital scheme to develop both existing partner services
and new partners, we are encouraging customers to join and make payments via theirsmartphones while at the same time achieving improvements in the efficiency of our humanresources. In the issuer business, we started issuing a new tie-up card with Shop Channel
in the TV home shopping industry in August 2021 and, in the processing business, started
issuing the new apollostation cards by IDEMITSU CREDIT CO.,LTD., in April 2021.

Digitalization of existing tie-up card issuers
Existing partners
Provide digitalproducts

Credit Saison‘s Flat 35
Issuer businessAs a non-face-to-face channel,
issue a new tie-up card with
“Shop Channel” in the TV home
shopping industry(From August 2021)

Expand sales of paymentrelated products toindividual customers andcorporate customers in the
Finance Business

Rent Quick
Credit Saison‘s Rent
Guarantee service

Processing business
Diversificationof new customer
development
channels

Start issuance of the new“apollostation card” credit cardfrom IDEMITSU CREDIT CO.,LTD.

Provide added
value throughbenefit services,etc.

Credit guarantee
Promote combined sales of
payment products/groupproducts for SME owners

Promotion of digitalization
Note: Use of the Internet for preliminary screening, etc.

(From April 2021)

CMYK：C33 M98 Y96 K0
RGB：b32426

Promote credit card
enrollment to users of
Flat 35 Loans

Expand card enrollment andrent payment through Rent
Quick Credit Saison‘sRent Guarantee service
アイソレーション
0.25

23

1

CSDX Strategy

Creating Lifestyles

Bringing about a transformation in both the customer
experience and employee experience through a redesignof the Company in a way that fits with the digital era

Kazutoshi Ono

Director, Senior Managing Executive Officer and CTO, CIO
Company-wide promotions of DX strategies
Head of Digital Innovation Division
In charge of IT Strategy Dept., Strategic Planning Dept.
General Manager, IT Strategy Dept., Technology Center

Q

Please tell us your thoughts regarding DX as
the Company’s CTO and CIO.

The terms “Before Internet/After Internet” and “Before
digital/After digital” literally express the fact that the eras
before and after the advent of the Internet and the transition
to digital technologies are completely different. Against thisbackdrop, if a company were able to redesign and update
those of its businesses and organizations originally designedin the “before” era in a way that incorporates strengths
suited to the “after” era, it would succeed in becoming
even stronger and in sustaining growth. This is a belief I
have continued to hold for a long time. Amid the transition
between these eras, the positioning of IT has transformed
from conventional enterprise IT intended to enhance theefficiency of and shorten the time required for internal work
into business IT, which goes beyond simply improving work
efficiency. As a result, the way in which we now apply IT in
the services and products we provide creates a qualitativechange in the customer experience itself, which in turnultimately connects to business competitiveness.
Given this business environment, I believe that it isextremely important for us to move away from relying on
outside vendors for all our IT needs and instead internalize
digital technologies within the Company. We also possess
the option of handling on our own those aspects of DX
that are involved with the customer experience that directly
helps to set us apart from our competitors. As we observe
the response of our customers, we will develop on our own
those aspects of DX that require us to frequently make minor
corrections (pivots) without changing our basic footing. If we
can drive transformation while firmly grasping this powerof digital within our own hands, Credit Saison will makemajor bounds as one of the few financial companies to havesuccessfully reinvented itself in the digital era. And I believe
this will serve as a force that also revitalizes Japan’s industry.
These are my beliefs under which I have driven DX forward.

Q

What are your thoughts on how you willseparate those aspects of DX that you
internalize from those which you do not?

We have named our approach the Bimodal Strategy, underwhich we consider DX through three different patterns,
24

namely those aspects for which we will rely on existingvendors, those aspects for which we will transition to
in-house development, and those aspects for which we willtake a hybrid approach. Emphasizing stability, requiring
many different teams, and having aspects that are partiallya test of strength, Mode 1 will rely on the cooperation ofoutside partners. Aspects of DX that require rapid launch
and areas where results can be produced through small
teams will be internalized as Mode 2. Anything that falls
in between these two will be advanced in a hybrid format.
Specifically, we will transition to in-house developmentof the work systems used by the service and businessdivisions, as well as three of our API platforms.
After I joined the Company in March 2019, we began
the development of Saison’s Otsukidama completely
in-house with eight members recruited from the Technology
Center, which had just been formed at that time. During thisprocess, we determined that we could develop businessdivision systems on our own, so in this sense we havealready taken steps toward in-house development.

Q

Please tell us about the CSDX Strategy.

Our approach to DX is ultimately intended to help improve
the CX (customer experience ) and the EX (employee
experience), in other words, ease work for employees.
Having established these two goals as the linchpins of DX,
we will incorporate approaches that are suited to the digitalera, as well as the strengths of in-house development, asa means of realizing DX in ways that contribute to CX or
EX, or both at the same time. We can achieve neither CX
nor EX without digital human resources, however. In thisrespect, digital human resources stand at the center of ourefforts to drive business creation and business co-creationon the side of CX, and digital development processes andstrengthening of digital platforms on the side of EX.

CSDX Strategy

Q

Please tell us about the digital humanresources required for DX.

We view our digital human resources for this purposein three separate layers. Core digital human resources
are specialists who possess digital skills and have foundsuccess outside the Company. Business digital humanresources are those who have accumulated experiencein various departments and have applied through open
recruitment. These business digital human resources,
who understand business sites with a sense of reality,
supplement those areas of business in which core
digital human resources on their own would lack anunderstanding. Likewise, business digital human resources
utilize their knowledge and serve as communication
contact points with various departments within the
Company, thereby enabling the business side and thesystem side to work together on an equal footing when
considering and creating those systems that are truly
desired by the frontlines. We believe that this approachis key. In fact, our efforts to secure business digital humanresources have progressed smoothly, with nearly 30
employees applying for 12 openings during the first open
recruitment in 2020 and nearly 90 applying for more than
20 openings in 2021. Going forward, we will also increase
the number of digital IT human resources who alreadypossess knowledge of existing work systems and the credit
card industry but intend
to acquire digital skills
Core
Layer
in the future.
1 digitallysavvy
Of the nearly 40
personnel
employees at the
OJT
Study
sessions
Layer
Technology Center,
Digitally savvy
2
personnel
just under 30 are
Training
Job postingscore digital humanLayer
resources and about
Digital IT personnel
3
10 are business digital

human resources. We intend to expand the number ofbusiness digital human resources to equal that of core
digital human resources going forward.

Q

Where does the secret lie for making the CSDXStrategy a success?

First, one of the clear outcomes we foresee as part of the
CSDX Strategy is a significant decrease in application
development costs through in-house development. In
addition, by accompanying their colleagues within the
Company, employees will experience and share eachother’s difficulties and thereby understand their respective
challenges, where considering the optimal solutions forthese challenges together and working with each other todevelop applications within the Company holds the key
to success for the CSDX Strategy. Hybridizing technicalcontributions by core digital human resources with thein-depth knowledge on business possessed by businessdigital human resources will create a kind of internal
ecosystem in which these two groups influence each other,
as well as our digital IT human resources. This is perhaps oneof the greatest features and strengths of the CSDX Strategy.

Q

How will you work to retain digital humanresources?

In the world of engineers, a rewarding work experience
is not solely about compensation, the development
environment, and machine specifications. Indeed, I haveseen with my own eyes how the value system of the working
environment and the empathy for this environment act as
powerful cohesive forces. Since its founding, the Technology
Center has recruited engineers, data scientists, designers,
and security specialists from outside the Company andhas acted as a department that carries out the in-housedevelopment functions for DX, in other words, Mode 2,
25

via teams specialized with core digital
human resources. In October 2021, we
reorganized the IT Strategy Department as
a new arm to oversee the Bimodal Strategy and have put inplace a structure wherein the System Planning Department
handles Mode 1 DX and the Technology Center takes thelead on Mode 2 DX. Although the same types of engineers
are involved in Mode 1, which emphasizes stability, andMode 2, which emphasizes speed, the cultures are as
different as oil and water. Even so, we have established a setof rules so that these different value systems proceed with
development under the HRT Principles: Humility, Respect,
and Trust. And as a workplace that balances the speed of astart-up company with the scale of many different customers,
I believe it serves as an environment that allows engineers toenjoy their work while producing results.

Q

Finally, do you have a message for the readers
as the officer in charge of the CSDX strategy?

Currently, highly capable human resources in the digitalarena are gathering at the Company, while at the same timethose of our human resources adept in the actual work aresteadily acquiring digital skills. Looking 5–10 years down
the road, we will embody our Management Philosophyof a leading-edge service company by engaging inbusiness development that fits with the digital era and bycontinuously creating new and unprecedented services thatare received with surprise and delight. With the DNA createdby our CEO, Hiroshi Rinno, coursing through our veins,
Credit Saison overflows with the potential to incorporate
the power of digital in a single stroke and become stronger
than ever. And I feel this is an extremely rewarding work
experience. For us to be seen as a successful example of adigital redesign that is suited to the times, we will continue tovigorously push forward with this endeavor. So, I hope that
our stakeholders look forward to this day.

CSDX Strategy

Background and Policy

Issues and Initiatives

Amid the wave of digitalization that is ever accelerating amid the COVID-19 pandemic, at
Credit Saison we are strongly promoting DX in terms of both offensive and defensive DX—
through business transformation/conversion beyond digitalization—with the aim of providing
thrilling experiences that exceed the expectations of both customers and employees alike.
We aim to be a corporation that leads the digital age by realizing both CX, which creates
thrilling experiences for customers, and EX, which transforms the experiences of employees.

In promoting digitalization, at the Technology Center that was established in 2019 we aredeveloping in-house systems under the leadership of the CTO and CIO, who are themselvesprofessional human resources with engineering backgrounds. We are promoting DX interms of both business creation and business co-creation that contributes to improving
the customer experience, digital development processes that lead to improved employee
experience, and the strengthening of the digital infrastructure. This we are achieving bymeans of a bimodal strategy by which we apply Mode 1, which emphasizes stability, to areas
where failure cannot be tolerated as a financial business, and Mode 2 to areas where speed
is important and it is necessary to respond quickly to changes in the times. For example, inthe offensive digitalization that contributes to improvements in CX, we have already realized
new products, including SAISON CARD Digital and Otsukidama, by means of in-housesystem development. In the meantime, regarding the defensive digitalization that contributes
to improvements in EX, we are advancing the knowledge system for call centers, the FAQ
system for all employees, etc., by means of agile development through in-house production
while actively working to improve user interface (UI) and user experience (UX).

• Construct an agile development system• Promote the utilization of digitaltechnology and applications• Open innovation strategy

Improve customer satisfaction

Business
Creation

E1

DigitalDevelopment
Process

C2

Business
Collaboration

Digitally savvy
personnel

Developing company culture
Cybersecurity measures

Offering newcustomer experiences

C1

Expanding use ofdigital technology

Improve Employee Experience (EX)Improve Customer Experience (CX)CSDX Strategy’s Four Columns

CSDX Promotion Indices (FY2022)• By 2024, expand the number of digital humanresources to 1,000 and accelerate the transition toa digital organization by revitalizing the gradation
organization and promoting the cultivation ofbusiness digital human resources• Set CSDX promotion indices to create thrilling
experiences for customers (CX) and transform
employee experiences (EX)• The achievement status of the CSDX promotion
indices is conﬁrmed twice a year (September/March)at the CSDX Promotion Meeting.

Digital human resources:

Digital human resources:(composition ratio: 3%)(composition ratio: 20%)

150

1,000

FY2021

E2

FY2024*1

Create thrilling experiences
for customers (CX)

Digitalchannelratio*280.0%(+5% YOY)

NPS®*3+5.0pt*1 The digital human resources rate in FY2024 is estimated based on the number of
employees in FY2020.
*2 Digital channel support ratio in the credit card and finance businesses*3 NPS® is a registered trademark of Bain & Company, Fred Reichheld, and Satmetrix Systems.
Source: NTTCom Online NPS® Benchmark Survey 2021 Credit Card Division, Benchmark
Survey 2020 Credit Card Division, etc.
*4 Number of digital human resources (Layer 1 to Layer 3) ÷ Total number of employees*5 Measure of satisfaction with questions about sense of cooperation, motivation, andinformation sharing*6 Paper usage in credit card and finance business operations• Accelerate usage of the cloud• Promote links with external systems• Digital IT investment budget

26

CX+EX

KGI
KPI

Strengthening
Expanding digital organizations
the Digitaland foundations
Foundation• Integrate the IT/digital andbusiness departments• Promote concurrent in-house development

Accelerating to Digital Organization

Create experiences
for employees (EX)Digital
Employeehuman satisfaction
resourcesscore*5
4
ratio*

6.0%(+100% YOY)

Amountof paperused*6+10.0% -10.0%

For more detailed information. pleasecheck our website:

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

Customer Strategy

Creating Lifestyles

Background and Policy

Issues and Initiatives
By means of our customer strategy, we will value the real that is our strength while striving
to improve customer convenience and management efficiency through digitalization. To
promote digitalization, we are working on in-house system development and operation
while building an agile service development system by developing in-house IT. Whilepursuing effortlessness that eliminates hassle and stress for our customers, we will create
CX that can be said to be easy and convenient by improving the UI and UX. For example,
by having new customers use the smartphone self-contained service SAISON CARD Digitalat the time of enrollment, we will not only be providing a sense of security through digitalusage notifications when using the service but also offering benefits according to theirusage records. In addition, when customers make inquiries, we plan to provide a digitalchannel as a new service to resolve questions. On the other hand, instead of digitalizing
everything, for customers who want real verbal communication we will continue to offerthat service. We will continue to provide services that are close to our customers, such asenrollment, procedures, and inquiries through Saison Counters and call centers.

Due to the widespread use of smartphones, it has become possible for customers to carryout a range of transactions. Furthermore, amid the COVID-19 pandemic, digitalization is
rapidly expanding because non-face-to-face and non-contact methods can prevent the
spread of infection. Under such circumstances, we will work to bring about the fusion of thereal and the digital, achieve customer success by providing services that are close to ourcustomers, and switch from a sold-out model to a retention model.

Promoting Digitalization, while Valuing the Real Services That Are Our Strengths
Achieving Customer Success by Providing Services That Are Close to the Customer
Our Company’s strengths are in real services
Staff responses at counters,
call centers, etc.

Innovation at branches/operation
departments

Achieve customer success

Usage Examples

Transition from a “sellout product” model to aretention model

Enrollment

Inquiries• Smartphone self-contained• Construction of knowledge

service SAISON CARD Digitalsystem at call centers• Release of new services on
digital channel to answer
questions

Usage• Provide peace of mind

through usage notifications

Promoting digitalization
Achieve in-house systemdevelopment/operation
Achieve an agile service
development system throughin-house IT maintenance

Provide a customer
experience that is easy andconvenient
Improve UI/UX• Provide benefits according
to usage record

Pursue an effortlessexperience that eliminates
customer hassle/stress27

Global Strategy
Expanding the global business while
promoting localization and solving
societal issues of financial inclusivity

Creating Lifestyles

Q

After the Company entered the Shanghai, China, market
in 2005, we established a regional hub in Singapore in2014 and a presence in eight countries, primarily in Asia,
including Vietnam, Cambodia, Indonesia, and Thailand, as
well as India, with a view to expanding our business globally.
Southeast Asia has the highest growth potential of all
overseas regions, not to mention its close geographicalproximity to Japan, together with close ties and affinity to
our country. It was therefore a natural conclusion for us tofocus our efforts on developing our business in Southeast
Asia as a priority region among overseas markets.
Since joining the company in July 2013, I have beenplanting the seeds of businesses that could become thenext pillars of Credit Saison, with Singapore as the hub ofSoutheast Asia. Now, some eight years later, promisingsprouts have emerged, and we are beginning to seebusinesses that likely will blossom within the next 2–3 years.

Q

Kosuke Mori

Senior Managing Executive Officer
Head of Global Business Division,
General Manager, Global Business Division,
In charge of India business
Being assigned to Credit Saison Asia Pacific Pte. Ltd.

What is the status of your global strategy?

Please tell us about the business environment
and the competitive situation in Southeast Asia.

Even before the pandemic, the digital infrastructure
was advancing rapidly in Southeast Asian countries, but
COVID-19 has spurred that momentum; if you cannot
tackle digital, you cannot ride this wave. Moreover, in termsof the financial environment, COVID-19 has provided theimpetus for attracting an unprecedented amount of funds
from around the world to the Southeast Asian region. In
such a situation, competition is escalating among various
players, from major financial institutions such as banks
to start-ups engaged in FinTech as they seek to expand
their customer base through digitalization. This is partly
because investors from around the world are financiallybacking start-ups and partly because major local financial
28

institutions are focusing on digital transformation tosurvive.
In Southeast Asia and India, an overwhelming segmentof the population is underserved in terms of financial
services from banks and other such institutions. To provide
for this segment of the population, a range of FinTech
start-ups are using apps to offer installment payments for
EC purchases and financial loans based on payment datafrom restaurants. We have partnered with these innovative
FinTech companies to develop a “BtoBtoC” model thatplaces us at the center of the FinTech ecosystem, andour business is expanding along with the growth of thisecosystem.

Q

What kinds of initiatives are you undertaking incountries where you already have a presence?

As we were a late entrant in Southeast Asia, we werefeeling our way around the different regulations in eachcountry to figure out how to proceed with our financial
business. I think we have been blessed with having avariety of paths before us on what form our presence
should take, gained through the repetition of proposing
and reexamining options, such as creating our own
subsidiaries from scratch, partnering with local companies
that possess licenses and customer bases, establishingjoint ventures, or investing in or acquiring local companies.
For example, the establishment of a joint venture company
in Vietnam to engage in our retail finance business andthe acquisition of licenses for digital lending operations
and other ventures in Indonesia were originally born out of
encounters with people in the region, starting with a single
business card and by constantly knocking on doors.
While Southeast Asia and South Asia haveoverwhelming populations of the underserved, theirdigital infrastructures have developed in a leapfrog
fashion, with some areas even more advanced than Japan.

Global Strategy

We have a history of making our cards available to womenin Japan, which is the very essence of inclusion, and our
growth has been thanks to the support we have received
from so many people.
In Southeast Asia as well, we are promoting financial
inclusiveness by providing services digitally to the huge
numbers of underserved populations, and I feel that areasof overlap exist. Given that the underserved have greatneeds for financial solutions, I would like to ride the digital
wave and grow our business with the flexibility and speed
that only a non-bank can provide.

Q

Please tell us about your future global strategy.

The first step is to nurture the budding business andmake it bloom. At the same time, we will continue along
a second path to sow more seeds than ever before. The
most essential resource for the success of our global
strategy is, of course, our human resources. Whether they
are hired externally or trained internally, or they are local
or from Credit Saison’s headquarters, they are all equallyimportant, regardless of nationality.
In the past, the focus has been on creating one fromzero, such as sowing the seeds of a business or searchingfor seeds, but I believe that the process of turning one
into 10 and 10 into 100 will present a different level ofchallenges. With “Set for Scale” as the theme for thecurrent fiscal year, we will continue to build out monetaryscale, the number of personnel, andthe corporate functions that support
them as we take on the challenge of a
new dimension.
Regarding the cultivation of new
businesses, for example, we havestarted to finance the supply chain of
the Siam Cement Group, the largest

corporate group in Thailand, and we are preparing toenter the Philippines. We will also aggressively pursue new
business development in regions outside of Asia.

Q

What kind of management do you have in place
for human resources?

We place great importance on the localization of humanresource management at on-site locations. For example,
our local management team in India is made up entirelyof local members. This is because right from the start wehave been conscious of the need to build an excellent
management team made up of local Indian personnel.
Less than half a year after the start of our business there,
India was forced into a severe lockdown due to thepandemic’s spread, and under such circumstances, many
foreign nationals dispatched to India, including Japanese,were forced to return to their home countries. However,with a team of local personnel firmly taking care of thebusiness as their own, we have been able to steadily
conduct operations in an orderly manner, not only innormal times but also in emergencies.
On the other hand, it is important to have people who
fully understand the culture and background of Credit
Saison in order to promote internal collaboration. At theregional headquarters in Singapore, the Credit Saison
spirit spontaneously comes to life, including among local
personnel. I think this has been fostered by hiring young
people who are motivated to raise their hands and take onchallenges, entrusting them with an ever-greater workload,and encouraging them to take on new challenges.
This is similar to the process I went through as an
employee hired mid-career. Instilling thinking to the effectof “I can do it, I want to do it,” and by knowing that they
have support from top management, they will be able tocontinue to take on challenges without fear of failure. In
this way, you will grow and your business will grow as well.
29

As the business grows, the greater the range of work you
will be responsible for. I believe that this kind of humanresource management is leading to the development oflocal human resources, even overseas, who are also in tune
with the culture of Credit Saison.

Q

What kind of role is the global business playing
relative to the new vision of “transforming
ourselves into a comprehensive life service
corporate group”?

Being engaged in the global business, I often hear thephrases “Everything is FinTech” and “embedded finance.”
This is because FinTech is embedded in various aspectsof people’s lives and companies’ economic activities,
whether you look at EC purchases or payments between
corporations. I believe that Credit Saison’s goal of
becoming a comprehensive life service corporategroup is, as the phrase implies, a vision in which thebarriers between financial services and other services
disappear and become integrated. Ultimately, I think
we will arrive at a model that is increasingly prevalent
in the lives of consumers and in the economic activities
of corporations, both domestically and globally. The
current focus of our global business is financial services
and FinTech, but I believe that we can establish ourselves
as a comprehensive life service corporate group, evenoverseas, by integrating other services and products inthe future.
As the head of global business, I aim to establish theNo. 1 local business driven by top-class management
teams, even by international standards. This means by
Indians in India and Indonesians in Indonesia, and so on.
We will also continue to take on the challenge of resolving
issues in global society, such as financial inclusion, sothat Credit Saison is commonly recognized as a global
company that represents Japan.

Global Strategy

Background and Policy
India

Amid expectations for an ongoing expansion in both population and GDP, we expect
significant growth in Asia, although the fact that relatively few people in the region havebank accounts indicates that the current level of financial services being offered might not
be sufficient to meet the needs of all the people.
Given these conditions, the spread of smartphones and the rapid progress ofdigitalization are contributing to new services being developed using the latest in cuttingedge technologies. Credit Saison will realize financial inclusion and, in turn, contributeto the economic development of these regions by leveraging its partnerships with local
companies to provide financial products and solutions to underserved segments of the
population mainly in Southeast Asia and India where many have insufficient access tofinancial services from banks and other institutions.

Kisetsu Saison Finance(India) Private Limited• Established June 2018
(Investment ratio 100%)• Digital lending businessIndonesia

Vietnam
HD SAISON Finance
Company Ltd.

• Established May 2015
(Investment ratio 49%)
• Retail ﬁnance business

ThailandPT. Saison
Modern Finance• Established September 2015
(Investment ratio 82%)
• Digital lending business/leasing business

Issues and Initiatives
Overseas, we are working to improve our business foundation to make our global businessa major pillar of the Company’s business. At HD SAISON Finance Company Ltd. in Vietnam,
in addition to the individual installment business for motorcycles and home appliances,
we are developing a credit card business throughout the country. Going forward, we will
prepare a system for expanding membership acquisition and will work on such areas asfunction development.
Saison Capital Pte. Ltd., which invests mainly in overseas early-stage start-ups, will
resume new investment while paying close attention to the COVID-19 infection situation.
We have also started an impact investment business that provides necessary funds tounderserved individuals and small and medium-sized enterprises mainly in Asia. Throughthese projects, we will continue to take on further challenges by promoting efforts towardfinancial inclusion and the Sustainable Development Goals (SDGs) set by the United
Nations. Despite being affected by COVID-19 infections, demand from our main target
demographics, such as the middle layer and underserved layer, has remained strong evenduring the COVID-19 pandemic. While collaborating with a wide variety of local partners
we will develop our global business into a pillar of the Company’s business.

Philippines• Undertaking preparations for the launchof the ﬁnance businessSingapore

SIAM SAISON Co., Ltd.

• Established in November 2018
(Investment ratio 30%)
• Digital credit granting/payment business

China
Credit Saison Corporation (Shanghai) Limited• Established March 2005
(Investment ratio 100%)• Consulting business

Credit Saison Asia Paciﬁc Pte. Ltd.

• Established May 2014
(Investment ratio 100%)• Overseas business development
and integrated management
Saison Capital Pte. Ltd.

• Established June 2019
(Investment ratio 100%)• Investment and ﬁnancing foroverseas start-ups

30

Cambodia
Idemitsu Saison
Microfinance(Cambodia) Plc.

Idemitsu Saison
Microﬁnance(Cambodia) Plc.

• Established August 2015
(Subsidiary of an afﬁliated company
in which Credit Saison holds a 50% stake)• Loan and installment payments businessGlobal Strategy

Main Services

Concentrated Investment of Management Resources in Businesses That
Contribute to Profits in Order to Make the Global Business a Major Pillar of
the Company’s BusinessBusiness Creation and Diversification

Implementation of the CVC Business and the Impact Business by Saison Capital Pte. Ltd.
At Saison Capital Pte. Ltd., we are making strategic investments in Southeast Asia andIndia as priority regions. We are already investing in multiple projects by discovering
next-generation unicorns and promoting investment activities centered on businesscollaboration. Also, regarding impact investment, currently in Cambodia, Indonesia, and
the Philippines, we have started lending utilizing technology in the financial inclusion sector
and plan to continue actively investing and lending mainly in Southeast Asia.

In the global business, we will concentrate our management resources in businesses that
contribute to profits. At HD SAISON Finance Company Ltd., our joint venture in Vietnam,
we will start full-scale development of the credit card business, which we had soft-launchedin August 2020, from 2021. In India, Kisetsu Saison Finance (India) Private Limited has
obtained a long-term AA+ rating from the local rating agency CRISIL and will expand
the loan amount by raising funds from local financial institutions. In Indonesia, we will
strengthen our business foundation centered on P2P lending and consumer finance.

Kisetsu Saison Finance (India) Private Limited
India

CVC business• Aim to increase loan amount by procuring funds from a local financial institution• Achieve strategic investment thatemphasizes Southeast Asia and India• Strengthen branding and deal sources
through LP investment and uniquescouting programs• Start hybrid lending in addition to wholesale lending and tie-up lending• Received an AA+ long-term rating from CRISIL, an Indian ratings company thatis a subsidiary of S&P Global

Impact financing busines
Current status
Full-scale implementation started
Target sector

Target region

Financial inclusion
technology

Southeast Asia

Asset categories

Strategic partners

Investments (example)

HD SAISON Finance Company Ltd.
VietnamPrivate debt/
financing• Expansion of individual installment payments (e.g., formotorcycles, smartphones)• Full-scale development of the credit card business

PT. Saison Modern FinanceIndonesia

Supplementing
resources
through tie-ups

After establishing a new company,
shift to this phased development• Expand the business foundation through P2P lending and consumer finance• Realize a selection of new strategic partners

31

Group Strategy

Creating Lifestyles

Background and Policy

Main Services

Launched the “Saison’s Lifestyle Research” Website

Toward the realization of a comprehensive life service corporate group, each Group company
is launching a variety of products. Group companies that provide services that meet market
needs will continue to develop solution services that enrich the lives of our customers withhigh quality. At the same time, we aim to provide comprehensive life services by creating new
businesses that utilize the networks of each company. We will also utilize venture investment,
business alliances, M&A, and other means to further expand our business.

In September 2021, we launched the “Saison’s Lifestyle Research” website, which brings
together the collective strengths of the entire Group, with the aim of transforming ourselves
into a comprehensive life service corporate group. As a medium that provides tips andtriggers information for solving problems and worries related to living from 50 years ofage—centered on the categories of money, health, and family—we provide information on
how to resolve each concern from a variety of perspectives. Utilizing the big data handled in
the Payment Business in the years to come, we will expand the content to match the target
generation. As a scientific and distinctive information medium based on marketing data, wewill, for example, increase the number of articles on themes of high interest that emerge fromthe consumption behavior of seniors.

Issues and Initiatives
We are developing new businesses while exploring various forms, such as businessalliances and the formation of joint ventures, toward transforming ourselves into acomprehensive life service corporate group. In particular, we are considering creating new
businesses by collaborating with business partners to provide services that are closely
related to daily life, such as the advertising, healthcare, and pet businesses. SAISON ASSETMANAGEMENT CO., LTD., which has taken on the needs of customers’ asset formation, had
total assets under management exceeding ¥400 billion in April 2021. In addition, SAISONFUNDEX CORPORATION has been well received for its Saison leasebacks, which meet thechanging times and customer needs, such as products to support retirement funds.

Providing Comprehensive Life Services Tailored to Customers’ Life Events acrossthe Five Businesses and Group Companies
Payment Business

Lease BusinessBorrowing

Remittances
Financialarrangements
Purchasing

Shopping

Householdpurchase/leasing

Finance Business

Real estatetransactions
Renovations
Savings

Settlement ofexpenses
Operational efﬁciency
WelfareEntertainment Business

Investment
Asset
management
Life events(start work, marriage, raising children...)Corporate cycle(foundation, growth/maturity, transformation)

Inheritancehttps://life.saisoncard.co.jp/

Real Estate–Related
Business

For more details, please check our news releases.
https://corporate.saisoncard.co.jp/wr_html/news_data/avmqks000000bn86-att/20210928_Release.pdf

32

Human Resource Strategy
Accelerate reforms by increasing thenumber of employees who question theconventional wisdom of work and think
for themselves
Q

Please tell us what excites you about your roleas the person in charge the Strategic Human
Resources Dept. as the Company pursues
its management vision of “transforming
ourselves into a comprehensive life service
corporate group.”

The Credit Saison Group aims to achieve customer
success through the fusion of the real and digital worlds
based on the basic concepts of “Innovative,” “Digital,” and“Global” to realize its management vision. I believe theinnovative concept requires not only “0-to-1 personnel,”
who are able to create one from zero, but also those who
can turn one into 10 and then 10 into 100, while in somecases dismantling 100 back to zero.
One of the five key phrases of the “CS Style” action
guidelines common to all employees is “question
conventional wisdom.” Previously, staff departments
focused on the creation of new products and services,
yet line departments are now revising business processes
in a concerted effort to satisfy customers easily andquickly. “Innovative” behavior begins with having a
sense of discomfort about one’s own previous work in an
unquestioning matter, regardless of the field.
Increasing the number of employees, even by one,
who have this sense of discomfort requires training
based on internal case studies. While on-the-job training
is important, we also focus on training across divisions
and departments to enable employees to “question
conventional wisdom.”

Creating Lifestyles

Q

Please tell us about your initiatives andachievements in FY2020.

In the past, the Strategic Human Resources Dept. had been
deeply colored by the principle of standardization, but now
the value of this standardization has faded with the current
diversification of business. I feel that we need to pursue
training tailored to each individual’s thinking and businessneeds as much as possible. The first step is to ascertain
exactly what is going on, and to this end, it is important toengage in dialogue with employees. We held discussions
online with regional offices from Hokkaido to Kyushu, while
speaking with head office staff departments both in person
and online. From the second half of FY2019 to the middle ofthe first quarter of FY2021, the Strategic Human Resources
Dept. and the Career Development Office comprehensively
conducted interviews and roundtable discussions using a
combination of approaches.
Regional office employees do not know because
the information is not addressed individually to them. In
response, we tell them that instead of being passive, theyshould try to obtain this information. On the other hand, itcame to our attention that corporate departments appear
to be delivering the information but actually aren’t.
During our roundtable discussions, I pushed back bysaying “nothing will change unless you have the desire to
step forward.” This prompted employee interest in making
proposals to identify “Femtech” needs for the Company’s
more than 70% female employees and, in certain cases,
provide beneficial products and services to customers,
which have resulted in positive spin-offs.
Meanwhile, there were few opportunities to meetglobal employees directly due to the COVID-19
pandemic, yet online conferences enabled us to connect
with overseas staff and showcase fellow employees inother countries and regions who are also working under
the Credit Saison umbrella. Although the pandemic
33

Kazue Yasumori

Managing Executive Officer
General Manager,
Processing Business Division,
In charge of the Screening Center,
Tokyo Risk Management Center,
Osaka Risk Management Center,
Strategic Human Resources Dept.

has caused many hardships, it has also prompted us
to establish communication methods that transcend
domestic and international distances.

Q

Please discuss the types of employees required
for “transforming ourselves into a comprehensive
life service corporate group.”

I think the most important thing is our response todiversification. The problems and needs of customers are
increasingly diverse. The goal of “transforming ourselves into
a comprehensive life service corporate group” is to provide
services that satisfy customers. To realize this, it is importantthat Credit Saison employees are engaged in what is goingon around them, regardless of age, gender, nationality, or
job rank.
The power to transform the Company from its previous
financial business model to a comprehensive life service
corporate group does not lie in a single individual or an
influential CEO. The key is to ensure that as many employees

Human Resource Strategies

as possible can connect their work with social issues.
While Company-wide strategies target, to a certain extent,
categories such as Generation Z, women, and seniors,
employees must propose and realize strategies based on
their actual experiences.

Q

How do your recruitment and training
approaches differ from before?

We are shifting to skill- and job-oriented recruitment. We
seek mid-career hires able to fully leverage the skills andexperience they have cultivated in the direction Credit
Saison is pursuing. We also require them to work as a teamwhile creating synergies with existing employees so that“one plus one equals three or even 10.” Our hiring process
for new graduates is evolving with a deeper focus on asking
what each new graduate wants to do within the Company’sbusiness and what they are interested in.
Executives and recognized experts conduct training
online. For example, we have called on Director, Senior
Managing Executive Officer, CTO, and CIO Kazutoshi Ono totalk about the digital domain. In addition, Executive Officer
Kaori Shimada, who is in charge of corporate sales, will speak
on preparing for corporate sales while Managing Executive
Officer in charge of finance Naoki Nakayama will commenton the outlook of the real estate business.
In 2020, I conducted a training program exclusively
for female employees to help instill a leadership mindset.
This training opened the door to short-time workers andthose on childcare leave. As a part of this training program,participants were encouraged to adopt a proactive
approach toward obtaining information even when working
reduced hours or on paid leave. Emphasis was placed on
utilizing in-house Company networks and devoting as muchtime as possible to recurrently pursuing work that met witheach participant’s aspirations. In doing so, participants werecomforted that they should never feel guilty about life events

such as childbirth and childcare. In addition, I have always
thought it was important for women to make their presence
felt in the Company. With that in mind, I had a female person
in charge, rather than a manager, discuss the Saison Rose
Gold American Express® Card, which was conceived solely
by female employees and launched in November 2020. I
think I impressed upon them that managers are not the only
ones who have a say or presence in the Company and that it
is not only management that can bring about reforms.

Q

Personnel exchanges from outside the Company
and internal recruitment are picking up.
What has been the effect of this development?

Yes, the number of temporarily transferred employees
has been increasing. For example, one of our employees
who is currently working at CASM—a joint venture between
CyberAgent and Credit Saison—remarked favorably: “As anew company, it will take some time for results to emerge,
but I would like to see as many employees as possible learn
about this experience.”
In addition, we have listed about 30 internal and external
openings from this fiscal year, with about 400 employees
applying. I think the role of human resources is to leverage
the principle of internal competition and to provide theopportunity for individuals to grasp their desired jobs andpositions. We need to make open recruitment the norm tobreak free from the seniority system. By clearly expressing
their vision and creating a concrete talent portfolio based on
workforce planning, departments can create a buzz. As thenotion that “a vision can be illuminating” spreads by word of
mouth, the number of applicants should increase.

Q

Please tell us about the challenges going forward.

In our industry, digitalization is creating synergies, so futurelabor shortages are not a serious concern. That said, I
34

think we need to think of ways to improve openness andrenewal through promotions and demotions with a clear
direction. For employees to be active until the age of
70 or 75, the Company needs to take additional humanresources measures to clarify what it can do and what
individual employees should think about.
Furthermore, the common personnel system for all
employees that we implemented in September 2017
in anticipation of the legalization of equal pay for equal
work was positive in that employees with limited work
contracts found what they wanted to do and raised
their voices. Conversely, I see some negative effects
from the elimination of the promotion system. Thissystem has not yet become a company-wide platform,
so I think establishing reskilling and recurrent work is
counterproductive. We are currently working to build atalent system that can properly manage each employee’s
profile so that interviews no longer go unrecorded despite
conducting interviews at every opportunity.
In addition, I believe that the true meaning of“Innovative” is found by listening to the voices of
employees. With this in mind, I ask department managers
to break down the direction of the Company basedon what it means to be a comprehensive life service
corporate group, and what the department is targetingin an effort to convey to each employee that this is why
these jobs exist. Based on this, which jobs you can do as
an employee is expressed in a single package. Conveying
one’s message to this extent would prompt employees
to think about their own careers and would make what
their managers have to say more important for them.
The Strategic Human Resources Dept. intends to create
mechanisms to ensure that reforms are implemented
rapidly, while enhancing the psychological safety of
employees by eliminating an atmosphere of uncertainty,
pressure, and conjecture.

Financial Capital Strategy

Creating Lifestyles

Achieving Group-wide synergies throughthe interplay between structural reforms
and new businesses
Shingo Baba

Managing Executive Officer and CFO
M&A, Group company management
Head of Corporate Planning Dept., Corporate Risk
Management Dept., Treasury & Accounting Dept.

Q

partner stores due to store closures and self-quarantining
on account of the COVID-19 pandemic. On the other
hand, operating income rose substantially, up 185% year
on year, as we kept in check operations-related expenses
linked to card transaction volumes and other factors, had
lower bad debt costs due to weak capital demand, andthere was the absence of a one-time cost increase that
occurred in FY2019.
Although the Lease Business was also affected by
the voluntary suspension of business by partners due to
COVID-19, we held net revenue at +0%, essentially the samelevel as the previous year, and profit increased by 85% above
the previous year due to a decrease in bad debt costs.

Please evaluate and analyze the businessresults for FY2020.

In FY2020, Credit Saison reported a decrease in sales andan increase in profits. In specific terms, net revenue totaled¥282.6 billion, down 9% year on year, due to the impact of
COVID-19. Business profit amounted to ¥48.3 billion, up
34% compared with the previous fiscal year.
In the Payment Business, net revenue declined by 10%
year on year due to falling numbers of new cardholders,
and less shopping and other transaction volumes andbalance, as the Company was unable to take advantage
of its strengths in developing and utilization of cards at

Net revenue by segment
Payment

Lease

Finance

311.4

–9 %

(Billions of yen)

320
240

8.8
17.2
43.1
12.2

0

282.6

5.5 (–37%)
14.5 (–15%)
43.4 (+1%)
12.2 (+0%)

40
30
20

2020

10
(FY)

0

1.9
6.9

36.1

+34%

48.3

2.9
6.2

17.9 (+185%)

2020

40

1.58

1.69

1.64

1.52

1.0

(FY)

35

Special allowance

60

3.0

0

Impairment losses
on ﬁnancial assets(Billions of yen)

4.0

21.2 (+18%)

18.0

Provision for loss
on interest payment

5.0

5.3 (–23%)

5.4 (+85%)

Bad debt costs (consolidated)

(%)

2.0

2019

Credit risk

Delinquency over 90 days (consolidated)

Note: Growth rate in parentheses

50

209.1 (–10 %)

232.4

2019

Entertainment(Billions of yen)160
80

Credit risk

Business profit by segment
Real estate–related

In the Finance Business, credit guarantees balances fell
due to the impact of partner financial institutions’ focus on
government support for business operators in response to
the spread of COVID-19. On the other hand, Flat 35 Loans
and asset formation loans demonstrated stable sales thatwere up 1% over the previous year, and profit rose 18% dueto the promotion of support for home purchases and a focus
on cooperation with partners.
In addition, the Real Estate–Related Business recorded
a decrease in sales of 15% from the previous year and a
decline in profits of 23% due to self-restraint in business
operations and other factors, while the Entertainment
Business posted a business loss of ¥1.7 billion due to the

2016

2017

2018

2019

1.29

2020

20

(FY)

0

50.5

43.3
27.3

15.9

2016

34.2

30.1

34.0

29.5

2017

0.6

31.8

35.2

4.2
0.1 11.1

2018

2019

23.1

23.8
23.8

8.7

2020 ’21 Est. (FY)Financial Capital Strategy

cancellation of live performances and the closure of facilities.
As shown above, profit rose as an unintended result of
lower costs in the COVID-19 pandemic, but from FY2021
onward, we will grow the top line in each domain while
expecting a cost reversal as the COVID-19 pandemic abates.
First, in the Payment Business, we will review theconventional human wave tactics approach to customer
development and implement business structural reforms,
including with the realization of success with customers
through the integration of our strengths in the physicaldomain and digitalization driven by the promotion of digitaltransformation (DX). For example, the alliance with Shop
Channel is going extraordinarily well, and the smartphone
self-contained service SAISON CARD Digital, which launchedin November 2020, is also expected to be profitable as it canbe issued without face-to-face meetings and is non-contact,
while being promoted mainly as a proprietary card.
Moreover, the Real Estate–Related Business is expected
to perform well in the future due to stable real estate prices.
In the Entertainment Business, ticket sales company Eplus
Inc. is a joint venture between Sony Music Entertainment(Japan) Inc. and the Company, and its financial base isstable. Given this, the Company is working to differentiate
itself from competitors by taking certain risks and acquiring
new content with an eye on the post-COVID-19 period.
Taking a medium- to long-term perspective, we will
broaden our management base as a comprehensive life
service corporate group. In addition to SWITCH SAISON,
in which employees develop services based on ideas theycome up with themselves, the executive version, Make New
SAISON 2.0, has been launched. The Finance Business,
which also steadily contributes to profits in the COVID-19
pandemic, is expected to see new business contract needs.
By combining measures aimed at improving efficiency
through business structural reforms with an array of new
businesses, this development will elicit their respective
merits and realize synergies across the entire Group.

Q

Please explain your policy on funds
procurement.

As a non-bank financial institution, our ability to procure
funds at low cost and in a stable manner is directly linked
to our business activities, which in turn leads to increased
profitability. In such a business model, maintaining financial
soundness and being aware of credit ratings is a priority. In
this regard, our basic policy of preparing for emergencies
by securing liquidity on hand and funding commitment
lines remains unchanged. We believe that we were able
to navigate through the COVID-19 pandemic in a stablemanner, and in preparation for the expected tapering (areduction of quantitative monetary easing measures) andfuture interest rate hikes, we will diversify the repayment
dates of interest-bearing liabilities and continue to maintaina long-term borrowing ratio of about 70% and a fixed ratio
of about 60%.
Our main method of financing is through borrowings
from banks and other financial institutions, as well as fromthe financial markets through the issuance of bonds andCP (commercial paper). In this context, we set a goal toraise funds from local financial institutions in FY2020, basedon the assumption that we would expand the scale ofour overseas business. However, due to the impact of the
COVID-19 pandemic, as well as the emphasis on efficientmanagement with low interest rates in Japan, we did notreach the level we had expected. Nonetheless, that our local
subsidiary received a long-term rating of AA+ from CRISIL, arating agency for S&P subsidiaries in India, proved to be one
major step forward in accelerating our overseas expansion.
In the future, we will continue to diversify our procurementwith an emphasis on stability and cost in response to themarket trends of the day.
We are also currently in discussions with rating agencies
and other parties regarding a social bond for which wewill be the issuer, which will be limited to investments and36loans for impact projects in Asia that launched in December
2020. We are forging ahead on initiatives to address the
SDGs and aim to help further address environmental, social,and governance (ESG) concerns through the realization offinancial inclusion while simultaneously procuring funds.

Q

What is your focus in terms of risk capitalmanagement?

Risk capital management is one of the pillars that underpins
the maintenance of ratings by rating agencies and stable
funding. We aim to maintain and improve upon the “A+(stable)” rating obtained from R&I (Rating and Investment
Information, Inc.) through a series of management measures,such as understanding the amount of assumed risk foreach business, diversifying risks without relying on specificbusinesses, improving asset efficiency, and expanding
surplus capacity by replacing the business portfolio.
We also see risk capital management as one of the tools
with which to engage our investors. Starting in FY2021,
we are keen to provide opportunities for the executives incharge to offer first-hand explanations of the CSDX andglobal strategies and to further strengthen our engagementwith investors.
We have not reduced dividends even under past severebusiness environments, and we have continued to pay
stable dividends during the COVID-19 pandemic as well.
We will continue to maintain this policy of stable dividends.
That said, we are currently in a phase where we should be
investing our management resources in global businesses
that are anticipated to undergo remarkable growth, and weare eager to manage our risk capital surplus so that it will
be effectively utilized for future growth and we will not face
too much risk. We believe that we will be able to increase
dividends by promoting the business structural reforms
and global business development that we are currently
undertaking.

Financial Capital Strategy

Q

Please tell us about your asset allocation
strategy.

At the ALM (Asset and Liability Management) Committee
meetings to be held in FY2021, we plan to calculate WACC
(weighted average cost of capital) and ROIC (return on
invested capital) for each of our major businesses and use
them in planning our asset allocation strategy. Through thisprocess, I believe that we will be able to take a further stepin our discussions from the two perspectives of profitability
through efficient use of capital and business growth,and that those engaged business divisions will deepen
their discussions. As the outside directors, who were notoriginally members of the ALM Committee, have asked toparticipate in the committee and because we are having
these discussions together, I expect a lively discussion basedon their opinions, which, while severe, are grounded in theirrespective areas of expertise.

Q

In conclusion, please tell us about your view of thefinancial strategy in terms of “transitioning to acomprehensive life service corporate group.”Ever since I joined the Company, I have felt a strong sense oftrying to preserve the corporate culture that started with Seiji
Tsutsumi. This sensory aspect, which includes culture, does
not appear on the financial balance sheet. However, I believethat this non-financial information will become the basis of an
economic sphere unique to the Company if it can be instilledin Japan and overseas. One of my roles is to communicate
with stakeholders based on quantitative information to
explain the values behind our culture to the outside world
and to create connections between those within and outsideof the Company. We have just now arrived at the starting
point. We would like to fully explain our business strategy andthe value we create to our stakeholders and to consider andimplement our financial strategy based on their assessment.

Basic Policy behind the Financial Strategy
Financial soundness and liquidity on hand
Maintaining and improving ﬁnancial soundness(A+ credit rating) through appropriate
Considering the Company’s business model, under our financial strategy we manage
risk capital management
the Company with an awareness of financial soundness (credit rating A+). We measure
Knowing the possible risks for each business
Minimizing risks by not depending solely
the confidence level, which represents the amount of risk suited to this rating, as 99.75%
on any businessand engage in risk capital management in a way that allocates the minimum required
Improving asset efﬁciency (= proﬁt margin)
Expanding the surplus quota by changing
capital by quantifying this level for each business and affiliated company. Based on
the business portfolio
the investment allowance derived in this way, we engage in “growth investments” andDistribution of capital surplus
distribute “shareholder returns.” Calculating these enables us to execute agile decisionmaking for matters that fall within the scope of the investment allowance, even in the
Aggressive investment
Appropriate shareholder
in growing ﬁelds
returnscase of high-risk overseas investment and financing projects or share repurchases, andStable and continuous
Strategic investments
to prioritize the maintenance and improvement of financial soundness.
dividends through expansion
in Japan andof the revenue baseoverseas
One aspect we pay particular attention to in working to maintain financial
FY2020(capital alliance/M&A)
Dividend
per share forecast ¥45
soundness is securing liquidity on hand for emergency funds. Against the more than
Payout ratio forecast19.3%
Investments¥3 trillion in total assets held by the Group, we have secured a commitment line ofin new alliances
Stock buyback to improvein various businesses
capital efﬁciency
approximately ¥300 billion, a credit receivables liquidation limit of approximately¥180 billion, cash on hand of approximately ¥100 billion, and liquidity on hand of
Balance of interest-bearing debt
approximately ¥580 billion.
(non-consolidated)
Diversifying methods to procure funds
The Group places importance on stability and cost when procuring funds andendeavors to diversify its procurement methods. In terms of our main funding
methods, in addition to relative transactions with banks, financial institutions, life
insurance companies, and non-life insurance companies, we conduct indirect
financing such as syndicated loans and commitment lines, and direct funding suchas issuance of straight bonds and CP.
In terms of indirect procurement, we are striving to mitigate refinancing risks
by cultivating new financial institutions with which we can expect long-term stabletransactions and diversifying our procurement sources. For direct financing, inaddition to straight bonds and CP, we are working to reduce liquidity risk and costs
by diversifying our funding methods, such as with the liquidation of receivables
that are not affected by our credit status.
Moreover, we will need to investigate measures for mitigating foreignexchange risk as we expand business in Southeast Asia. We can address foreignexchange risk by hedging yen procurement in Japan with foreign exchange
contracts and currency swaps, and by procuring funds locally.
37

Debt

Corporate bonds(Billions of yen)
3,000
2,000
1,000
0

1,850.9

1,951.6

2,201.1

20.0
389.5
340.0

1,147.9

1,202.1

2017

Securitization

2,380.2 2,373.4
35.0
550.0

55.3
482.0

415.0

467.0

505.0

1,255.1

1,328.2

1,331.1

20.0
511.0

40.0
358.0
305.0

2016

CP

2018

2019

2020 (FY)

Note: Securitized borrowings coinciding with the Flat 35
Loan business are calculated after excluding the interestbearing debt balance and long-term/fixed ratio estimate.

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

(%)
80
60
40
0

Fixed interest borrowing ratio

68.2

67.3

65.9

66.1

69.3

61.8

62.6

60.3

59.2

63.9

2016

2017

2018

2019

2020

(FY)

Financial Capital Strategy

Risk Capital Management

Shareholder returns
We believe it is important to take action that strengthens our corporate structure andcontinues to expand our business to increase shareholder value. In terms of returning
profit to shareholders, our policy is to make stable, continuous dividend payments to ourshareholders while enhancing internal reserves to realize these goals.
In the past, we have maintained stable dividends even when recording losses
coinciding with the restructuring of our real estate subsidiary. We have also maintained aconsistent dividend forecast even during the current COVID-19 pandemic. As a non-bank,
it is important for us to hold a certain level of shareholders’ equity as part of business
operations, so we will focus on our ability to continue offering a stable dividend without
being swayed by performance or transient factors.
Meanwhile, we will maintain a robust financial structure that allows us to acquire
shareholders’ equity whenever necessary, while at the same time preparing to respondagilely at the required timing. In working to raise corporate value, it is also importantfor us to share perspectives through close dialogue with creditors, and we will address
shareholder returns in consideration of the balance between shareholders and creditors.

We have defined business profit, ROE (return on equity), and the shareholders’ equity ratio as
the major management indicators for raising corporate value. As an independent non-bankcompany, among these, securing a certain shareholders’ equity ratio is critical to building
financial stability. With this understanding, we consult the opinions of rating agencies andmanage the Company with attention paid to maintaining a 15% shareholders’ equity ratio
over the medium to long term.
In terms of risk management, the ALM Committee deliberates risk quantification for eachbusiness, risk capital investment policies, the weighted average cost of capital (WACC), andthe target for return on invested capital (ROIC).
In terms of individual investment proposals, members of the Investment Strategy Committeewith expertise in financial, digital, and global matters, as well as those involved in finance,accounting, legal affairs, and risk oversight, deliberate on matters from a multifaceted perspective
to first identify risk. Following this, we make the actual investment decisions at meetings of the
Executive Board and the Board of Directors. In terms of high-value investment and overseas
investment proposals, we employ the capabilities of outside experts to help identify potential
risks and deliberate the countermeasures for these at Board of Directors’ meetings.

Trends in management indicators

Capital policy (Risk capital management)

Medium- to long-term target

10

ALM is introduced to measure risk and allocate risk capital for each business.

Shareholders’Equity (left)

Remeasurement is performed regularly to reﬂect track record updates and changes on the balance sheet.
Consolidated capital¥543.5billion

Payment
Business

Lease
Business

FinanceBusiness

Real EstateBusiness

FY2020GlobalBusiness

CreditGuarantee
Business

Risk capital allocationfor each business¥396.8 billion

etc.

Risk factors
Interest rate
Bad debt

Price ﬂuctuation(excludes the impact of adopting IFRS 9)

Dividends ¥70 billion
Minimum required capital Risk capital¥108.7 billion
surplusInvestment allowance¥30.9 billion

139.6billion

Dividend policy

ROE of% or more
Shareholders’ Equity Ratio of about

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.

Assets categorized
by business

Dividend per share and payout ratio(Billions of yen)

550

Risk capital allocation policy
Twenty percent of the consolidated capital within therisk capital surplus is secured as the minimum required
capital (¥108.7 billion).

15%

Shareholders’Equity Ratio (right)

No dividend cuts in the past even during times of management hardship

ROE (right)
(%)

20

530.9

Dividend per share (left)
(Yen)

15.6

15

450

60

40
10

400

With an eye toward achieving sustainable growth ingrowth investments for the future and in existing
businesses, we will review the business portfolio in
consideration of capital costs and optimize thebusiness portfolio by redeploying the management
resources that have been generated.

7.1

0

38

42.9

Payout ratio (right)
Completion of system migration(second-stage system release)

First-stage release of
the associated core system

Completion of the Atrium
restructuring plan

Full implementationof the revised
Money Lending
Business Act
Atrium businessreorganization
29.3(spin-off)

21.6
16.8

45
35

23.7

13.5 14.9

24.1

45 45

31.4

19.3
19.5

0

2016 2017 2018 2019 2020

0

(FY)

(%)

60

45

43.6

30
20

5

350

58.3

80

Start of Atrium
restructuring plan

500

After excluding the minimum required capital, an
investment allowance (¥30.9 billion) is aggressively
invested as resources in global businesses with highgrowth potential.
In addition, we will actively invest management
resources in new businesses, including M&A, toreturn proﬁts to shareholders andexpand growth opportunities.
Moreover, the Payment Business, which was severely
impacted by COVID-19, invested resources in efforts
to maximize LTV.

Stable and continuous dividend payments

30

15

0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (FY)
(forecast)
Net income（￥billion）(55.5) 18.6 12.8 9.4 32.7 25.5 12.6 26.1 42.2 38.3 30.5 22.8 36.1 36.5

JGAAP

IFRS

Responses to Risks/Opportunities

Creating a Future

The Credit Saison Group’s businesses carry with them several risks, including risks related to the external environment as well as financial and business aspects. In this context, in addition tocontinuing 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. The forward-looking statements contained herein are based on the Credit Saison Group’s judgment as of the date of submission of its Securities Report (June 23, 2021).

Risks common to the industry
Risk

Details

Responses

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 the domestic and overseas
economic environment (employment environment, household disposable
income, personal consumption, etc., due to recession)

Calculation by risk capital management (RCM) of the risk capital requiredby business to maintain ratings and maximization of returns within thescope of the risk capital surplus

Fund Procurement

Among fund procurement methods, such as borrowing from financial
institutions and the issuing of corporate bonds and CP, liquidity risk due
to the considerable amount of funding with a procurement period of lessthan one year

In fund procurement, maintaining a certain percentage of long-term
and fixed financing; the setting of liquidity enhancement limits, suchas commitment lines; the reduction of liquidity risk by promoting
diversification by executing direct procurement, such as corporate bonds
and liquidation of receivables

Market Risk

• Risk of falling prices of investment assets, such as stocks of listed andunlisted companies, venture investment funds, bonds, real estate, andreal estate funds• Rise in funding interest rates when interest rates rise

Impairment of Financial
Instruments (Allowancefor Doubtful Accounts)

Various Regulatory andLegal System Changes

Risk of non-repayment of receivables by large numbers of customers
due to changes in the domestic and overseas economic environment(employment environment, household disposable income, personal
consumption, etc., due to recession)• Risk of increase in the amount of reimbursement claims from customers
regarding the portion of interest that was higher than the interest rateceiling set by the Interest Rate Restriction Act, interest that within theGroup in Japan was repaid before the revision of the Act• Risk of having to cease certain services due to regulatory changes, etc.

39

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

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 tocredit limits, credit information management, and internal ratings, as well
as monitoring of credit status• The amount of allowance required at the present time is recordedin consideration of the reimbursement record and trends in interest
reimbursement claims• While complying with laws and regulations, prompt responses to service
developments in accordance with new regulations

Responses to Risks/Opportunities

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

Details

Responses

Risks

Collateral damage to owned assets and physical injury to employees resulting from more frequent natural
disasters and abnormal weather due to climate change• 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 andKansai regions• Establishing a new Sustainability Promotion Committee in August 2021 chaired by the Representativeand Executive President, and enhancing the response to climate change and other issues
P41 Credit Saison’s ESG Management

Risks

Risk of economic downturn, corporate bankruptcies, declines in consumer spending, and repeated issuanceand extensions of state- of -emergency declarations resulting from a failure to curtail the COVID-19 pandemic• Thoroughly implement employee health management and infection countermeasures, and expand
services targeting new customer segments by building new remote-type member capture models
using SAISON Card Digital

Occurrences ofLarge-Scale
Disasters due toEarning the trust of customers, business partners, and employees through BCP (Business Continuity Plan)
Climate Change Opportunities formulation and education while increasing corporate value
Impact of the
COVID-19
PandemicCompetitive
Environment

Relationships
with Major
Partners

Overseas
Business
Development

Opportunities

Initiated business structure transformation based on changes in customer psychology and behavior
caused by the COVID-19 pandemic

Risks

Intensifying competition due to new entrants into the payment industry from other industries brought
about by deregulation and technological advances

Opportunities
Risks

Development of new business fields and new products/services through collaborations with otherindustries
Deterioration of business performance of business alliances that form important strategies and business
partners with whom we have a capital relationship, changes of business alliance conditions, andcancellation of alliances with partners

Business development utilizing the acquisition of memberships through alliances with partner companies
Opportunities and organizations, expansion and diversification of services, product sales channels, and customer basesof both parties
Risks

Market trends in the countries in which the Company develops its business, the presence of competitors,
politics, economy, 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 notpossess a bank account and are unable to receive financial services

Risks•System failures due to malfunction of computer systems, communication line disruptions, etc.
•Decreased trust due to leakage or unauthorized use of, for example, personal information (membership
information) and confidential information due to cyberattack, etc.

System Risk andCyberattack Risk

•External sales of core systems in which the Company has been accumulating know-how for many years

Opportunities •In collaboration with external partners, external sales of secure payment systems in which use is made offraud prevention technology

P20 Progress of the Medium-term Management Plans

P44 Health management• 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 cashlesssociety, including smartphone payments, QR code payments linked to partner apps, and SAISONCARD Digital
P27 Customer Strategy•Strengthening relationships with existing partners•Building a business model that does not depend on a specific partner by promoting new alliances withpartners in diverse industries and sectors•Dispersion of country risk by expanding into multiple countries/regions, risk mitigation through regularrisk analyses and monitoring of countries in which the Company maintains a presence
P28 Global Strategy•Development of contingency plans, such as ensuring the backup of important systems•Development of measures to counter cyberattacks, such as raising employee information security
awareness and minimizing damage•Appropriate protection measures and system development of personal information, as stipulated
under the Personal Information Protection Law, acquisition of Privacy Mark

Risks

Risk of negligence and inappropriate handling of administrative tasks due to a large amount of manual
paperwork•Creating an administrative work manual, regular inspection of administrative work status, prevention of
employee errors and fraud, development and operation of a whistleblowing system for early detectionof any illegal activity•Promoting automation of administrative work by the systematization and introduction of robotic
process automation (RPA)
P22 Business Strategy

Risks

Risk of being unable to secure diverse, talented human resources to provide high-level services tocustomers and develop advanced products and services•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 andspecialist/expert systems•Introducing support systems, such as voluntary elective training programs and age-based careerdevelopment seminars, and creating a challenge-oriented culture through the establishment of anenvironment that works to offer long-term, multifaceted education and career development
P33 Human Resource Strategy

Actualization of
Administrative
Risks
Opportunities Expanding demand for administrative process agencies at affiliated cards and partners

Development
and Securing of
Human
Opportunities New service/product development by securing talent with expertise in digital technology
Resources

40

Credit Saison’s ESG Management

Implementing ESG Management
Partnership

PeoplePersonnel

Working together
Prosperity
with partners
Regional promotion

SocialPlanetEco-friendliness

Peace

Social contribution

Environment

Governance

About committee activities during FY2021

During FY2021, the first fiscal year in which it was active, theSustainability Promotion Committee met each month to reflect the
Sustainability Strategy within the next Medium-term Management Plan.

Value Co-Creation with Stakeholders

SDG Initiatives
Contributing to the SDGs is one of
the major goals of Credit Saison.
Meanwhile, simultaneously creating“Social Value” and “Economic Value”
is one of the obligations placedon companies engaged in global
business. To fulfill these goals andobligations, we are steadily advancing
ESG management. In promoting ESG
management, we are addressing socialand environmental issues from theperspective of the “Five Ps” in a bid toachieve inclusion in the SDGs.

“Five Ps” to AddressSocial andEnvironmental Issues

Structure of Sustainability
Promotion Committee

Business partners

Shareholders

Board of Directors
Administrative
agencies

Employees

Regional
communities

Customers

Climate change
Demographic andother social
structural changes

Social andenvironmental issues

Digitalization

41

Increasingsocial disparities

Representative
Directors
Sustainability
Promotion
Committee

Climate Change
Strategy WG

Instructions

Sustainability Promotion Committee Members
Chairperson

Representative, Executive President
and COO Katsumi Mizuno

Vice-chair

Managing Executive Officer and CFO
Shingo Baba
Senior Managing Executive Officer
Kosuke Mori

Reply

To remain as a company on whichsociety depends, it is important tounderstand what stakeholders demand
and to reflect these demands inbusiness activities. Credit Saison will
always place the utmost importance on
the expectations and harsh opinionsof its stakeholders. Every effort will
be made to channel this feedback
into further improving the Company’s
corporate value and ensuring its
sustained growth.

Becoming a ﬁnance company advancing with customers for 50 years

In August 2021, Credit Saison established the Sustainability
Promotion Committee as an advisory body to the Representative
Director in relation to sustainability activities. This Committee will
enhance initiatives to resolve social and environmental problems
through business Group-wide with the aim of achieving a sustainable
society. It will also serve to link activities targeting social andenvironmental problems that had conventionally been carried out
independently in a way that allows us to pursue initiatives in a more
integrated, three-dimensional, and concrete manner.
We have established two task forces under the Committee, namely
the Climate Change Strategy WG and the Diversity, Equity, andInclusion WG, for the purpose of promoting decisions made by theCommittee and of reporting and making proposals to it. Along withendorsing the TCFD recommendations, the Committee will promote
diversity, equity, and inclusion, such as the advancement of women.
With the Representative, Executive President and COO serving as
its chair, the Committee comprises globally minded male and female
members who hail from within and outside the Company and are thus
able to promote the exchange of various opinions.

Members
Reporting

Value Co-Creation
with Stakeholders

Establishing the new Sustainability Promotion Committee

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

Contributing toRealizing the SDG
Objectives

Reporting

Basic Approach to ESG
Management

Creating a Future

Diversity, Equity,and Inclusion WG

Managing Executive Officer
Kazue Yasumori
Executive Officer Kaori Shimada
Outside Director Nana Otsuki
Advisory member

Makoto Hayama(Fellow at the Institute for Global Environmental Strategies)

Human Resources

Related Stakeholders

Creating a Future
Employees

To accelerate reforms led by innovative human resources, Credit Saison has
established systems that allow employees with different genders, educational
histories, nationalities, and backgrounds to independently build their own
careers while leveraging their individuality.

Having abolishedcompany employee
classiﬁcations,decided to adopt an
employee role-based
system (Equal pay for
equal work)• Realizing the “ofﬁce leading to the
future” concept• Reforming awareness of work styles

I
Co mpro
rpo v
ra in
te

C a r e er

Human Resource
Strategies

lo p

m

e
• Career development sheet• One-on-one meetings• Open challenge• Choice-based trainingyC

h a racteristics• CS Style• SWITCH SAISON• SAISON CONFERENCE• Make New SAISON 2.0• CS Style Chips

Bonus

Monthly salaryDeﬁned contribution pension plan

Temporary employees

Fixed-term
employment

Bonus

Mate employees (part-time employees)

Monthly salary

Fixed-term
employment

Hourly wage

Currently (from September 16, 2017)
Full-time employees

Indeﬁnite-term Monthly salary Bonus
employment

Deﬁned-contribution pension plan

• Abolished employee classiﬁcations and moved all employees
to indeﬁnite-term contracts• Realized equal pay for equal work based on role
• Bonuses provided to all employees twice a year
• Uniﬁed all programs, including deﬁned-contribution pension plans
and welfare beneﬁt programs

ProgramContent
We promote effective utilization of commuting or moving time by working at home and mobile work to increase
productivity and promote activity.
Employees can determine their working hours of the working day at their own discretion within the range of total
Flextimemonthly working hours each month to realize their optimum work style according to the operational circumstancesof their department.
In addition to day and half-day paid leaves, employees can now take hourly leaves for various purposes. (Maximum 5
Hourly paid leaves
workdays per year)
Reduced workdays Employees can have reduced workdays or working hours not only for childcare or nursing care, but also foror working hours
developing skills after work. (Maximum 168 days per year, reduced hours of up to 2 hours daily in units of 30 minutes)
Employees who meet the requirements can take on a sideline. We support any arrangement which can lead to career
Second job
advancement and where the experience gained externally can benefit the main work in the company.

B
ife d IL
rk n
Wo em at
Sys

Fostering a corporate culture
in which every person cancontinue to take on challenge

Monthly salaryIndeﬁnite-term employment

Teleworkn i a lati a n cti v eesveEstablishing a systemthat allows employees tomake learning a habit
and form their own careers

Ke

Professional employees

Indeﬁnite-term employment

Realization of diverse work styles

Dent

System before reforms (up to September 2017)

General work employees

Programs and initiatives to support diversity, equity and inclusion

mon HR Sy
Com All Employstemees
forHealth
Ma
na
ge
m
e

he
ding t mentgranUp e Enviro
ﬁc
Of

e
g alu
V

nt

With the aim of “creating an environmentand corporate culture that bolsters thepotential of each and every employee,” in2017 we abolished the existing employee
classifications, which included specialist
workers and specific-category employees(part-timers). Except for some types of parttime employees, all employees are now
designated as full-time employees who areindefinitely employed and treated according
to their respective functional roles of
responsibility (with equal pay for equal work).

Working on sustainable growth
as a “leading-edge service company”

Reforming work styles to realize
the streamlining of operations and enable
employees to work more resourcefully

Productivity
Management
Organizationfor 2021

Reforming the personnel system for sustainable growth:Pursuing the advancement of all employees

Supporting balance with home
ProgramContent
It is possible to take childcare leave until March 31 of the fiscal year the child turns three years old. We canprovide a strong system for balancing work and childcare by not limiting the period of childcare leave to one
Childcare leave
year. During this time, the person can spend the time in a way that suits them, such as working hard to improvetheir career through self-development, allowing for a smooth return to work.
Spouse childbirth leave Employees may take 5 days of paid leave within 30 days before or after the day of birth to their spouse.
Female employees who are pregnant and have difficulty working due to morning sickness or after childbirth, orMorning sickness leave, female employees who are pregnant or are within one year after childbirth and need to go to the hospital for
hospital visit leave
checkups can take the necessary number of days off.
Employees who take care of children who are under elementary school age can take 5 days off per year (withpay) if they have only one child, or 10 days per year (without pay from the 6th day) if they have two or moreChild nursing leavechildren, in increments of one day, half a day, or hours in order to provide care to sick or injured children or toreceive vaccinations or medical checkups for their children.
During the period of time that nursing care is necessary, employees can take five days per year if you have one
Nursing care leavefamily member to care for, or tendays per year if you have two or more family members to care for, in incrementsof one day, half a day, or hours.

Creating an environment
in which employees canautonomously aim for
greater productivity, suchas via a ﬂextime system andworking from home42

Human Resources

Supporting employee growth
We are developing the means and environment for each individual to proactively consider and work on his or her career. In addition, we aim forthe growth of our employees and the organization by providing opportunities to take on challenges and a system to support those challenges.
Career Development
Sheet

Declaration of past experience and orientation and future career and growth plans. Thinking about the future direction of career will lead our employees to take active action in making it areality. The contents of the declaration will be used as a reference for human resource development planning and optimal job placement.

Human Resource
Development Meeting

Once a year, supervisors get together to talk about employee development plans. Development approaches that suit each employee are nailed down not only based on the wishes of theindividual but also from multiple perspectives to support the employee’s growth.

Career Design Program

One-on-One Meetings
Dream challenge
Open challenge
Job competition
Choice-based training

We provide support to our employees in considering their autonomous career according to the expected roles by age and issues in their personal career development.

This type of meeting creates an environment where supervisors and subordinates can communicate in both directions and feel safe to challenge each other.

Once a year, employees can apply for a transfer to their desired department. This system allows employees with a clear image of their own career path and potential contribution to thecompany to directly contact the Strategic Human Resources Dept.
This system allows employees to apply for positions, such as when a new business or new department is being set up, without having to go through their superiors.

Employees at the section manager level or above can declare their desired position once a year. It is also possible for them to submit a request to start a new company, and all declarations
will be looked over by management and used as a reference for organizational and personnel changes.
Credit Saison has prepared a program that allows employees to choose the learning they need for their own training and career development in line with their own goals.

In addition, we provide training to managers on basic knowledge (education on systems, performance evaluation, etc.), management, communication, mental health, and harassment.

Supporting the advancement of diverse human resources■ Promotion of the advancement of women

History of support for diverse human resources

With women accounting for approximately 70% of all employees, Credit Saison listens to the
feedback of our employees as we work to expand those systems that allow all employees
to continue working in a highly motivated manner and that ensure female employees do
not have to quit their jobs or abandon their careers due to major life events. In recognitionof these activities, we have been selected as a constituent of the MSCI Japan Women’s
Empowering Index for four consecutive years. Currently,
our ratio of female managers (general managers, section
chiefs, department managers) stands at 52.0%.

‘82 Initiated proactive hiring of
women for both new
graduates and mid-career‘89 Introduced work location
courses (countrywide andregional types)

1980

Support for the promotion and retention of employment of people with disabilities

‘07

‘07
‘07

Expanded the reduced working hoursystem (up to April 15 of the year thatthe child reaches the fourth grade ofelementary school)
Expanded the scope ofcounter-restricted positions to all sales
Introduced the spouse childbirthleave system‘92 Introduced the childcare leave system‘93 Introduced the nursing care leave system‘97 Introduced the childcare and nursing
care reduced working hour system

We recruit both new graduates and mid-career workers throughout
the year. To support the retention of employees, we introduce
tools to support their employment, provide training, and conduct
regular interviews. In addition, in order to create new employment
opportunities, we have opened the “Saison Farm Toda,” which
grows herbs indoors, and the "Ubiquitous Office Team," which
consolidates internal office work, to further promote employment.

2000

1990
‘12
‘13
‘16
‘17
‘18
‘19

43

‘20
‘21

Expanded telework application
coverage amid the corona pandemic
Promoted employment of people
with disabilities through establishingan administrative team

2010

2020

Extended the nursing care leave system and expanded the reduced
working hours system (expanded reduced working hours options)
Expanded the reduced working hours system (resumption of
reduced working hours after returning to regular working hours)
Tested the introduction of a remote work system
Introduced a common personnel system for all employees to befurther active
Promotion of employment of people with disabilities through theestablishment of a farm called ”Saison Farm Toda“
Initiatives to reform work styles through ofﬁce renewal

Human Resources

Health management
Health management promotion system

The health promotion team within the Strategic Human Resources Dept. play a central rolein promoting activities for maintaining and improving employees’ health.
A system has been set up that allows employees to easily consult regarding their mental
and physical wellbeing.

Health management declaration
To continue to create new value as a “leading-edge service company,”
we aim to ensure each employee is always in their best condition so they can
perform at the height of their potential, the happiness of our employees and theirfamilies, and the provision of good services to our customers and partners.

Representative, Executive President and COO
Representative, Executive Vice President and CHO
Strategic Human Resources Dept.
Planning and promotion of health management,
safety and health, labor management,
implementation of health maintenance andhealth promotion measures, support for
employees on sick leave

Basic Principles
Ensuring health and safety is a critical requirement for all operations. Our basic
views concerning health are as follows.

Industrial
physicians 2
Public healthnurses 3

Cooperation

Palette Health
Insurance Society

Each ofﬁce all over Japan

1. For employees, health is necessary for realizing their life design plans.

Implementation and operation of health promotion measuresfor each ofﬁce, led by the hygiene committee of each ofﬁce

2. For companies, employees need to be healthy to harness their capabilities
sufficiently to contribute to the business activities and social activities.

3. Employees should look after their own health but companies ought to support
such activities.

Specific Activities

Creating healthy mind and body
• Activities on women‘s health• Cancer control• Measures against lifestyle-relateddiseases and smoking

Policies• Companies comply with mandatory safety considerations.

• Companies maintain the necessary systems for safety management. Specifically,
companies promote systems for task environments, work environment
management, and health management while providing education on
occupational safety and health to supervisors and managers as well as employees.

Creating a workplace where anyone can continue to work

• Activities for ensuring appropriate working hours andhaving employees balance work and family life
• Helping employees to continue working while receiving
treatment

For more detailed information, please check our website: https://corporate.saisoncard.co.jp/en/sustainability/diversity/health/External evaluation• Employees take steps on their own to ensure their safety and improve their health.
1. Employees actively participate in activities to promote health that companies
implement.

2. Employees are responsible for managing their own health so they can do theirwork enthusiastically.

We have been recognized
as an Excellent HealthManagement Corporation
2021.

44

We were awarded “Gold” inthe “Gan Ally Award”

In 2020, we were recognized
as a company with excellent
performance in the promotionof cancer control in thecorporate action for promoting
cancer control.

In July 2021, we acquired theSilver certification, recognized
as a company with excellent
health management initiatives.

Human Resources

Peer-to-peer bonus system (CS Style Chips)

About the 53rd floor “Camp” freely usable space and introduction of SCANDIA
MOSS for the 52nd floor breakroom

Credit Saison is introducing a new version of its
peer-to-peer bonus system that allows employees
to send incentives to each other for the results
and contributions of those jobs that are not easily
recognized on a day-to-day basis. The giving ofchips with words of gratitude and praise among
employees for actions and initiatives alignedwith CS Style is leading to the stimulation ofcommunication that crosses between locations
and departments, improvement of motivation, andpromotion of CS Style practices.

In the spring of 2021, Credit Saison opened “Camp,” a freely usable space on the 53rd
floor of Sunshine City, and renovated the breakroom on the 52nd floor. SCANDIA MOSS
is an environmentally friendly, natural material that was born from the wilds of Scandinavia.
Installing SCANDIA MOSS along part of the walls serves to purify the room of airborne
ammonia, acetaldehyde, acetic acid, and othertoxic substances, thereby helping to create anenvironmentally friendly space.
We will continue to use environmentallyfriendly products when designing office spaces
in an ongoing effort to improve the environment.

Great that you successfully used Zoom to holdan online seminar for customers!
I was under the impression that “you canʼt
succeed without visiting the customer,” but I
was able to make contact with many people atonce, so it was a win-win situation without any
effort on the customerʼs part!
Iʼd like to follow your example!
#Embrace challenges#Question conventional wisdom

SWITCH SAISON in-house venture program

CS Style

As of October 2021, we have held the SWITCH SAISON in-house venture program, whichaims to rapidly transform our employees’ ideas into part of the business, five times. Thus far,
we have adopted several business proposals from among the nearly 900 total submissions.
The program attracts employee ideas from across all age groups and offers support
through a commercialization mentor program. At the same time, the program allows forflexible personnel changes for those who have made successful proposals.

To ensure every employee embodies the uniqueness of Credit Saison, the Company
formulated an employee conduct policy called “CS Style” that is shared by all employees. As a
conduct policy that leads to the realization of the Company’s “leading-edge service company”
management philosophy, every employee works daily to put CS Style into practice.
Management Philosophy

Holding the SAISON CONFERENCE and Make New SAISON 2.0 events

Leading-edge service company

We are advancing these efforts to raise employee motivation and foster a sense of unity
among the Group. As part of Make New SAISON 2.0, an executive version of SWITCHSAISON, our executives propose new businesses. Moreover, we held the SAISONCONFERENCE, which aims to have the CEO and executives share our vision and strategies,
to deepen the understanding of our current situation and management strategies, as wellas to create a corporate culture that undertakes challenges without fearing failure.

Value
Practical implementation of the principles of customer satisfaction
Mutual respect for our interests and those of our business partners
Developing a corporate culture of creative innovation
The action guidelines (work style) required of employees
to realize our management philosophy
CS Style
Embracechallenges

Questionconventional
wisdomWork until
the job isﬁnishedElevate teampower

Elevateyourself45

Human Resources

Special feature
SWITCH SAISON in-house ventures
Launched for the purpose of fostering a corporate culture in which employees generate ideas and of creating new services that address the changes in society’s needs and markets,
SWITCH SAISON also connects to in-house education activities intended to achieve diversity, equity, and inclusion.
Proposals transformed into part of the business
SAISON KAZUYA YouTube Channel
Due in part to the difficulty of
conducting face-to-face sales becauseof COVID-19, I realized that we could
use YouTube to steadfastly convey
and disseminate information 365 daysa year, 24 hours a day without rest. I
hope that this approach to YouTubeKazuya Itobased sales activities eventually serves
Digital Marketing
Dept.
as an opportunity to foster a corporate
culture that allows us to enjoy our work while undertaking
challenges without becoming stuck in convention. I would
be pleased if those of different age groups find this ideainteresting, including customers coming to see us as acompany that can undertake different challenges and thoselooking for work choosing us as a place to apply. Although
this idea necessarily aims tocontribute to higher profits
through greater awareness,
I also hope viewers see us as
the most interesting credit
card company in Japan.

In-house awareness activities
School Visit: SAISON TEACHERThis project got its start as part of the first batch of SWITCHSAISON submissions. As of March 2021, approximately
4,000 students have attended 90 events. This project
offers classes grounded in reality as its employee lecturers
can apply knowledge acquired through actual work. The
program has also begun offering online classes designedwith an awareness of two-way communication.
Once the age of adulthood is lowered under a revision
to Japan’s Civil Code slated for April 2022, Japan mightwell see an increasing number of financial problems
among younger age groups. We therefore hope that
this program will provide younger people with accurate
financial knowledge as a means of preventing these
problems. We will
pursue classes ina way that helps
attendees become
independent
consumers with theability to choose anduse the appropriate
payment method.

Femtech seminar and exhibition
As a company with a high number offemale employees and customers,
and that has fostered a sense of safety
and trust among women, I felt thatoffering products and services under
the concept of Femtech, which aims tosolve the health problems of women
Tomoko Sekithrough technology, could connect toDigital Marketingnew customers and create comfortable Dept.
working environments for employees. When we held
in-house Femtech seminars and exhibitions, we were able todraw out many new revelations.
Going forward, we will identify
more needs and study theirfeasibility and aim to evolve thisprogram into an activity that
addresses the unique emotional
and physical symptoms anddemands of women, including
the desire to feel at ease or toconsult with specialists.

Initiatives for universal manners and manners toward LGBT
We encourage employees to take the Universal Manner Test*1 to learn the “mindset” and“actions” that enable them to act from the perspective of someone different from themselves,
such as an elderly person or a person with a disability. We also participate in LGBT*2 mannertraining*3, where we learn about the concerns and anxieties of the LGBT community, and learn
specific knowledge and ways of dealing with the community in order to provide support.

*1 The Universal Manners Test is organized by the Universal Manners Association of Japan, and is a certification test for systematically learningand acquiring the ”mindset" and "actions" needed to deal with diverse people, including the elderly and people with disabilities.
*2 LGBT is a general term for sexual minorities and is an acronym for [L] lesbian (female homosexual), [G] gay (male homosexual), [B] bisexual,and [T] transgender (a person who lives or wants to live a gender different from the one assigned at birth).
*3 LGBT Manners Training” is sponsored by the Japan Universal Manners Association, and provides specific knowledge and ways to deal
with the concerns and anxieties that the LGBT community tend to have, as well as points that can be taken into consideration and ways toprovide casual support in the workplace and in services.

46

Environment

Related Stakeholders

Creating a Future
Regional Customers Employees
communities

Credit Saison implements environmental efforts on an ongoing basis regarding regular
operations within the Company, including the full-on promotion of paperless operations.
We also pursue environmental conservation activities together with local communities
through the management of Akagi Nature Park.

Paperless operations using a document
management application

Paperless initiatives
Eliminating paper applications by promoting SAISON CARD Digital
Credit Saison is working to reduce paper consumption and CO2 emissions by promoting the use of online card
statements and applications.
Reducing paper consumption will help to lower CO2 emissions, while digitalization is expected to reduce CO2
emissions by 500 g per card statement envelope. Through the expansion of digitalization, we will continue to both
improve customer convenience while promoting initiatives to manage environmental issues.
Moreover, we are promoting the digitalization of Saison Counters, as well as the transition to paperlessprocedures and labor-saving operations.
Contributing to society through the management of the Akagi Nature Park
Under the theme of “Coexistence of Humanity and Nature,” the Akagi Nature Park (Shibukawa City, Gunma Prefecture)provides an environment that aims to create a beautiful forest in which animals and plants can grow with vitality, andwhere visitors can feel the comforting presence of nature. The Park got its start in the 1980s under the leadership of Seiji
Tsutsumi of the Seibu Saison Group, who undertook the 21st century challenge of creating a “harmonious coexistence
between human activity and nature,” and developed the Park by replacing the vegetation in what was once a manmade forest. Credit Saison has managed the park since 2010 with the assistance of many individuals, companies, andorganizations that have endorsed the Park’s goal of passing on a rich nature to the children who will support the future.
As a place of environmental education that conveys the wonder of nature, a cultural forest of uncompromising“beauty,” and a location of recreation and relaxation that allows one to feel the comforting presence of nature, the Park
welcomes regular visitors and has developed various programs. One of the newer programs offered by the Park is“Parents and Children Exercise and Play Classrooms,” which allows participants
to enjoy therapeutic walks in the forest while exercising their bodies. As a resultof avoiding outings to prevent the spread of COVID-19, secondary health issues
arising from factors such as a lack of exercise have become a recent problem.
Forests, however, are relaxing and can strengthen the immune system, among
other effects. Using its standing as a “Forest Therapy Site” for which these effects
have been proven through physiological and psychological experiments, the Park
has contributed to the greater health of those in the community.
47

Credit Saison is working to reduce
paper consumption by promoting thedigitalization of paper documents,
particularly by using paperless faxes anddocument management applications.
Along with improving operational
efficiency by shortening the time spentsearching for and filing documents,
Ami Miyauchi
digitalization helps reduce document
General Affairs Dept.
storage space and the volume of
discarded documents, which contributes to reduced CO2
emissions and other environmental impacts.
For example, the Credit Saison Finance Business Rent
Guarantee Group introduced a document management
application for customer rent guarantee service operations in
September 2020 to transition some of the operational flow topaperless operations. One year after introduction, the Grouphas reduced paper consumption approximately 10% despite aroughly 180% increase in the number of applications comparedwith the previous year.
We will further promote the shift to paperless operations
and continue efforts targeting environmental problems.
• Reduction of paper consumption through online statements(500 g of CO2 reduction per envelope)• Paperless board meetings by using tablet devices for meeting materials• Active use of conference calls and video conferencing• Reduction of electricity consumption by shutting down PCs when awayfrom the desk or not in use• Casual office attire (Cool Biz, Warm Biz)
Note: Adopted year-round from May 2018

Partnerships

Related Stakeholders

Creating a Future
Customers

Business
partners

By leveraging our strengths to support the development of solutions thatcombine the technologies, ideas, and services of other companies, andto support start-up companies, Credit Saison is working to develop newservices and business collaborations with various companies.

Making Wine&Wine Culture Co., Ltd., and the Wine and Spirits Culture Association,
which administer the TANABE YUMI WINE SCHOOL and SAKURA Japan Women’s
Wine Awards (SAKURA Awards), into fully owned subsidiaries

Q

Investment-related approaches and activities

This initiative has been ongoing for the past 30 years along thelines of wine, “Sommelier Training,” and “Wine Culture Promotion”
as led by Yumi Tanabe, a leading wine expert and educator inJapan. The SAKURA Awards, which began in 2014, was the firstto adopt an international wine judging committee to be led by
women working in the wine industry. Having been involved for
Toshihisa Aikawa
many years in promoting the advancement of women, this initiative Wine&Wine CultureCo., Ltd. Director
echoed with us and led us to become more interested in helping
Credit Saison Co.,
to develop the initiative and make it part of our business. (Aikawa) Ltd., Corporate

In response to social issues and changes in the environment, Credit Saison invests along
the two axes of “solution development with a focus on finance” and “support for start-up
companies undertaking the challenge of innovation.”
In 2012, we began participating in
Investment areas
limited partnerships (LPs) for the purpose
Payments between
Creator economy
of collecting overseas informationcompanies
Telecommuting
Sales
Educationand launched collaborations withWork Style HR
New Stylestart-up companies in Japan. We have
Invoiceestablished a certain degree of presence
EC (D2C)
management
BNPL
by executing direct investments in
BaaS
companies that possess the potential
CreditFinancefor business synergy. In 2015, weFinanceLeasebegan principal investments with theLendingestablishment of Saison Ventures Co.,
CCC
Renewable
Ltd., which provides corporate ventureenergyFemtechcapital (CVC) for companies in Japan.
SDGs

Bioeconomy

3R

Carbon neutral

Please tell us about the background to this project.

Q

What are you trying to achieve through this project?

Under the theme of “Women and Wine,” we are leveraging our
network to utilize this initiative as a promotion and event activity for
Saison Card members, and are considering offering wine schools,
proposals that marry wine and food, and a SAKURA Awards wine
party. With a target of women who enjoy both their work andprivate lives, we will rapidly deploy membership services under
the theme of wine, for which there is a high demand among ourcustomers, regarding the Saison Rose Gold American Express®
Card that we began issuing in November 2020. (Aikawa)Contents for women
Beauty/Health

Beauty/HealthQ

Investing in Grace Group Inc. as a provider of egg freezing services
In October 2021, we invested in Grace Group, a company that provides egg freezing services
for the purpose of tackling social issues, including promoting the advancement of womenand addressing declining birthrates. We engaged in advertising activities intended toincrease awareness of the Grace Group’s services and developed optimal financial products
to actively support the careers and life plans of a diverse range of women.
Going forward, we will go beyond investing in egg freezing services totackle overall women’s healthcare as a means of expanding the Femtech
market, which covers a wide range of fields that address each life stage.

Please discuss your vision in working together with
Credit Saison.

By leveraging our more than 30 years of experience in the wine
industry and working alongside Credit Saison with its nearly 36
million Saison Card members, we believe we can disseminate
wine culture beyond where it stands today and help to expand
consumption. We will convey the joy of wine to an even greaternumber of people through STOREE SAISON and the “Tento-mushi(ladybug)” card member magazine. (Tanabe)

48

Planning Dept.
Strategic M&A Office
General Manager

Yumi Tanabe

Wine&Wine CultureCo., Ltd.
Representative
Director
Wine and Spirits
Culture Association
Chairperson
TANABE YUMI WINESCHOOL President
SAKURA Awards
Chairperson andJudging Committee
ManagerPartnerships

Establishing CASM, Inc. together with CyberAgent, Inc., as a marketing company that leverages card payment data
In June 2021, we established CASM, Inc. together with CyberAgent, Inc., a leader in the digital marketing industry, as newcompanies that will provide marketing solutions leveraging card payment data. CyberAgent, Inc., also owns “AI Lab,” an AI
technology research-and-development organization.
AI Lab has been involved in the research of alternative data applications for the purpose of ascertaining real-time
economic conditions at the refined granularity required for research into recommendation information optimization andfor decision-making by companies and governments. AI technology enables comprehensive alternative data analysis,
including high-precision payment data analysis, as well as insights into consumption behavior and customers.
This project aims to utilize our payment data more effectively, as well as to create new businesses and value.

Q

Please tell us about the background to this project.

Credit card payment data allow users to rapidly ascertain consumption trends from the level of accuracy based on identity verificationand the promptness of payments. Because the need to utilize these data as “alternative data” is expected to increase amid the majorchanges in purchasing behavior due to the new lifestyles resulting from the COVID-19 pandemic, we felt that we could transform thesedata into new value creation and businesses by combining them with the know-how in Internet advertising and marketing held by
CyberAgent, Inc. This understanding led us to establish a joint venture with this partner. (Kawahara)

Q

What are you trying to achieve through this project?

By combining Internet technology with card payment data, we can optimize and diversify recommendation information for card
members in a way that makes them realize they want a specific product, for example, or provide marketing solutions for manufacturers
and retailers that utilize payment data in a way that promotes changes in customer behavior and leads to increased sales. We will also
attempt to create new businesses that combine the business fields and know-how of both companies. (Kawahara)

Q

Kazutomo Kawahara
Credit Saison Co., Ltd.
Executive Officer
Digital Innovation
Division and DigitalMarketing Dept.
General Manager

Please discuss the reasons you chose Credit Saison and how you feel about our corporate culture on a daily basis.

I felt that because Credit Saison holds the payment data for nearly 36 million people and is actively working to create new businesses
that utilize and expand on such data it was a match for the AI knowledge and development technologies held by CyberAgent, Inc.
Those involved in the project are steadily moving forward with confidence in the potential held by data and are strongly bolstered by
Credit Saison’s stance of constantly challenging new fields. (Shimoda)

49

Mitsuru Shimoda

CASM.inc
Representative Director

Regional Development

Related Stakeholders

Creating a Future
Regional Administrative
communities
agencies

Contributing to regional economic development and problem solving inJapan and overseas through financial services while creating a convenientand plentiful society.

Achieving a Safe, Secure, and Convenient
Cashless Society
Building a diverse
payment scheme

Appropriate managementof personal information

Information/
cybersecurity

Preventing excessive
indebtedness
Improving the accuracy ofunauthorized use detection

Visit our website for details.
https://corporate.saisoncard.co.jp/en/sustainability

Partnership agreements with local governments
Credit Saison concluded a partnership agreement on disasterprevention and education with Yokohama City and set up
the Bosai Café to educate people about how to preventand mitigate disasters. As part of this program, we makedonations to Yokohama City‘s disaster awareness program
and to hold disaster prevention workshops. We also signed apartnership agreement on health promotion
with Fukushima Prefecture and in addition to
supporting activities that promote people's
health, we also make donations to the
Yokohama City disasterprevention andprefecture's animal welfare center.
mitigation workshop
Also, we have also signed acomprehensive agreement oncooperation with Kanagawa Prefecture
and are working together to revitalize thelocal community and solve social issues Donating to the
Fukushima Prefectureusing Eikyufumetsu Points.
Animal Welfare Center
Note: Donations can be made to any of these programs with Eikyufumetsu Points.

Note: All photos are for representation purposes only.

Providing financial services in Asia
In the rapidly growing Asian region, Credit Saison isdeveloping retail financial businesses tailored to eachcountry and aiming to realize financial inclusion for theiremerging middle classes. To contribute to the expansionof the finance business and the development of theregional economy, we are promoting the foundation of
medium- to long-term overseas strategies and businessdevelopment along two axes: business alliances withstrategic partners in each country and investment in andthe financing of promising companies.
•

•
•
•

In Vietnam, in addition to launching a new credit cardbusiness, by developing the individual installment
business for motorcycles and home appliances

In Indonesia, by developing the digital lending business
In Thailand, by providing BtoB financial services

In India, by developing the digital lending business
Underserved segment that is unable to receive
sufﬁcient ﬁnancial services from banks, etc.

Providing ﬁnancial products andﬁnancial solutions in collaboration with local companies

Achieving ﬁnancial inclusion and contributing to
the economic development of the countries
in which Credit Saison operates

50

Akagi Nature Park initiatives with special-needs
schools
Under the management philosophy of “Preserving a Lush
Forest for the Children of the Future,” the Akagi Nature Park
engages in activities that contribute to the community in a
way that creates a sustainable society together with local
companies and schools.
In 2021, the Park began selling products made by
students at the Gunma Prefectural Shibukawa Special-needs
School as part of their occupational training program.
Experiencing how the products they make are sold anddelivered to customers helps the students to learn more
broadly about society’s systems. This initiative thereby aims
to help students imagine themselves working and to fill ingaps wherever possible between school and work to ensure
the students become human resources who can excel in the
future. In addition, by acknowledging human resources ina diverse range of situations and with different values, we
discover hints to improve the comfort of all Park visitors andto incorporate the concept of diversity into the Park.

Social Contribution

Related Stakeholders

Creating a Future
Regional Administrative
communities
agencies

In working to realize a sustainable society that is even more convenient andprosperous than it is today, we will go beyond simply using our assets, andmerge these with the technologies, ideas, and services of our stakeholders
as we drive forward initiatives to resolve problems.

“KASSAI” fundraising service
To create “the future of finance,” in 2020 we executed a capital participation in Fintertech
Co., Ltd., a subsidiary of Daiwa Securities Group. This move is intended to develop andprovide “next-generation financial services,” such as cryptocurrency-backed loans and loantype crowdfunding.
Due to the significant impact of COVID-19, the continued existence of the travel,
sports, restaurant, music, theater, and many other industries has been threatened. There isnothing more unfortunate than losing an entire industry or organization even though there
are those who want it to continue and want to support it, feeling that they must not lose
something so important to themselves. To improve the sustainability of these industries
in whatever way we can, we believe systems are needed to deliver the thoughts of theirsupporters in a concrete form so that they can be made a reality, which is why we manage
the “KASSAI” fundraising service. “Gold Ribbon Walking,”
an activity supported by Aflac Life Insurance Japan Ltd. thatseeks to improve recovery rates among and promote anunderstanding of children battling childhood cancer, and theKansai Philharmonic Orchestra, which canceled or reduced
the scale of many of its performances, are two examples thathave used this service.

Launching the “YoriSoi Care” hospital discharge support
service as a joint project with MedPeer, Inc., in the field ofhome healthcare

With its aging society, Japan is faced with the urgent challenge of enabling the elderly
to receive the medical and nursing care services they require in the communities inwhich they have always lived, while maintaining a lifestyle that stays true to themselves.
Home healthcare and nursing care, however, rely on collaboration between many relatedorganizations, including hospitals and nursing care facilities.
In cooperation with MedPeer, which operates the “Primary Care Platform” as a link
between medical institutions and patients, we launched the “YoriSoi Care” hospitaldischarge support service as a joint business venture in the home healthcare field. This
project leveraged the platform building know-how MedPeer possesses as part of its
healthcare business together with our know-how and networks in the Finance Business.
Along with improving the efficiency of hospital discharge coordination operations, thiseffort aims to create a “Hospital Discharge Support Platform” that expands options forpatients and allows them to easily find a treatment facility that meets their needs.
Through this business, we will provide new value in home healthcare and will work to
expand services in the healthcare business and solutions in the BtoB area.

Support for sporting and cultural activities
With the desire to continue to grow alongside Japan’s national soccer team, we have beena supporting company to the team since 2001 and through a sponsorship agreement with
the Asian Football Confederation (AFC) have supported the soccer community in Asia since2014. We are also committed to supporting the dreams of children by providing valuable
opportunities that fall outside the realm of normal daily activities, including as part of our“High Touch Kids” program, which is held under our philosophy of having children visit sports
stadiums to see Japan’s representatives strive toward victory in person.
Credit Saison has also been a sponsor of performances in Japan by José Carreras of Spain,
one of the members of the world-renowned The Three Tenors, since 1999. We support José
Carreras’ activities in a variety of ways, including through the donation of funds obtained fromcommemorative goods prepared for his annual
recitals to the International José Carreras
Leukaemia Foundation, which was founded
after his successful battle with leukemia.

Conventional hospital discharge coordination operations (left) and “YoriSoi Care”
hospital discharge support service flow (right)
Conventional

YoriSoi Care

Hospitals coordinate between the patient,
their families, and the treatment facility
Hospital as
agent
Patient

Treatment facility

The treatment facility applies to receive the patient
through “YoriSoi Care” based on patient data on theplatform, thereby ensuring an optimal match between
the patient and the treatment facility

Patient

Hospital
inputsinformation

Treatment facility
Apply toreceive patient51

Incorporation of External Opinions andKnowledge to Improve Governance

Creating a Future

Q

Naoki Togashi

Outside Director (Independent)
Director, NAGAHORI CORPORATION
Trustee, Japan Association of
Corporate Executives

Nana Otsuki

Outside Director (Independent)
Expert Director, Monex, Inc.
Professor, Nagoya University of Commerce andBusiness Graduate School
Trustee, Nishogakusha University
Audit & Supervisory Board Member, Tokio Marine
Holdings, Inc.
Outside Director, Mochida Pharmaceutical Co., Ltd.

Hitoshi Yokokura

Outside Director (Independent)
Partner, Waseda Legal Commons, LPC
Auditor, Minori Audit Corporation
Outside Audit & Supervisory Board
Member, ITO EN, LTD.

Outside Director Roundtable Discussion

We will deepen discussions at Board of Directors’ meetings with the aim of“transforming ourselves into a comprehensive life service corporate group”
while utilizing external knowledge and perspectives.

52

In 2021, Credit Saison set forth a new
management strategy for “transforming into acomprehensive life service corporate group.”
What must the Company do to achieve thisgoal, and how do you approach the executiveside as an outside director?

Togashi: As for the Company’s goal of “transforming
ourselves into a comprehensive life service corporategroup,” I see this as a grand experiment that no othercredit card company, or even more specifically, noJapanese business company, has ever attempted before.
There are few successful examples of financial groups
entering the non-financial arena. Against this backdrop,
Credit Saison, as a so-called independent credit cardcompany, is entering non-financial fields as a corebusiness, which is extremely challenging because thisis not simply a matter of starting a physical or online
retail distribution business. This move reflects the factthat we have reached a major turning point in this era,so the realization of this ambitious objective cannot beseen as an extension of the past. It will be important for
the Company to ensure that the various steps it takes
reflect the world it is truly aiming for. I find examining
the individual proposals toward reaching this goal to be
motivating. In this sense, my role is to foster a deeper
discussion about the perspective from which we should
move forward. I always try to think deeply about various
future-oriented businesses with an eye to going beyond
simply “breaking out of the industry mold” to “create
something unimaginable.”
Yokokura: Materials detailing specific agenda items atrecent Board of Directors’ meetings provide a conceptual
outline for the Company’s goal of “transforming into acomprehensive life service corporate group,” while eachagenda item has been designed with an awareness ofIncorporation of External Opinions and Knowledge to Improve Governance

how it relates to this goal. As I mentioned in the Integrated
Report 2020, I still feel that the ultimate role of outside
directors, who are in a position to supervise businessexecution, is to step on the final emergency brake. In
addition, I think it is important to focus on the Company’s
policy-making process from the perspective of supporting
appropriate risk-taking and to deepen discussions byconstantly checking, for example, on the consistency ofdecision-making as it is positioned within this overarchingstrategy and how it stands in relation to the strategic
goal. It is difficult for part-time outside directors to gain athorough knowledge of the finer points of a company. As
an unbiased and detached outside director, however, I try
to deepen discussions with the executive side by using myexpertise, such as my way of thinking as a lawyer and myperspective as an accountant.
Otsuki: For a company that has so far operated ina stable manner to endeavor to “transform itself” iseasier said than done. In addition, with the businessenvironment drastically changing, not only Credit
Saison but also its competitors are broadening
various initiatives to further expand their operations.
Accordingly, I think “speed,” “boldness,” and“communication” will be especially important for theCompany going forward. Although “speed” is of course
important, “boldness” is needed for making decisions
without being too risk-averse, though this requires
enhanced follow-up and monitoring to detect and correct
any mistakes as soon as possible. As for “communication,”
I think it is necessary to enhance the disclosure of not
only financial but also non-financial information, suchas environmental initiatives, and to disseminate suchinformation both internally and externally.
Togashi: Regarding financial information, the mattersof each business unit discussed mainly at the Board of
Directors meetings are only one aspect of the overall
picture. Yet, the Company’s corporate value is formedby accumulating such data, so I think one of our roles isto speak out about how each business unit is currently
positioned from the overall perspective of financial
strength, capital strength, and corporate value.
Otsuki: I completely agree. It is important for allcompanies, not just Credit Saison, to try new things thathave never been done before. In this context, decisions
are made by examining the business activities and risks ofindividual departments from an overall perspective. We as
outside directors play a critical role in helping to maintainthis sense of balance.

53

Q

How do you think the Board of Directors
should evolve?

Otsuki: The role of directors, whether internal or external,
is to supervise the executive side, and this will notchange even as the Board of Directors evolves. On theother hand, I feel that as the direction of the Company
changes, directors and outside directors will in turn berequired to add more value. Some studies have shownthat Japanese companies, in particular, tend to demandthat their outside directors have more advisory functions
than American companies do. I feel that there are needs
and expectations for such advisory functions for outside
directors at Credit Saison as well.
Togashi: In the case of American companies, forexample, when an IT committee is established, half ofthe members are outside directors with IT experience,or if the firm is a financial institution, they have IT
experience in a financial institution. The Nomination &Remuneration Committee also includes experts, such asindividuals with experience in HR and those who havebeen involved in HR matters. The mission of outside
directors is to supervise corporate management, but with
the increasing need for specialized business discussions,they are expected to provide third-party opinions basedon the knowledge and experience they have acquired intheir careers, even when this experience is in a different
field, while a deep understanding of the business is
becoming essential. I therefore feel that we are in anage when it is difficult to serve as an outside director
unless you have expertise connected to that business.
Accordingly, we as outside directors need to become
more sophisticated to help the Board of Directors evolve.
In addition, even though our function is to supervise andmonitor, we make decisions on equity and investment

Incorporation of External Opinions and Knowledge to Improve Governanceproposals that come before the Board of Directors, so
I believe that we have moved beyond supervision to
performing a risk-taking role.
Yokokura: The composition of Credit Saison’s outside
directors shows that we are not a homogeneous groupof people, and thus we all have perspectives that arecompletely different from one another. I think the Boardof Directors functions well in that the three of us eachask questions from different angles and delve deeper
into discussions.
Togashi: The skills matrix of outside directors shows realdifferences.
Yokokura: I think the characteristics of Board members
are a result of the Company’s earnest approach tocorporate governance.
Togashi: Yes indeed. On the other hand, when I think
about the issues facing the Board of Directors today, one

thing that must be addressed is the need to strengthen
the administration of the financial management system
to include more crisis scenarios, given the fact that the
number of investment and equity proposals is increasingin Japan and overseas. Funding is necessary to open
up new frontiers, but it is not inexhaustible. How muchcorporate value is being generated with current capital?
What is the debt ratio? How much procurement capacity
is available? These financial considerations have an
important role to play, and while a crisis management
system is currently in place, it needs to be deepened topromote management based on various scenarios. It isalso important to more urgently and immediately informmanagement and the Board of Directors of issues that
arrive when pursuing investment and equity activities
in order to contain them. Furthermore, looking beyond
the successes of large investment or equity proposals,
it is important to be able to not only make quantitative
judgments such as good revenue and financial position
but also to fully consider and evaluate qualitative
aspects—both defensively and offensively (including
risks)—such as the qualifications of the management
personnel of the acquired company, their commitment
to the business, the relationship of trust between
the management and mid-level employees, and thecorporate culture.

on which I serve as a member. I have been amazed at theextremely high level of awareness among its members
since the very first meeting. Beyond simply holding
meetings, the committee has been active in sharing
what they have learned about sustainability on a daily
basis. Each member is taking a leadership role while
making sustainability a personal matter, and I’m verymuch looking forward to seeing how these members withan extremely high level of awareness will get the entire
company involved.

Otsuki: I mentioned earlier that Credit Saison’s
three challenges are “speed,” “boldness,” and“communication.” For “communication,” I think that
effectively conveying to the capital markets what theCompany is already doing, both financially and nonfinancially, will positively impact financial strength andthe Company’s ability to raise funds, which are a limited
resource as Mr. Togashi mentioned. As for changes in thegovernance structure, the Company newly establishedin August 2021 the Sustainability Promotion Committee,

Yokokura: Looking at the further evolution of the Boardof Directors, Board meetings should discuss not only
individual agenda items but also major policies and ideas
such as how to steer the entire company and addressrisks when they arise. We need to discuss opportunities
and risks from a micro perspective to transform Credit
Saison into a “comprehensive life service corporategroup.” In addition, however, it would be good if theBoard of Directors could delve deeper into the overall
vision for the Company from a macro perspective that is54

Incorporation of External Opinions and Knowledge to Improve Governancenot limited to specific proposals. Directors in charge havea direct stake in each specific agenda item, but there
needs to be a forum for discussing what the Company
as a whole should be like, separate from the businesses
each director represents.
Togashi: Executive officer meeting materials provide
an avenue for better understanding of the pros/consand opinions expressed prior to Board meetings. I think
this has enabled the Board to operate more effectively
and efficiently than before. As Mr. Yokokura mentioned,
though, it would be good to have an off-site meeting
where major themes can be decided.
Otsuki: Materials from the executive board meetings arecertainly shared, making it easier to keep track of internal
discussions. Still, there is room to improve the efficiencyof the Board of Directors by devising ways to discuss all
the items on the agenda.

Q

In closing, what message do you have forstakeholders?

Togashi: Many people, including investors, probably still
think of Credit Saison as a credit card company. A lookat the actual business shows that the finance business is
growing and, in turn, Credit Saison has expanded beyond
being a credit card firm. And now, for the first time in theindustry, the Company is working on “transforming into
a comprehensive life service corporate group.” I’m suresome people view this challenging “transformation” as acause for concern. In a time of drastic change, however, it
looks to me that Credit Saison is taking the initiative withan eye to 5–10 years down the road. Looking back, theSeibu Group leveraged its credit card business to transform
its installment payment subsidiary into a credit cardcompany, which has subsequently expanded its financial
business and is now poised to enter the non-financial field

in a unique manner. I view this as the evolution of Credit
Saison, and looking back five years from now, this will
likely be seen as “revolutionary.” To this end, we as outside
directors will do our utmost to work together with executive
management, and I hope that all stakeholders have highexpectations for the future growth of the Company.
Otsuki: As Mr. Togashi said, we are now doing our best
to achieve dynamic growth that is unprecedented. Asof today, most of what we can share with you, including
capital markets, is about past efforts. Going forward,
however, the Company will provide a vision that is a clean
break from the past. Credit Saison will continue to makeevery effort to communicate with stakeholders to ensurethat they understand this point. In addition, the Company
is taking on the challenge of various new initiatives led
by young employees. We will continue to discuss suchinitiatives from the perspective of outside directors as we
pursue these initiatives together. Many of these initiatives
are new to us though, so we are bound to make somemistakes. However, we are “not afraid of failure” and seethat “small mistakes are common,” so we hope you will
understand this as well.
Yokokura: As I mentioned last year, history has proventhat it is not those who are strongest at the time but those
who can adapt to change that survive. This is true of thedinosaurs that died out while mammals endured. Credit
Saison is now taking on the challenge of maintaining its
position while continuing to grow as a “comprehensive life
service corporate group.” At Board meetings, discussions
are held with a firm focus on the Company’s goals, andthere is always an attempt to further promote and deepen
these discussions, which I view as a healthy and earnest
approach to “adapting to change.” I hope that all our
stakeholders will continue to keep a close eye on thishealthy growth.

55

Corporate Governance

Creating a Future

Our basic view on corporate governanceTo realize our basic management policy ofobtaining the understanding and consent
of our shareholders by continuously
improving corporate value over time andcreating innovative services, the Credit
Saison Group is implementing a variety of
initiatives to improve and strengthen our
corporate governance in recognition of
the enormous importance of bolstering
management supervisory functions toattain business objectives and enhance
management transparency.
For details, please see our Corporate Governance Report.

https://corporate.saisoncard.co.jp/en/
sustainability/diversity/governance/pdf/
governance_report_202111EG.pdf

Management/executive system

Matters concerning composition of governing
bodies and organization management

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 confidenceof our shareholders and other investors, we strive to improve and strengthen corporate
governance by nominating outside directors and outside ASB members. The Board of
Directors and Nomination & Remuneration Committee receive advice and recommendations
from outside directors to ensure the appropriateness of business decision-making. This
enables directors, who are well versed in business matters, to maintain and improve
management efficiency.
In addition, the ASB is strengthening its management oversight function by coordinatingwith directors, executive officers, and others from the Internal Audit Office and the unit
responsible for supervision of internal controls.
Since March 2020, we have reviewed the director composition of our Board of Directors
and introduced our executive officer system, in order to strengthen our corporate governancesystem through separation between operational execution and management supervision.
With these changes, we aim to exercise more appropriate management supervision functions
while developing an efficient business execution system.

Company with Audit& Supervisory Board
Members

Governance System
Number of directors stipulated by the Articles

25

Term of office for directors stipulated by the
Articles1 yearChairman of the Board of Directors

President

Number of directors (of which are outside
Directors)
Outside directors on the Board

9 (3)Appointed

Of outside directors, the number who are“independent directors”

3

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)

4 (3)Number of outside Audit & Supervisory Board
members who are “independent directors”

3

Changes in the Governance Structure

Corporate Governance Structure

2006 Enforcement of the Companies Act
2014 Formulation of the Stewardship Code

General Meeting of Shareholders
ElectionIndependent
AuditorElection

Audit &
Supervisory
Board

2015 Application of the Corporate Governance CodeElection

Monitoring/
Inspection

Election/Delegation/Supervision
Appointment/
Consultation

Cooperation
Guidance

Internal Audit Ofﬁce

2006

Board of Directors

Representative
Directors

ImportantCommittees(Risk Management
Committee, Compliance
Committee, etc.)

Report/AdviceNomination &Remuneration
Committee

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

Outside Audit &Supervisory Board
Effectivenessevaluations for
the Board of Directors

Guarantee of effectiveness

56

2018

2019

Assurance of transparency for appointment/
dismissal of directors andfor ofﬁcer remuneration, etc.

Outside Directors

Timely disclosure andprovision of materials

2017

2020

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

Nomination &Remuneration
Committee

Delegation of Management Authority

Monitoring

2016

Separation ofmanagement
and execution

Audit

Departments

2015

Improvement and disclosure of
Board of Directors functions

2021

Corporate Governance

Composition of the Directors

Outside (3)33.3%

Independence(ratio of
Outside Directors)

Internal (6)66.7%

Female (1)11.1%

Diversity(ratio of women)

Male (8)88.9%

Nomination &Remuneration Committee

Status of compliance with the Corporate Governance Code
The Credit Saison Group follows all the principles stipulated in the Tokyo Stock Exchange’s
Corporate Governance Code with the exception of the following:

As an advisory body to the Board of
Directors, the Nomination & Remuneration
Committee has five members, the majorityof whom are outside directors. The
Committee is chaired by the Company’s
Representative Chairman and CEO, andits members are appointed by resolutionof the Board of Directors. The Committee
consults with the Board of Directors about
matters related to the appointment anddismissal of directors and the formulationof remuneration policies for directors,
deliberates them, and submits reports aboutsuch matters to the Board of Directors.

Supplementary Principles 4.1 (3) Roles and Responsibilities of the Board (1)The business environment in which the Company operates has been significantly affected by advancements
in digital technologies, including FinTech, and given the expansion in businesses requiring fresh perspectives,
including the establishment of overseas operations, it might not always be appropriate to establish set
standards based on one-time discussions for the knowledge, experience, and ability required for the Chief
Executive Officer (CEO). The Company at present has not formulated specific succession plans for the CEOor conducted oversight regarding such at the Board of Directors. The Credit Saison Group intends to review
how the Board of Directors can effectively oversee succession plans, including through discussions by the
Nomination & Remuneration Committee over succession plan guidelines in line with the Company’s mediumto long-term strategies.

Supplementary Principle 4.3 (2) Roles and Responsibilities of the Board (3)The business environment in which the Company operates has been significantly affected by advancements
in digital technologies, including FinTech, and given the expansion in businesses requiring fresh perspectives,
including the establishment of overseas operations, it might not always be appropriate to establish set
standards based on one-time discussions for the knowledge, experience, and ability required by the Chief
Executive Officer (CEO). The Company at present has not established special procedures or evaluation
criteria for appointing its CEO. The Credit Saison Group intends to review procedures for properly appointing
qualified CEOs, including through discussions by the Nomination & Remuneration Committee over succession
plan guidelines in line with the Company’s medium- to long-term strategies.

The effectiveness of the Board of Directors

Implementation
Summary

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 andAudit & Supervisory Board members (including retirees before the expiration of their termof 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.

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

Summary ofAssessment
Results

Supplementary Principle 4.3 (3) Roles and Responsibilities of the Board (3)The Company at this time has not established special procedures or evaluation criteria for the dismissal of
the CEO. However, if a CEO, etc., causes significant damage to the Group, or violates laws, regulations, or
the Articles of Incorporation in a manner that merits dismissal, the Board of Directors with the participation ofoutside directors will deliberate the matter thoroughly before moving to dismiss.

Principle 4.11 Preconditions for Board and Audit & Supervisory Board EffectivenessIn a rapidly changing business environment, the Credit Saison Group believes it is important to improve thevalue-creation function of the Company by ensuring that the Board of Directors is well balanced in terms ofexperience, knowledge, and special abilities, and not just in terms of gender or nationality. We have appointed
directors with a sufficient level of diversity that are able to effectively respond to business format changes whileleveraging our strengths in line with our medium- to long-term strategies. At present, the structure of the Boardof Directors does not sufficiently take gender and nationality into account. With the Company’s medium- tolong-term strategies in mind, we strive to appoint a diverse range of directors, including consideration ofgender and nationality. The Company’s independent outside directors are appointed based on the needfor human resources with the knowledge necessary to effectively contribute to sustainable growth and theenhancement of corporate value over the medium to long term, including in financial matters such as capitalefficiency. Our Audit & Supervisory Board members are appointed based on their experience, abilities, andknowledge in finance, accounting, and legal affairs.

We have confirmed that the Board of Directors is operating at a generally proper level and thatthe effectiveness of the Board of Directors as a whole has been secured.
With the introduction of the executive officer system in March 2020, the composition of theBoard of Directors has become appropriate. Furthermore, the establishment of the Committeeof Executive Officers to deliberate and report on progress of important matters related togeneral management and matters to be resolved by the Board of Directors in advance hascreated an environment for deeper discussion. As a result, the Committee of Executive Officers
has had the effect of encouraging intensive reporting on the progress of important issues related
to business execution and the exchange of diverse opinions and clarification of deliberations
through preliminary discussion on matters to be resolved by the Board of Directors.
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.

57

Corporate GovernanceNon-monetary remuneration shall be paid at a certain time each year as Restricted
Stock Compensation, with the annual remuneration level set by position and the amountcalculated by taking into consideration such factors as the existence of representative
rights. The following conditions have been set for the Restricted Stock Compensation.

About Director Remuneration
About 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.
As the basic policy for determining the content of remuneration for Individual Directors’Compensation, the Company considers the balance between the level of remuneration
at other companies and industries of similar size with employee salaries, regarding
the director remuneration structure and individual remuneration, and has set a level of
remuneration for Directors in accordance with their position and existence of representative
rights, etc. The remuneration for inside Directors consists of basic remuneration,
performance-based remuneration (bonus), and Restricted Stock Compensation. The
remuneration for outside Directors consists of basic remuneration only.
The basic remuneration is a fixed monthly remuneration, and the annual remunerationlevel by position is set and the amount is calculated after taking into account the existenceof representative rights, etc. The performance-based remuneration (bonus) is calculated bymultiplying the amount of the basic bonus by position, etc., taking into account the retention
rate, etc., by the performance-based coefficient for quantitative indicators (based on a 50:50
weighting of the growth rate of quantitative performance indicators and the achievement
rate of plans, respectively, and comprehensively taking into account the occurrence oflarge-scale disasters, pandemics, etc.) and the performance-based coefficient for qualitativeevaluation, and will be paid at a certain time each year. The performance indicators for the
performance-based remuneration (bonus) are the growth rate of non-consolidated ordinary
income (excluding one-time factors, etc.) and the achievement rate of plans to enhance
corporate value. In addition, the Company uses as qualitative performance indicators theresults of evaluation of each Director by all Directors, including such Director, regarding eachdirector’s contribution to the Company’s performance and enhancement in corporate value.
In calculating the planned amount of performance-based remuneration (bonus) for
FY2020, the impact of the COVID-19 pandemic will be taken into consideration, where
the performance-based coefficient for quantitative indicators is expected to be 80% andthe performance-based coefficient for qualitative indicators is expected to range from
80% to 120% for each Director.

(1) Eligible Directors shall not transfer, create a security interest on, or otherwise dispose of (hereinafterreferred to as “Transfer Restriction”) the restricted stock that is allotted as such compensation(hereinafter referred to as “Allotted Shares”) during the period from the day when the Eligible
Directors are allotted the Allotted Shares up to the day when such Eligible Directors retire or
leave any of their position as Director or any other position specified by the Board of Directors(hereinafter referred to as the “Transfer Restriction Period”).
(2) In the event that the Eligible Directors retire or leave any of the positions of (1) above prior to the
expiration of the period specified separately by the Company’s Board of Directors (hereinafterreferred to as the “Period of Service”), excluding in the case of reasons acknowledged as justifiable by
the Board of Directors, the Company shall acquire the Allotted Shares rightfully without contribution.
(3) The Company shall lift the Transfer Restriction on all of the Allotted Shares at the expiration of theTransfer Restriction Period, on the condition that the Eligible Directors have continuously served as
Director and in any other position specified by the Company’s Board of Directors during the Periodof Service. However, in the event that the Eligible Directors retire or leave any of the positions
specified in (1) above prior to the expiration of the Period of Service, for the reasons stipulated in(2) above that are acknowledged as justifiable by the Company’s Board of Directors, the number ofAllotted Shares for which the Transfer Restriction is to be lifted and the timing of lifting the Transfer
Restriction shall be reasonably adjusted as necessary.
(4) Pursuant to the stipulation in (3) above, at the time of expiration of the Transfer Restriction Period,
the Company will acquire the Allotted Shares for which the Transfer Restriction has not been lifted,
rightfully without contribution.
(5) Notwithstanding the stipulation in (1) above, in the case where an agreement of a merger with
the Company as the disappearing company, share exchange agreement, or share transfer plan
through which the Company becomes a wholly-owned subsidiary, or a matter concerning otherorganizational restructuring, etc., is approved at the Company’s General Meeting of Shareholders(or at the Company’s Board of Directors meeting in the case where approval of the General Meetingof Shareholders is not required for the said organizational restructuring, etc.) during the Transfer
Restriction Period, the Transfer Restriction will be lifted by the resolution of the Company’s Board of
Directors prior to the effective date of the said organizational restructuring, etc., with regard to thenumber of the Allotted Shares reasonably set forth in light of the period from the start date of theTransfer Restriction Period to the approval date of the said organizational restructuring, etc.
(6) In the case prescribed in (5) above, pursuant to the stipulation in (5) above, at the time immediately
after the lifting of the Transfer Restriction, the Company will acquire the Allotted Shares for which
the Transfer Restriction has not been lifted, rightfully without contribution.

The Nomination & Remuneration Committee considers the ratio of remuneration bytype based on the remuneration levels in other companies and industries of similar size
to the Company. The approximate ratio of each type of remuneration is as follows: basic
remuneration/performance-based remuneration (bonus)/non-monetary remuneration(Restricted Stock Compensation) = 7:2:1.
58

Corporate Governance

Board members is fixed remuneration only, and the amount of remuneration for each Audit& Supervisory Board member is determined by discussion of the Audit & Supervisory Board
within the total amount resolved at the General Meeting of Shareholders.
The total amount of remuneration for FY2020 for different classifications of directors and
ASB members, along with subtotals for different types of remuneration, is shown below.

Credit Saison resolved to establish a Nomination & Remuneration Committee as avoluntary advisory committee at the Board of Directors meeting held on June 7, 2019.
Regarding director remuneration, this committee will report on the following matters basedon the submission by the Board of Directors.
• Formulation of the remuneration policy and the individual remuneration package ofdirectors• Other matters which the Board of Directors has discussed with the Nomination &Remuneration Committee• Formulation, amendment, or abolition of basic policies that are necessary for deliberationof the matters stated above• Other matters deemed necessary by the committee

Classification

The decision authority of the amount of remuneration for each individual Director may bedelegated to the Chairman of the Board of Directors based on a resolution of the Boardof Directors, and the scope of such authority is the amount of basic remuneration for each
Director, the allocation of evaluation of performance-based remuneration (bonus) for each
Director, and the allocation of monetary remuneration receivables for the acquisition of
restricted stock. As a measure to ensure that such authority is properly exercised by the
Chairman of the Board of Directors, the Nomination & Remuneration Committee formulates
the criteria for the remuneration to be received by Directors, and the Chairman of the Boardof Directors makes decisions based on such criteria and in accordance with the scopedelegated by the Board of Directors.
In regard to the total amount of Director remuneration, at the 57th Ordinary General
Meeting of Shareholders held on June 23, 2007, it was resolved that the annual amount of
remuneration for Directors should be within ¥750 million per year (which includes the amountfor Outside Directors of up to ¥50 million per year) and the annual amount of remuneration
for Audit & Supervisory Board members should be within ¥150 million (Provided, however,that it does not include the amount of employee salary portion for Directors who concurrently
serve as an employee.).
In addition, at the 70th Ordinary General Meeting of Shareholders held on June 18, 2020,
it was approved that grant monetary remuneration receivables, which shall be up to ¥150
million per year to the Directors excluding outside Directors as the property to be contributed
in-kind, within the scope of the above monetary remuneration limit for Directors, and the total
number of the Company’s common stock to be issued or disposed of by paying all of themonetary remuneration receivables granted as contribution in kind shall not exceed 250,000
shares per year (in the event of unavoidable grounds that require adjustment of the total
number of shares to be issued or disposed of as the restricted stock, such total number ofshares may be adjusted within a reasonable range). The remuneration for Audit & Supervisory

Total
remuneration

Total amount of remuneration by type (Millions of yen)
PerformanceNon-monetary
based
remuneration, etc.
remuneration, etc.

Number ofpeople(Millions of yen)Basicremuneration

Directors(excluding outside directors)

347

257

68

22

12

ASB members(excluding outside ASB members)

16

16

—

—

1

Outside directors

24

24

—

—

4

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. Number of people as described above includes eight retired Directors, including one outside Director.
3. Performance-based remuneration represents the planned amount of performance-based remuneration (bonus) to be paid
for the current fiscal year.
4. The content of non-monetary remuneration is the Company’s common stock, and the conditions, etc., at the time of allotment are as described in (1) – (4) on page 58.
5. As of the end of FY2020, there were eight Directors and four Audit & Supervisory Board members.

Name, classification, total remuneration (consolidated), and total amount of remuneration(consolidated) by type of each director, outside director, and ASB member

We omitted listing individuals as there were no directors, outside directors, or ASB
members whose total remuneration exceeded ¥100 million.

Internal Director Remuneration Structure

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

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

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

Strengthening the compliance and risk management systems
To keep improving our corporate value, we identify the enhancement of corporate governanceas a key management initiative. To this end, we are improving our internal control systems,
strengthening our risk management framework, and fully adhering to compliance requirements.
59Corporate GovernanceDialogue 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. In addition, the Company actively
discloses those sustainability-related initiatives intended to achieve a sustainable societythat can only be undertaken by Credit Saison. Moreover, the Company actively engages
in dialogue with shareholders and investors through financial Results Briefings, securities
company organized conferences, individual meetings, and briefings for individual investors.
In addition to these efforts, the Company held the General Meeting of Shareholders in a
streaming format over the Internet for the first time in 2021 as a measure to prevent the
spread of COVID-19. The Company will continue to promote IR activities with an awarenessof shareholder and investor needs.

Results of IR Activities in FY2020
Financial Results Briefing

2

Securities company organized
conferences

2

Individual meetings with sell-side
analysts/institutional investors

176

Investor briefing for individuals

1

ReportTopics from FY2020

Use of Live Internet Streaming at the 71st Ordinary General Meeting of
Shareholders

March 2021: “Corporate Website” Renewal

To improve convenience for all users, the most recent website renewal updated theentire design and layout with a focus on more intuitive content placement and easieraccess to required information. Moreover, theupdate expands upon content and information
included in “IR news,” “Credit Saison in numbers,”“Brand concept,” and “Sustainability” withthe aim of creating a website that allows for astraightforward, comprehensive understandingof the Company’s information.

Monitoring/
ReportingIntroduction/
TestingRiskmanagement
planning

Risk
evaluation

Risk
aggregation

Risk
identiﬁcation

UpdateIn 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, the unit responsible for overseeing internal controls. As forinternal controls on financial reports, the Corporate Risk Management Department leads the way
in promoting the proper functioning 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 Corporate Risk
Management Department lead the way in preventing risks from materializing and in working
to minimize the effects on the Company when they do arise. Accordingly, we strive to maintainour risk management framework by holding regular internal training sessions for employees inaccordance with “risk management rules,” “rules concerning loss risk management,” and “crisis
management rules.” With respect to various issues within the Group and matters of control
that pose serious risks, the Group Strategy Office of the Corporate Planning Dept. leads theway in monitoring business execution at Group companies and sharing information with the
management departments of Group companies.
As for our compliance system, we have established a 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
Risk Management System
activities and organized the ways in
Credit Saison Board of Directors
which directors, executive officers,
and employees should conduct
Risk Management Committee
themselves as standards of conduct.
• Company-wide Risk Management Policy
ActionCheck
As a further means of strengthening• Important risk planning, execution,
progress management
our compliance system, we havedisclosed this declaration and code of
Risk Management Department
conduct on the Company’s employee
Departments in charge of risk
website, inform employees about
our compliance help desk, and hold
Departments and Group companies
compliance training sessions to
Plan
Do
Check
ensure rigorous adherence to these.
We will continue to study
approaches to management that best
suit the Credit Saison Group considering
global trends in corporate governanceand our basic policies for ensuring the
Actionproper functioning of internal controls.
60Board of Directors/Audit & Supervisory Board Members/Executive Officers

Creating a Future

Front row (from left): Tatsunari Okamoto, Yoshiaki Miura, Katsumi Mizuno, Hiroshi Rinno, Naoki Takahashi, Kazutoshi Ono

Back row (from left): Nana Otsuki, Naoki Togashi, Hitoshi Yokokura(As of October 1, 2021)

Board of Directors
Hiroshi Rinno

Born in Aug. 1942

Representative, Chairman and CEO
Corporate strategy, global strategy, branding,Group strategc management
Mar. 1982 Joined Credit Saison Co., Ltd.
		General Manager, Credit Business
Planning Dept.
Apr. 1983 Director
June 2000 President and CEO
Mar. 2019 Representative, Chairman and CEO

Tatsunari Okamoto

Born in Apr. 1967

Director, Managing Executive Officer
Head of Finance Division,
General Manager, Finance Division,
In charge of Leasing Business Dept.
Apr. 1990 Joined Credit Saison Co., Ltd.
June 2011 Director
June 2020 Director, Managing Executive Officer

Katsumi Mizuno

Born in Aug. 1969

Representative, Executive President and COO
Overall management execution
Head of Public Relations Office, Branding
Strategy Dept., Payment Business Division, Sales
Development Division,
General Manager, Payment Business Division
Apr. 1992 Joined Credit Saison Co., Ltd.
June 2013 Director
June 2020 Director, Senior Managing Executive
OfficerMar. 2021 Representative, Executive President
and COO

Naoki Togashi

Naoki Takahashi

Born in Aug. 1950

Representative, Executive Vice President and CHO
Promotions of strategies, new businesses, Head ofAudit Office, General Affairs Dept., Strategic Human
Resources Dept., IT Strategy Dept.
Apr. 2005 Joined Credit Saison Co., Ltd. Advisor
June 2005 Managing Director
Mar. 2016 Representative, Executive Vice
President
Mar. 2020 Representative, Executive Vice
President and CHO

Born in Oct. 1960

Nana Otsuki

Yoshiaki Miura

Born in Sept. 1966

Director, Senior Managing Executive Officer
Credit card joint ventures affairs
Head of Processing Business Division, Credit Division
Apr. 1990 Joined Credit Saison Co., Ltd.
June 2016 Director
June 2020 Director, Senior Managing Executive
Officer

Born in Sept. 1964

Kazutoshi Ono

Born in Aug. 1976

Director, Senior Managing Executive Officer and
CTO, CIO
Company-wide promotions of DX strategies
Head of Digital Innovation Division, In charge of IT
Strategy Dept., Strategic Planning Dept., General
Manager, IT Strategy Dept., Technology Center
Mar. 2019 Joined Credit Saison Co., Ltd. as CTO,
General Manager, Technology Center
June 2019 Director
Mar. 2020 Director, Managing Executive Officer
June 2021 Director, Senior Managing Executive
Officer and CTO, CIO

Hitoshi Yokokura

Born in May 1969

Outside Director (Independent)

Outside Director (Independent)

Outside Director (Independent)

Apr. 2007 Trustee, Japan Association of Corporate
Executives (Present)
June 2014 Director, NAGAHORI CORPORATION (Present)
Apr. 2017 Representative Director, Japan Representative
Partner, Oliver Wyman Group (Present)
June 2017 Outside Director, Credit Saison Co., Ltd. (Present)

June 2017 Outside Director, Credit Saison Co., Ltd. (Present)
Apr. 2018 Professor, Nagoya University of Commerce and Business
Graduate School (Present)
June 2018 Audit & Supervisory Board Member, Tokio Marine Holdings,
Inc. (Present)
Sept. 2019 Trustee, Nishogakusha University (Present)
Mar. 2021 Expert Director, Monex Inc. (Present)
May 2021 Outside Director, Mochida Pharmaceutical Co., Ltd. (Present)

Mar. 1995 Registered as certified public accountant (Present)
Dec. 2007 Admitted to Japanese Bar, Tokyo Bar Association
		Joined Bingham (Present)
Apr. 2014 Partner, Waseda Legal Commons, LPC (Present)
July 2017 Auditor, Minori Audit Corporation (Present)
June 2020 Outside Director, Credit Saison Co., Ltd. (Present)
July 2021 Outside Audit & Supervisory Board Member, ITO EN, LTD.
(Present)61

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

From left: Hiroaki Igawa, Chie Kasahara, Haruhisa Kaneko, Munehiro Harada

Audit & Supervisory Board Members
Haruhisa Kaneko

Born in Nov. 1956

Hiroaki Igawa

Executive Officers
Born in Oct. 1958

Standing Audit & Supervisory Board
MemberStanding Audit & Supervisory Board
Member (Outside/Independent)

Jan. 1990 Joined Credit Saison Co., Ltd.
June 2008 Director
Mar. 2010 Managing Director
Mar. 2015 President, Qubitous Co., Ltd.
		
(Merged with Credit Saison Co.,
Ltd. in April 2020)
June 2019 Standing Audit & Supervisory
Board Member of Credit Saison
Co., Ltd. (Present)

Apr. 1982 Entered Ministry of Finance
June 2013 Director-General, Nagoya Customs
June 2014 Auditor (Regular Employee), East
Nippon Expressway Company
LimitedJune 2019 Standing Audit & Supervisory Board
Member of Credit Saison Co., Ltd.
(Present)

Munehiro Harada

Audit & Supervisory Board Member(Outside/Independent)

Born in July 1954

Standing Audit & Supervisory Board
Member (Outside/Independent)
Apr. 1978 Entered National Police Agency
Apr. 2012 Director General, Kanto
Regional Police Bureau
June 2013 Managing Director, Nichidenkyo
June 2019 Standing Audit & Supervisory
Board Member of Credit Saison
Co., Ltd. (Present)

Chie Kasahara

Back row (from left): Masaki Negishi, Kaori Shimada, Yuichi Kawahara, Yasuyuki Isobe, Ryuki Tabata
Front row (from left): Kazue Yasumori, Shunji Ashikaga, Kosuke Mori, Shingo Baba, Naoki Nakayama

Born in Sept. 1968

Apr. 2000 Registered as an attorney at law, DaiIchi Tokyo Bar Association (Present)
June 2015 Audit & Supervisory Board Member(Outside), Credit Saison Co., Ltd.
(Present)
Jan. 2019 Senior Partner, Atsumi & Partners(Present Atsumi & Sakai) (Present)
June 2019 Audit & Supervisory Board Memberof Achilles Corporation (Present)
Dec. 2020 Audit & Supervisory Board Member of
MTI Ltd.
（Present）

Kosuke Mori

Born in May 1977

Shingo Baba

Born in Jan. 1971

Yasuyuki Isobe

Born in Aug. 1969

Kaori Shimada

Born in Oct. 1966

Senior Managing Executive Officer
Head of Global Business Division,
General Manager, Global Business
Division, In charge of India business,
Being assigned to Credit Saison Asia
Pacific Pte. Ltd.

Managing Executive Officer
CFO
M&A, Group company management
Head of Corporate Planning Dept.,
Corporate Risk Management Dept.,
Treasury & Accounting Dept.

Executive Officer
Collection & Research Business
General Manager, Credit Division

Executive Officer
Head of CS Planning Dept., General
Manager, Sales Development Division,
General Manager, CS Planning Dept.

Shunji Ashikaga

Kazue Yasumori

Masaki Negishi

Ryuki Tabata

Born in May 1971

Managing Executive Officer
Company-wide Corporate Sales
Head of Saison AMEX Division,
General Manager, Saison AMEXDivision, In charge of Credit Guarantee
Dept.

Born in Nov. 1973

Managing Executive Officer
General Manager, Processing Business
Division, In charge of Screening Center,
Tokyo Risk Management Center, Osaka
Risk Management Center, Strategic
Human Resources Dept.

Born in Sept. 1972

Executive Officer
In charge of Corporate Planning Dept.,
Processing Sales Dept., Processing
Planning Dept.,
New Business Development Dept.,
Global Strategy Planning Dept.

Naoki Nakayama Born in June 1965

Yuichi Kawahara Born in Dec. 1975

Managing Executive Officer
In charge of Finance Planning Dept.,
Finance Business Dept.
General Manager, Finance Business Dept.

Executive Officer
General Manager, Digital Innovation
Division, Digital Marketing Dept.

62

Born in June 1967

Executive Officer
In charge of Processing Development
Dept., Affinity Business Dept., MF
Business Development Dept.

Skills and Signature Strengths of Directors,
Audit & Supervisory Board Members, and Executive Officers

Creating a Future

Credit Saison decided to visualize the management skills of directors, Audit & Supervisory Board members, and executive officers as a skill matrix and release the results of its “VIAIS” based strength assessment as strengths that characterize those individuals that are important for flexible management in an age of uncertainty. By leveraging management skills
and these strengths, we will continue to undertake greater challenges and contribute to society as a comprehensive life services corporate group into the future.
Introduction of a skill matrix
Corporate
Globalmanagement

Representative, Chairman andCEO

Hiroshi Rinno●●

Representative, Executive
President and COO

Katsumi Mizuno●●

Representative, Executive Vice
President and CHO

Naoki Takahashi●

Director, Senior Managing
Executive Officer

Yoshiaki Miura●

Director, Senior Managing
Kazutoshi Ono
Executive Officer and CTO, CIO●

Director, Managing Executive
Officer

Tatsunari Okamoto●

Outside Director

Naoki Togashi●

Outside Director

Nana Otsuki

Outside Director

Hitoshi Yokokura

Standing Audit & Supervisory
Board Member

Haruhisa Kaneko●

Standing Audit & Supervisory
Board Member

Munehiro Harada●Standing Audit & Supervisory
Board Member

Hiroaki Igawa

Audit & Supervisory Board
MemberChie Kasahara

Senior Managing Executive
Officer

Kosuke MoriManaging Executive Officer
and CFO

Shingo Baba

Managing Executive Officer

Shunji Ashikaga

Managing Executive Officer

Kazue Yasumori

M&A/
Legal
Human
Financial
Real Finance/
Sales/ Digital/
ESG
New
affairs/Risk
resources/
affairs/
estate Loans
MarketingITbusiness
Accounting Labor affairs management
●

●

●

●

●

●

●

●

●
●

●

●

●

●

●

●

●
●
●

●
●

●

●

●

●
●

●

●

●

●

●
●

●

●

●
●

Managing Executive Officer

Naoki Nakayama●

Yasuyuki Isobe

●

●

●

●

●

●

Executive Officer

Kaori Shimada●

Executive Officer

Masaki Negishi

Executive Officer

Ryuki Tabata

Executive Officer

Yuichi Kawahara

●
●

●
●

●
●

●

●
●

●

●

2. From a business strategy perspective in particular, emphasis is being placed on the Global,
Digital/IT, and New Business/M&A skills in a bid to transform ourselves into a comprehensive
life service corporate group.

63

2

●

●
●

●

6

4

●

Executive Officer

Notes: 1. The data presented in this table do not reflect all the skills possessed by the Boardof Directors, Audit & Supervisory Board members, and executive officers. Up to sixof the major skills and other attributes are marked.

●

●

●

●

8

●

●

●

10

●

●
●

12

●

●

●

Top 5 Signature Strengths*2

●
●

●

●

●

●

●

●

●

●

Based on the strength assessment results using VIA-IS*¹, we found theCredit Saison Board of Directors to be characterized by “Curiosity,”“Honesty,” “Creativity,” “Fairness,” and “Perseverance.” These
characteristics can be considered strengths that also connect to theshared values of “practical implementation of the principles of customer
satisfaction,” “mutual respect for our interests and those of our business
partners,” and “developing a corporate culture of creative innovation,”
which serve as our management philosophy.

0

ve
ry

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am or
w
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nc n
a lit
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lf- tyRe an
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dg n
Pe me
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pe nt
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Hu iveFo mrg ilitive ynBr essa

Position

Director and Executive Officer Strengths*1 “VIA-IS” is an assessment tool developed by Dr. Christopher Peterson and Dr. Martin Seligman, two of theforemost figures in positive psychology. The strengths that characterize individuals are segmented into 24
categories, the top five of which are referred to as “Signature Strengths.” http://www.positivepsych.jp/via.html
Peterson, C., & Seligman, M. E. P. (2004). Character strengths and virtues: A handbook and classification.
New York: Oxford University Press and Washington, DC: American Psychological Association. www.viacharacter.org*2 Nine directors and 10 executive officers conducted self-assessments, from which the top five characteristics
were aggregated.

Corporate Information/Investor Relations Information (As of September 30,2021)
Stock Information

Shareholders Memo

Common Stock Authorized

300,000 thousand shares

Common Stock Outstanding

185,444 thousand shares

Number of Shareholders

19,265

Individual Investors, others
4.55%

Securities Companies

0.60%

Other Corporations

9.17%

Financial Institutions

37.30%

Treasury Stock15.68%

Composition of
Shareholders

Foreign Investors

32.98%

Major Shareholders (Top 10)
Equity stake

Institution

Number of shares
Ownership(thousand)percentage (%)

The Master Trust Bank of Japan Ltd.
(trust account)

34,53522.09

Custody Bank of Japan, Ltd.
(trust account)

14,212

9.09

Daiwa Securities Group Inc.

8,050

5.15

HSBC BANK PLC A/C M AND G（ACS）

5,988

3.83

BNYMSANV AS AGENT/CLIENTS LUXUCITS NON TREATY 1

4,453

2.85

THE BANK OF NEW YORK 133972

4,440

Custody Bank of Japan, Ltd.
(securities investment trust account)

Corporate Profile

Fiscal Year

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

Ordinary General
Meeting of Shareholders

Convened each year in June

Record Date

Ordinary general meeting of shareholders
and year-end dividend payments - March 31
Should any other record date be required, apublic notice will be issued in advance.

Transfer Agent andAdministrator of Special
Accounts

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

Administrative Office ofTransfer Agent

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

Mailing Address

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

Telephone Inquiries

0120-782-031 (9:00-17:00 excluding
weekends and holidays)

URL

https://www.smtb.jp/personal/agency/
index.html

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

2.84

Stock Listing

Tokyo Stock Exchange

3,786

2.42

Securities Code8253

Mizuho Bank, Ltd.

3,000

1.92

Custody Bank of Japan, Ltd.
(pension special deposit account)

2,337

1.49

STATE STREET BANK AND TRUSTCOMPANY 505103

2,056

1.32

Notes: 1. The 29,070,289 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.

Data Section[Notice of Address Change, etc. and Inquiries Relating to Shares]
Shareholders who have an account with a securities company are asked to contact therelevant 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 tothe transfer agent at the number indicated above for telephone inquiries.

64

Name

Credit Saison Co., Ltd.

Incorporated

May 1, 1951

Head Office

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

Representative

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

Listed Stock
Exchange

Tokyo (First Section)
1. Payment Segment(credit card business, servicing (loan collection agency)
business, etc.)

2. Lease Segment(lease business)

Business

3. Finance Segment(credit guarantee business and finance-related business)

4. Real Estate–Related Segment(real estate business, real estate leasing business, andservicing (loan collection agency) business, etc.)

5. Entertainment Segment(amusement business, etc.)

Paid-in Capital¥75,929 million

Numberof Regular
Employees

4,288

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
1,598 (based on conversion to a 7.5-hour workday).

11-Year Summary of Selected Financial Data

Data Section(Millions of yen)

JGAAP1/IFRS 2
Financial Data
Consolidated

For the year

At year-end
Per share data(in yen and
U.S. dollars)

Operating revenues/Net revenue
Selling, general and administrative expenses
Impairment losses on financial assets
Financial costs
Operating income
Ordinary income/Business profit
Net income attributable to owners of the parent/
Profit attributable to owners of the parent
Total equity
Total assets
Interest-bearing debt
Net income per share/Basic net income per share
Equity per share/Equity attributable to owners of the parent per share

Return on equity (ROE)
Key financial
Return on assets (ROA)
ratios (%)
Equity ratio
Non-Consolidated
Operating revenues
Selling, general and administrative expenses
Financial costs
For the year
Operating income
Ordinary income
Net income
Total equity
At year-end
Total assets
Interest-bearing debt
Return on equity (ROE)
Key financial
Return on assets (ROA)
ratios (%)
Equity ratio
Credit card business
Credit card cash advanceBusiness agency
Lease business total
Transaction
Credit guarantee
volumeReal estate mortgage loans
Other (finance business)
Other
Total volume of new contracts
Non-Financial Data (Non-Consolidated)
No. of employees(Females)(Males)Ratio of female managers (%)
No. of paid leave days approved/Ratio of paid leave used (%)
Average overtime hours per month

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

285,712
235,758—
22,577
27,37733,762

244,009
192,184—
19,95831,86538,590244,405
187,170—
14,922
42,31253,214

247,577
197,852—
13,38836,33644,408259,076
206,192—
12,72240,161
43,687

269,919
221,553—
11,772
36,59343,802278,944236,661—
11,06931,21353,065292,183
241,740—
9,671
40,771
56,717

304,855
220,974
34,088
9,878—
52,233

311,410
236,910
39,376
10,471—
36,184

282,625
202,380
31,867
11,266—48,352

12,8299,453

32,77025,552

12,62826,16342,25338,32930,51722,86336,132347,9152,231,246
1,657,832
70

355,727
2,155,906
1,409,802
51

394,868
2,141,802
1,359,856
178

422,8292,285,943
1,468,740
139

447,082
2,373,299
1,557,836
69

418,988
2,550,990
1,729,066
147

446,882
2,720,051
1,857,477
259

480,669
2,940,022
1,957,244
235

491,741
3,212,465
2,203,818
187

485,476
3,357,229
2,413,565
143

532,057
3,409,247
2,429,488
231

1,880

1,921

2,132

2,283

2,424

2,564

2,725

2,933

3,006

3,102

3,397

3.8
0.6
15.5

2.7
0.4
16.4

8.8
1.5
18.3

6.3
1.2
18.3

2.9
0.5
18.8

6.1
1.1
16.4

9.8
1.6
16.4

8.3
1.4
16.3

6.2
1.0
15.3

4.7
0.7
14.4

7.1
1.1
15.6

239,657
194,194
19,97725,48428,706
7,596
320,3032,097,773
1,575,231
2.4
0.4
15.3
3,953,411
371,403
1,362,275
92,70973,375
3,053
57,45135,923
5,949,600

210,207
153,505
18,80937,89341,001
5,613
322,5022,059,435
1,368,154
1.8
0.3
15.7
3,402,494
266,904
2,112,431
96,852
92,837
11,14449,604
27,625
6,059,891

204,121
149,844
16,88237,394
41,52924,147349,2022,051,908
1,337,201
7.2
1.2
17.0
3,547,050
260,089
2,166,062
105,356
115,297
11,571
48,201
28,0406,281,666

205,873
160,927
15,11929,82634,872
18,637
367,8082,200,459
1,457,001
5.2
0.9
16.7
3,852,980
264,092
2,303,998
114,694
126,281
46,78075,96933,6336,818,427

219,336
169,899
14,06635,37038,44911,315
388,470
2,287,986
1,551,189
3.0
0.5
17.0
4,089,389
277,025
2,434,824
106,801
137,335
50,45980,63337,737
7,214,203

228,713
186,492
12,62029,59932,61425,570359,428
2,468,797
1,725,891
6.8
1.1
14.6
4,258,284
267,723
2,522,242
106,000
150,101
82,420114,043
37,907
7,538,720

238,637
203,038
11,282
24,31628,21021,045
374,477
2,623,644
1,852,551
5.7
0.8
14.3
4,476,608
253,837
2,671,710
108,101
159,914125,629
180,286
35,8838,011,968

249,865
207,093
9,872
32,90038,871
22,190396,831
2,831,296
1,953,740
5.8
0.8
14.0
4,683,038
248,156
2,873,183
114,569
131,922
160,762
241,949
32,1198,485,698

259,018
215,726
9,748
33,54339,63425,875407,533
3,107,284
2,202,839
6.4
0.9
13.1
4,788,537
242,980
3,014,831
115,589
114,277
207,779
287,830
27,351
8,799,174

268,020
235,794
10,535
21,69028,34833,391
404,8093,210,925
2,378,701
8.2
1.1
12.6
4,946,908
237,555
2,985,255
127,178
101,510
175,621341,131
30,2608,945,420

251,307
208,269
11,53031,50738,02629,931
441,683
3,280,302
2,413,154
7.1
0.9
13.5
4,500,366
155,004
2,609,412
114,885
70,283
141,698
322,366
26,696
7,940,715

2,265
1,652
613
20.5
9.1 (52.1)
13.7

1,865
1,306
559
20.8
8.3 (46.1)
14.6

1,938
1,358
580
19.0
9.1 (49.8)
13.2

2,007
1,395
612
18.1
9.1 (49.9)
16.2

2,078
1,447
631
20.1
9.5 (52.8)
15.6

2,163
1,515
648
20.9
8.2 (45.7)
16.1

2,289
1,597
692
22.4
9.2 (52.4)
14.5

3,297
2,483
814
21.2
10.0 (56.8)
11.1

3,239
2,424
815
20.8
13.1 (72.9)
10.2

2,981
2,169
812
21.0
15.0 (82.5)
10.8

4,319
3,250
1,069
24.3
13.1 (72.4)
9.3

1. Japanese standards were applied until FY2017.
2. International Financial Reporting Standards (IFRS) are applied from FY2018 onward.

65

Segment Highlights

Data Section(Millions of yen)

JGAAP1/IFRS 2,3

2017

2018

2019

2020

2021

Payment Segment

211,633

220,320

228,518

232,441

209,130

Lease Segment

13,27812,885

12,586

12,26912,290Finance Segment

31,07435,41739,231

43,112

43,412

Real Estate–Related Business Segment

13,64815,472

18,113

17,227

14,595Entertainment Business Segment

10,396

9,288

8,761

8,822

5,536

Adjustment(1,086)(1,200)(2,357)(2,462)(2,340)278,944

292,183

304,855

311,410282,625

Payment Segment

7,971

12,71916,915

6,297

17,968

Lease Segment

4,313

4,349

5,720

2,951

5,455

Finance Segment

12,817

16,213

19,20918,004

21,279Real Estate–Related Business Segment

4,904

6,401

8,305

6,957

5,390

Entertainment Business Segment

1,199

1,082

2,078

1,969

(1,745)

Operating revenues/Net revenue

Total net revenue
Operating income/Business profit

5

3

3

3

3

31,213

40,771

52,23336,18448,352

Card shopping

124,654

131,827

136,464

140,579

131,029

Cash advances

35,47334,74533,08432,932

28,882Loans on deeds

1,511

1,329

1,071

844

654

Processing/transactions handled
on behalf of other companies’ cards

25,542

27,03428,22731,01427,402

Agency services

13,934

15,045

15,896

12,491

5,069

Payment-related income

9,217

8,969

11,507

12,297

13,684
1,024

Adjustment
Total business profit
Breakdown of income from payment business segment

261

208

852

767

Intersegment revenue or transfers

1,037

1,158

1,415

1,512

1,384

Total credit service business income

211,633

220,320

228,518

232,441

209,130

Finance income

Main card indices (non-consolidated)
New cards issued (thousands)

2,610

2,440

2,110

1,800

1,250

Total membership (thousands of members)

26,46026,95026,79026,39025,700

Active membership (thousands of members)

14,78014,98014,90014,96013,950Transaction volume (billions of yen and billions of U.S. dollars)

4,730.4

4,931.1

5,031.5

5,184.4

4,655.3

Shopping

4,476.6

4,683.0

4,788.5

4,946.9

4,500.3

Cashing

253.8

248.1

242.9

237.5

155.0

594.8

631.3

640.5

645.7

573.0

Card shopping revolving credit balance

380.8

414.2

422.5

426.8

388.8

Cashing

214.0

217.1

218.0

218.8

184.2

Balance (billions of yen and billions of U.S. dollars)

1. Japanese standards were applied until FY2017.

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

3. Figures for net revenue and business profit represent the amounts before appropriation of inter-segment transactions.

66

Major Business Sales Bases (As of October 1, 2021)

Data Section

In consideration of the new era, a new sales style
Due to the changes in our sales style, we reconsidered theapproaches that would best suit our offices and decided on asystem of three domestic sales departments.
Utilizing newly established satellite offices as well as offices
designed for the remote style of working, we have alsochanged the traditional concept of commuting to a fixed office
and updated our sales operations to a style that provides
value to our customers regardless of location or time.
Domestic sales departments

3 bases

Changed to a domestic sales systemcomprising three departments, inTokyo, Osaka and Fukuoka

Satellite offices

9 bases

Using the current offices, locatedin Aomori, Fukushima, Shizuoka,
Nagano, Ishikawa, Okayama, Ehime,
Kagoshima and Okinawa prefectures

East Japan Sales Dept.
2F Otowa NS Bldg.,
10-2, Otowa 2-chome,
Bunkyo-ku, Tokyo
112-0013, JapanWest Japan Sales Dept.

4F Kansai Ubiquitous Bldg.,
12-11, Minamisenba 1-chome,
Chuo-ku,
Osaka City, Osaka
542-0081, Japan

Head Office

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

Remote-style offices

4 bases

China
India

Thailand
Vietnam
Cambodia

Newly established as our remotestyle bases in Sapporo, Sendai,
Nagoya and Hiroshima

Global business regional headquarters
Credit Saison Asia Pacific Pte. Ltd.
Credit Saison Asia Pacific Pte Ltd.
9 Raffles Place #06-00 Republic
Plaza, Singapore 048619

Kyushu Sales Dept.

9F Kyukan Hakata Ekimae Bldg.,
19-27, Hakataekimae 2-chome,
Hakata-ku, Fukuoka City, Fukuoka
812-0011, Japan

67

Singapore
Indonesia

Philippines

Organization Chart

Processing Development Dept.
Processing Sales Dept.
Processing Planning Dept.

Branding Strategy Dept.

Processing Business Division

Customer Service Dept.
Operation DX Dept.
Credit Planning Dept.

Credit Division

Strategic M&A Development OfficeOsaka Risk Management Center

Strategic Planning Dept.

Public Relations Office

Management Conference

Representative Directors

Compliance Office

Credit Risk Management Center
Credit Management Center
Operation Group

Affinity Business Dept.
New Business Development Dept.
Saison AMEX Planning Dept.

Saison AMEX Division

Business Solution Dept.
Product Development Dept.
Saison AMEX Sales Dept.

Treasury & Accounting Dept.

Affluent Segment Business Group
Loyalty Desk Group
Sales Group
Digital Sales Group

Finance Planning Dept.

Business Management Group

Leasing Business Dept.

Operation Center
Planning Group

Finance Division

Credit Guarantee Dept.

Sales GroupOperation Center
Business Management Group

General Affairs Dept.

Structured Finance Group
Housing Loan Group

Audit Office

Audit & Supervisory Board

Audit & Supervisory Board Members

Board of Directors

Payment Business Division

General Meeting of Shareholders

Business Center
Alliance Preparation Office

Tokyo Risk Management Center
Osaka Management Dept.

Group Strategic Management Office

Corporate Risk Management Dept.

Billing Settlement Center

Screening Center

Corporate Planning Office
Corporate Planning Dept.

Tokyo Information Center
Osaka Information Center

Strategic Human Resources Dept.

Digital Innovation Division

Career Development OfficeFinance Business Dept.

Asset Formation Loan Group

Digital Service Dept.

Rent Guarantee Group

Digital Marketing Dept.

Solution Sales Group

Product Development Dept.

Operation Center

Asset Management Dept.

Full Life Business Group

Sales Development Dept.
East Japan Sales Dept.
Customer Satisfaction Planning Dept.

Sales Development Division

Customer Relations OfficeWest Japan Sales Dept.
Kyushu Sales Dept.
MF Business Development Group
Global Strategy Planning Dept.
Republic of Singapore1

System Planning Dept.

Republic of India 2

Technology Center
Global Business Division

Infrastructure Management Dept.
IT Strategy Dept.

Republic of Indonesia 3
Kingdom of Cambodia 4
Kingdom of Thailand 5

Infrastructure System Development Dept.

Republic of the Philippines

Business System Development Dept.

People’s Republic of China 6

Digital System Development Dept.

Socialist Republic of Vietnam7

68

1 CS Asia Pacific Pte.
2 Kisetsu Saison Finance3 Saison Modern Finance
4 Idemitsu Saison Microfinance
5 SIAM SAISON
6 世尊商務諮詢
7 HD SAISON Finance(Abbreviation)

List of Affiliated Companies (As of October 30, 2021) Note: In the order of the Japanese syllabaryMain consolidated subsidiaries

Data Section

Major equity-method affiliates
Payment Business

Payment Segment
JPN COLLECTION SERVICE
CO., LTD.

Services

Credit card business, prepaid card
IDEMITSU CREDIT Co., Ltd. business,finance business

SAISON ASSETMANAGEMENT CO., LTD.

Asset management

Shizugin Saison Card Co.,Ltd.

Credit card business, credit
guarantee business, prepaid cardbusiness

Saison Personalplus Co., Ltd. Temporary staffing business

Saison Information
Systems Co., Ltd.

Information processing services

SAISON FUNDEXCORPORATION

Seven CS Card Service
Co., LTD.

Credit card business

Kisetsu Saison Finance (India)
Digital lending business in India
Pvt. Ltd.

Daiwa House Financial
Co., Ltd.

Credit card business

PT. Saison Modern FinanceDigital lending, payments, points
business, and lease business inIndonesia

Takashimaya Financial
Partners Co., Ltd.

Credit card business

Credit guarantee business,real estate finance business,loan businessResona Card Co., Ltd.

Credit cards and credit guarantees

SAISON FUNDEXCORPORATIONHD SAISON Finance
Company Ltd.

Finance business in Vietnam

Atrium Co., Ltd.

Comprehensive real estatebusiness,
servicing business

Concerto Inc.

Amusement services, amusementbusiness, real estate rental
business

Eplus Inc.

Ticket sales

Loans, real estate, credit
guarantees

Finance Segment

Real Estate–Related Segment

Entertainment Segment

Entertainment Segment
Concerto Inc.

Amusement services, amusementbusiness, real estate rental
business69

Responsible Officer’s Guarantee/Editor’s Postscript
Responsible officer’s guarantee

Information disclosure tools
Credit Saison discloses various types of information for our shareholders, investors, and allother stakeholders on our website.

On Publishing the Credit Saison Integrated Report 2021
Thank you for reading to the end of the Credit Saison
Integrated Report 2021. Based on our leading-edge service
company management philosophy, we are taking on thechallenges of “transforming ourselves into a comprehensive
life service corporate group” that, under our basic concept
of Innovative, Digital, and Global, is working to achievecustomer success by combining the real and the digital. This
report describes the status of building our managementfoundation. We also clarify the value creation mechanismthat makes use of the diversity that is our strength, such as
in the more active participation of women in the workplace,and showcase a variety of initiatives designed to assist in
resolving social issues through collaboration with various
stakeholders. During the preparation of this Report, weconsulted the International Integrated Reporting Framework
advocated by the International Integrated Reporting Council(IIRC) and the Guidance for Collaborative Value Creation
advocated by the Ministry of Economy, Trade and Industry
as we edited. This report was produced in collaboration witha wide range of relevant departments within the Company,
with the Corporate Planning Office of the Corporate
Planning Department playing a central role in editing. As theexecutive officer responsible for editing, I hereby declarethat the preparation process was properly carried out andthat the details listed herein are accurate.
I hope that this report will serve as a communication
tool for all stakeholders, including customers, shareholders,investors, business partners, and employees, to gain abetter understanding of and become more familiar with
Credit Saison. As we will continue to value dialogue with
our stakeholders and would like to devise ways to enhance
disclosure and transparency in the years to come, we would
appreciate receiving your unreserved opinions.

Data Section

Corporate Information

Business

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

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

Sustainability

IR Information

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

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

Editor’s postscript

Shingo Baba

We published a report with the integrated format for the first time in March 2020, and thismarks our third such report. Because the chances of reading this report on a variety of devices
have increased due to the COVID-19 pandemic, we started with a fundamental review thatchanged the format from vertical to horizontal to improve legibility and ease of reading.
By using our creativity for the content and visual aspects while emphasizing thenarrative-based aspects of this report, we devised ways in which readers could gain a better
understanding of the “Credit Saison of the past” and the “Credit Saison of the future.” I do
think, however, that there are some sections that are still insufficient to enable readers to fullyacquire an appreciation of our strategies and future-oriented initiatives. We will thus continue
to seek the honest opinions of our readers so that we can further deepen communication withall stakeholders while upgrading and expanding the content of the report.

Managing Executive Officer
CFO
M&A, Group Company
Management
Head of Corporate Planning
Dept., Corporate Risk
Management Dept.,
Treasury & Accounting Dept.

Having won an award at theInternational ARC Awards, an annual
report competition in the UnitedStates, the Credit Saison Integrated
Report 2020 has even received highacclaim overseas.

70

International ARC Awards
Summary Annual Review
Category/Bronze Award

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 2021
For the Year Ended March31, 2021

FY2020(As of March 31, 2021)
Thousands ofMillions of yen
U.S. dollars

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FY2020(As of March 31, 2021)
Thousands ofMillions of yen
U.S. dollars
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
Total assets¥ 101,001
2,607,838
139,530
47,25078,774
13,37429,095
14,850171,42173,888$912,228
23,553,453
1,260,213
426,752
711,470
120,793262,786
134,122
1,548,241
667,347

80,680728,693

37,56913,972¥ 3,409,247

339,318
126,195$30,791,616

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-1-¥229,962
9,823
2,429,488
23,7996,079
113,207
17,121
1,521
1,005
45,181
2,877,190$2,076,972
88,721
21,942,634
214,951
54,911
1,022,469
154,637
13,744
9,077
408,066
25,986,187

530,971
75,92985,198414,260

4,795,619
685,778
769,493
3,741,510

62,808567,275

18,392
1,086
532,057¥3,409,247

166,1139,808
4,805,428$30,791,616-2-

CONSOLIDATED STATEMENT OF INCOME

RECONCILIATION FROM PROFIT BEFORE TAX TO BUSINESS PROFITFY2020(April 1, 2020 toMarch 31, 2021)
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

FY2020(April 1, 2020 toMarch 31, 2021)
Thousands ofMillions of yen
U.S. dollars¥50,915$459,859

Profit before tax

Total
Of interest income¥206,722
12,28643,41232,38229,548
1,028
325,381
108,784$1,867,073
110,972
392,092
292,474
266,872
9,292
2,938,778
982,519

Total
Net revenue
Selling, general, and administrative expenses
Impairment losses on financial assets
Finance costs
Share of profit of investments accounted for using equity method
Other income
Other expenses
Profit before income tax expense
Income tax expense
Profit18,74324,01242,755
282,625
202,380
31,867
11,266
4,168
12,475
2,839
50,915
14,668¥36,247

169,286
216,874
386,160
2,552,617
1,827,858
287,822
101,760
37,652
112,676
25,644459,859
132,482$327,377

Profit attributable to
Owners of parent
Non-controlling interests
Profit¥36,132
114¥36,247$326,343
1,033$327,377

Cost of sales
For the real estate-related business
For the entertainment business-3-

Reconciliations (Selling, general, and administrative expenses)

924

8,351

Reconciliations (Other income)

6,672

60,263

Reconciliations (Other expenses)
Adjustments for the application of the effective interest method tofinancial assets

2,473

22,337711

6,429

Subtotal

2,562

23,145¥48,352$436,713

Business profit-4-

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FY2020 (April 1, 2020 to March 31, 2021)

Share capital
Balance as of April 1,
2020¥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¥85,279 ¥384,182 ¥

62,881Other comprehensive
income36,132Comprehensive income
Purchase of treasury
shares
Disposal of treasury
sharesShare-based
remunerationtransactions

114

36,247

17,20917,20917

17,227

17,20953,342

131

53,474

0

0

0

0

0

0

31

73

104

978

¥75,929

Share capital
Balance as of April 1,
2020

6,055

¥85,198 ¥414,260 ¥72
62,808

978567,933

112
3

3

7,041

148

6,893

Other comprehensive
income326,343

Comprehensive income
Purchase of treasury
shares
Disposal of treasury
sharesShare-based
remunerationtransactions

Total

155,434

155,434

157

155,592

155,434

481,777

1,190

482,967

3

0

0

0

0

285

661

946

Balance as of March 31,
2021

730
$685,778$769,493$3,741,510 $

-5-

293

63,5291,240

63,529

8,839

8,839

63,601

567,275 $166,113$4,795,619

658

Eplus Inc.
HD SAISON Finance Company Limited
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.
5. ACCOUNTING POLICIESValuation standards and methods for financial assets
(a)
1)

1,015

54,690Seven CS Card Service Co., Ltd.

$7,279 $4,384,720
327,377

Other
Total transactions withownersResona Card Co., Ltd.

Takashimaya Financial Partners Co., Ltd.

1,033

1,015

Idemitsu Credit Co., Ltd.

Daiwa House Financial Co., Ltd.

3

8,839

3. ACCOUNTED FOR USING EQUITY METHOD
Number of companies accounted 31
for using equity method
Names of principal companies
Saison Information Systems, Co., Ltd.

Total

326,343

63,529Transfer from othercomponents of equity toretained earnings
Changes in ownershipinterest in subsidiaries

2. SCOPE OF CONSOLIDATION
Number of consolidated subsidiaries
34
Name of principal consolidated subsidiary
Saison Fundex Corporation
At the meeting of the Board of Directors held on February 26, 2020, a resolution was passed for theabsorption-type merger of Qubitous Co., Ltd. (“the absorption merger”), a consolidated subsidiary of
the Company. The effective date of the absorption merger was April 1, 2020.

Shizugin Saison Card Co., Ltd.

3

Dividends

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.

¥1,086 ¥532,057

Noncontrollin
g interests$19,518 $4,377,441

326,343

Profit7,033

112¥18,392 ¥530,971

Thousands of U.S. dollars
Equity attributable to owners of parent
Other
CapitalRetained
Treasurycomponents
surplusearnings
sharesof equity$685,778 $770,223 $3,469,855 $

137

978

112

80

32

7,033

Other

Balance as of March 31,
2021¥805 ¥485,476

36,132

7,033

Total transactions withowners

1. BASIS FOR PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
Total

0

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

Total¥2,161 ¥484,670

36,132

ProfitNoncontrollinginterests

1,015

Financial assets
Initial recognition and measurement
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.

29

29

1,337

62,264The Group recognizes financial assets on the transaction date when it becomes a party to thecontract on such financial instruments.

$9,808 $4,805,428

All financial assets are measured at fair value plus any transaction costs, except for those classified-6-

as financial assets measured at fair value through profit or loss.

4)

Financial assets that meet both of the following conditions are classified as financial assets
measured at amortized cost:
The assets are held within a business model whose objective is to hold the assets in order tocollect contractual cash flows.

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 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.
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.

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 or not the credit risk has
increased significantly, the Group takes reasonably available and supportable information in
addition to past due information.

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.
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.
2)

However, for trade receivables that result from transactions that are within the scope of IFRS 15,“Revenue from Contracts with Customers,” (IFRS15) 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.

Subsequent measurement
After initial recognition, financial assets are measured as follows, depending on their classifications:

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.

(i) Financial assets measured at amortized cost
Financial assets are measured at amortized cost using the effective interest method.

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.

(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 othercomprehensive income is reclassified to profit or loss.

(b) Financial liabilities
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.

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

Dividends received from such financial assets are recorded in profit or loss under “Other income.”
3)

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

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

Derecognition of financial assets
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.

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 initialrecognition.

(iii) Financial assets measured at fair value through profit or loss

A gain or loss on equity instruments designated as those measured at fair value through othercomprehensive income is recognized in other comprehensive income.

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.

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.
3)

Derecognition of financial liabilities
The Group derecognizes financial liabilities when they are extinguished (i.e., when the obligation
specified in the contract is discharged), canceled, or expired.

-7-

-8-

(c)

recognized in equity through other comprehensive income remains in equity until the future cash
flow occurs.

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)(d) Derivatives and hedge accounting
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.
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 on 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.

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 15
Valuation standards and methods for inventories

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

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.
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:
1)

Fair value hedges
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.

2)

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.
The amount posted in other comprehensive income is reclassified to profit or loss when the hedgedtransaction affects profit or loss.
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-9-

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.

Valuation standards and methods for property, plant, and equipment, and depreciation methods(a)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.
The estimated useful lives of main assets are as follows:
Buildings

39 to 47 years

Other

5 to 10 years

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.
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.
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.
The estimated useful lives of main assets are as follows:- 10 -

Investment property

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.

19 to 50 years

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.

Goodwill
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 (excluded 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. Included in costs areborrowing 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.

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.

Impairment losses of goodwill are recognized in the consolidated statement of income and not reversed
subsequently.

The estimated useful lives of main assets are as follows:

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

Software5 to 15 years

Impairment of non-financial assets

Other

5 to 20 years

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.

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.
Leases(a)

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.

Leases as a lessee
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract
is 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.

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.

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.

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).

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.
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.

Accounting policy for significant provisions(b) Leases as a lessor

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.

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.
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 a receivable at an
amount equal to the net investment in the lease.
For the operating lease, the Group presents assets subject to operating leases in its consolidated- 11 -(a)Provision for point card certificates
The Group offers a rewards program to its card holders (members) as the major benefit of holding- 12 -

the credit card. Under the program, card holders can exchange points earned based on the amountof credit 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 arises for the membership fees received.
2)(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.
(c)

3)

4)

Employee benefits(a)(b) Lease business
Revenue is recognized under IFRS 16, “Leases.” (“IFRS 16”). For details, see Note “3. Significant
Accounting Policies, (10) Leases, (b) Leases as a lessor.”(b) Short-term employee benefits
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.

(c)1)

Credit guarantees

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:2)

Payment business(d) Real estate-related 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 agency. Revenue
recognition criteria by service are as follows:1)

Finance business
Fees are received when the Group guarantee loans provided by their partner financial institutions.
Revenue is recognized under IFRS 9. For details, see Note “3. Significant Accounting Policies,(4) Financial instruments, (e) Financial guarantee liabilities.”

Revenue(a)Processing/agency for other companies’ credit cards and business agency
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 agency refers to card processing and receivables collection businesses
conducted by subsidiaries as outsourcing businesses, which receive fees from their partnercompanies. Revenue is recognized when service is rendered, and the performance obligation issatisfied on a contractual basis.

Defined contribution pension plans
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.

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
“3. Significant Accounting Policies, (4) Financial instruments, (a) Financial assets, 2) Subsequent
measurement,” revenue is recognized under IFRS 9 using the effective interest method.

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

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 “3. Significant
Accounting Policies (4) Financial instruments, (a) Financial assets, 2) Subsequent measurement,”
revenue is recognized under IFRS 9 using the effective interest method.

Credit card shopping

Finance-related business
Fees are directly received from customers who obtain loans directly from the Group. As stated in
Note “3. Significant Accounting Policies, (4) Financial instruments, (a) Financial assets,2) Subsequent measurement,” revenue is recognized under IFRS 9 using the effective interest
method.
For 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.

(i) Affiliated store fees
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.
Customer fees mainly represent fees received from cardholders for using revolving payments
and other services. As stated in Note “3. Significant Accounting Policies (4) Financial
instruments, (a) Financial assets, 2) Subsequent measurement,” revenue is recognized under
IFRS 9, “Financial Instruments” (“IFRS 9”), using the effective interest method.
- 13 -

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- 14 -

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.

(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:(a)

Foreign currency transactions
Foreign currency transactions are translated into the functional currency of each entity of the Groupby 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 into
the functional 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 the 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.
Other important matters for the preparation of the consolidated financial statements(a)Accounting for consumption tax
Consumption tax is accounted for by the tax exclusion method.

(b) Functional currency and presentation currency
The consolidated financial statements of the Group are presented in Japanese yen, which is thefunctional currency of the Company. Amounts less than one million yen are rounded down to thenearest million yen. Japanese yen amounts have been translated into U.S. dollars at the rate of¥110.72 = U.S.$1, the approximate exchange rate on March 31, 2021, for the convenience of thereader. Amounts less than one thousand dollars are rounded down to the nearest thousand dollars.
These translations should not be construed as representations that Japanese yen amounts have beenor could be converted into U.S. dollars at that or any other rate
(Notes on changes in presentation)
In accordance with the revision of the Corporate Accounting Rules, "Notes on Accounting Estimates" hasbeen included in the notes to the consolidated financial statements for the current fiscal year.

Millions of yen¥2,607,838
3,239
29,095
14,850171,42173,88837,5699,823
5,809
113,207¥17,121

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

Foreign currency translation

Thousands of U.S. dollars$23,553,453
29,261
262,786
134,122
1,548,241
667,347
339,318
88,721
52,467
1,022,469$154,637

The above amounts for "Trade and other receivables" and "Other financial assets" are net of theallowance for doubtful debts; the amounts are ¥49,075 million (U.S. $443,238 thousand) and ¥141
million (U.S. $1,282 thousand), respectively.
1. 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:
Although the outbreak of the novel coronavirus disease (COVID-19) has started over a year ago,concerns regarding the resurgence of infection remain and the outlook regarding this matter remains
uncertain. Depending on the situation of the spread of the disease, deterioration in the economic situation,such as a slump in personal consumption or corporate bankruptcies caused by the spread of COVID-19,
could have a significant impact on the Group's performance and financial position. COVID-19 hasvarious impacts, particularly with regard to the credit risk on receivables held by the Group and the riskof impairment of non-financial assets. In calculating the impact of these two risks on the Group’s
consolidated financial statements, the Group uses macroeconomic variables, such as the unemployment
rate announced by think tanks. The calculation methodology is based on the deterioration ofmacroeconomic variables that correlate with credit risk and the reduction in future cash flows from the
cash-generating units. In most think-tank scenarios, macroeconomic variables deteriorate in the year
ending March 2022 and recover in the year ending March 2023. Therefore, 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 and impairment of nonfinancial assets,
if the expected negative impacts relate to those estimates. Although the Group believes that theseestimates are best available at the time of preparation of the consolidated financial statements, there is ahigh degree of uncertainty in the assumptions used in the estimates. In the event that COVID-19 spreads
or accompanying changes in the economic situation occur in the future, the estimates may be revised 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.
In estimating future cash flows, the Group takes into account not only historical information, such as- 15 -- 16 -

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.

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
the credit 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.

(f)

Recoverability of deferred tax assets
Deferred tax assets and liabilities are recognized for temporary differences between the carrying- 17 -- 18 -

6. COMMITMENTS(NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ACCUMULATED

DEPRECIATION AND ACCUMULATED IMPAIRMENT LOSSES OF
PROPERTY, PLANT, AND EQUIPMENT
31,853
Millions of yen

287,690
Thousands of U.S. dollars

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

49,075
Millions of yen
141
Millions of yen

Other financial assets

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

443,238
Thousands of U.S. dollars
1,282
Thousands of U.S. dollars

843,148 Thousands of
U.S. dollars

93,353 Millions of yen
Bonds and borrowings(Securitized borrowings)

843,148 Thousands of
U.S. dollars

1,511 Millions of yen
Other financial assets(Guarantee deposits)

13,647 Thousands of
U.S. dollars

1,743 Millions of yen
Other financial liabilities(Deposits received)

15,744 Thousands of
U.S. dollars

94,864 Millions of yen
Total

856,795 Thousands of
U.S. dollars

95,096 Millions of yen
Total

858,892 Thousands of
U.S. dollars"Securitized borrowings" are liabilities arising from the securitization of instalment receivables andfinance 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 ¥2,618 million (U.S. $23,645 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 businessBorrowings entered into by GFINSERVICES (S) PTE. LTD.
Customers related to mortgage loans provided by partner financial
institutions
Customers related to housing loans provided by partner financial
institutions
Total- 19 -

Thousands of U.S. dollars$36,888,553
1,611,600$35,276,952

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

93,353 Millions of yen

Millions of yen¥4,084,300
178,436¥3,905,864

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 their 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 subsidiaries and associates is as follows:

Millions of yen

Thousands of U.S.
dollars¥216,529$1,955,648

40

363

82,2201,069

742,601
9,660

103,763

937,167

1,486

13,423¥405,109$3,658,864(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:
Total amount of commitments
Borrowings made under the commitment

Millions of yen¥300,000Thousands of U.S. dollars$2,709,537¥300,000$2,709,537

Net amount(NOTES TO CONSOLIDATED STATEMENT OF INCOME
1. 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:
Millions of yen

Thousands of U.S. dollars¥924$8,351

Reconciliations (Selling, general, andadministrative expenses)
Loss related to COVID-19 (*1)

924

8,351

Reconciliations (Other income)

6,672

60,263Gain on sale of shares of subsidiaries and associates

3,968

35,845Gain on sale of fixed assets

2,629

23,747

Other

Reconciliations (Other expenses)
Loss on disposal of noncurrent assets
Amount of payment (*2)
Impairment losses on nonfinancial assets
Other
Adjustments for the application of the effective interest
method to financial assets(*3)
Total

74

670

2,473
592
580
1,218
82

22,337
5,348
5,245
11,001
740

711
¥

2,562

6,429
$

23,145*1 In response to various requests from the national and local governments taken to address COVID-19, theGroup compensated some of its employees due to the suspension of business partners and locations and took
measures to close some locations temporarily. This item of reconciliation from business profit comprises
nonrecurring expenses that include the fixed costs (such as personnel costs and depreciation) resulting fromthe aforementioned businesses. The Group recognizes ¥662 million (U.S. $5,983 thousand) grant, received asa government grant pertaining to COVID-19, in the third quarter of the fiscal year ended March 31, 2021, as
profit or loss and has excluded it from related expenses.
*2 A onetime adjustment for expenses with business partners.
*3 Mainly reversal of effective interest rate adjustments, such as loan administration fees and transaction costs.

- 20 -

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.

(NOTES TO CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
1. TYPE AND NUMBER OF SHARES ISSUED AS OF MARCH 31, 2021
Common stock

185,444,772 shares

2. DIVIDENDS

Risk management system for financial instruments

Dividends paid

Resolution

Total amount ofdividends
Dividends per
Class of shares (Millions of yen) share (Yen)*Thousands of *U.S. dollars
U.S. dollars

Ordinary general
meeting of shareholders Common stock
held on June 18, 2020

¥7,033*$64,632¥45*$0.41

Record date

Effective date

March 31, 2020

June 19, 2020

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.

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

Resolution (planned)
Ordinary general
meeting ofshareholders held on
June 23, 2021

Class ofsharesTotal amount ofdividends
Dividends per
Resource of(Millions of yen) share (Yen)dividends*Thousands of *U.S. dollars
U.S. dollars

Commonstock

Retainedearnings¥7,035*$63,542¥45*$0.40Record date

March 31, 2021

June 24, 2021

(NOTES TO FINANCIAL INSTRUMENTS)
1. STATUS OF FINANCIAL INSTRUMENTS
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.
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, 2021,
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 in 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- 21 -

Market risk management

Effective date( ) Interest rate risks 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.
( ) Price fluctuation risks management
Based on the ALM policy, the Group mitigates price fluctuation risks of investment products,
including investment (operational) 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.
() 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.

( ) 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 to- 22 -

the 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, 2021, rises by one basis point (0.01%), profit before tax for the fiscal
year ended March 31, 2021, will decrease by ¥2 million (U.S. $21 thousand), and conversely,
when the benchmark interest rate falls by one basis point (0.01%), profit before tax for the fiscal
year ended March 31, 2021, will increase by ¥2 million (U.S. $21 thousand). The effect assumes
that risk variables other than interest rates remain constant and that there are no correlations
between interest rates and other risk variables. When actual interest rates go beyond thereasonably estimated range, it could have a greater impact on profit or loss compared to theestimated amount.
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.

2. MATTERS RELATED TO THE FAIR VALUE OF FINANCIAL INSTRUMENTS
The amounts reported in the consolidated statement of financial position, the fair values, and thedifferences between them as of March 31, 2021, are as follows:
Carrying amount
Trade and otherreceivables
Operational investment
securities and investment
securities(Millions of yen)*Thousands of U.S.
dollars(Millions of yen)*Thousands of U.S.
dollars(Millions of yen)

Investment securities*Thousands of U.S.
dollars(Millions of yen)

Other financial assets*Thousands of U.S.
dollars(Millions of yen)*Thousands of U.S.
dollars

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.

Fair value

Difference

AssetsTotal¥2,607,838¥2,664,526¥56,687$23,553,453$24,065,446$511,993

47,25047,250426,752

426,752

78,77478,774

711,470

711,470

13,374

13,374

120,793

120,793

2,747,236

2,803,924

56,687

24,812,470

25,324,463

511,993

Liabilities(Millions of yen)
Trade and other payables*Thousands of U.S.
dollars(Millions of yen)

Bonds and borrowings*Thousands of U.S.
dollars(Millions of yen)*Thousands of U.S.
dollars(Millions of yen)

Other financial liabilities

Total*Thousands of U.S.
dollars

229,962

229,9622,076,972

2,076,972

2,429,488

2,435,074

5,585

21,942,634

21,993,084

50,44923,799214,951

23,799214,951¥2,683,250¥2,688,836$24,234,559$24,285,008¥$

The fair value of financial instruments is calculated as follows:
AssetsTrade and other receivables(a) Accounts receivable – installment
Accounts receivable – installment with variable interest rates reflect market interest rates in the
short term. Thus, accounts receivable – installment are stated at carrying amount, given that the fairvalue approximates the carrying amount, unless the credit status of debtors changes significantly inlater periods. On the other hand, the fair value is determined for accounts receivable – installment
with fixed interest rates by discounting credit risk-adjusted future cash flows from the group offinancial assets classified by the type of loans and maturity terms, using a risk-free market interest
rate. The fair value of certain delinquent receivables is measured by deducting the estimated amountof bad debts from the carrying amount of receivables at the end of the reporting period, assumingthat the calculated amount approximates 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, assumingthat the fair value approximates the carrying amount based on expected repayment periods andinterest rate terms.
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 the- 23 -- 24 -

5,585
50,449principal and interests arising from respective lease periods and subtracting debtor’s credit risk,
which is then discounted using a risk-free market rate.
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.
Other financial assets
Since these are settled in a short period of time, the fair value approximates the carrying amount, andis therefore stated at that carrying amount.

(e) Long-term loans payable under securitized receivables
Long-term loans payable under securitized receivables 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 securitizedreceivables is determined by discounting the aggregate amount of principal and interests of theborrowings compartmentalized by certain periods of time at interest rates that would be offered forsimilar borrowings.
Other financial liabilities
Since these are settled in a short period of time, the fair value approximates the carrying amount, andis therefore stated at that carrying amount.
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 ¥414,932 million(U.S. $3,747,586 thousand). The liability amount recognized in the consolidated statement offinancial position is ¥9,823 million (U.S. $88,721 thousand) and the fair value is ¥26,003 million(U.S. $234,858 thousand) (asset).

Liabilities
Trade and other payables
Trade and other payables are stated at carrying amount as their fair values approximate their carrying
amount due to the short settlement period.
Bonds and borrowings(a) Short-term loans payable
Short-term loans payable are stated at the carrying amount as their fair values approximate theircarrying amount due to the short settlement period.
(b) Commercial papers
Commercial papers are stated at the carrying amount as their fair values approximate their carrying
amount 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 Groupwas 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
rates that would be offered for similar borrowings.
(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.”- 25 -- 26 -

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

Thousands of U.S. dollars

Carrying amount¥73,888$667,347

Fair value¥93,427$843,818

Note

The amount recorded in the consolidated statement of financial position is the cost less accumulated
depreciation and accumulated impairment losses.
Fair values at the end of the period are mainly determined by the Group, which refers to the Real EstateAppraisal Standard (and the appraisal value is adjusted using indicators as necessary).

(NOTES TO EARNINGS PER SHARE)EQUITY ATTRIBUTABLE TO OWNERS (Yen)
OF PARENT PER SHARE*U.S. dollars
BASIC EARNINGS PER SHARE(Yen)*U.S. dollars(NOTES TO SIGNIFICANT SUBSEQUENT EVENTS)
There are no pertinent items.

- 27 -¥3,397.92$30.69¥231.24$2.09