CREDIT SAISONINTEGRATED REPORT

2022

Credit Saison’s New Challenges

Transforming ourselves into
a comprehensive life services groupwith ﬁnancial services at the core thathelps to resolve customers’ problems
Consumer values are becoming ever more diversiﬁed due to changes insocial structure, such as the declining birthrate and aging population as

well as the advancement of women, and changes in awareness and values,
for instance, regarding the environment and gender. To meet the diverse

needs of our customers, we have taken steps to become a comprehensive
life services group that goes beyond being a ﬁnance company.

Intending to solve the issues and problems that have newly arisen

in people’s daily lives, we aim to provide products that offer not only

convenience and value for the money but also good experiences andpositive values. In a rapidly changing business environment leveraging
the business foundation and customer base that we had previously

cultivated through ﬁnancial services, we will co-create innovations with
our stakeholders while contributing to a sustainable society.

1Credit Saison’s New Challenges

Strengths that will accelerate our transformation into a comprehensive life services group

1 2 3
From the time of our founding to the present day, what has enabled us to bring about reforms in response to changes in the business environmentand overcome numerous difficulties has been our three inherent strengths.
We will continue to leverage those strengths as we usher in our third founding and become a comprehensive life services group.

Credit Saison’s DNA

Instilling of Philosophy

Breakthrough Innovations

DNA of facing challenges andinitiating reforms that has been
passed down since our founding

Reforms for sustainable growthand so that every employee canplay an active role

Innovative services thatrevolutionized the industry

The creative destruction to create innovation
through customer-oriented thinking andpartnerships; the desire to empower people
who are constrained, such as women andyoung people, to ensure their freedom
from positions in which they are sociallyconstrained; the “getting closer to ourcustomers” for new and flexible ideas—all lie
in Credit Saison’s DNA.
These building blocks of our DNA
have been handed down from the time of
our founding and have led to the ability
we possess to face challenges and initiate
reform now.

We have been developing our businessby building partnerships through open
innovation and striving for co-creation with
our partners. These partnerships have led toour current broad customer base.
Having introduced a common HR
system to promote the active participationof all employees, we are also realizing equalpay for equal work. Furthermore, in 2022,
we are revising the HR system and creatinga system that will provide added backup
to employees as they face challenges andadditional encouragement to their personal
growth.

Saison Group founder

Seiji Tsutsumi

2

Since the 1980s, we have launched asuccession of customer-oriented services
that have broken with conventional wisdom,
such as instant credit, instant issuance,
Japan’s first signatureless payments, andEikyufumetsu Points. We will continue tobring about innovation in areas other thanfinancial services with revolutionary ideasthat meet customer needs.

CONTENTS
VisionSpecial Feature

Data Section

1 Credit Saison’s New Challenges

34 CSDX Strategy: Interview with
the Director in Charge

66 11-Year Summary of Selected
Financial Data

36 The CSDX Strategy as the Platform for
Supporting the Entire Group67 Segment Highlights/
5-Year Non-financial Data

3 Contents/Editorial Policy
4 A History of Reforms and Challenges
6 Interview with the CEO
10 Value Creation Stories
12 The Five Businesses
Strategy
13 Interview with the COO
17 Retrospective Overviews of Past
Medium-term Management Plans
18 Overview of the New Medium-termManagement Plan
19 Growth Strategy (1): Establish the Saison
Partner Economic Zone and Reinforce
Business Coordination within the Group
21 Growth Strategy (2): Revitalization of the
Payment Business23 Growth Strategy (3): Promotion of
Healthy Growth and Expansion into New
Fields for the Finance Business

68 List of Affiliated Companies

Sustainability

69 Corporate Information/
Investor Relations Information

39 Responses to Risks/Opportunities
41 Sustainability of the Credit Saison Group70 Responsible Officer’s Guarantee/
Editor’s Postscript

43 Response to Climate Change(Information Disclosure Based on
the TCFD Recommendations)

50 Human Resources
53 Contributing to a Safe, Secure, andConvenient Cashless Society
54 Information/Cybersecurity
55 Coexistence with Local Communities

59 Corporate Governance

30 Financial Capital Strategy: Interview with
the Executive Officer in Charge

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

Saison Green

Credit Saison works diligently to provide its wide range ofstakeholders 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 andfinancial standing, the Credit Saison Integrated Report 2022
contains non-financial information that covers a wide range ofenvironmental, social, and governance (ESG), as well as otherfields. This report is intended to help our many stakeholders
to better understand the Company’s efforts to create value
over the medium and long term and ensure its sustainablegrowth.
In compiling this report, we have referredto the International Integrated Reporting
Framework recommended by the IFRSFoundation and the Guidance forCollaborative Value Creation issued
by Japanʼs Ministry of Economy, Trade,and Industry (METI).

48 Human Resource Strategy:
Interview with the Executive Officer
in Charge

28 Global Strategy: Interview with the
Director in Charge

Saison Blue
Symbolizing people’s happiness and aspirations

Editorial Policy

47 Human Rights

56 Three-way Discussion on Sustainability
Governance

About the Company’s corporate colors

Symbolizing trust, peace of mind, culture and innovation

45 Environment

25 Growth Strategy (4): Acceleration of
Global Business Expansion

The concept behind our logo

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

63 Messages from Outside Directors

Reporting Period
This Report covers the 2021 fiscal year (FY2021: April 1, 2021, to
March 31, 2022). Some activities in FY2022 are described as well.

3

VisionA History of Reforms and Challenges

1951

Founding of Midoriya Co., Ltd., a department store that soldproducts on a monthly installment basis

1980

Conversion to the payment business

The dawn of the Saison Group’s
philosophy and culture

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

The company that is today Credit Saison wasestablished in May 1951 as Midoriya Co., Ltd.,a department store that sold products on amonthly 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.
Seiji Tsutsumi, the founder of the Saison Group,
foresaw the growth of consumer needs after theneeds for food, clothing, and shelter had beensatisfied following World War II. Tsutsumi advocatedan “integrated lifestyle industry” to promote
distribution reform by expanding business to allareas of daily life while leading the consumption
culture. “Always paying attention to the customer
and providing society with new innovations”—thisidea is at the heart of the Saison Group.

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 a succession of customer-oriented
services that have broken with generally accepted industry practices and traditions,
including instant credit screening, instant card issuance, signature-less payments, andEikyufumetsu Points that never expire. In 2002, Credit Saison achieved the top positionin the industry in terms of four indicators: the number of cards issued annually, total
cardholding membership, the number of cards in operation annually, and annual cardtransaction volume.

Management Philosophy
We will fulfill our corporate social responsibility by striving to meet the
expectations of all our customers, shareholders, and business partners.
We will compete successfully in the market by promoting our three sharedvalues: practically implementing the principles of customer satisfaction as aleading-edge service company; mutual respect for our interests and those of ourbusiness partners; and developing a corporate culture of creative innovation.

1982

Issued the Seibu Card and started instant credit screening,
instant card issuance, and instant use at Saison Counters

1988

Developed an international credit card with no annual
membership fees through a tie-up with Visa and Mastercard

1990

Started the first cards in Japan to support signature-less transactions

2002
2003
2004

Started Eikyufumetsu Points, a program for points that never expire
Established a business model that provides capital,
human resources, and know-how through mergers
with companies such as Idemitsu Kosan, Resona HD, Takashimaya, etc.

2006

Launched the points exchange website Eikyufumetsu.com(currently Saison Point Mall)

2010

Issued the world’s first Centurion design cardwith American Express

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

4

A History of Reforms and Challenges

2000

A change of business structure

Full-fledged advance into the financebusiness and expansion of the fee
business as a new revenue source
From 2002 onward, as reorganization of the creditcard industry became more active, Credit Saison
strengthened its marketing and took steps toimprove value-added in its card operations. In 2006
the Company merged with UC Card Co., Ltd. (cardissuance business).
Making maximum use of management
resources cultivated in the card business, Credit
Saison strengthened an assortment of businesses
related to leasing, credit guarantee, and financing.
In the latter business, Credit Saison developed
a diverse array of services for corporate andindividual clients, including office-automation
and IT equipment leasing plans tailored to clients’capital-investment plans, personal loans arrangedin partnership with financial institutions, Flat
35, and rental-income guarantee support. The
Company also founded the industry’s first creditcard processing company. These initiatives served
to expand Credit Saison’s fee business as a fresh
revenue stream.

2014

Acceleration of the global
business

Growing from a Japanese non-bank toa finance company distinctive in Asia
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 base and haveentered the retail financial business in line witheach country, centered on ASEAN. Using theseproducts and services as tools, we have established
a complex sales system that turns corporations andindividuals into customers. As a non-bank capableof responding to changes, we shifted to a businessmodel that addresses the various payment andfinancial needs of companies and provides cashlessfunctions for all individuals and corporations inJapan and elsewhere in Asia.

5

2022

Acceleration of digitalization

Transformation into a comprehensive
life services group
Fusing real and digital to achievecustomer success
We are currently working to accelerate thedigitization that we have been promoting since 2019
and to transform ourselves into a comprehensive
life services group as a “Neo Finance Company”
without being constrained to the category of afinance company. Our mission statement is tofuse the real and the digital to achieve customer
success. Furthermore, through the CSDX Strategy
announced in FY2021, we are accelerating ourbusiness transition and transformation using digitaltechnology.
The entire Group will strive to increasecustomer satisfaction and create new value by
quickly providing kind and appropriate solutions toproblems that arise in a mature society.

VisionInterview with the CEO

Encouraging human resources
to take on challenges while

continuing to create innovation

Hiroshi Rinno

Representative, Chairman and CEO

6

Interview with the CEO

Our understanding of the business environment

Third founding*: Transforming into a comprehensive life services group

In the Company’s 2021 Integrated Report, I mentioned that I would keep a close eye
on international political developments, including friction between the United States
and China. It is no secret that global conditions have become increasingly tense overthe past year. Struggles over the balance of power between the United States, theEuropean Union, China, and Russia, including the conflict in Ukraine that began in
February 2022 and the prospect of a Taiwan contingency, are indicative of a global
environment in a state of flux.
As far as the status of capitalism is concerned, the overwhelming role that profits
have played in society has significantly accelerated disparity. Taking into consideration
developments throughout advanced countries including Japan, we are arguably at a point
where a correction is no longer possible, and conditions are out of control. In addition,nations with strong authoritarian aspirations have risen in prominence, and even majorcountries and communist states are becoming increasingly concerned that such clashesof national egos could occur at any moment and for any reason. Amid such geopoliticalrisks, Japan is continually underperforming and losing its global standing, with the lowest
economic growth rate among developed countries.
Under these circumstances, we are strengthening our global operations, not only inJapan but also in India and the Southeast Asia region, to solidify our business portfolio. Ina bid to increase the pace of the Group’s global business development, steps were taken
to transfer control of the global business promotion
and management functions within the Company’s
Head Office to Credit Saison Asia Pacific Pte. Ltd., asubsidiary in Singapore that engages in the integrated
management of the Group’s bases throughout theregion, and to change the company’s name to Saison
International Pte. Ltd. in April 2022. Through thesemeans, we have bolstered the control function overthe entire overseas market, with a prime focus on
India and Southeast Asia, and established a system
to promote horizontal cooperation among existingoverseas companies and new business developmentby accelerating the decision-making process. I believe
my profound sense of crisis concerning Japan’s
position in world affairs is reflected in the Company’sorganizational structure.

In announcing details of its new Medium-term Management Plan in May 2022, Credit
Saison outlined details of its intention to transform itself into a comprehensive life services
group while achieving customer success through the fusion of the real and digital worlds.
What then is the difference between the third and previous founding periods? Primarily, ourintention to move away from a business model that relies on the Payment Business against
the backdrop of a change in the structure of society.
Under this vision of a comprehensive life services group, we will work to raise the level ofcustomer satisfaction by responding more thoughtfully, appropriately, and swiftly than any
other company to every problem faced by consumers as part of their lives. This vision also
draws on the concept of an integrated lifestyle industry advocated by Seiji Tsutsumi, founderof the Saison Group. The Saison Group, at that time, had the idea of pushing forward a
distribution revolution by expanding its business in all areas related to daily life, while
foreseeing new consumer needs and leading consumer activities and culture. On a personalnote, I have learned much from this management style of Mr. Tsutsumi, and as a manager, I
have pioneered a path that has enabled Credit Saison to grow while replaying this processof creative destruction in the credit card industry as part of the Group’s financial arm.
During our third founding period, we will create an economic sphere, which we referto as the Saison partner economic zone, as a forum for the Group to establish itself as acomprehensive life services group. In building this loosely connected economic zone,
which can be established on a stand-alone basis without the need for capital ties orbusiness alliances, we will pursue solutions to all our customers’ problems. In September
2021, we launched Saison’s Lifestyle Research website as a medium for solving the worries
and problems faced by consumers from their 50s. In addition to money-related content
including such essential financing needs as loans and real estate as well as household
budgeting and the funds required for retirement and the future, the website covers a wide
range of lifestyle activities including house cleaning and visiting graves as well as such
categories as cleaning services, trouble with housing, computer consultation, maintenanceand repair, beauty, inheritance, and pet care. With its abundant menu, the site has gained
the support of many customers in its first year of operation. Over this period, page views
per month have exceeded 2.5 million. In this manner, customers can contact the Saison
Group at any time should they confront problems or hold concerns about their daily lives.
We are confident in our ability to address all issues at hand. In creating a structure of thiskind, I am convinced that the Saison partner economic zone will succeed. In contacting
Saison’s Lifestyle Research website, customers will find solutions to their problems quickly
and in the cheapest and most thoughtful way available. In creating a service area of this7

Interview with the CEO

nature, we will undoubtedly gain the support of customers, and through word of mouth,
enjoy an increase in the number of cardholders.
Efforts to build this economic zone are in concert with a loose connection of partnercompanies. Under a give and take arrangement, our contribution encompasses amembership base of approximately 36 million customers. I believe that this customer
base will bring us one step closer to realizing our vision where all participants within theeconomic zone reap considerable benefits. In addition to partner company businessgrowth, our customers enjoy solutions to all their problems.

Innovation is born and can only be nurtured in an organization rich in diversity
I have said that the greatest source of our growth is our ability to drive innovation. The
innovation generated by the Company during its second founding broke with industry
credit card convention, which had historically served as a payment tool held by a select few
with a certain amount of income. Credit Saison democratized credit cards by capturing newcustomer segments including young people and women̶a key shopping demographic.
Efforts to attract large numbers of card members were also buoyed by offering suchinnovations as instant credit, issuance, and use of credit as well as free annual membershipfees. Building on these initiatives, Credit Saison has been quick to put forward a host ofinnovative measures including Eikyufumetsu Points and signatureless transactions, whichhave gained the support of customers while spurring growth.
Representing two halves of a whole, creative destruction, the essence of capitalism, andcompetition, the essence of business, form the core components of innovation, which inturn fuels social reform and development. Innovation is often confused with breakthroughsin technology, when in fact, the concept of innovation differs from the technologicalingenuity that brings about new discoveries. The role of innovation is to bring latentdemand to the surface by asking “Why haven’t we had this before?” The difference between
coming up with an idea, or not, and between implementing an idea, or not, is the deciding
factor, as opposed to the difficulty of whether it is technically feasible. From a different
perspective, this means that everyone has a chance to create innovation.
Serving as a breath of fresh air, we can ensure that the organization remains conducive
to innovation by actively recruiting experienced
personnel from outside the Company tocomplement existing staff. One major positive inhiring experienced external human resources is theadversity it brings by not having to rely on existing
internal personnel. In the absence of support fromwithin the Company, one is forced to make do on
one’s own. When this happens, one inevitably feels
a sense of desperation. The principle of the able
minority is not about gathering a small number ofthe elite. Rather, it is about sticking to the few tobetter nurture top-ranked personnel.

First founding: Midoriya Co., Ltd., a department store that sold products on a monthly installment basis, established in 1951.
Second founding: Company changed its name to Seibu Credit Co., Ltd., in 1980. Shifted to a credit card company.
Third founding: Currently taking up the challenge of transforming into a comprehensive life services group under the new
Medium-term Management Plan.

Combining the strengths cultivated in the real world with the digital world
Credit Saison recognizes that three core concepts̶innovative, digital, and global̶are
critical in realizing its third founding vision. From a digital perspective, the Company’s CSDXStrategy is exhibiting greater-than-expected progress in attracting DX human resources.
The impact of the pandemic on consumer behavior has been mixed. On one hand, brickand-mortar (real) stores have struggled. On the other hand, we have seen an accelerated
shift toward the virtual domain including the online purchase and delivery of products andservices. In this context, the digital domain is said to have expanded to around 20%–25%of total consumer spending. Despite the remarkable pace of e-commerce growth, real
stores still account for 75% of the total. This
three-to-one ratio is unlikely to change in theforeseeable future. Credit Saison has expanded
its membership centered on house cards forlarge-scale allied retailers and banks. In working
to expand our house card membership, we havegained considerable expertise in speaking on a
one-on-one basis with a broad array of customers.
This know-how and track record cultivated in thereal world will be put to full use in the digitizationof our services. In harnessing our strengths in thereal world, while skillfully utilizing DX, as we makeinroads into the virtual world, we will take positive
steps toward creating new customer experiences.
At the same time, we will be better placed to secureresidual profits in the event of an upswing in thewithdrawal of real stores.

8Interview with the CEO

I have also worked diligently to carry forward Mr. Tsutsumi’s management ideaof customer first, the organizational concept of management republicanism, and theorganizational culture of humanism, together with the philosophies of gender equality, theuselessness of educational backgrounds, meritocracy, and not implementing a seniority
system. I also make it a point to encourage the use of honorifics for both business partners
and employees to ensure that relationships are conducted as equal partnerships and not
between superiors and subordinates. A flat organizational structure, such as one formed
by a team of equals, is a key to putting innovation into practice immediately. While notknowing who will take notice of an innovation as it occurs, a hierarchical organization likea pyramid, in contrast, requires a considerable amount of time before innovation can bebrought to fruition.
I have always said that the lack of a sense of impending crisis is a company’s worst
enemy. Lacking a sense of crisis weakens the competitive fervor that is critical forcompanies and drains their strength to drive innovation. Innovation is the by-product ofa sense of crisis, and where there is no sense of crisis, there is no innovation. Mr. Mizuno,
Executive President and COO, oversees the executive function. As CEO, I believe that oneof my most important roles is to ensure that the Company’s ability to innovate continues togrow. This means instilling a sense of impending crisis in our employees, while at the sametime creating an environment in which the brightest individuals are encouraged to take onchallenges in a flat organization and allowed to fulfill their aspirations without the fear of
making mistakes.
Under the keyword incubation, we put forward the idea of building more than 100
companies and increasingly leaving their management to employees who volunteer totake the reins through open recruitment in our 2021 Integrated Report. In September thisyear, we adopted a new human resources system and introduced a mechanism throughwhich employees can engage in work that meets with their aspirations. The Company’s goal
to become a comprehensive life services group is clear. The first step is to recognize that
we are no longer just a credit card company. With this in mind, we must continue to be acompany that encourages employees to design and choose what they want to do with theirlives, and to take on challenges of their own volition.

Developing the ability to see the true nature of things on a global scale
Earlier, I explained that we are strengthening our global headquarters function in
Singapore. Credit Saison’s business continues to exhibit remarkable growth across suchglobal markets as Southeast Asia, where the average age of the population is young andgrowth potential is high. For the younger generation to play an active role on the global
stage, I feel it is extremely important for them to go beyond economics and deepen theirunderstanding of political, cultural, philosophical, and religious affairs in countries aroundthe world. It is vital for the youth of today to face the truth of the different events occurringaround the world without being swayed by the overwhelming amounts of information.
Equally important is the need to cultivate the ability to learn from history and to see things
for what they truly are.
Compared to people in other countries, Japanese people are distinguished by theirconcern for their surroundings and their adherence to rules. Conversely, I fear that there
are only a limited number of people who will make judgments on their own and focus on
the true nature of things. In his book An Encouragement of Learning, Yukichi Fukuzawa
advocated that all people are born equal with the same qualifications and status. In the
Jitsugokyo, the teachings of Kobo Daishi, one of the most respected and popular Buddhist
masters of Japan, it is said that “If a man does not study, he will have no knowledge. A man
without knowledge is a fool.” (The difference between a wise man and a fool depends onwhether or not he learns.)
We will work to remain a company that always questions the true nature of what we
do. At the same time, we will endeavor to never stop learning and continue to give our
employees every opportunity to take on new challenges while sharing all the right values.
As we strive to achieve our established goals, we ask for the continued support andunderstanding of all stakeholders.

9VisionValue Creation Stories
Our Image of Society

Customers

Established in 1951 as Midoriya Co., Ltd., a department store that sold products on
a monthly installment basis, Credit Saison has, in the face of various difﬁculties,
continued to take on challenges as a leading-edge service company.

A sustainable societythat is even moreconvenient andprosperous than today’s

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.
Employees

Resolving customer problems
centered on ﬁnancial services

Transforming into
a comprehensive
life services group
Declining birthrate,
aging population
Climate change

Value co-creation
with stakeholders

Shareholders

Partners

Regions/communities

Realization ofﬁnancial inclusion*

Digitalization

Changing society/
Global environment

Promoting conversion
to cashless operations
Growing needs for asset formation*Financial inclusion: Ensuring that everyone has access to and beneﬁts from ﬁnancial services.
Financial inclusion is recognized as an important theme for achieving the SDGs.

10

Contributing to the creation of a sustainable society that is even more convenient andprosperous than today’s by resolving social and environmental issues

Value Creation Stories

Main Management Resources
Corporate culture that has
been handed down incontinuous succession

Awareness toward co-creation
with all stakeholders

Meritocracy free from age, gender,or educational attainment bias
An organizational culture that allows
creative destruction and failure“CS Style” action guidelines

comprehensive life services group
centered on ﬁnancial services

Transforming thecustomer/employee experience bypromoting digitalization that fuseswith the real worldTransforming existing values andcreating new values in response tovarious problems

Human resources with vitality

Five Businesses

Inno
va
t

ive
Providing a wide rangeof advanced security
services with thestrengths ofcreditworthiness and awide customer base

4,084

(of whom 3,058 are women)*Excluding part-time employees

Innovation creation capabilities
Credit know-how nurtured over the72 years since the Company’s founding
Professional human resources
well-versed in the payment/ﬁnance ﬁelds

l
gita
Di

Human resources that are active under
our common system for all employees*
Consolidated
5,562
number of employees
Non-consolidated
number of employees

Service development track recordin the ﬁnance ﬁeld
System infrastructure capable ofresponding ﬂexibly to changeRock-solid sales platform
Industry-leading customer base
Number ofindividual members
Number ofcorporate
card issuers

Approx.

3,600 million

Diverse ﬁnancing based onhigh creditworthiness
Consolidated¥3,610.7 billion
total assets¥2,569.0 billion

Highest level of creditworthiness forindependent non-bank

High credit rating

Taking on the challenge ofﬁnancial inclusion throughﬁnancial services

P12

Payment Business

Rating and Investment Information, Inc. (R&I)(Continuously for 26 years since October 1996) A+

Partners

Regions/ Shareholders Employees
communities

Realization of a resilient organization

Progress in social and environmental initiatives by
establishing the Sustainability Promotion Committee
Number of committee meetings/
working groups held
26 in total
Committee: Seven times; WG: Climate change 10 times;
DE&I: Nine times

Number of dialogues held withshareholders/investors

196
0

Number of security incidents

Fostering motivation and diverse values

74.9%
24.5%

Ratio of female employees

Lease Business
Finance Business

Paid leave take-up rate

Real Estate–related
Business

Number of new product releases

Entertainment
Business

G lo b al

Customers

Ratio of female managers*2
No. of human resources withdigital technology backgrounds

Approx. 260

73.5%

New business/Product development

Approx. 40*1

Number of SWITCH SAISON proposals andnumber of commercialization projects

Approx. 1,000 proposals;four commercialization projects

Strengthening ability to resolve
social and environmental issues

Business alliances aimed at building
a carbon-neutral and recycling-oriented society
Environmental protection activities

About 74,000 visitors(operation of Akagi Nature Park)

More than
150,000 companies

Sound ﬁnancial base

Interest-bearing debt

Value Created in
Collaboration with Stakeholders

Transforming ourselves into a

Reducing paper consumption bydigitizing recruitment operations

Enriching our customers’ lives andenabling them to live happily andtrue to themselves
Achieving sustainable growth andimproving corporate value throughsound corporate management

Creating a better society throughco-creation with partners

Materialities for Sustainability
Protecting the rich natural environment and culturethat enriches life, and energizing people in the region
and community

Sustainability of the Credit Saison Group

11

P41

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

Financial inclusion for the underserved class,especially in Asia

Financial results

Return on equity (ROE)

Shareholders’ equity ratio

6.5% (previous ﬁscal year: 7.1%)
15.6%(equity ratio attributable to owners of parent)

Improvement ofGroup business proﬁt
Total dividends
Total shareholder return(non-consolidated)(previous ﬁscal year: 15.6%)¥52.3 billion(8.2% increase from the previous ﬁscal year)¥8.6 billion(¥7.0 billion in the previous ﬁscal year)

76.9%(75.4% in the previous ﬁscal year)

Note: The standard is as of the end of March 2022, but some as of November 2022 also included.
*1 Total aggregated number of products and services from April 2021 to March 2022
*2 General manager and manager

VisionThe Five Businesses
Net revenue by segment

Business profit by segment

Lease BusinessEntertainment Business¥11,837 million (4.0%)¥6,407 million (2.1%)

Entertainment Business

Adjustment(-¥2,224 million)

Adjustment¥3 million¥237 million (0.5%)

Real Estate–related Business
Real Estate–related Business¥22,704 million (7.6%)
Finance Business¥48,313 million (16.2%)¥12,350 million (23.6%)

Consolidated
net revenue¥299,017
million

Payment Business¥211,979 million (70.9%)

Lease Business¥5,805 million (11.1%)(FY2021)

Consolidated
business proﬁt¥52,336

Finance Business¥19,922 million (38.1%)

million(FY2021)

Payment Business¥14,016 million (26.8%)

Note: Amount in parentheses ( ) indicates share of total.

Payment Business

Lease BusinessIn addition to credit cards, we offer a variety of payment services,
including prepaid cards and smartphone-based payments, withan eye to bringing about a cashless society. To better meet theneeds of our customers, we engage in a one-stop processing
business outsourced to us by credit card and other companies.
Furthermore, outside of Japan (mainly in Asia), we promote
financial inclusion by providing digitalized and localized financial
services to people (underserved people) and small businesses
that are unable to receive adequate financial services.

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 take on new challenges in growth fields such asenvironmental products.
12

Finance Business

Real Estate–related
Business

Entertainment Business

Including the credit guarantee business and thefinance business, we develop lifestyle creation
financial services ranging from home purchases
to rentals, with a focus on Saison’s Flat 35,
Saison Asset Formation Loans, and Credit
Saison’s Rent Guarantee service Rent Quick.
We conduct the real estate business, real estateleasing business, and servicing (loan collection
agency) business, etc.

Includes the amusement business, among others.

Strategy

Interview with the COO

Transitioning to an offensive arrangementfor our third founding through the buildingof the Saison partner economic zone andremarkable global business growth

Katsumi Mizuno

Representative, Executive President and COO

13

Interview with the COO

has passed since you were first appointed in March 2021. Please tell
Q Ausyear
your views looking back over this past year.
Although behavioral restrictions during the COVID-19 pandemic this past year were erratic,
swinging back and forth between looser and tighter approaches, within the Company I
kept an awareness of communicating with the frontlines as often as possible, and strove
to actively observe the frontlines through both on- and off-line means. I continuously
stated my thoughts on the new Medium-term Management Plan and the importance ofmaking deliberate changes. Ultimately, I was able to converse with more than half of ouremployees. I aspire to a level organization wherever possible, and I dive into and travel
around the frontlines, which I feel has closed the distance between management and thefrontlines. Externally, I actively visited our business partners, together with Chairman Rinno,
and shared with them our concept of an economic zone that positions our customers as
hubs linked together by loose horizontal connections.

degree of settlement. And our new system remains in stable operation, so I feel we haveentered a period where we will without question transition to an offensive arrangement.
The three innovative, digital, and global themes raised in the new Medium-termManagement Plan have each shown steady progress. The innovative theme serves as
the overarching concept for the entire Plan, including digital and global, but in addition
to service revisions and reductions, we will drive forward products and services that fusedigital technologies and innovation, like SAISON CARD Digital, which launched in 2020.
Internally, we are taking a bidirectional bottom-up and top-down approach to creating
innovative initiatives, where executives lead by example and propose new businesses insome cases. In terms of digital, we have been more successful than expected in recruiting
and securing DX human resources under the CSDX Strategy, and we will continue to launch
new services in succession as we advance our redesign of operations. Global has also
begun to produce significant early results, which will be introduced in the Global Strategy(P.28).

addition to trends in the spread of COVID-19, the situation in Ukraine and
Q Inotherchallenges presented uncertainty. What is your sense of the current

provide an overview of the new Medium-term Management Plan thatQ Please
was recently announced.

business environment?

In May 2022, we announced the new Medium-term Management Plan: transforming into
a comprehensive life services group while achieving customer success through the fusionof the real and digital worlds. The reason we purposefully changed the phrasing used in
the previous Medium-term Management Plan from comprehensive life services company
to group is because we felt that we wanted a greater awareness of an economic zone thatconsists of loose horizontal links centered on our customers. The Company has always
taken a stance of encouraging independent management at each Group company, evenin terms of individual Group company governance, so we never considered an economic
zone concept that was tightly tied by brand or capital relationships. This is because theCompany essentially considers our services from the starting point of our customers
and aspires to become a comprehensive life services group that offers a high level ofconvenience for our customers. This loosely bound economic zone consists of a broad,lightly tied group of companies that provide those services that we feel our customers
desire to use and is based on the concept of bringing together various services fromdifferent brands. For this reason, we will sometimes even form alliances with competitors
and incorporate them into this economic zone when doing so would assist our customers.
On the other hand, in terms of the Saison brand, which was built up by our founder, Seiji
Tsutsumi, and has attracted broad support among the affluent and senior segments, we
decided to use the term Saison partner economic zone because we hope to fully relaunch

The effects that a weak yen, higher crude oil prices, inflation, and other world affairs haveon the Company can be both positive and negative. A weak yen and inflation, for example,
have a positive impact from the standpoint of transaction volumes, where the overseas
funds in which we were early investors when the yen was strong have had a positive impact
in terms of the numbers. On the other hand, when the yen swings lower the cost of dollardenominated payments, including some payment fees and cloud usage fees, for example,
increase, which has a negative impact.
Our global business has shown remarkably strong growth, so macro trends ininternational affairs are no longer someone else’s problem. Therefore, we keep watchwith our antenna always up in regard to how various overseas situations will affect theCompany’s businesses and finance recipients.

back over the previous Medium-term Management Plan, what is
Q Lookingyour assessment?
Despite being faced with the COVID-19 pandemic, we basically achieved all our initial
target values. Although we recorded broad allowances regarding the overpayments issue,
this problem is approaching an end in terms of the fact that we have come to see some14

Interview with the COO

this brand for Generation Y and Generation Z, which do not possess the same positive
brand awareness as other segments. The Saison Group has valued the ideal of solving the
problems of our customers from the starting point of our customers, and this ideal has
spread beyond Japan to touch the heartstrings of our overseas employees, who have been
rapidly growing in number. In Vietnam, India, Indonesia, and the other foreign countries inwhich we engage in various businesses, the Saison brand has come to symbolize the idealof viewing our customers as the starting point and has begun to take root as a common
facet among our employees.
Under the new Medium-term Management Plan, we have four growth strategies:
1) Establishment of the “Saison Partner Economic Zone” and reinforcement of businesscoordination among the Group, 2) Revitalization of the Payment Business, 3) Promotion ofhealthy growth and expansion into new fields for the Finance Business, and 4) Accelerationof global business expansion. As the quantitative goals for the final fiscal year of the plan,we aim to achieve consolidated business profit of ¥70.0 billion and an ROE of around 8%.

risks in real estate financing, while leveraging the strengths of each Group company withreal estate–related businesses. In the area of asset formation loans, along with working tosell bonds as we have in the past, we will take on the challenge of businesses targeting
power couples and other households that have an average annual income of ¥10 million or
more.
To accelerate global business expansion, we aim to achieve financial inclusion throughthe core lending business, which targets underserved demographics that find it difficult toreceive loans from standard financial institutions, and the core investment business, whichtargets promising start-ups throughout the world. As we begin to see the relaxation of
movement restrictions imposed during the COVID-19 pandemic, we have high anticipation
for growth acceleration among existing businesses and will support this growth throughfast-paced decision-making centered at the International Headquarters (IHQ) establishedthis year in Singapore. Moreover, CVC has strengthened and expanded its teams at a rapid
pace and aims to explore investment targets on a worldwide basis.

tell us about the key points to the four growth strategies raised in the
Q Please
new Medium-term Management Plan.

Q Tell us about your image for the Company five and 10 years from now.

In establishing the Saison partner economic zone and business coordination among theGroup, we will further promote the effective use of the Group’s customer base, which
consists of approximately 36 million members. Amid this loosely bound economic zone,
we will create value for customers while demonstrating mutual synergy through a morestratified series of services enabled by combining resources between Group companies
and between the different businesses within the Company in a complex manner.
To revitalize the Payment Business, we will promote our transition to our customers’
main cards by advancing two strategies, namely the AMEX Strategy, which is based on
SAISON AMEX products that leverage the AMEX brand with its well-known standing as asafe and secure brand, and the New GOLD Card
Strategy, which enhances the Life Time Value of
our customers. We will also promote measuresthat allow both our individual and corporate
customers, including SMEs, to use AMEX formaking settlements.
To promote healthy growth and expansion
into new fields for the Finance Business, wewill advance structural reforms that emphasize
balance by identifying the opportunities andIn terms of the balance for the medium- to long-term business portfolio, we envision a
3:3:3:1 ratio structure for the Payment, Finance, global, and new businesses, respectively. In
FY2021, overly robust real estate business profits led the Company, which brought the ratio
to 7:2:1 for the Finance, Payment, and global businesses, respectively. The ratio accounted
for by the global business has shown more rapid expansion than expected, however, and
the Payment Business has emerged in a form that soundly and stably produces profits at a
steady level. So, I feel that the future 3:3:3:1 ratio structure has become a viable reality.
Regarding new businesses, in August 2022 we established ReSAISON Co., Ltd., whichaims to increase waste recycling rates and realize a recycling-oriented society. In September
2022, we launched Saison’s VETs Support Club, which enables remote diagnosis andconsultation services for pets by using video calls to connect pet owners and veterinarians
online. Through a collaboration with the Japan Veterinary Medical Association, we built a
network covering approximately one-third of all veterinary clinics in Japan. We will continue
to offer this service as a new business while we work to spin it off as a new company.
Although I mentioned that we have entered a period when we will go on the offensive,
looking at the current growth momentum in the global business and the professional knowhow and skills of members involved in the global business, we have even seen indications
that we will emerge as a company that 10 years from now will earn more than half of its
business profits overseas. When I was in charge of the global business and would visit
15

Interview with the COO

controlling failure to some degree. Meanwhile, detecting the changes in the times naturally
requires us to directly visit the frontlines. Which is why I will lead by example as part of amanagement style where we fully experience the atmosphere of what is occurring at ourclients, business partners, and frontlines, and listen to their respective challenges as raw
feedback. Most important, however, we will confront issues of sustainability head on toensure business continuity.

different countries, we were still at the stage of gathering human resources and building
the network from scratch, which is in part why we adopted a management style centeredon Japanese personnel. Today, however, our foreign national employees lead the global
business. As a country that has achieved remarkable economic growth, India presents
robust capital demand, and we currently operate offices in 16 locations throughout thecountry. A female entrepreneur from Malaysia in her 30s serves as CEO, leading a local
staff of around 300 as she works to steadily expand operations. The business in India isalready profiting, and we expect to see the balance scale grow to ¥100 billion in the near
future, which has led us to debate the format of future business growth in India with an eye
to an IPO. Similarly, the business in Vietnam and at Julo, the entity conducting P2P lending
in Indonesia, are both driving business growth under the leadership of local staff. By
implementing measures for the Credit Saison business foundation based on expectations
for growth in the global business, we envision the Company itself undergoing a majortransformation into an international company. And we intend to grow the Company byexpanding the Finance Business and Payment Business in a way that places them into afriendly rivalry with the global business.

Q Finally, please provide a message to the stakeholders.
First, we increased the dividend this year for our shareholders. Although we will continue
to consider increasing the dividend, acquiring shareholders’ equity, and other forms ofshareholder returns as necessary, the mainstay of shareholder returns is without question
based on improving performance by ensuring our initiatives organically function with ourcustomers, business partners, employees, and other stakeholders, as well as on increasing
corporate value by discovering growth potential.
Therefore, we will work to solve the different problems of our customers in a tailoredfashion by approaching our customers of our own initiative and by deploying services witha human touch, an approach that has served us well thus far. Moreover, we have previously
advanced initiatives together with our business partners that aim to expand our customer
base. Within the loosely bound economic zone concept centered on our customers, as wesolve the problems of our customers, we will undertake initiatives that offer advantages
for our business partners, such as sending customers from our customer base to ourbusiness partners. Because the capabilities of employees are the very essence of vitality forcompanies, we are considering approaches to expand returns to our employees, such as
introducing a performance-based remuneration system. At the same time, we will create anenvironment that allows our employees to continue undertaking various challenges as they
enjoy the changes that the Company steadily implements and see these changes in the
Company as growth opportunities for themselves.
Through these initiatives that organically linkcustomers, business partners, employees, and otherstakeholders, we intend to achieve sustainablegrowth as a company that is also attractive in termsof performance and growth potential, so we humbly
ask for your continued support.

Q What are some of the challenges in promoting growth?
The key to the Company’s ongoing transformation is human resources, and the diversityof the people that gather at the Company has made quite a bit of progress. Our open
corporate culture that accepts diversity and our management stance of actively delegating
authority by preparing positions for younger employees have become aspects that
attract human resources with a rich spirit of challenge. In fact, the Company has drawn
many individuals that profess their desire to accomplish something when they join the
Company. To ensure that these individuals undertake new challenges, I intend to steadily
advocate a culture that allows for failure. Although we revised the personnel system in
September 2022, the goal of this move was in part to prepare a route for those who wantto undertake challenges and an opportunity to do so upon first fully considering what itis that they want to accomplish. This is important for advancing our work-style reforms.
Building an organization in which individuals can engage in their work with a sense of joy
and motivation is a core element of corporate vitality. And building a resilient organization
requires each employee to be both physically and mentally healthy; in other words, this also
requires health management.
Now that we have entered a period where we will go on the offensive, we intend toundertake new challenges in the global, finance, and payment businesses, while skillfully
16Strategy

Retrospective Overviews of Past Medium-term Management Plans
FY2008operating revenue(JGAAP)

Initiatives
beforeFY2015

Payment¥34.5
billion

Lease

Real estate–related

FinanceEntertainment

FY2019–FY2021

FY2016–FY2018

Medium-termManagement Plans

FY2018business proﬁt(IFRS)¥52.2
billionFY2021business proﬁt(IFRS)

Medium-term Management Vision

Neo Finance Company
in Asia¥52.3
billion*Further acceleration of revival of the card business andtransformation to a general non-bank

Basic Management Policy for FY2015

Basic Policy

MISSION STATEMENT

Change the business model to one
that combines five businesses via
stronger corporate marketing

Realize innovation and changing business models

Become a finance company advancing with customers for 50 years

Face the challenge of becoming apeerless new finance company in Asia
able to overwhelm the competition
Basic Management Policy for FY2014
Face the challenge of changing thebusiness model by strengthening
corporate marketing
Evolve into a non-bank capable ofresponding to change

Face the challenge of new business models
Expand the stock business andthe fee business
Strategies/Measures
1 Face the challenge of changing the cardbusiness model
2 Collaborate strategically via open innovation
3 Enter multilateral alliances centered on thefinance business
4 Develop diverse business throughout Asia
Results
Full migration to the Associated Core System

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

Completed a foundation capable of allianceexpansion and product development
Responsive to diverse customer needs
Payment platform enhancement/Financebusiness expansion
Expanded the Global Business into more countries
17

Provide peace of mind anddiscover the potential in money
Strategies/Measures

I Growth strategies and structural reforms
in the Payment Business

Payment Business

II Further expand the Finance Business as a non-bank

Lease & Finance
Segments

1 Expand shopping transaction volume (BtoC field)
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

1 Strengthen relationships with partners and expand
new alliances

Finance Business

III Expand the earnings base of the Global Business witha view to the future
1 Transition from the sowing stage to the harvestingstage in countries where we have operations

Global Business
Global BusinessResults
The Payment Business was in the process of recovery from the effects ofshortened business hours and people having refrained from going out. In
contrast, the Company had the definite prospect of business diversification,
the Finance Business having expanded steadily as the second pillar, and the
Global Business being expected to contribute more to profits as the third pillar.
For details, please see pages 30–33.

Note: With a view to the future, in FY2021 the Company recorded provision for loss on interest repaymentof ¥13.6 billion. Excluding the impact of this one-time factor, actual business profit was more than
¥65 billion, thereby achieving the business profit target of ¥60 billion adopted for the Medium-termManagement Plan.

Strategy

Overview of the New Medium-term Management Plan
Basic Policy

Management indicators

Transformation into a comprehensive life services group

Business profit targets

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

Payment(Billions of yen)
80

Having adopted transformation into a comprehensive life services group as its mediumterm management vision, under the basic concept of innovative, digital, and global, theCompany formulated a Medium-term Management Plan to cover the period from FY2022
to FY2024 with the mission statement of “achieving customer success through the fusion of
the real and digital worlds.” As a NEO Finance Company that is unfettered by the limitationsof a standard finance company, we will help resolve all the kinds of problems that arise inmature societies toward the realization of the Medium-term Management Plan. The entire
Group will work to resolve issues in a more friendly, appropriate, and quick manner thananywhere else; increase customer satisfaction; and create new value. Through these efforts,
we aim to achieve consolidated business profit of ¥70 billion in FY2024, the final year of the
plan.

60

18.4

40

Sales
expansion

With all kinds ofproblems as
starting points,
innovate existingvalues and create
new value

Growthstrategy1framework

2 3 4

1

CSDX strategy
P34

2

P20

Non-consolidated
46.0

FY21 (Actual)

FY24 (Planned)

Notes: 1. Included in the Payment Business, aside from payment/leasing/ﬁnance
2. Non-operating proﬁt and loss included in the Payment Business

Main indices of management indicators
(Yen)
500

EPS

Shareholders’ Equity Ratio

200

P19–P27

ROE

(%)

18

About 15%

15.6
400

Above 30%300

3Consolidated contribution
21.9

15.2

More than¥300

About 15%

12

P48

0

18

FY21 (Actual)

Progress in linewith benchmark
ROE: Above 10%

About 8%

6

100

Strengthening of
personnel capability

Medium- to Long-termManagement Goals

Shareholders’ Equity Ratio:

226.4
6.5%

Branding strategy

Consolidated
contribution
24.0

Non-consolidated
30.4

3.0

Use ﬁnancial
services as amethod to take on
the challenge ofﬁnancial inclusion

Reinforcement of Business Foundation

70.0

12.2

20

GlobalImproved
proﬁtability

Other Consolidated Contribution

3.5

Continue with the three concepts, accelerating their penetrationand drive within each business

By promoting digitalconversion in
combination with real
life, change thecustomer/employee
experience

Global52.3

Basic Concept

Innovative

FinanceAbove 30%0DigitalLease

FY24 (Planned)

0Goal in current
medium-term plan (up toFY24) is around 8%
Aiming to achieve in thenext medium-term plan orlater (from FY25 onward)

Strategy

Growth Strategy (1): Establish the Saison Partner Economic Zone andReinforce Business Coordination within the Group
Saison Partner Economic Zone Concept Map
Partners

Department stores

Intend to increase/prepareIndividuals

Pa
ym

en
t

セゾンビジネスサポート

Problems

BUSINESS SUPPORTBusiness
success

Ofﬁce automation (OA)
communication equipment
sales/maintenance
Creditguarantee

Financial services

Rich lifestyle
Safety/security

Securities

Lease

Convenience/
good value

Telecommunications

Want to know/learn
Fintechencna

Credit Saisoncore businesses

Expensemanagement
新社名ロゴタイプデザイン案

Real estateGroupcompanies

Inter-corporation
payment services

Management
C
consulting

Bank/credit unions

Fi

Banks

Investment

Unstaffed stores

Sustainable society

Corporations
Crowdfunding

Lending

HR training services

l

ba

lo

G

Online advertising

Web3

bu N
si ew
ne
ss

Payment services

Cryptocurrency

Establish the Saison partner economic zone
We will pursue synergies with Group companies in addition to our existing business
partners to establish the Saison partner economic zone with the aim of becoming a nonbank with a strong presence in each financial business: Payment, Finance, and Real Estate–
related. Specifically, we will actively promote initiatives that allow our existing alliancepartners to utilize the Group’s base of approximately 36 million customers, and we will work

to expand our share of corporate transactions through Group collaboration. In addition todeveloping new products in the fields of payment, asset management, and real estate, wewill create value suited to individual customers by combining resources of Saison partners
through the diversification of coordinated relationships and services.

19

Growth Strategy (1): Establish the Saison Partner Economic Zone and Reinforce Business Coordination within the Group

Establish the Saison partner economic zone and reinforce business coordination
within the Group

Branding strategy
In our branding strategy, we will again return to the former Saison Group concept, namely,
to promote a distribution revolution by expanding business in all areas related to daily life
while taking the lead in consumption activities and culture by anticipating new consumer
needs. In so doing, we will position the Saison brand more than ever at the forefront of ourstrategy. As we pursue this alliance strategy, the Saison brand, which until now has been
linked as a sub-brand, will be positioned under the concept of Saison Marketing. Based on
this concept, the Group will work together to develop the Saison brand into a brand thatcatches the attention of customers everywhere.

Group company management teams have adopted a fiercely independent style, without
being hemmed in by brands or capital relationships. While maintaining the management
independence of each Group company, we will continue to develop and expand the Saison
partner economic zone, a loosely connected horizontal economic sphere. Against thisbackdrop, we aim to differentiate ourselves from our competitors by further strengthening
Group product coordination based on each customer, as well as establish Saison as acomprehensive life services group that offers the greatest convenience to our customers.
To this end, we will further promote the creation of synergies among Group companies anddifferent businesses within the Company, including initiatives to date shown below.
For details on major affiliates, please see page 68.

By raising customer recollection rates, promote mutual use ofGroup company services among customers

Creating value by demonstrating synergies between Group companies
and different businesses within the Company
Group Company Synergies

Unify the Saison・Marketing worldin the Group as a whole

Credit cards

Credit cards

AMEX/T&E
Asset
management

Fashionable/Smart

Asset
management

Seniors

Give concepts priority
Appeal to beneﬁts

Synergies between Different
Businesses within the Company
Media that delivers information
related to daily life for people
in their 50s and older, with afocus on the categories ofmoney, health, and family

Proposing a richer
lifestyle throughcard shopping andasset creation

Credit card
usage

Financial productbrokerage

Asset creation

Saison Marketing

Consider things people don’t doCredit cards

Creating an image of
Saison these areas.

Finance

MarketingPublicrelations

By paying their monthly rent witha Saison Card, users can earnpoints that can be used for
payments such as rent and security
deposits with this service

SME

Senior life

SAISON
BRAND
Advertising

Link and unify advertising, promotion, public
relations, and PR projects as coordinatedmarketing activities and branding within the Group
Increase effectiveness and efﬁciency while
creating a distinct brand world

Saison Card
payment

20

Strategy

Growth Strategy (2): Revitalization of the Payment Business
AMEX Strategy

New GOLD Card Strategy

To revitalize the Payment Business, we will further promote the effective use of the AMEX
brand. We have been affiliated with AMEX for about 25 years, and since 2022 the AMEX
brand has become the No. 1 brand among other international brands in terms of ourtransaction volume at the Company. By
Credit Saison Shopping Transaction
working to make SAISON AMEX a topVolume Share by Brand
ranking AMEX brand and pursuing the
AMEX Strategy to establish products,
the Company aims for a total transaction
volume of more than ¥3 trillion by FY2026
AMEX
for Credit Saison’s proprietary AMEX brand.
AMEX
Furthermore, we will strive to acquire
new members among individuals, SMEs,
and wealthy demographics, as well as to
AMEX brand became No. 1 in Credit Saison’s
invigorate the use of AMEX cards.
monthly transaction volume

Promote cards to be used as a main cardwith the new royalty service SAISON GOLD Premium Card
The future of Credit Saison

Combining the special feeling of gold + beneﬁts that make you want to use it
day-to-day to create a product customers will choose for their main card

SAISON GOLD Premium・¥1,000 movie tickets (tax included)
・Maximum 5% refunds on convenience store and café purchases
・Abundant travel support such as airport lounge services andtravel accident insurance

First card in Japan to use“METALSURFACE CARD™” materials

Penetration of SAISON=AMEX
as people’s perception of the brand・Point rates double when used for ¥500,000 or more inpurchases per year

Invitation = Making customers feel special

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

Credit Saison up until now

AMEX Strategy

Individuals

Main Beneﬁts

Approach wide-ranging customer demographics through various alliances

SME

Concept card

Proper card

Partner card

Top-ranking cards
BUSINESS Pro AMEXPLATINUM AMEX
GOLD
AMEX
BLUE AMEXPEARL AMEXROSE GOLD
AMEX

Another core strategy for revitalization of the Payment Business is the New GOLD Card
Strategy. Targeting the broad customer base we have expanded to date, we have released
a new GOLD card, SAISON GOLD Premium, which grants benefits based on the amountspent as a new royalty program starting in July 2022, and we are working to make thisthe main card for our customers. For good customers who own a proper card, customer
spending tripled after switching to GOLD AMEX compared to standard memberships. In
addition, customer spending among SAISON GOLD Premium members has also been
growing continuously since the card was issued, indicating that measures to acquire GOLD
members are already showing results.

PLATINUM BUSINESSAMEXCOBALT BUSINESS
AMEX

21

Growth Strategy (2): Revitalization of the Payment Business

Expansion of business in the BtoB field
To revitalize the Payment Business, we will also expand business in the BtoB field. In FY2021,
we worked to significantly shift our nationwide sales structure from traditional sales toindividuals to sales to corporations, and we have established a human resource structure
to strategically capture the BtoB market. Starting in FY2022, we will strive to expand ourshare of the BtoB payment market as we strengthen our non-card payment products, SME
channels, and customer communication in sales, while collaborating not only with Fintech
companies centered on the AMEX brand but also with SaaS providers that promote BtoB
payments among Fintech companies.

Invest in the BtoB ﬁeld with a focus on non-card payment, SME channel strengthening,and enhancement of customer communication themes, striving for expanded market share
Product

ChannelEntry into the non-card
payment ﬁeld

Expansion ofalliance businesses andstrengthening of coordination

Business card and commercial
product cross-sales

Expansion of sales channels
through alliance businesses

Sales

Enhancement ofcustomer communication

・Inside SalesTeams strengthening
・CustomerSuccess strengthening
・WEB, Marketing strengthening

Main Indices of the Payment Business
BtoB shopping transaction volume YoY

New card issuances

BtoB transaction volume remained high during COVID-19

120

2,000

110

112

112

119

113

90

84

95

98

123

124

131

1,520

26,50025,40024,000

1,000
0

98

FY21 (Actual)

FY24 (Planned)

Active cardholders(Thousands)

60

0

FY21 (Actual)

FY24 (Planned)

Shopping transaction volume
16,00016,000(Billions of yen)
6,400

13,89030

027,000

2,500

150

136

(Thousands)

3,000

(%)

134

Total cardholders(Thousands)

13,0004,200

6,250.0
Corporations

4,823.1
Corporations
Individuals

FY19
1Q 2Q

3Q

4Q

FY20
1Q 2Q

3Q

4Q

FY21
1Q 2Q

3Q

4Q

FY22
1Q 2Q

0

4Q (Planned)

22

FY21 (Actual)

FY24 (Planned)

0

FY21 (Actual)

Individuals

FY24 (Planned)

Strategy

Growth Strategy (3): Promotion of Healthy Growthand Expansion into New Fields for the Finance Business
Five major layers of structural reform
ability, strengthening structured finance, promoting digital transformation, and developing
new products targeting wealthy demographics.
Furthermore, we will closely monitor risks while furthering strengthening cooperation
with Group companies such as Atrium, Concerto, and Saison Fundex, along with ourpartners, to ensure the sound growth of the Finance Business Group-wide.

In the Finance Business, we will work to further improve asset efficiency without allowing
currently favorable market conditions to make us complacent. We will clarify the division of roles
that leverage the strengths of Group companies with real estate–related businesses. In addition,
we will further deepen cooperation with our business partners while pursuing structural reforms
centered on five key areas: improving investment efficiency, strengthening corporate sales

Using division of roles that leverages the strengths of Group companies with real estate–related businesses, cover the market
Active promotion of a balance of opportunity and risk in real estate ﬁnancing
Structured Finance

Investment

Purchase
rent

Five Major Layers of Structural Reform

Flat 35

ReformDevelopment

Real EstateBusiness

FinanceBusiness

Management

Sales

Collateral
loans

1
2
3
4
5

Improving investment efﬁciency:

Taking on the challenge of selling asset formation loans and bonds,
and launching businesses targeting wealthy demographics

Assetformation

Real estate mortgage loans

Taking on the challenge of developing products targeting wealthydemographics utilizing the assets of the Company and its alliances
23

Strengthening corporate sales ability:

Sales promotion at more than 300,000 lessees

Strengthening structured ﬁnance

Promoting digital transformation:

Reduced costs and improved productivity

Developing new products targeting
wealthy demographics:

Initiatives based around real estate investment

DXGrowth Strategy (3): Promotion of Healthy Growth and Expansion into New Fields for the Finance Business

Growth strategies that identify opportunities and risk
To improve asset efficiency, we will take on the challenge of developing new productchannels targeting wealthy demographics based on asset formation loans, bond sales,
and real estate loans, as well as developing and planning of the products themselves. To
strengthen our corporate sales ability, we will promote sales to more than 300,000 lessees.
To promote structured finance and digital transformation associated with these measures,
we will work to create systems focused on productivity improvement to ensure thedevelopment of low-cost, diversified businesses. We will actively expand into new businessareas while promoting a balance of opportunities and risks in real estate financing.

Lease/Finance-related business product balance target (including off-balance)
Lease(Billions of yen)
4,000

Credit Guarantee

Housing-loan Guarantee

About 40%

3,000

Rent Guarantee

Asset Formation Loan

About ¥3.8 trillion

Flat 35 Loans

About ¥2.7 trillion

2,000

1,245.3

1,000

754.9

0

328.4

142.1
220.2

FY21 (Actual)

FY24 (Planned)

Payment Business + Finance Business Integration
Expand sales of payment-related products to individual customers and corporate customers in the Finance BusinessNo. ofbusiness partners

300

Approx.
companies

Saison leases

No. ofbusiness partners

Flat 35

Approx.

330,000
companies

CreditGuarantee

No. ofbusiness partners

Afﬁliatedﬁnancial institutions

Approx.

Dozensof companies

400

24

No. ofbusiness partners

150

Approx.
companies

Strategy

Growth Strategy (4): Acceleration of Global Business Expansion
Business profit target (accumulated profit for each country’s business)

We have established operating companies in India and four Southeast Asian nations andare accelerating the development of our lending business in the Asian region. Despite theimpact of the COVID-19 pandemic, the Company continues to steadily expand its business,particularly in India and Vietnam, with locally driven, robust risk management.
In addition, through investments in FinTech business operators and cutting-edge areas
made through our overseas corporate venture capital (CVC) business, we are focusing
on creating synergies with existing businesses while exploring potential new business
opportunities.
Through these initiatives, we will promote our business to underpin a third pillar of growthin the Group and to contribute to efforts to realize a sustainable society on a global scale.

Lending business(Billions of yen)
8

Investment business

7.0

7
6

Approx. 2 times

5
4

3.5

3

Kisetsu Saison Finance (India) Pvt. Ltd.
India

2

Digital lending focused on BtoBtoC

1

HD Saison Finance Co., Ltd.
VietnamIndividual installments, cash loans, etc.

0

FY21 (Actual)

PT. Saison Modern Finance
Lending
Business

Lending to SMEs via P2P platforms
Indonesia

Offering virtual credit cards to individuals

Investment
Business

Impact investment business

HD Saison Finance (Vietnam) outstanding loans(Billions of yen)(Billions of yen)
140
120

180

Supply chain finance within the commercial
distribution of Group companies

100
80

Saison Capital Pte. Ltd.
Singapore

Kisetsu Saison Finance (India) outstanding loans
240

Siam Saison Co., Ltd.
Thailand120

Overseas CVC

60
40

60

Construction of Foundations for Business Expansion
Singapore

FY24 (Planned)

Main indices of the global businessJulo Holdings Pte.Ltd.

Saison Investment Management Pte. Ltd.
Singapore

FY22 (Planned)

20

Saison International Pte. Ltd.
International Headquarters (IHQ)

025

FY21 (Actual)

FY22 (Planned)

FY24 (Planned)

0

FY21 (Actual)

FY22 (Planned)

FY24 (Planned)

Growth Strategy (4): Acceleration of Global Business Expansion

Lending Business

Breakthrough in the India Business

Three years since business commenced, firm growth has beenachieved through our unique strategy

Kisetsu Saison Finance (India) CEO Interview

Setting Our Sites on Becoming the Lending Giant of India

In India, Kisetsu Saison Finance (India) Pvt. Ltd. provides loans to the local underserved
population.
Since its launch in 2019, both its business and organization have steadily expanded inscale, growing to become one of the mainstays of our global business in about three years,
with a loan balance of more than ¥60 billion as of the end of September in FY2022, anda consolidated contribution profit of ¥860 million in the first half of the fiscal year, second
only to Vietnam.
Lending by Kisetsu Saison Finance (India) consists primarily of financing to local nonbanks (wholesale lending) and financing to individuals and SMEs through partnerships
with FinTech business operators. By working with local non-bank partners and leveraging
FinTech know-how, we have found solutions to the problems of credit and collection, which
are major financing issues in developing countries, and have steadily increased the numberof partners and customers by securing human resources and fortifying the foundation forsystem development at this company.

kind of contribution is Kisetsu Saison Finance (India) Pvt. Ltd.
Q Whatconsidering vis-à-vis India’s underserved population and lending market?
India offers huge business opportunities, and we aim to satisfy the needs of ourcustomers in a variety of ways as a stable, long-term lender. With a core focus
on helping small and medium-sized enterprises (SMEs) and customers who areunable to obtain loans from banks to acquire adequate financing, both directly
and indirectly, we hope to achieve our vision of building India’s first neo-lending
conglomerate through a partnership and technology-driven approach.

Q Ltd. stand out among all the other lending business operators?

What are the strengths that make Kisetsu Saison Finance (India) Pvt.
Also, please tell us about your future growth strategy that will utilize
those strengths.

■ Strategy for success in India

The monthly lending volume of our FinTechaffiliated lending business has grown by
approximately tenfold over the past year.
We’ve achieved major differentiation from ourcompetitors through financing cost advantages
gained from our AAA rating and system
integration with our partners, and this has
made us a lender of choice among our industry
peers. Our current loan balance is just above¥60 billion, but we are already looking down
the road at ¥100 billion in the future. For now,
we will focus on continuing to expand the BtoB
model, and to become India’s Lending Giant,
we will use the profits to build a foundation for
the BtoC model while further growing the scaleof our operations.

Kisetsu Saison Finance (India)’s loans are positioned as so-called senior loans, which areloans that have a high reimbursement ranking in the event of a customer’s default or thebankruptcy of a partner. This allows this company to successfully enter the market with lessrisk. In addition, at the end of FY2021 we launched a proprietary lending business (BtoC
model) that leverages our accumulated expertise and customer base to develop into a
more profitable business model.
Underpinning these growth strategies is the local appointment of excellent humanresources. The CEO and nearly all the more than 300 employees are local staff, allowing fora swift response to rapidly evolving local trends and regulatory developments.

26

Kisetsu Saison Finance (India) Pvt. Ltd.
CEO Presha Paragash (Right)

Growth Strategy (4): Acceleration of Global Business Expansion

Sustainability

Investment Business Overseas CVC Business

Issuance of our first social bond
Allocated to loans for underserved populations, primarily in Asia

Saison Capital Pte. Ltd. invests in start-up companies and funds with a focus on Southeast
Asian FinTech business operators. In FY2021, the company achieved its first exit, andmoreover, in 2022, it was selected as a CVC TOP10* company by CB Insights. In this way, we
are raising both our profile and business track record.
In addition to existing investment areas, we are actively investing in the web3 domain
with the aim of further developing our investment business and creating the next pillar ofour business, and we will seek to integrate it with existing businesses in the future as we
pursue returns.

In June 2022, we issued our first social bond (bonds issued by companies, local
governments, etc., to raise funds for projects that help solve social issues).
The procured financing will be used for a capital increase and loans to Kisetsu Saison
Finance (India) Pvt. Ltd. in India and to Saison Capital Pte. Ltd. in Singapore. The issuance ofsuch corporate bonds will allow us to contribute to social development and the resolutionof issues facing society by diversifying funding sources and accelerating financial inclusion
for the underserved population that does not have access to existing financial services.

*A top 10 ranking of the world’s most exceptional venture capital partners

CVC investments (examples)■ Supporting the activities of diverse human resources

Web3 domain investments(examples)

Currently, we have more than 7,000
employees at our overseas locations(including joint ventures), most of whom are
locally hired and of diverse nationalities.
We are also promoting locallyled business operations by actively
appointing talented local personnel to ourmanagement team.

Building a Foundation for Business Expansion■	Established an international headquarters (IHQ)

in Singapore as a foundation for the acceleration of business expansion

To support future business expansion, we established our
IHQ in Saison International Pte. Ltd.* in Singapore. We will
steadily transfer the shares of each overseas affiliate to Saison
International, and by accelerating the pace of decisionmaking and designing a cross-functional organization, we willtransition to a structure that can compete globally.

The SAISON GLOBAL SUMMIT 2022 held in July 2022

*Corporate name changed from Credit Saison Asia Pacific Pte. Ltd.

27

Strategy

Global Strategy: Interview with the Director in Charge
Promoting business growth based on financial inclusion, an important
prerequisite in achieving the SDGs, in a bid to create greater social value

Kosuke Mori

Director, Senior Managing
Executive Officer
Head of Global Business Divisionback on the Group’s global business in
Q Looking
FY2021, what were the outcomes and challenges?
By ensuring that our stance toward business and risk
management was in line with conditions under COVID-19,
we were able to substantially accelerate the pace of
renewed lending business growth in FY2021. In India,
we were also successful in improving technologicalaccessibility through the development of systems in-houseand promoting smooth operations while gaining support
as the partner of choice from affiliated FinTech business
operators. As a result, we were able to take advantage ofthe overwhelming scale of demand in India and achieve asignificant leap forward, with a nearly fivefold increase in thebalance of outstanding loans compared with the previous
fiscal year. In Vietnam, we took positive steps to promotesound operations while managing risks despite the major
wave of COVID-19 infections entering 2021. Another major
development worth mentioning in FY2021 was the launchof the impact investment business in practical terms. Here,we put in place a framework for providing much needed
funds to such underserved groups as micro businesses andindividuals, who are unable to obtain adequate financing
services from banks and other institutions, in collaboration
with FinTech business operators, emerging lenders, andmicrofinance institutions. In this regard, FY2021 was a year
during which we saw clear signs of what will become a corepillar of our lending business in the future.
New activity in the investment business was temporarilysuspended in FY2020 due to the impact of COVID-19.
With the resumption of activities in FY2021, energies weredirected toward accelerating the pace of theme-specificnew investments in such areas as embedded finance*1
and BtoB supply chain finance while strengthening ourpresence in the region. As far as the sourcing of investment
projects is concerned, we also undertook various measures
to put in place a sourcing system. This included steps tofoster a community to share know-how through various
initiatives including the creation of FinTech knowledge
content while capturing human resources through the useof social networking services. These endeavors led to theimprovement of Saison Capital’s branding.
*1 Embedded finance: Also referred to as plug-in finance, embedded finance is theintegration of financial services or tools within the products or services provided
by non-financial organizations.

tell us about the business environment and competition
Q Pleasein Southeast Asia and India and how it affects your business.
In addition to the various restrictions imposed following
the outbreak and spread of COVID-19, many foreign
players, including Chinese companies that had engaged intransactions under favorable short-term terms and conditions,28

withdrew or scaled back their operations amid changes in
the geopolitical environment and growing global concerns
toward China and Russia. In terms of the Group’s global
expansion, Credit Saison has continued to place considerable
importance on the long-term development of the countries
and regions in which it operates. Against this backdrop, I
sense that each market is increasingly welcoming partners
like us who are able to build relationships with this longterm perspective. Amid the sharp decline in stock markets,
inflation, and the incidence of interest rate hikes since the endof 2021, we have witnessed a change in the FinTech funding
environment in the lending business. Signs of a change inthe balance of power between the Company and FinTechbusiness operators have also emerged as, for example,
startups that cannot demonstrate profitability find it moredifficult to raise funds amid the decline in the number of fundproviders. Taking the aforementioned into consideration, we
recognize that recent changes in the business environment
are providing a tailwind for the Company.

Saison has identified acceleration of global
Q Creditbusiness expansion as a growth strategy under its new
Medium-term Management Plan. How is the global
business positioned within the Group as a whole?

Amid the innovative, digital, and global themes raisedGroup-wide, our goal is to develop the Group as a third
pillar that can firmly support growth from a quantitative
performance perspective. As I mentioned earlier, there areindications that a lending business framework for providing
much needed funds to the underserved through allianceswith FinTech business operators and emerging lenders is
beginning to emerge in various countries. There are also
signs of an improvement in organizational capabilities thatencompass the human resources, know-how, and systems
necessary to expand horizontally into other new markets
over the medium to long term based on this framework. In

Global Strategy: Interview with the Director in Charge

this sense, I would offer that the global business is becoming
one of the Group’s three pillars both in name and in reality.

do you see are the challenges for the global
Q Whatbusiness?
Every aspect of our global business is new. In addition todifferences with the Group’s existing activities, the global
business is an initiative that we are undertaking completelyfrom scratch. This includes establishing diverse regulations
and systems depending on the country and region. Taking
the aforementioned into consideration, we recognize thathuman resources will determine the success or failure ofevery aspect of our global business. Human resources inthis instance comprise local front-office staff, personnel
who are responsible for the corporate functions of eachcountry’s business at the IHQ in Singapore, and employees
who support our global business from Tokyo.
While recognizing that the front-office staff in chargeof launching new businesses are distinguished by theirentrepreneurial spirit, my challenge is to create anenvironment that allows them to maximize their strengths
and excel. At the SAISON GLOBAL SUMMIT 2022 meetingof team members from each country held in July 2022, I
was convinced that the Company’s vision and mission had
attracted the best human resources. Looking ahead, we
will draw on our track record in Japan to realize financial
inclusion and innovation in each country with a greater
sense of urgency. As I mentioned just a moment ago, thismission is attracting the best and the brightest. The growthof each individual directly translates to further businessexpansion. And, as business expands, individuals areafforded greater responsibilities and perspectives thereby
expanding the arena in which they can excel. We are awarethat this virtuous cycle of human resources and businessgrowth will allow us to acquire and further strengthen ourhuman resources base.

tell us about the impact and changes
Q Pleasethat the IHQ in Singapore has had since its
establishment in April 2022.

This is now my ninth year working in Singapore. Throughout
this period, I have worked closely with the Company’s Head
Office in Tokyo and promoted teamwork when conducting
business and undertaking investments in each country.
Singapore has positioned efforts to become a hub for
global human resources as a national strategy. Against thisbackdrop, we recognize the critical need to put in placean Achilles’ heel function in Singapore at a time when our
global business is growing more rapidly than ever. This isprecisely the accelerator that will help ramp up the paceof growth of our global business into one of the Group’s
three pillars. Moreover, we recognize the importance of a
global business strategy that is not led by a team comprised
largely of Japanese and controlled by Japan. Rather, we
envision that an international lineup based in Singapore
will oversee the overseas market. For this reason, we have
dubbed the newly established structure as an international
as opposed to a regional headquarters. Moving forward,
we will gradually delegate more authority to the IHQ toaccelerate growth through timely decision-making.

Q How does the global business contribute to its ongoingsustainability as well as the sustainability of society?

Credit Saison has continued to adopt an innovative approach
when promoting financial inclusion in Japan through products
and services that banks cannot provide. Positioned at the heartof efforts to achieve the SDGs, Credit Saison is committed
to funding the financial inclusion and innovation endeavors
driven by FinTech business operators and emerging lenders
through its global business.
Over and above impact investment, the wide-ranging
financial inclusion that is being realized also in India and29

Vietnam plays an important role in shining a light on theGroup’s sustainability activities. Kicking off these activities,
Credit Saison procured funds for the purpose of financial
inclusion overseas through the issuance of social bonds inJune 2022. Next year, one year after the issuance of social
bonds, we hope to publish an impact report on the effectsof our global financial inclusion business. In publishing
this report, we will internally measure and analyze bothquantitatively and qualitatively the scope and income
range of the people we have reached and the areas inwhich we have contributed.

closing, what message do you have for
Q Instakeholders?
I joined the Company with the aim of serving as a bridge
between Japanese companies and the global market.
Currently responsible for the Group’s financial inclusionbusiness, which stands directly at the center of ourefforts to achieve the SDGs and helps create substantialsocial value, I find my work today extremely rewarding.
Looking around the world, there is a large number ofsuch underserved groups as micro businesses andindividuals as well as a host of problems to solve. Against
this backdrop, we will first work with FinTech business
operators and emerging lenders to laterally expand ourbusiness in Asia and other markets with large FinTech
ecosystems*2. We will then use the know-how andresources gained from this business growth as the driving
force to further develop financial inclusion in emerging
markets. Moving forward, Credit Saison will continue toensure that the Company’s economic value leads to thecreation of further social value. As we work to achieve ourestablished goals, we ask for the continued support andunderstanding of all stakeholders.
*2 FinTech ecosystem: An industrial ecosystem comprised of a diverse range ofparticipants, including companies, financial institutions, government agencies,
lawyers, investors, technology developers, and others involved in FinTech.

Strategy

Financial Capital Strategy: Interview
with the Executive Officer in Charge
Continuing stable financial operations
while strengthening risk capitalmanagement

the Payment Business, we are aware of issues including the needto strengthen initiatives intended to capture new cardholders,which will have an impact over the medium to long term, andto expand transaction volumes for the high-yield shopping
revolving balance and cash advances. In the Finance Business,despite the COVID-19 pandemic, we diversified operations bydecidedly expanding the top line for asset formation loans, Flat
35 loans, and rent guarantees. The Real Estate–related Businessalso experienced stable growth in real estate prices due tothe low interest rate environment, while Atrium contributed
significantly to profits as the operating company and theEntertainment Business returned to positive territory.

Shingo Baba

Managing Executive Officer and CFO
Financial & capital strategy, IR, M&A
Head of Public Relations Office,Corporate Risk Management Dept.,
Treasury & Accounting Dept.

Q Now that the previous Medium-term Management
Plan has ended, what is your overall assessment?

provide an overview of the business results
Q Pleasefor FY2021.
As a company that enjoys many partnerships with brick-andmortar stores, Credit Saison experienced particularly strong
headwinds during the COVID-19 pandemic when consumers
refrained from going out, making for continued severity inthe business environment throughout FY2021. Despite thissituation, the business results for FY2021 saw increased sales

Net revenue by segment
Payment

Lease(Billions of yen)
300
250
200

5.5
14.5
43.4
12.2

Finance282.6 +6%

Real estate–related

299.0

50
0

Entertainment

11.8
（-4%）

60
50
40
20
10

2020

2021

（%）

Over 65.0

4.0

70

30
211.9
（+1%）

209.1

Note: Growth rate in parentheses

(FY)

0

5.3
17.6

48.3 +8% 52.3

4.7
22.3

–1.7

2020

2021

0.2
（-）
12.3
（+129%）
19.9（+13%）
5.8（+23%）
14.0（-37%）

Credit risk bad debt costs (consolidated)

5.0(Billions of yen)
6.4（+16%）
22.7（+56%）
48.3（+11%）

Although the pandemic’s complete transformation of thebusiness environment after we initially formulated the Mediumterm Management Plan had an impact on the Company, we
worked to revise the business composition in line with thischanging environment, for which we made steady progressin both the Payment Business and the Finance Business. For
example, we transitioned from business development centeredon the real world as usual to expanding digital services using
SAISON CARD Digital. Although we cannot deny that areas of

Credit risk delinquency over 90 days
(consolidated)

Business profit by segment

150
100

among all business segments, except the Lease Business, as net
revenue totaled ¥299.0 billion, up 6% year on year. With profits
increasing in every segment except the Payment Business, forwhich we recorded a provision for loss on interest payments,
business profit ultimately amounted to ¥52.3 billion, up 8% year
on year. If we exclude the temporary overpayment portion in
the Payment Business, our assessment shows that in practice weachieved our ¥60 billion business profit target for the final fiscal
year of the previous Medium-term Management Plan. Regarding(Billions of yen)
60

3.0
2.0

Provision
for loss oninterest
payment
13.6

40

1.69

1.64

1.52

1.0
0

(FY)

30

Provision for loss on interest
payment carryover
Impairment losses on ﬁnancial assets
Special allowance carryover

2017

2018

2019

34.2

30.1
1.29

2020

20

1.14

2021

(FY)

0.6

2017

2018

31.8

35.2

34.0

29.5
0

50.5

4.2
0.1

11.1

2019

23.1
8.7

2020

38.2

29.0

24.4

13.6

2021

0.1

2022 (FY)Plan• Utilized macroeconomic variables as future forecast information and recorded
additional provisions from the future forecast numbers• Due to the ratio of unpaid receivables and the status of deferred payment receivables,
special allowances were recorded to prepare for future increases in such accounting
line items as delinquent receivables.

Financial Capital Strategy: Interview with the Executive Officer in Charge

the global business experienced delays in terms of the paceof the Plan compared to our initial expectations due in partto restrictions on movement, we did manage to successfully
strengthen its functions as a business entity, including systembuilding and governance enhancements. Now that we are livingwith COVID-19, we expect to see further activity in the payment,
finance, and global businesses.

Q Tell us about the current credit risk situation.

Credit Saison has been able to maintain credit risk at a low
level in terms of delinquency over 90 days. In general, credit
risk increases in the event of emergencies, during which bad
debt costs also tend to balloon, so we braced ourselves when
the world first entered the COVID-19 pandemic. Looking
back, however, our credit quality actually improved during thistime. Along with macroeconomic elements such as generous
support in the form of government subsidies and unsecured
and interest-free loans, as well as the Bank of Japan’s ongoingnegative interest rate policy, our improved credit quality
stemmed in part from a higher deposit rate corresponding
to the degree to which consumption fell as people refrained
from going out. Our analysis also shows that our AI-based
fraud detection system and efforts to strengthen credit
controls were effective in improving credit quality. Although
we did accumulate provisions for loss on interest payments inanticipation of future trends, in FY2022 this effort enabled us tobuild up allowances equivalent to more than 3.6 years of losses,
even if we assume a drawdown at the same level as FY2021.
As of November 2022, we do not plan to make any broad
additional allocations, but we will continue to keep a close eye
on future trends.

tell us about the basic policy behind the
Q Pleasefinancial strategy.
Considering the Company’s business model, we manage theCompany with an awareness of financial soundness (credit

rating A+). For more than 10 years, we have measured theconfidence level, which represents the amount of risk suited
to this rating, as 99.75%, and have engaged in risk capitalmanagement in a way that allocates the minimum required
capital by quantifying this level for each business and affiliatedcompany. The ALM*1 Committee deliberates risk quantification,risk capital investment policies, and WACC*2 and ROIC*3
targets for each business, from which we derive the investment
allowance for implementing aggressive growth investments andshareholder returns. Calculating these enables us to prioritize
the maintenance and enhancement of financial soundness
while executing agile decision-making for matters that fall within
the scope of the investment allowance, even in the case ofhigh-risk overseas investment and financing projects or share
repurchases.
In terms of individual investment proposals, members of
the Investment Strategy Committee with 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 throughrequests for approval and at meetings of 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 forthese at Board of Directors’ meetings.
As of the end of March 2022, consolidated interest-bearing
debt (including lease debt of ¥15.3 billion) amounted to¥2,569.0 billion, of which debt accounted for 54.5%, corporate
bonds for 20.7%, CP for 18.1%, and securitizations for 6.7%. Of
the assets owned by the Group, 68.6% consist of installment
accounts receivable, mainly in the Payment Business. With theturnover rate averaging more than three times a year, however,
we have been able to maintain a high level of liquidity.
*1 Asset Liability Management (ALM): Comprehensive management of assets andliabilities*2 Weighted Average Cost of Capital (WACC): The interest expected to be paid by acompany on average to all right holders as compensation for financing*3 Return on Invested Capital (ROIC)31

Q Please tell us your thoughts on fund procurement.

We place importance on stability and cost when procuring funds
and endeavor to diversify our procurement methods. In termsof our main funding methods, in addition to relative transactions
with banks, financial institutions, life insurance companies, andnon-life insurance companies, we conduct indirect financing
such as syndicated loans and commitment lines, and direct
funding such as issuance of straight bonds and CP. In terms ofindirect procurement, in addition to building relationships withexisting business partners, we are striving to mitigate refinancing
risks and to reduce costs by cultivating partnerships with new
financial institutions with which we can expect long-term stabletransactions to diversify our procurement sources. For direct
financing, in addition 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 notaffected by our credit status.
In terms of interest-bearing debt, we will continue tomaintain our basic policy of a 70% long-term interest rate
ratio and 60% fixed interest rate ratio as part of our ongoingconservative approach to financial operations. Unlike theongoing negative interest rate situation in Japan, the UnitedStates, Europe, and even emerging economies are slowly
approaching a period of rising interest rates. Assuming thepotential for interest rate increases in Japan, as well, we will
maintain our conservative approach to financial operations sothat we can continue to procure funds in a stable manner at low
interest rates. This will also allow us to gradually benefit from theeffects of a shift to long-term fixed interest rates at the time ofrollover and new fund procurement.
Moreover, in the global business, which is driving businessexpansion with a focus on Southeast Asia, we must investigate
measures to mitigate foreign exchange risks that coincidewith lending and investments. Conducting asset management
and procurement using the same currency will enable us tohedge foreign exchange risk for the entire Group to somedegree, so we will work to procure funds locally in addition toutilizing foreign exchange contracts and currency swaps for yen

Financial Capital Strategy: Interview with the Executive Officer in Charge

procurement in Japan. We have already acquired a local credit
rating for our operating company in India and have establisheda system that enables external procurement from local financial
institutions. From the perspective of regulations and businessscale, the global business is not necessarily able to procure
funds locally for every country and region like we have in India,
so we will provide support in the form of guarantees and direct
lending from Tokyo as necessary and pursue ideal financing
methods throughout the entire Group.

Balance of interest-bearing debt (non-consolidated)
Debt

Corporate bonds

CP

Securitization(Billions of yen)
2,800
2,100

1,951.6

1,400
700
0

2,391.92,201.1

20.0
389.5
340.0

20.0
511.0
415.0

1,202.1

1,255.1

2017

2018

46.7
550.0

2,411.6

93.5
482.0

2,535.2

156.0
466.0

467.0

505.0

533.0

1,328.2

1,331.1

1,380.1

2019

2020

2021

(FY)

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

(%)

80
60
40
0

Fixed interest borrowing ratio

67.3

65.9

66.3

69.8

71.9

62.6

60.3

59.4

64.4

65.2

2017

2018

2019

2020

2021

(FY)

tell us about the background to the social
Q Pleasebonds issued in June 2022 and your thoughts on
this.

In addition to being part of the financing method diversificationthat the Company is advancing as an important measure, we
issued these social bonds as one of our ESG initiatives amid therecent increase in investors that are engaged in ESG finance.
Using funds that are stably procured at low interest rates to help

provide financing to underserved demographics in emerging
economies, for example, will also serve to fuel business growth
for the Company while having an impact on society. Although
the scale of this effort is still small, we intend to expand these
initiatives in the future in stages.

tell us your thoughts on the shareholders’
Q Pleaseequity ratio.
To raise corporate value, we have defined three major
indicators, namely business profit, ROE (return on equity
attributable to owners of the parent) to ensure an awarenessof capital efficiency, and shareholders’ equity ratio (equity ratio
attributable to owners of parent) for maintaining and improving
financial soundness. As an independent non-bank company,
securing a specific shareholders’ equity ratio is a particularly
important indicator for us when considering the Company’s
credit rating and transactions with financial institutions andother creditors. In addition to considering the opinions ofrating agencies and market trends, we maintain an awarenessof flexibly securing a shareholders’ equity ratio of around 15%
over the medium to long term as another one of the guidelines.
At the same time, in each instance we investigate our stance on
the shareholders’ equity ratio considering discussions by the
ALM Committee and Board of Directors. We are also holding
discussions over asset allocation and maintain a policy ofstrengthening initiatives intended to increase ROIC and reduce
WACC for each project. This policy calculates WACC for eachproject based on quasi-capital derived by applying the risk
ratio to the used assets. We also intend to take an approachthat allows us to present specific asset allocation policies upon
fully investigating the adequate level of asset allocation fromthe perspective of various stakeholders. In particular, the rapidly
growing global business has seen a demand for businessassessments that do not rely solely on ROIC indicators butthat also consider growth potential. For this reason, we aim forbusiness growth that looks to flexibility and speed from both aquantitative perspective and a qualitative perspective based ona sensibility that is unique to the Company.

32

Q How do you intend to link the Company’s mediumand long-term financial capital strategies to value
creation?

With an eye to higher interest rates in the future, the central
pillar of the financial capital strategy focuses entirely on stablefinancial operations. I am certain that each business division
will fully realize business growth, so my role is to strengthenrisk capital management. And I must also provide quantitative
yet easy-to-understand explanations to various stakeholders,
including investors, creditors, business partners, and employees.
The fact that the Company includes sensibility-based
management as part of business growth is a point that sets us
far apart from our competitors. Founded on our solid financialbase, we intend to connect our capital strategies to greater
corporate value.

Q In November 2022, the Company announced arevision to the risk capital allocation model. Pleaseprovide some details on this.

The Company’s business composition is transitioning from abusiness model centered on the Payment Business to one thatassumes growth in both the Finance and global businesses. The
global business has experienced changes regarding both thequality and quantity of the country risks for each country andregion in which we do business, foreign currency risks, and otherrisks that we consider, which is one of the reasons we revised therisk capital allocation model. The most recent revision continues
to use the same confidence level of 99.75% for earnings at risk
(EaR)*4 required to maintain our current credit rating yet reduces
the percentage of consolidated shareholders’ equity to be
secured as the minimum required capital from the conventional
20% to 15%. As a result of revising the risk allocation model
for finance-related businesses, real estate–related businesses,
and global businesses, the capital surplus calculated as
approximately ¥50 billion will continue to be distributed
into appropriate shareholder returns and aggressive growthinvestments. We will continue to revise the allocation modelFinancial Capital Strategy: Interview with the Executive Officer in Charge

on a regular basis in line with business growth as we deepen
discussions into further upgrading the model.
*4 Earnings at Risk (EaR): The maximum variation in earnings value assumed due tochanges in the market environment over a specific period and within a specificconfidence interval.

tell us your thoughts on the capital policy
Q Pleaseand shareholder returns.
The Company has defined the basic policy for the capital policy
as engaging in efforts to enhance corporate value while fullybalancing the three aspects of soundness, growth potential, andshareholder returns. To increase shareholder value, we believe

it is important to take action that strengthens our corporate
structure and that continues to expand our business. Meanwhile,
our policy on returning profits involves enhancing internal
reserves and making appropriate, stable, and continuous
dividend payments to our shareholders.
We generally distribute our dividend on earnings retained
once per year as a year-end dividend payment, which in
FY2021 amounted to ¥55 per share. Moreover, we intend toefficiently invest these internal reserves in growing areas thatwill contribute to sustainable growth in corporate value. In
November 2022, we formulated a policy for purchasing treasury
shares as a shareholder return measure and have prepared toCapital policy (risk capital management)

Dividend per share and payout ratio

Background to Review of the Risk Capital Allocation Model

Top Priority

Implement a review of the surplus risk capital allocation model
considering changes in the Company’s business environment,
including the outlook for contribution to business proﬁt of the
ﬁnance business, which has grown into the second pillar, andthe global business to become the third pillar in a shift fromthe business model based on the existing payment businessAs a non-bank withinterest-bearing debt ofapproximately ¥2.5 trillion, theCompany will have sufﬁcient risk
capital to maintain an A+ credit
rating from R&I.

Shareholder returns

Stable, continuous dividend

No dividend cuts in the past, even during times of management hardship like the 2008 global ﬁnancial crisis.

Dividend per share
(Yen)

75

Results of review of major items
Conﬁdence level, including
EaR required to maintain A+
credit rating

99.75%

No change

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

20%

Revised to 15%

Risk allocation modelfor each business

＋¥5

31.4%

24.1%

19.5%

¥45

0
Proﬁt attributable toowners of parent(Billions of yen)

Investment in growth areas
Investment in new partners (M&A, new alliances)in each business and proactive investment ingrowth areas inside and outside Japan to create
a comprehensive life services group

While continuing to aim for business proﬁtof ¥70 billion in three years as speciﬁedin the Medium-term Management Plan,
proﬁt will reach a new level, so a ¥5 pershare increase in the dividend is planned.

Stock buybacks(Billions of yen)

24.3%

¥55

23.2%

¥60

2018

2019

2020

2021

2022

30.5

22.8

36.1

35.3

Forecast 40.5

10.0

Flexible implementation

At the meeting of the Board of Directors held on November 10, 2022, the Company formulated and approved apolicy for the purchase of treasury shares as a shareholder return measure. The speciﬁc details for the purchase oftreasury shares will be published after being resolved at a separate meeting of the Company’s Board of Directors.

33

(%)

75

50

＋¥10

25

Allocation of surplus capital approx. ¥50.0 billion

In addition to returns through dividends inline with growth, carry out stock buybacks
with awareness of capital efﬁciency

Payout ratio

With additional allocations for provision for loss on interest
repayment excluded, actual business proﬁt was above¥65 billion, achieving the ¥60 billion goal of the previous
Medium- term Management Plan, so the dividend wasraised by ¥10 per share.

50

Non-consolidated: ﬁnance-related
business
Consolidated:
review of realestate–related
business/global
business, etc.

Basic approach to allocation of surplus capital

Appropriate shareholder returns

execute this policy in a flexible manner upon comprehensively
taking account of investment opportunities, our financial
standing, and the stock price level. In working to raise theCompany’s corporate value, we must also share our perspective
through extensive dialogue with as many stakeholders as
possible and address this issue while considering the balance
between our shareholders and creditors.

25

0

(FY)

Special Feature

CSDX Strategy｜
Interview with the Director in Charge
Evolving “Genuine DX” in linewith the business portfolio
based on the outstanding
outcomes of “CSDX”

doubled the total number of app downloads from 5.5 million
in FY2019 to 10.6 million, and we increased the number offollowers of our official accounts (Twitter, Instagram) from 12,000
three years ago to 295,000 today. Our digital counters, which we
installed focusing solely on pilot sites, are now at 66 locations.
Although we have utilized the “Slack” digital communication
platform for the past three years, the number of active users
over this time increased from 178 to 3,199, with users now
hailing from nearly every part of the Group. In FY2022, weeven received the “Country-Specific (Japan) Digital HQ Award
for Excellence” as part of the customer “SLACK SPOTLIGHT
AWARDS,” during which Slack Technologies, LLC, selects only
one company from each country every year.

Kazutoshi Ono

Director, Senior Managing Executive Officer and CTO, CIO
Group-wide promotions of DX strategies, Why SAISON strategy
Head of CSDX Development Dept., Customer Success Division,
In charge of Full Life Business Dept., General Manager, CSDX
Development Dept., Technology Centertell us about the outcomes and challenges
Q Pleaseof the “CSDX Vision” strategy announced last year.
Although we only announced the details of the “CSDX Vision”
in September of last year, we began working on these activities
in March 2019. So, I would like to look back at our efforts overthe past three and a half years from the two facets of progressin relation to the KPIs and qualitative changes. I will begin with
the KPIs. From the perspective of CX, the ratio of procedures
and inquiries made by customers through digital channels
stood at 76.7% against our target of 80.0%, and NPS stoodat +1.7% against our target of +5.0%. Although Likeme♡bysaison card and some of the other new concept cards wehave begun issuing have been well-received among young
people, we unfortunately missed our targets for these. Fromthe perspective of EX, the ratio of human resources with digitaltechnology backgrounds among all Credit Saison employees
on a non-consolidated basis reached 5.6%, just below our targetof 6.0%. Although we did increase the employee satisfaction
score 2.9 points, we failed to meet our goal of a 10-point

CSDX Strategy also emphasizes EX along withQ The
CX. Tell us about the background to this emphasis,increase because of this effort’s extremely challenging nature. By
applying digitalization, we reduced the amount of paper we useby 13.7%, exceeding our goal of 10.0%.
Having engaged in full-scale DX since 2019, including
establishing the Technology Center, our efforts to shiftdevelopment in-house have reduced the costs of in-housedeveloped systems by 61.8% compared to those developed
externally, and have produced other outcomes such as
solving the difficulties faced by those on the frontlines andenhancing the experience value of our customers. Meanwhile,
our application of AI to detect unauthorized credit card use
in the Payment Business has improved the unauthorized
use prevention rate from 81.4% in 2019 to 92.5% today, an
increase of more than 10 percentage points. Amid increasing
unauthorized credit card use in the industry as a whole, we
positively note the significant emerging benefits of DX in thisarea. In addition, we automated 730,000 hours of manualtasks from FY2019 to FY2022 using RPA systems, data linkage
systems, and other types of software. Moreover, by enriching
services and campaigns through digital channels, we nearly34

as well as about the progress toward the targetof expanding human resources with digitaltechnology backgrounds to 1,000 by FY2024.

The reason the CSDX Strategy emphasizes both CX and EX isbecause it is employees alone that create experience value forcustomers through CX. In short, enhancing EX will connect toenhancing CX by extension, so we have placed a similar levelof importance on EX as CX. Moreover, in today’s digital era, it is
not enough to consider digital strategies at a few departmentsthat promote the use of digital technologies. Instead, today’s
world requires us to grasp the kinds of difficulties those on thefrontlines face when interacting with customers, and to ensureeach employee takes ownership of these challenges as they
search for solutions while leveraging digital technologies. In
this sense, enhancing both core digital human resources andemployees who are familiar with digital technologies directly
connects to corporate competitiveness. In addition, the solution
to enhancing the experience value of customers through CX lies
within the response of our customers. When we launch a newservice, for example, if the initial outlook and customer response
differ, the business departments and the system departments

CSDX Strategy｜Interview with the Director in Charge

must accompany each other along the same vector as they
search for a solution in a flexible manner. Which is why weemphasize agile, concurrent in-house development.
Although the number of human resources with digitaltechnology backgrounds reached nearly 150 during theprevious fiscal year, we are already certain this number will
increase to 260 (51 core digital human resources, 52 businessdigital human resources, and 157 digital IT human resources)
by April 2023. Nearly quadrupling this number to 1,000 will bea challenge, but our internal open recruitment system, which
we refer to as open challenge, is also increasing the number ofhuman resources who have volunteered to study programmingand data science with the goal of becoming business digital
human resources.

already attracted nearly 100 high-level human resources withexperience as CTOs at start-up companies and other types ofdigital technology backgrounds that are suited to the layer that
we refer to as core digital human resources in Japan. These
global human resources with digital technology backgrounds
are already working to share information with one another as
appropriate from the perspective of Group-wide DX. And justas we are doing for Group companies in Japan, in working to“transform into a comprehensive life services group,” we areadvancing mutual human resource exchanges and investigatingGroup-wide system architectures. For example, the “NEXT
SAISON” project, which is an initiative put forward by theCompany’s executives, has this year added members fromGroup companies prompting the start of new interaction.

will the CSDX Strategy evolve under the new
Q How
Medium-term Management Plan?

Q Tell us about the points that are emphasized byclosing, what message do you have for
Q Instakeholders?

In the coming age, business strategies and digital technologies
will enter an inseparable relationship within every industry.
As the roles played by digital technology become ever more
important, we will pursue in-house development for eachsystem in a concurrent and agile manner, while reviewing the
feedback and reactions of our customers. At the same time, wewill leverage the variety of data acquired through these efforts
for the purpose of visualizing our various business fields. For
example, we have already defined quantitative KPIs such as theratio of unauthorized credit card use prevented in the Payment
Business, whereas in the Finance Business we will evolvein a direction that improves upon the accuracy of credit byleveraging data and that provides personalized services basedon fact data to our customers. For this reason, it is important for
us to continue focusing our efforts on recruiting and developing
data scientists.

At the request of companies that do business globally,in particular, I have recently had an increasing numberof opportunities to speak about our DX initiatives as arepresentative example of a Japanese financial institution thathas found success in DX. And as a financial institution of oursize, our use of cloud computing services and communication
platforms as part of our core business’s core systems, not as DX
in subsidiaries, new businesses, and other areas separate fromour core business, has been introduced as a leading DX initiativefrom Japan’s financial industry. We plan to deploy our “Genuine
DX” initiatives in alignment with our business portfolio, fromthe Payment Business to the Finance and global businesses.
I am convinced that these types of initiatives will only take on
significance when advancing DX within the core of our business,
and we are committed to advancing them with the enthusiasmof serving as a form of proof that they are also possible at aJapanese financial institution. I therefore humbly ask for thecontinued support of all our stakeholders.

Under the new Medium-term Management Plan, we willturn in the direction of achieving a 3:3:3:1 balance for the
Payment Business, Finance Business, global business, andnew business, respectively, within the business portfolio in
aims of “transforming into a comprehensive life services
group.” Naturally, we will evolve the CSDX Strategy in amanner that aligns with the new Medium-term Management
Plan. Specifically, we will distribute human and economic
resources in a manner that aligns with this 3:3:3:1 allocation.
For example, although we have focused on the Payment
Business in designing systems for the call centers that service
our customers thus far, we will expand these efforts to address
real estate and other parts of the Finance Business as well. And
in terms of global developments, instead of assigning humanresources with digital technology backgrounds in Japan to theglobal business, we will gather human resources with digitalbackgrounds that are well-versed in local business practices,
as well as in how to act as a team, in aims of expansion in an
independent manner for each country and region. With its
particularly remarkable business growth, in India we have

the CSDX Strategy in working to “transform into acomprehensive life services group.”

35

Special Feature

The CSDX Strategy as the Platform for Supporting the Entire Group
Three steps of digitalization

Digital platforms

Today’s world is one in which companies that can offer “new experiences” via digital technologies
come out on top, whereas those that cannot fail to survive.
The “CSDX (Credit Saison Digital Transformation) Strategy” raised by the Group does not view
DX itself as the end goal. Instead, it sees the very “innovation of experience” that lies beyond as theobjective of promoting DX in a way that involves the entire Group.
Credit Saison has organized the utilization status of digital technologies by each businessdivision into one of the three stages defined by the Ministry of Economy, Trade, and Industry as“DX success patterns.” Under this organization, we will promote the use of digital technologies in amanner that suits the respective business division with the aim of providing exhilarating experiencesthat exceed the expectations of our customers and employees.
The Finance Business, in particular, maintains a deeply rooted analog culture, where fax
machines are still used to transact documents and face-to-face sales remain the mainstay, forexample. The emergence of “remote work” and other changes during the COVID-19 pandemic,
however, have led to an increasing number of customers who are unable to visit real estatecompanies in person. This in turn has triggered the spread of Internet-based approaches toattracting customers and has increased the number of voices desiring services based on digitaltechnologies. By introducing digital technologies that align with the changing needs of ourcustomers, we have automated and streamlined our real estate operations, improved customer
satisfaction, and allowed ourselves to focus on core operations because of greater productivity.

To accelerate the digitalization of the business divisions, Credit Saison requires infrastructure thatoffers a high degree of flexibility and scalability. For this reason, we actively leverage AWS and othercloud services in driving development that looks to the cloud first when launching new services. We
are also systematically migrating existing systems to the cloud in aims of transitioning 80% of oursystems by FY2024.
Moreover, we migrated our internal API platform, which links our core and peripheral systems,
to the cloud through in-house development. As a result, we have been able to migrate functions that
previously relied on core systems to the internal API platform, thereby reducing the load on the coresystem and optimizing the peripheral application functional layout, for example.

Digitization

Digitalization

Digital transformation

Conversion of
analog and physicaldata to digital data

Business process
digitalization

Business model
innovation

Migrate 80% of Systems to the Cloud by FY2024

Customer

Service domain

Customer
contact
New services

FutureContent
distribution

Current

Receiving
applications
Creditgranting
Pointmanagement

Online services
for members

Saison CDP
Data analysis

Fraud detection

Marketingautomation

Internal tools

CreditscreeningCollection

Authorization

Core system

Employees
DX

Cloud area

Innovation

Migrating the internal API platform that connects core and peripheral systems
Step 3.

Createa business model

Digitization

Step 2.

Transform the customer/
employee experience
Step 1.

Build the CSDX
infrastructure

FinanceBusiness• Digitize businessprocesses• Build next-generation
systems

Digitalization

Payment
Business

Greater ﬂexibility and scalability results from migrating the internal API platform to the cloud

Digital transformation

Globalbusiness

NEW

Cloud

• Promote the digital lending
business• Combine the real and • Create and duplicate new
businesses
digital worlds

CoresystemDigital36

On-premises

Internal API
platform

Membershipapp

CRM system

Membership
database

Digital counter

New
services

Credit screening
system, etc.

Membership site, etc.

The CSDX Strategy as the Platform for Supporting the Entire Group

Digital human resources

In-house development

Credit Saison is actively expanding systems designed to train the human resources required topromote digitalization, recruiting mid-career professionals, and assigning these human resources in
conjunction with the importance and priority of business strategies. To accelerate digitalization, we
will primarily assign digital human resources to the Finance Business, which is expanding in scale.
We will also accelerate the development of digital human resources in Japan through the exchangeof digital human resources that can leverage cutting-edge digital technologies from India and otherparts of the global business.

Credit Saison is building an in-house development system that allows us to undertake some aspectsof IT system development that we had previously outsourced to different external vendors.
Shifting to in-house development has enabled agile development at much lower costs, whileat the same time allowing us to accumulate knowledge. We are advancing the shift to in-housedevelopment with a focus on smartphone apps as important contact points with customers and on
internal systems. In-house development of smartphone apps involves every aspect of the process,including developing functions that are easy to use from the customer’s perspective and designing
service implementation. Our developers also propose new functions and services, and by involving
the business departments in their efforts, they have been able to implement functions based on
ideas that had not been conceived of before.

Japan

Finance Business

Payment Business

Overseas

Global business

Faster smartphone app development speeds
In-house development of smartphone apps
as important customer contact points• Update interfaces
and designs• Create easy-to-usefunctions and service
guidelines• Improve operational
speeds through app
redesign

Human resources
exchange

Assign digital human resources in conjunction with the importance and priority of business strategies
Layer 1

Layer 2

Core digital
human resources

Human resources who possess extensive
knowledge and experience in digitaltechnologies and data use, and who leadthe digitalization of the entire Group• Engineers• Data scientists• Cybersecurity• Designers

Human resources who have been reskilled in digital• Generalists+ core digital technologies• Digital marketers

Layer 3

Digital IT human resources

App engineers
Agile development

Card services
Beneﬁt services
New services• Accelerate
implementation of
new functions/services• Realize seamlessconnections with apps
• Realize implementationof functions based on
developer ideas

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

technologies and data use, in addition to their operational
Business• Citizen developers
digital human resources knowledge and experience in the business departments, • Citizen data scientists
and who promote the digitalization of the entire Group
Human resources who possess
knowledge related to digitaltechnologies and data use, and who
use this knowledge in their own work

App

Creation of new customer contact points
through digital technology

Release of various services starting from smartphone apps

• Domain experts• Work system experts• Digital certiﬁcation system

Developer side and requesting side develop systems in a fully combined manner =(Business departments)
Concurrent in-house development
Development
ﬂexibility
Digital departments(Digital departments)

Core digital human resources who possess digital skills will work together with business digital
human resources who possess operational knowledge and digital IT human resources to promote
digitalization throughout the Group. Moreover, Credit Saison has established a personnel system(open challenge) that enables employees to transfer their assignments to digital departments on a
voluntary basis and to participate in new business projects. Under open challenge, we recruit humanresources who aspire to retrain as engineers and data scientists and transfer the assignments of
those individuals who pass the screening process via an official personnel announcement. Throughtraining and OJT, these transferees acquire digital skills and use these newly acquired skills alongwith their experience in the business departments to digitalize the entire Group.

Business departments

Development cost
reductions

Updates to existing systems/Operational problems in business divisions/Use of RPA and other digital technologies

37

The CSDX Strategy as the Platform for Supporting the Entire Group

Layer 1

Layer 2

Layer 3Core
digital humanresources

Through the open challenge system, Credit Saison is expanding our efforts to train the digital human resources who areindispensable for promoting the CSDX Strategy in each business. Members who have been reassigned as business digital
human resources after volunteering in FY2021, the first fiscal year of the CSDX Strategy, are now actively involved in various
fields, including internal system and portal app in-house development, as well as dashboard development using BI tools*.

Business
digital humanresources
Digital IT human resources

Examples of activities by members transferred through open challengeQ

Ryo Hirata

Employed since 2016
Pre-transfer assignment:
Finance Division

Rikako Nagumo

Employed since 2015
Pre-transfer assignment:
Tokyo Information
CenterMasaya Kinugasa

Employed since 2005
Pre-transfer assignment:Core System
Development Dept.

What projects have you contributed to in the past?

Q

Why did you apply for open challenge?

I developed an internal FAQ system used for back-office operations
inquiries. Because I am also an employee, it was easy for me to imagine
how this system would be used and the kinds of topics that would besearched, for example. And the user departments and development
departments developed this system in a concurrent manner.

I applied because I felt frustrated whenever I was unable to respondto requests from card members and business partners. Although I
investigated improving our systems to respond to these requests, I had
to give up on the idea because of the hefty vendor development fees.
So, I decided to apply because I wanted to become involved in in-housedevelopment myself so that I could put aside having to “give up” dueto the hefty vendor development fees, and thereby respond to various
requests from customers and employees.

Q

Q

What projects have you contributed to in the past?

Tell us what you have done to improve your skill level.

I was involved in the development of the “COMPASS” knowledge
system, which is used to search manuals when providing customer
support. We developed the system using the respective experiencesof the members, for example, by incorporating opinions frommembers with work experience at the information centers andprocessing departments, including myself, into the screen design.

As an open challenge member, I have met with others to review thecontent that we have studied, ask each other about what we do notunderstand, and teach each other to ingrain our knowledge. During
actual system development, I study using textbooks. The Technology
Center also organizes study sessions that introduce IT technologies
and the operations of other departments on an irregular basis, where I
have also acquired a broad range of information about fields in which I
am not involved as part of my regular duties.

Q

Q

What projects have you contributed to in the past?

I was involved in the development of the internal API platform.
Through this project, I learned about modern frameworks, testing
methods, and architectures, and used my experience in the Core
System Development Dept. as I led the system tests in connection
with the internal systems to be linked to the platform, and incoordinating the migration timetable.

38

What kind of role do you want to play going forward?

When I was assigned to the Core System Development Dept., I felt
there were problems with the high development costs and the longdevelopment times with vendor development, so I wanted to become
involved in development as an engineer myself. I hope to contributein many ways to Credit Saison’s business, namely by acquiring skills
through my work on many different projects and by working on
systems with a greater sense of speed.
* BI tools: Software that analyzes and visualizes various data for management and business purposes.

Sustainability

Responses to Risks/Opportunities
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.

Risks common to the industry
Risks

Details

Responses

Economic Conditions• Decrease in transaction volumes of credit cards, loans, credit guarantees, andreal estate mortgage loans provided by the Group, and decline in the loancollection rate due to deterioration of the domestic and overseas economic
environment (employment environment, household disposable income,personal consumption, etc., due to recession)• Decrease in capital investment by SMEs, which are the main customers of theLease Business, and deterioration in corporate earnings• Recorded loss on valuation of real estate for sale, etc., due to falling real estate
prices in the Real Estate–related Business• Calculation by risk capital management (RCM) of the risk capital requiredby our business to maintain ratings and maximize 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 theconsiderable amount of funding with a procurement period of less than one
year• In fund procurement, maintaining a certain percentage of long-term
and fixed financing; the setting of liquidity enhancement limits, suchas commitment lines; and the reduction of liquidity risk by promoting
diversification by executing direct procurement, such as corporate bonds
and the liquidation of receivables

Market Risk

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

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

Impairment of
Financial Instruments(Allowance for
Doubtful Accounts)• Risk of non-repayment of receivables by large numbers of customers due tochanges in the domestic and overseas economic environment (employment
environment, household disposable income, personal consumption, etc., due
to recession)• Ongoing soundness of claims and appropriate allowance for doubtful
accounts by strengthening credit management systems, such as
establishment and operation of credit management systems relating tocredit limits, credit information management, and internal ratings, as well
as monitoring of credit status

Provision for Loss on
Interest Payment• Risk of increase in the amount of reimbursement claims from customers
regarding the portion of interest that was higher than the interest rate ceilingset by the Interest Rate Restriction Act, interest that within the Group in Japanwas repaid before the revision of the Act• The amount of allowance required at the present time is recorded inconsideration of the past reimbursement record and trends in interest
reimbursement claims

Various Regulatory
and Legal System
Changes• Revisions, changes in interpretation, and increasing strictness of general laws
and regulations pertaining to company management, and adoption of newlegal regulations• Risk of having to cease certain services due to regulatory changes, etc.

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

39

P30 Financial Capital Strategy

Responses to Risks/Opportunities

Risks and opportunities that need to be addressed over the medium to long term
Risks
Occurrencesof Large-Scale
Disasters

Details
Risks

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

Risks

Impact of the
COVID-19
Pandemic

Impact of
ClimateChangeCompetitive
Environment

Overseas
Business
Development

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

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

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

Opportunities• Improving corporate value through recognition of climate change countermeasures and CO2 reduction activities• Securing human resources by improving corporate value and name recognition, improving employee motivation, andgaining the trust of various stakeholders by increasing recognition from investors who have a high interest in ESG

Risks• Intensifying competition due to new entrants from other industries into the payment industry as the result of
deregulation and technological advancement• Presenting favorable transaction conditions and services to customers without regard to profitability by competitors in
the real estate finance market

Opportunities

Relationships
with Major
Partners

Responses• Physical damage to owned assets and human damage to employees due to large-scale natural disasters (e.g.,
earthquakes) in various regions in Japan and overseas• Developing new business domains and new products/services through collaboration with other industries• Expanding market share by improving convenience and strengthening relationships with affiliated companies

Risks• Deterioration of business performance of business alliances that form important strategies and business partners withwhom we have a capital relationship, changes of business alliance conditions, and cancellation of alliances with partners

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

Risks• Market trends in the countries in which the Company develops its business, the presence of competitors, politics, theeconomy, law, culture, religion, customs, foreign exchange rates, and various other country risks• Development of existing and new services in countries/regions where there are many people who do not possess a
Opportunities
bank account and are unable to receive financial services
Risks

Opportunities
Risks
Opportunities
Risks

Opportunities• System failures due to malfunction of computer systems, communication line disruptions, etc.
• Decreasing reliability due to the emergence of risks and leakage/unauthorized use of personal information (member
information) or confidential information due to cyberattacks, etc.
• External sales of core systems in which the Company has been accumulating know-how for many years• In collaboration with external partners, external sales of secure payment systems in which use is made of fraud
prevention technology• Risk of negligence and inappropriate handling of administrative tasks due to a large amount of manual paperwork• Expanding demand for administrative process agencies at affiliated cards and partners• Risk of being unable to secure diverse, talented human resources to provide high-level services to customers anddevelop advanced products and services; risk of human resources leaving the Company• New service/product development by securing talent with expertise in digital technology

40• Formulating a BCP plan and regularly confirming its effectiveness; implementing BCP education and training• Improving the credit card usage environment by decentralizing authorization systems to the Kanto and Kansai regions
P43 Response to Climate Change• Response to changes in the business environment by transforming the business portfolio from management based on
the Payment Business to a comprehensive life services group• Expand services targeting new customer segments by building new remote-type member capture models using
SAISON Card Digital• Thoroughly implement employee health management and infection countermeasures• In August 2021, we established the Sustainability Promotion Committee (chaired by the Representative, Executive
President and COO) to strengthen initiatives for sustainable business operations• Express support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) andpromote information disclosure on governance, strategy, risk management, and indicators/targets related to responding
to climate change• Promote CO2 reduction by reducing paper consumption by changing to online statements and application, reducing theissuance of plastic cards through SAISON CARD Digital, and use of recyclable materials in the envelope windows of statements
Online statements: As of August 2021, 44% reduction compared to total members / Reduction of 500 grams of CO2 per envelope
Online applications: 95% of face-to-face card applications are accepted on tablet devices

P43 Response to Climate Change• In addition to issuing credit cards, prepaid cards, and other plastic cards, working to provide a wide variety of payment
platforms aimed at improving customer convenience in a bid to realize a cashless society, including smartphone
payments, QR code payments linked to partner apps, and SAISON Opportunities CARD Digital• Increasing screening speed for the purpose of improving customer convenience, strengthening relationships with realestate–related companies, and achieving differentiation by providing products and services unavailable from othercompanies
P34 CSDX Strategy• Strengthening relationships with existing partners• Building a business model that does not depend on a specific partner by promoting new alliances with partners indiverse industries and sectors

P19 Growth Strategy (1): Establish the Saison Partner Economic Zone and Reinforce Business Coordination within the Group• Dispersing country risks by expanding into multiple countries/regions; reducing risks through regular risk analysis of thecountries where we are located; establishment of a detailed monitoring system for local affiliates
P25 Growth Strategy (4): Acceleration of Global Business Expansion

P28 Global Strategy• Development of contingency plans, such as ensuring the backup of important systems• Improving employee awareness of information security and developing countermeasures against cyberattacks, such as
minimizing damage through the introduction of systems capable of detecting advanced cyberattacks• Appropriate protection measures and system development of personal information, as stipulated Opportunities under
the Personal Information Protection Law, acquisition of Privacy MarkP54 Information/Cybersecurity• 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 detection of any illegal activity• Promoting automation of administrative work by the systematization and introduction of robotic process automation(RPA)• 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 andcharacteristics of employees, such as the executive officer and specialist/expert systems• Introducing support systems such as a new business proposal system, a voluntary selective training program, andcareer development seminars by age group; creating a culture of taking on challenges through the development of anenvironment that allows for long-term/multifaceted training and career development, for example, personnel allocation
based on employee requests centered on open recruitment
P48 Human Resource Strategy

Sustainability

Sustainability of the Credit Saison Group

Basic Approach

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

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

Sustainability promotion system
In August 2021, we established the Sustainability
Promotion Committee as an advisory body to theRepresentative Director regarding sustainability activities.
To realize a sustainable society, our entire Group isstrengthening its efforts to solve social and environmental
issues through our business.
With the Representative, Executive President and COO
serving as its chair, the Committee comprises globallyminded male and female members who hail from within
and outside the Company and are thus able to promote
the exchange of various opinions.
The Committee met seven times in FY2021, presenting
its findings regularly to the Representative Director
regarding Group-wide sustainability strategy andmeasures. On the basis of such findings, the Committee
submits reports to the Board of Directors as necessary(it did so in December 2021 and June 2022).

Structure of the Sustainability Promotion Committee
Board of Directors

AdviceRepresentative Directors
Sustainability
Promotion Committee

ReportingInstructions

Climate Change Strategy WG

Reply

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

41

Rules for members of
the Sustainability Promotion Committee• The chairperson of the committee must be the Representative,
Executive President and COO• Executive officer or higher in charge of various departments,
including the Corporate Planning Dept., Corporate Risk
Management Dept., Treasury & Accounting Dept., Strategic
Human Resources Dept., Sales Development Division, andGlobal Business Division• The ratio of men to women should be approximately 50:50• Outside directors should also be Committee members sothat they can receive opinions from an objective and neutral
standpoint• Engage third-party institutions to provide advice andrecommendations in their areas of expertise
Members of the Sustainability Promotion Committee
Chairperson

Vice-chair

Members

Representative, Executive President and COO
Katsumi Mizuno
Managing Executive Officer and CFO
Shingo Baba
Director and Senior Managing Executive Officer
Kosuke Mori
Senior Managing Executive Officer
Kazue Yasumori
Executive Officer Kaori Shimada
Outside Director Nana Otsuki

Sustainability of the Credit Saison GroupA sustainable society that is even more convenientand prosperous than today’sContribution to achieving the SDGs

Materialities for sustainability and initiatives
Materialities
Enriching ourcustomers lives, andenabling them to live
happily and true tothemselves

Expectations and needs of stakeholders

Efforts to address important issues

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

Enriching our customers
lives, and enabling them tolive happily and true tothemselves
Creating humanresources andan organization
where each
person can fulﬁll
an active role intheir own way

Sustainability
Promotion
Committee

Achieving sustainablegrowth andimproving corporate
value through soundcorporate
management

Creating abetter society
throughco-creation withpartners

Protecting the richnatural environmentand culture thatenriches life, andenergizing people in
the region andcommunity

Climate change

Digitalization• Cultivating good citizens who are
active members of society• Showing consideration for the
global environment, supporting
cultural and sports activities• Engaging in co-creation withgovernments, regional societies,
and communities• Strengthening corporate
Achieving sustainable
governance
growth and improving
corporate value• Strengthening the integration
through soundof Group growth strategy andcorporate management sustainability activities

Growing needs for
asset formation

Declining birthrate,
aging population• Developing an environment andfostering a culture that enables
diverse activities, and investingin human resources

Related Pages
Contributing to a Safe, Secure,
and Convenient Cashless
P53
Society
Information/Cybersecurity
P54

Acceleration of Global
Business Expansion
P25

Coexistence with Local
P55
Communities
Human Resource Strategy
P48

Human Resources
P50

Response to Climate Change(Information Disclosure
Based on the TCFD
P43
Recommendations)
Environment
P45

Human Rights
P47

Coexistence with Local
Communities
P55

Regions/communities

Changing society/
Global environment• Resolving problems forindividuals and corporations withfinancial services at the core

Partners

Protecting the richnatural environmentand culture thatenriches life, andenergizing people
in the region andcommunity

Shareholders• Creating a safe, secure, andconvenient society• Providing new value withbusiness partners, collaborating
Creating a better society
partners, etc.
through co-creation withpartners• Realizing financial inclusion
including Asia

Customers

Employees

Contents

Promoting conversion to
cashless operations

42

Corporate Governance
P59

Sustainability

Response to Climate Change

Related Stakeholders
Regions/
communities(Information Disclosure Based on the TCFD Recommendations)
Types of risks
Risks and
andopportunities opportunities

Business impacts

Indicators ofExtentimpact on business FinancialofTime span
impact impact
operations

Policies andlegal
restrictions

Increased anti-global
warming taxes, etc.

Impact on SG&A
expenses

Approx.
¥0.07
billionLow

Short
term tolong termMarketRising energy prices

Impact on SG&A
expenses

Approx.
¥0.3
billionLow

Short
term tolong term

Acutephysical risks

Damage to buildings due tothe intensification of windand flood damage

Impact on head
office, sales
divisions, data
centers, etc.

Approx.
¥0.1
billionLow

Short
term tolong term

Worsening of the macro
economy due to the impact
Impact on
Approx.
of rising temperatures on doubtful account¥4.3
agriculture, water resources,
costs
billionhealth, etc.

Low

Short
term tolong term

2019.09.10

Risks「 TC F D C ons or ti um 」ロゴマーク

GovernancePhysical risks

The Company expressed its support for the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations in 2022 and is involved in the TCFD consortium,
a discussion forum for the companies and financial institutes supporting therecommendations.
Based on the TCFD recommendations, we will continue to disclose information about
governance, strategies, risk management, metrics, and targets regarding our actions toaddress climate change in pursuit of a sustainable society.

Transition risks

Disclosure in line with the TCFD Recommendations

Chronic
physical risks

Frequent occurrence ofheatstroke due to a rise in
the average temperature
and an increase in electric
power costs due to the useof air conditioners

Impact on SG&A
expenses

Approx.
¥0.03
billionLow

Short
term tolong term

Exemption from a carbon
tax through theachievement of zero GHG
emissions

Impact on SG&A
expenses

Approx.
¥0.07
billionLow

Short
term tolong term

In pursuit of Japan’s 2050 carbon neutrality target andthe achievement of a decarbonized society throughco-creation with enterprises and individuals, we started
issuing Saison Card for becoz, a credit card with a carbon
neutrality perspective, the first of its kind in Japan.
The CO2 emissions of the cardholder are visualized bycategory using the cardholder’s card payment data
Impact of an within becoz (which means “be CO2 zero”), a DATAFLUCT
increase of inc. application platform. This motivates the subscriber tosustainability- change behavior to achieve decarbonization.
oriented
The issuance of the credit card encourages sustainability- Low
subscribers conscious future generations to connect with the credit
on our sales card’s initiatives for the decarbonization of society,indicators increases the number of cardholders using our credit
card, and changes their behaviors. This is expected toincrease the reduction of CO2 emissions and contributeto our revenue long term through credit card use.
The calculation of the impact on our business operations
depends on the outcome of the initiative (customer
attributes and trend of credit card use). No profit
assessment is performed at this point.

Short
term
Issuance
began
in June2022

We recognize response to climate change and other global environmental issues asimportant management themes that reduce risk and lead to earnings opportunities.
EnergysourcesPlease refer to page 41 for the structure of the Sustainability Promotion Committee. The Committee debates
the direction of activities related to sustainability strategy and answers to the Representative Directors.

Opportunities

We predicted changes in the external environment and analyzed the impact of climatechange on our operations in the future, in accordance with the TCFD framework and using
a scenario analysis method.
It is important for us to pursue sustainable growth by mitigating climate change andadapting to it through our business activities. Based on this understanding, we believe that
actions to address climate change are important in the management of our business. We
identify and assess its impact on us by forecasting changes in the external environmentand our operating environment accompanying the manifestation of climate-related risks
and by identifying risk events. In the scenario analysis, we referenced multiple existing
scenarios published by organizations such as the International Energy Agency (IEA) and theIntergovernmental Panel on Climate Change (IPCC).
Details of the strategy (scenario analysis) can be viewed at the following URL:
https://corporate.saisoncard.co.jp/en/sustainability/environment/tcfd/

43

MarketStrategy

Zero GHG
emissionsResponse to Climate Change (Information Disclosure Based on the TCFD Recommendations)

ResultRisk management(Tons of CO2)

The Risk Management Committee and the Corporate Risk Management Dept. are leading
the efforts to mitigate risk and minimize the impact of risks should they occur. To this end,
our employees regularly receive in-house training and endeavor to maintain our risk
management system in accordance with the Risk Management Regulations, Regulations
on Management of Risks of Losses, and Crisis Management Regulations. Regarding theissues underlying the Credit Saison Group or governance-related matters accompanied byserious risks, the Group Strategic Management Office, Corporate Planning Dept., leads thesupervision of the companies of the Credit Saison Group’s execution of business and sharesinformation with the supervisory divisions of the Credit Saison Group companies.
For climate change risks, the Sustainability Promotion Committee leads the formulationof policies and strategies for minimizing risks and seizing opportunities and structurally
monitors related efforts.
The Corporate Planning Office of the Corporate Planning Dept., the Public Relations
Office, and the Corporate Risk Management Dept., which collectively are the administrative
body supporting the Sustainability Promotion Committee, lead the regular review of risks
and opportunities relating to climate change.
The Climate Change Strategy WG met more than 10 times to deepen its discussions in
FY2021 while in September the Sustainability Promotion Committee began to meet once amonth to advance the discussion of climate change (a report was submitted to the Board of
Directors in December 2021 and June 2022).

Scope 1

Direct greenhouse gas emissions
from the business operator itself

The consolidated companies of the Credit Saison Group arewithin the scope of measurement.

six companies that are collectively responsible
for more than 95% of net revenue in FY2020 is measured.

The impact of the

1,023

593

17,540

Scope 1 + 2 (market standard) subtotal

18,563Comparedwith
FY202010,35642%
reduction
10,767

Scope 1 + 2 (location standard) subtotal

18,87910,950Category 1

Purchased products and services

81,712

61,284

Category 2

Capital goods

323,542

242,657

Category 3

Fuel and energy-related activities
that do not fall under Scope 1 and 2

3,071

2,303

Category 4

Transportation and distribution(upstream)––

17,856

10,173Category 5

Waste generated by operations

132

99

Category 6

Business travel

781

586

Category 7

Employee commute

1,587

1,190

Category 8

Leased assets (upstream)–

Category 9

Transportation and distribution(downstream)–

Category 10

Fabrication of sold products–– Comparedwith– FY2020
25%– reduction
35,633Category 11

Use of sold products

47,510Category 12

End-of-life treatment of soldproducts

9,355

7,016

262,955

197,216

Category 13

Leased assets (downstream)

Category 14

Franchises––

Category 15

Investment––

Scope 3

Indirect greenhouse gas emissions
that do not fall under Scope 1 and 2(emissions from other companies
associated with the activities of thereporting company)

730,645547,984

Notes:
1. C4: Relevant activities have been included inother categories
2. C8: Relevant activities have been included in
Scope 1 and 2
3. C9, 10, 14: No relevant activity

44

FY2030Indirect greenhouse gas emissions
from the use of electricity, heat, andScope 2 (location standard) steam, which are supplied fromother companies
Scope 2 (market standard)

Metrics and targets

TargetFY2020

4. C15: We will consider calculating it in the future
5. Targets set by referring to SBT (Science Based Targets)
6. The initiatives based on the calculation of Scope 1, 2, and 3 emissions
and the TCFD disclosure framework have gained the cooperation ofWasteBox Co., Ltd.

Sustainability

Environment

Basic Approach

Related Stakeholders
Regions/ Customers
communities

Partners

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

Issuance of SAISON CARD Digital for becoz, which visualizes CO2 emissions
We have partnered with Datafluct, Inc., which uses data science to solve corporate and social issues, to launch SAISONCARD Digital for becoz (hereinafter, “becoz card”) from June 2022. This is the first credit card in Japan* that can visualize CO2
emissions based on payment data.
The becoz card is equipped with a function that automatically links credit card payment data with the becoz wallet, which
is a service that enables visualization and offsetting of CO2 emissions by individuals. The becoz card uses an algorithm that
calculates consumer CO2 emissions from financial transactions. The algorithm was developed by Doconomy, a Swedishcompany working to address climate change. becoz card members can see a numerical value representing CO2 emissions
based on their daily credit card usage history. Users can also compare their CO2 emissions with the previous month and cancheck the categories that account for most of their emissions, the difference from the previous
month, and the emissions for each statement item.
Based on the vision that “a day will surely come when every one of us will have to be aware of
CO2 emissions,” we provide support so that people can understand environmental issues fromthe perspective of their daily lives and take the initiative in solving social issues. For example, weenable people to understand how CO2 emissions will change by replacing the payment of public
utility bills with clean energy.
*According to research by Credit Saison

Fintertech provides KASSAI with charity crowdfunding for the 50th
anniversary of WWF Japan
Upon the challenge of crowdfunding conducted by the World Wide Fund for Nature Japan (hereinafter, “WWF Japan”),
Fintertech Co., Ltd., which promotes the creation of next-generation financial services using cutting-edge technology, provided
WWF Japan with KASSAI, a service that enables anyone to easily create and publish charity websites. Credit Saison provided its
own advertising space for this project.

45

Environment

Management of Akagi Nature Park based on the philosophy of “Preserving a Lush Forest for the Children of the Future”

Akagi Nature Park in spring when the flowers are in full
bloom

Forest de Retreat—refreshes visitors through the power of Development and management of Zone D, which was
the forest
previously an unmanaged forest

We operate Akagi Nature Park with the cooperation of
official sponsors and cooperating organizations. As a forestthat possesses the beauty of the four seasons, which are theorigin of the human spirit and our culture, we offer special
experiences that will remain in the memories of park visitors.
Akagi Nature Park is a vast forest of 120 hectares (ofwhich 60 hectares are open to the public) at an altitude ofapproximately 600–700 meters at the foot of Mount Akagi.
Approximately 500 species of seasonal mountain grasses
and flowers grow in the park. Visitors can enjoy more than
1,800 species of insects and more than 70 species of birds
that inhabit the northern Kanto region in a habitat closely
resembling true nature.
The forest of Akagi Nature Park has been certified asa “forest therapy site” with a scientifically verified healing
effect. We are developing various programs that takeadvantage of this geographical advantage. For example,
in FY2022, as the impact of COVID-19 drew attention to
the importance of immunity, we leveraged the benefits ofoutdoor facilities and the effects of forest therapy to holda variety of initiatives such as health promotion programs,
environmental learning for experiencing nature, and art
programs. “Forest de Retreat” is a program in which aforest therapy guide instructs participants on how to use
their five senses to fully enjoy the healing power of theforest. “Forest Therapy Bus Tour with Physicians” allows
participants to experience forest therapy under theguidance of a physician. The “Insect Observation in theChildren’s Forest” is held for elementary school students.
The “Transplanting Experience” allows visitors to learn
about the forest life cycle, and to dig up young trees
grown from seedlings and plant them in suitable locations.
Through this diverse lineup of programs, we convey theappeal of the forest to visitors.
Furthermore, Zone D, which had been left unmanaged,
was regenerated as the “Experience Forest.” In addition totransforming the zone into a base for activities to conserve
biodiversity, we are improving the carbon dioxide fixation
function by thinning trees that cannot fixate carbon for along time and replacing them with long-lived tree species.
Furthermore, in August 2022, the “Summer Vacation
Rhinoceros Beetle and Stag Beetle Exhibition” was heldat the Akagi Nature Park exhibition building. To nurturechildren’s sensibilities and creativity, we actively provide
them with various opportunities to experience nature andstimulate their curiosity.
46

Children touching insects

Under the theme of “enriching life for visitors,” Akagi
Nature Park provides opportunities to experience nature.
We have built a system in which the park is supported bymany corporations and individuals. The park also functions
as a locally rooted operating model for maintaining
sustainable forests. In December 2021, the operation
model of Akagi Nature Park won the Excellence Award in
the Business Case Division of the Gunma Forest Business
Contest, which is sponsored by Gunma Prefecture.

Award Certificate, Gunma Forest Business Contest

Sustainability

Human Rights

Basic Approach

Related Stakeholders
employees Customers

Partners

To embody our management philosophy of being a leading-edge service company, together with our stakeholders, we will create a sustainable societythat respects human rights through our “Action Declaration” and “Behavioral Standards,” which are the values and conduct policy that we expect all
officers and employees to share.
■ Initiatives on children’s rights

Human rights policy

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

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

School Visit: SAISON TEACHER
https://corporate.saisoncard.co.jp/sustainability/csr/teacher/ (Japanese only)
Akagi Nature Parkhttps://corporate.saisoncard.co.jp/en/sustainability/environment/

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

■ Initiatives for correction and remedy (establishment of internal reporting system)

At the Credit Saison Group, we have set up an internal reporting system that can be usedby all Group employees, in accordance with the Whistleblower Protection Act. Organizedby our department responsible for compliance, this system permits employees to blow thewhistle to an internal reporting desk by e-mail, mail, or other means. In December 2020, we
set up an overseas hotline, which enables internal reporting from Group companies locatedoutside Japan. The hotline accepts consultations about misconduct against laws, internal
rules, general social norms, or corporate ethics, harassment including sexual harassment
and abuse of power, and issues in the workplace environment, among other matters.
Feedback from customers and other parties outside the Company is received at customer
support desks such as the Information Center and Saison Counter, where we aggregate andanalyze requests, suggestions, and compliments.
We share customer feedback and needs throughout the Company through means suchas important in-house meetings and the intranet. We then respond in ways that include
making internal adjustments, developing new products, improving services, supporting amore user-friendly Internet environment, and improving the quality of customer service.

Human rights: Policy/main initiatives
https://corporate.saisoncard.co.jp/en/sustainability/esg2/esg_policy.html#esg2-01

Initiatives for respecting human rights■ Prohibition of harassment

We have defined harassment items(subject to disciplinary action) in ourrules of employment. We also conductharassment education through compliancetraining via management classes for
executive employees (including headsof departments and offices) and new
managers. We also appoint complianceofficers in each department and implement
department-led education programs.

■ Universal Manners Test/LGBT Manners Training

We encourage employees to take theUniversal Manners Test to learn the ways ofthinking and behaviors that enable themto act from the perspective of someone
different from themselves, such as the elderly
and people with disabilities. Our employees
also participate in LGBT Manners Training tolearn how to interact with diverse people.

Internal reporting system (for employees)
https://corporate.saisoncard.co.jp/en/sustainability/esg2/esg_policy.html#esg2-10

Universal Manners Test/LGBT Manners Training
https://corporate.saisoncard.co.jp/en/sustainability/csr/

Customer support (for supply chain)https://www.saisoncard.co.jp/customer-support/ (Japanese only)

47

Customer feedback: Main improvement examples
https://www.saisoncard.co.jp/topic/list/voice/ (Japanase only)Sustainability

Human Resource Strategy｜Interview with the Executive Officer in Charge
We will increase our pool of human resources who can contributeto corporate value creation as members of a “comprehensive life
services group.”
tell us about the specific details of the
Q Pleasehuman resource strategy in the new Medium-termManagement Plan, which is aimed at achieving thegoal of “transforming into a comprehensive life
services group.”

Kazue Yasumori

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

While realizing the revision of our HR system to increase ourpool of professional human resources, we are focusing on theestablishment of internal recruitment for autonomous careerdevelopment and the reskilling of existing employees and on
the external recruitment of personnel with specialized skills.
Until now, we have not paid much attention to the intentions ofindividuals joining the Company in a general position capacity.
Regardless of their plans, they were simply placed in various
departments including sales, operations, and planning. To
encourage the development of professional human resources, I
now believe that it is necessary to create a system so that people
possess an awareness of themselves as professional humanresources and to have forums at which to listen to their aptitudes
and intentions.
First, regarding internal recruitment, we will prioritize
recruitment for departments and businesses that are positioned
as priority management strategies under the Medium-termManagement Plan. In the past, targeted departments haverecruited in writing, but from this year the heads of the relevant
departments will be recruiting by making videos of theirthoughts and information. The number of applicants was about
100, the same as last year, but their application forms describedin detail the content of and thoughts on what their experience
could contribute, and their presentations at interviews for thesecond screening were also impassioned. As they had applied
voluntarily, I feel that they are highly motivated to learn a varietyof things to achieve results, even when transferred to a different
department.

48

Also, regarding the recruitment of personnel withspecialized skills, as Credit Saison falls into the financial
category, we do not have a strong presence when it comes toacquiring people such as data scientists and web marketers in
the general human resource market. Therefore, Director of theTechnology Center and Director, Senior Managing Executive
Officer, CTO, and CIO Ono gave a series of lectures on thescope of human resource activities after joining the Company
at IT-related industry seminars and other venues, as a result of
which we reached the stage of being able to see an increasing
number of people searching our website and applying.
Regardless of whether they are new graduates or mid-careerhires, to avoid having newly joined employees from having “It
wasn’t supposed to be like this” thoughts, we do not adhere to
the concept that recruitment equals human resources and havethe personnel departments and the departments in charge workin concert to recruit and train personnel.

tell us about the background to and the
Q Pleasereasons for this revision of the HR system.
To create a new HR system, in FY2021 we collected a wide range
of information from inside and outside the Company, includinginterviews with employees from all bases and job levels, andconducted a series of studies to establish a system that would
lend itself well to Credit Saison. A few years ago, the Company
had made the decision to make all its personnel full-time
employees and at the same time delegated the authority forrises in rank or promotions to a higher status to the frontline.
However, the standards and judgments varied from workplace
to workplace, and there were some issues regarding theunderstanding and fairness of promotion decisions.
After a series of management-level discussions, weconcluded that we would introduce a uniform promotion
standard and a standardized assessment program for thisrevision of the HR system. Based on the premise of fairnessof opportunity and clarification of promotion criteria, we areaiming to create job content and role definitions suitable foreach job grade within a department in a visual form. Rather than

Human Resource Strategy｜Interview with the Executive Officer in Charge

providing justification for a higher job grade, this is intended togive individuals freedom of choice in how they work.
Most important is to set hurdles suitable for the job gradewith the superior and the person seeking promotion; for that
person to learn, think, and act daily to overcome those hurdles
through OJT; for the results to lead to personal growth; and toknow whether they were able to contribute to the growth of
the Company. OFF-JT is sometimes necessary on the path fromhuman resource to human asset, but I believe that the main axis
is the continuous solving of questions with no correct answer,
and promotion criteria that emphasize learning and action in
OJT, success and failure. I would like to discuss human resource
development using this HR system with managers, correct
any necessary points, and for it to permeate throughout theCompany. I would also like to pay particular attention to whether
people receive feedback on the evaluation of their results, andwhether that feedback was appropriate and acceptable.

tell us about some points and specific
Q Please
details for strengthening the new HR system.
The first point is that, alongside the lowest managerial position,
manager, we have created the position of dedicated manager,
who as a professional in a specialized field takes direct
responsibility and directs decisions. In recent years, both hiringand evaluation have been shifting toward becoming more job
based, and an increasing number of people want to dig deep
into their own strengths and aptitudes to build their careers.
Recognizing the need for ways of working that contributeto the Company by giving them the right to speak and takeresponsibility so that they can fully demonstrate their specialized
knowledge, we will see if they can demonstrate their abilities as
professional human resources.
Second, we have incorporated an assessment programfor both managers and dedicated managers to get to theposition of manager. With the assistance of external institutions,
we will look at individual abilities from all aspects, especiallyproblem-finding and interpersonal collaboration. For example,
it is a multifaceted measure of whether a person excels in theability to lead subordinates as a manager, or whether they
excel in the ability to pursue their own area of specializationand promote business. Although the content is different, theassessment program is used not only for promotion to manager
but also for promotion to job grades equivalent to the positionof section manager. I am sending messages that can be taken
as an opportunity for both to ask themselves questions about
their own careers. We have also added social issues andunderstanding of our company to our assessment program. In
these days of high uncertainty, I believe that it is necessary to atleast have an interest in domestic and international finance andthe environment.
In addition, we are continuing to actively engage inpersonnel exchanges outside the Company. Compared with2019, before the spread of COVID-19 infections, the numberof assigned employees and bases has increased by 20%.
Many employees say that by encountering new perspectives
outside the Company, they have broadened their horizons
and raised their perspectives. Depending on where they havebeen assigned, some employees might have to handle multiple
tasks such as planning, sales, and clerical work on their own,
but there are also employees who enjoy creating their own
work. It is necessary to reskill the necessary skills in anticipationof the assignment period, but as the method has not yet been
established, we will consider the realization of this while talking
with those who have experience of being on assignment. In
addition, from the perspective of personnel exchanges withcompanies within the Group, we started advertising positions
from FY2022. By having our employees experience being
assigned outside the Company, where they will come up against

49

increasingly sophisticated and complex business issues while
gaining an overview of the entire Credit Saison Group, I believe
will lead to the creation of corporate value as a “comprehensive
life services group.”

Q Amid the emphasis that is being placed oninvestment in human capital, please tell us about
your human resource strategy initiatives.

The most important thing is to ensure that employees continue
to work in good mental and physical condition. Instead ofbeing busy with work every day, I want them to be able to takean interest in all sorts of things, put their energy into their workwith a positive attitude, and feel that their work is rewarding.
To that end, we aim to improve the specific health guidance
consultation rate and cancer screening consultation rate on thephysical side combined with announcements for all employees
and individual announcements, and the holding of Femtech
seminars on women’s health issues. On the mental side, we holdcommunication training using case studies and a return-to-work
program that includes career support. We are also focusing
on building a foundation that allows us to work positively. We
will then hurry to realize the fostering of a culture in which
employees are motivated to reskill, such as “learning from
Credit Saison” practical educational training sessions among
employees and selective training at external companies, and thebuilding up of learning, such as financial knowledge and data
analysis that is not limited to occupations.
Finally, in an era in which living to 100 years of age isbecoming commonplace, there are various stages in a longlife. I would like to raise the willingness of employees to take onchallenges while improving the environment so that they canspend fulfilling days without anxiety doing not just “either” but“both” work and childcare, work and nursing care, work andlearning, and work and play. Toward the fostering of a corporate
culture in which all Credit Saison employees hope to continue
working at the Company and do not hesitate to take a step
toward challenges in their particular circumstances, I would liketo continue dialogue with organizations and individuals to instill
the idea of “life, work, and fulfillment.”

Sustainability

Human Resources

Basic Approach

Related Stakeholders
Employees

As one of the management bases that support the realization of the Medium-term Management Plan, to form a group of professional human resources,
we aim to create systems that allow diverse human resources to fully demonstrate their abilities and aptitude, and to foster an organizational culture.

History of support for diverse human resources

ʼ20

We have developed systems that allow diverse employeeswith different genders, educational backgrounds,
nationalities, backgrounds, etc., to independently form theircareers while leveraging their individuality, and have worked
to accelerate reforms with innovative human resources.
Since the 1980s, we have actively recruited women,
ensured the performance by women in various occupations
and positions, and expanded various systems so thatfemale employees do not have to quit their jobs orabandon their careers due to life events. Most recently, in2017 and in September 2022, we partially renewed ourhuman resources systems. Through these efforts, we seek
to become a corporation where all employees can work
comfortably and feel fulfillment.

ʼ21
ʼ82
ʼ89

ʼ92
ʼ93
ʼ97

persons

Womenpersons

persons

1,026

3,058

1990

Introduced childcare leave system
Introduced nursing care leave system
Introduced childcare and nursing
care reduced working hour system

2000
ʼ12
ʼ13
ʼ16
ʼ17
ʼ17

ʼ19

Approx.

Total of six
consolidated companies:272
employees

ʼ21
ʼ22

2010

2020

Extended nursing care leave period and expanded reduced working hours system
Expanded reduced working hour system(resumption of reduced working hours after returning to regular working hours)
Tested introduction of remote work system
Introduced a common personnel system for all employees to realize equal pay for equal work
Improved the ﬂexibility of work styles through revision of various systems(e.g., hourly paid leave, reduced working hours without restrictions, telework, ﬂextime system)
Promotion of employment of people with disabilities
through the establishment of a farm called “Saison Farm Toda”
Initiatives to reform work styles through ofﬁce renewal

Rate ofemployees who
have undergone
a stress check

16.7%

560

Ratio of female
managers

employees

Global humanresources

ʼ21

Ratio of female
officers

Seconding toGroup/affiliatedcompanies:

260
employees

Men

Expanded reduced working hour system(up to April 15 of the year that the child reaches
fourth grade of elementary school)
Expanded scope of counter-restricted positions to all sales
Introduced spouse childbirth leave system

ʼ18

Last year:150
employees

4,084

ʼ07
ʼ07

1980

Digital humanresources

All employees

ʼ07

Initiated proactive hiring of womenfor both new graduates and mid-career
Introduced work location courses(country-wide and regional types)

Expanded telework application coverage amid
the corona pandemic
Promoted employment of people with disabilities
through establishing an administrative teamIntroduced a nursery school matching service
operated by the Company
Launch of Sustainability Promotion Committee
and DE&I Promotion Working Group
Conducted resilience training for ofﬁcers

24.5％

Average years of
employment

13.3 years
Men

Women

years

years

14.0

Increased by approx. 3 times since starting
consolidated accounting from 2019

50

13.1

92.6%

Ratio of female
section managers

71.5％

Ratio of male
employees
taking childcare
leave

48.7%

※1

Note: Credit Saison non-consolidated(as of March 31, 2022)*1 Includes leave taken forchildbirth and childcare

Human Resources

Transformation into a comprehensive life services group

Themes of our human resource strategy that are management
bases for achieving the Medium-term Management Plan

We aim to be a group of professional human resources who continue
to create new value by taking on challenges without fear of failure,
thereby solving problems and worries in the world.

Professional human resources group

Risks

Three points of focus• Creation of mechanisms that enable diverse human resources to engage in diverse
performance (career development) by leveraging their individual characteristics and strengths• Fostering of an organizational climate that enables anyone to take on challenges
without fear of failure and allows failure• Educational support and investment in human resources who act autonomously andlearn/grow independently

Respect for diverse values
In an era where customer needs are rapidly diversifying andchanging, it is necessary to break down the homogeneity of
employees and transform diversity into a force for achievingorganizational change. Based on this sense of values, we
aim to create an environment in which everyone can work
energetically regardless of gender, age,or disability.
Furthermore, to revitalize ourinitiatives, we are promoting diversity
logos created from employee ideas
through internal recruitment.

Autonomous careerdevelopment

Health management

Support forbalancing work styles

Challenges

Value creation■ Promoting the advancement of women

Measures for DE&I andachieving a balancewith work (FY2021)

While achieving diverse career development, we aim to foster a corporate culture inwhich female employees, who account for about 70% of our employees, contribute to theorganization and company through a role in which they have a powerful voice. We have set
a KPI for achieving a female manager ratio of 25% by the end of FY2025. As one measure,
we are selecting female employees who are around 30 years old and who are expected to
become next-generation managers, and holding seminars to foster a leadership mindset.
Furthermore, in parallel with the development of Femtech, a product and service thatuses technology to solve women’s health issues and that was proposed and adopted byfemale employees as a new business, we conduct internal awareness-raising activities
such as seminars based on the concept of “aiming to create a workplace where female
employees of Credit Saison can work in a healthy manner both mentally and physically.”

Support for balancing
long-term care and work
Universal/LGBT Manners
Health issues
unique to womenChildcare seminars
for fathers■ Promotion of career development■	Promotion of hiring people with disabilities and creating a comfortable working environment

We are promoting the creation of an environment in which every
employee with disabilities can fully utilize their abilities and aptitude,
and where they can work with peace of mind. We also conduct
interviews to support their retention.
In addition, we hold study sessions for employees who workwith people with disabilities to learn about daily interaction while
exchanging opinions.

Diversity

To achieve the Medium-term Management Plan, we are promoting the strategic allocationof human resources by actively recruiting highly specialized human resources from outside
our Company for key
Description
Unit FY2019 FY2020 FY2021
posts such as specialized
Hiring ratio for people with disabilities %
2.16
2.33
2.31
positions. We will also
Ratio of female managers
%
21.0
24.3
24.5
be hiring engineering(General managers and managers)
students in FY2023.
Ratio of mid-career hiring among all hires
%
28.0
59.3
62.1

Study sessions held byhuman resources staff

51

Human Resources

Support for autonomous career development

Improving the well-being for each employee and as an organization

When expanding into new business fields, simply increasing expertise is not enough. Instead, we must also cultivate
diverse experiences and perspectives beyond the boundaries of the current affiliation and company. We encourage
employees to engage in learning to acquire the necessary abilities and skills for their own careers, and support
employees in taking the next step while leveraging their own strengths.

We have positioned the maintenance and promotion of health as an important management theme. We have also built
an organizational structure and are implementing various initiatives to promote health management. In preparation forour third founding, to create “people” and “organizations” that are resistant to change, we have implemented a resilience
program for officers. The program emphasizes the ability to strongly lead the organization in the face of adversity(resilience). Our officers lead by example; acquire the habit of enhancing the four vitalities of physical power, emotional
power, thinking power, and mental power; and spread those vitalities throughout the organization. By doing so, officers
aim to enable employees to continue working with even greater energy and happiness. We will continue these activities
in the future.

■	Providing opportunities forautonomous learning

We have introduced choice-based training as a systemthat allows employees to freely attend training thatmatches the competencies they want to acquire.
We hope that this will lead to the growth of both
employees and the Company by establishing the habitof demonstrating behavior that meets the expected roleand engaging in autonomous learning.
Furthermore, starting in 2022, employees who
have volunteered design their own course content
based on their own specializations and areas ofexpertise, and serve as lecturers for Saison’s Learning.
■ Second job

Employees who meet the requirements can take on asideline. We support any arrangement that can lead tocareer advancement and where the experience gained
externally can benefit the main work in the Company.

■ Career Design Program

We provide support to our employees in considering
their autonomous career according to the expectedroles by age and issues in their personal careerdevelopment.

■ NEXT SAISONWith the aim of “leading by example,” executives
select themes for solving various issues both insideand outside the Company. Together with generalemployees, executives play a central role in everythingfrom policy planning to new business development.
Interacting with executives also enables employees tolearn how to think from a management perspective.

External evaluation■ Open challenge

To support career autonomous human resources, we arerevitalizing internal recruitment to a higher level thanever before. In the spring of FY2021, we formulated ahuman resources portfolio based on our management
strategy and developed internal recruitment targeting
focus business fields, new businesses, and Group
companies. We received 300 applicants in FY2021. As
a result, we transferred 72 employees, which was threetimes as many as in the previous fiscal year.

We have been recognized as
an Excellent HealthManagement Corporation
2022.

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 August 2022, we acquired
the Silver certification,
recognized as a company
with excellent healthmanagement initiatives.

Promotion of diverse work styles
To ensure that all employees do not have to worry about balancing work and private life, and that motivated employees
can continue to play an active role, we are working to enhance systems and foster a workplace culture that understands
and supports a work-life balance.
Systems and initiatives for supporting diverse work styles■ Career Development Sheet

Declaration of past experience and orientation andfuture career and growth plans. The contents of thedeclaration will be used as a reference for humanresource development planning and optimal job
placement.

https://corporate.saisoncard.co.jp/en/sustainability/diversity/gender/■	Promotion of taking childcare leaveand support for returning to work

In addition to introducing a childcare leave system thatexceeds legal standards, we have prepared a variety of
training programs and systems with the aim of creatinga workplace culture in which everyone can actively
participate in childcare regardless of gender. Moreover,to support a smooth return to work and careerdevelopment, seminars for working mothers are held
every year with two courses: a Work-Life Balance Course■ SWITCH SAISONSWITCH SAISON is an internal venture programfor commercializing employee ideas. The program
has been held since 2019, and we adopted
commercialization proposals from approximately 1,000
applications.

52with the theme of balancing work and childcare, anda Career Design Course where employees can design
their own career vision for the medium term.
■ Flextime without core time

Within the range of the total number of hours worked
in a month, employees can decide at their own
discretion the number of hours that they work on
working days. This achieves the optimal work styleaccording to the characteristics of the department.

Sustainability

Contributing to a Safe, Secure, andConvenient Cashless Society

Basic Approach

Relevant stakeholders
Customers

Partners

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

Construction of diverse
payment schemes

Support for multiple loans

Proper management of
personal information

We recognize the priority issue of pursuing a balance between preventing the occurrenceof people with multiple loans due to overuse and enriching the lives of customers while
contributing to economic development. We strive to properly manage personal informationand prevent the occurrence of multiple loans through prudent credit and appropriate
follow-up after credit is granted.

Support for
multiple loans

Information/
cybersecurity
Improved accuracy ofdetecting unauthorized use

Construction of diverse payment schemes

Improved accuracy of detecting unauthorized use

To achieve a cashless society, we are working to realize a wide variety of payment platforms
with the aim of improving customer convenience.
In addition to issuing plastic cards such as credit cards and prepaid cards, we provide
various schemes such as smartphone payments and QR code payments linked to partnerapps.

We have built an even stronger security foundation by combining the know-how andexperience in credit card screening that we have cultivated over the 70 years since ourfounding with new systems created in collaboration with partner companies.
Specifically, we are working to eliminate unauthorized use in cashless payments in three
directions: AI-based automation of unauthorized credit card use detection, prevention ofidentity fraud by means of face recognition technology, and fraud prevention by means ofdevice identification technology. Through these initiatives, we provide customers with a safe
and secure payment environment and contribute to the spread of timely and contactless
payment methods in the new era.

Proper management of personal information
We recognize that the management of personal information is our most important
responsibility, and we have published the “Declaration on the Handling of Personal
Information.” In addition to complying with laws, regulations, guidelines, industry rules,
etc., we strive to foster and permeate management awareness by establishing internal
regulations, conducting internal training and compliance education, and essentiallyrequiring employees to acquire the qualification of the “Personal Information Handling
Chief” from the Japan Consumer Credit Association. Furthermore, regarding the handlingof personal information, we are working to strengthen security through measures suchas the use of dedicated lines, restrictions on people with access privileges, encryption of
information, and entry/exit management of information terminal installation locations. In
May 2006, we acquired the Privacy Mark, which is given to businesses that handle personal
information appropriately. We are working to maintain and improve the level of personal
information protection.

Secure payment environments in the cashless era
System for detecting unauthorized credit card use
A system for the discriminant analysis of transactions with highfraud risk using a fraud risk scoring model that utilizes AI(machine learning) to prevent fraudulent use by third parties.
The automatic learning of sophisticated fraudulent techniques
and the ascertaining of the latest trends at an early stage
enable the quick and highly accurate detection ofunauthorized credit card use from a huge amount oftransaction data.

Rogue device detection

A service that detects fraudulent activity on the Internet using
technology that identiﬁes every device used by the customer.
By detecting and preventing fraudulent online card
applications and the use of cards for shopping byimpersonating the cardholder, the service makes it possible
to eliminate anxiety about Internet transactions and provide
safe and secure Internet services.

Privacy Policy
https://www.saisoncard.co.jp/info/privacy-policy/ (Japanese only)

53

1

eKYC

AI-based
automation ofunauthorized
credit card use
detection

2

Fraud
prevention bymeans of device
identiﬁcation
technology

3

Prevention ofidentity fraud bymeans of facerecognition
technology

LIQUID eKYC is a new online identity
veriﬁcation service, provided by
Liquid Inc., which possesses identity
veriﬁcation technology based on
biometric authentication. The
service completes the application
procedure online simply by taking a
picture of the identity veriﬁcation
documents and face image.
Combining LIQUID eKYC with
Saison Connect, which links our card
information to API, enables its
immediate use on smartphones(mobile payments) after an
examination is completed without
waiting for the receipt of a plastic
card.

Sustainability

Information/Cybersecurity

Basic Approach

Relevant stakeholders
Customers

Partners

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

PolicyInformation/Cybersecurity initiatives

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

In systems such as our shared core system that handles important data such as customer
credit card information, we comply with PCI DSS, the global security standard in the credit
card industry.
Furthermore, in terms of security measures, we are implementing measures to block
unauthorized access from the outside through entrance measures based on network
multiple defenses.
We also periodically conduct system risk assessments to detect and improvesystem vulnerabilities. As a response to cyberattacks such as targeted attack e-mails, we
continuously take measures to prepare for cyberattacks, such as conducting simulated
e-mail drills to improve employee awareness of information security.
To further heighten the level of security in the future, we have formulated a road map
classified into four themes. We use this road map to examine and implement various
security measures.

Click here for details on information security
https://corporate.saisoncard.co.jp/en/sustainability/esg2/esg_policy.html#esg2-03

Management systems
We have established and comply with various regulations related to information security,
including information management regulations, and continuously review our internal
regulations to heighten our security level. Furthermore, we appoint the head of eachdepartment as a compliance officer and build and promote a system for promoting
information security.
To respond to cyberattack incidents, we have set up a Cybersecurity Response Teamas an organization within the Crisis Management Committee under the supervision of
the Board of Directors. The Team formulates response policies and procedures basedon collecting information on security vulnerabilities, and on collecting information andmonitoring cyberattacks and other forms of trouble. The Team is working to establish
systems that minimize the damage caused by an incident and then restore the situation.

Cybersecurity Diagram
Board of Directors
Appointment/delegation/supervision

Representative Director

Advice, etc.

Delegation/supervision

Departments

Appointment/delegation/supervision

Crisis Management Committee
Cybersecurity Response Team
Validity guarantee

Timelyreporting ofmanagement risks
andﬁnancial
conditions

General Affairs Dept., CSDX Development Dept., etc.

54

Theme 1

Continuous monitoring and response

Theme 2

Response to environmental changes
such as migration to the cloud

Theme 3Operation management when an incident occurs

Theme 4

Construction of a comprehensive security system

Sustainability

Coexistence with Local Communities

Basic Approach

Related Stakeholders
Regions/
communities

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

Issuing social bonds with the aim of solving global
social issues

Promoting next-generation education and financial
education through industry-academia collaboration

In June 2022, we issued Credit Saison Co., Ltd. No. 91
Unsecured Straight Bonds (with Inter-bond Pari Passu Clause;
hereinafter, “the Bonds”). These bonds are social bonds thatare issued by corporations, local governments, and otherorganizations to raise funds for projects aimed at providing
solutions to social issues. The Bonds are offered only toinstitutional investors and are Credit Saison’s first social bonds.
The funds raised through the issue of the Bonds will beapplied to the following two projects: 1) capital increase orloans for Kisetsu Saison Finance (India) Pvt. Ltd., an Indiansubsidiary of Credit Saison, and 2) loans to Saison Capital Pte.
Ltd., a Singaporean subsidiary of Credit Saison. The purpose of
the two projects is to provide solutions to the social challenges
confronted by the MSMEs or individuals within underserved
segments in emerging countries such as India and those inSoutheast Asia that have difficulty obtaining sufficient financial
services.
Under our management philosophy as a leading-edge
service company, Credit Saison aims to fulfill its social
responsibilities to all stakeholders. The issue of the Bonds wasmade under the theme of financial inclusion and the realizationof diversification of fundraising. Credit Saison will continue toaccelerate its global business development from Asia to theworld stage and contribute to social development and thesolution of social challenges.

We actively provide opportunities for next-generation educationand financial education to children who will lead the future.
One example is the financial education program “School Visit:
SAISON TEACHER,” which we have been conducting since
March 2019. Through this program, we have been providing onsite classes at schools nationwide so that children who will leadthe next generation can acquire correct financial knowledge
and become independent consumers. SAISON TEACHER is
held for all grades of junior high school and high school. Classes
are taught by Credit Saison employees who possess extensive
financial knowledge and know-how, thereby enabling children
to make appropriate decisions in the
future. We have already held the class
200 times since the program’s inception,
and about 9,900 students have taken theclasses*. SAISON TEACHER is free, andclasses can be conducted online as well Students participate in“School Visit: SAISON
as on-site.
TEACHER”
In August 2022, we signed an
educational partnership agreement with Reitaku University,
which is part of the Hiroike Institute. We utilize resources suchas human resources, knowledge, and information possessedby both universities and corporations, such as participationand cooperation by our employees in open college courses
and project planning/management
experiences. We aim to further improveindustry-academia collaboration interms of contributing to the local
economy and developing human
University President
resources that contribute to said
Tokunaga (left) andManaging Executive Officer
development.
Okamoto*As of the end of August 2022

55

Aiming for humanitarian assistance in Ukraine,
Started donations through point exchanges andcard payments
From March 2022, to provide support for the serious
humanitarian crisis currently occurring in Ukraine, in addition toaccepting donations through our point program Eikyufumetsu
Points for Saison Card members, we have started accepting
donations via payments by credit cards eligible for Eikyufumetsu
Points on the general online store “STOREE SAISON.” Donations
can be made using Saison Cards eligible for Eikyufumetsu
Points, and donations are accepted in units of ¥500 (100Eikyufumetsu Points = ¥500 donation). As a result of continuing
until July 31, 2022, we received ¥52.54 million in donations. In
September 2022, we reported the
donation amount directly to theAmbassador Extraordinary andPlenipotentiary of Ukraine to Japan
Sergiy Korsunsky at the Ukrainian
Embassy in Japan.

Fundraiser for Ukraine

Tax compliance
We comply with the tax-related laws and regulations of
the countries and regions in which we operate and pay
taxes appropriately. We will work to further improve our tax
governance in the future. Please see the following link for
information on our tax policy.
https://corporate.saisoncard.co.jp/en/sustainability/esg2/esg_policy.
html#esg2-08

Sustainability

Three-way Discussion on Sustainability Governance
was the background to the establishment of
Q Whatthe Sustainability Promotion Committee?
Mizuno: For example, our operation center is also entrusted with other companies’
information centers, so even if there is a typhoon in the Tokyo metropolitan area that makes
it difficult to go to work, if the operation center in the Kansai region can operate as usual, we
can answer inquiries from customers and companies. Not confined to environmental issues,
it can be said that a range of social issues, such as the spread of COVID-19 infections, have
had an extremely significant impact on our business. The safety and health managementof our employees are, of course, inextricably linked to business. To make our businesssustainable, we believe that tackling these issues head-on will lead to closer cooperation
not only with our customers but also with other stakeholders, including our employees. We
would like to have a broad and wide-ranging discussion on issues related to stakeholders. It
was with this in mind that we established the Sustainability Promotion Committee.

you look back at the Sustainability Promotion Committee in FY2021,
Q Whenwhat were the highlight discussions and developments?
Sustainability Promotion
Committee Member

Sustainability Promotion
Committee Chairperson

Sustainability Promotion
Committee Member

Kazue Yasumori

Katsumi Mizuno

Nana Otsuka

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

Representative, Executive
President and COO

Mizuno: The committee has formed two task forces, the Climate Change Strategy
Promotion Working Group (WG) and the DE&I (Diversity, Equity, & Inclusion) Promotion WG.
Regarding diversity, we have been working to promote the active participation of
women since the 1980s and, rather than evaluating people based on their educational
background, gender, and age, it has become commonplace to judge people based on
their abilities. For example, this year, a 32-year-old employee became the president of a
joint venture called ReSAISON, which is working on the realization of a circular economy.
Also, in the second half of FY2022, three people from other companies became generalmanagers. This is because we believe it is important to create new services based ondiverse values. I believe that these ideas are hard-wired in Credit Saison’s DNA.
In addition, we have been utilizing CO2 emissions visualization technology provided
by Doconomy AB, a Swedish company, since June 2022. We have also started issuing
SAISON CARD Digital for becoz, which can visualize CO2 emissions based on card usage
data, with the theme of climate change countermeasures, and these developments arosefrom discussions in our committee. I think it will take time to become profitable, but it isimportant to understand changes in customers who are greatly interested in environmental
issues and that we act accordingly.

Outside Director

In aiming to “transform ourselves into acomprehensive life services group,” we would liketo discuss stakeholder-related matters broadly andcomprehensively while passing on our corporate
DNA of “overturning common sense.”56

Three-way Discussion on Sustainability Governancedirector, what I am trying to do is talk from the perspective of comparisons with othercompanies. I feel that the committee is a lively forum, with plenty of comments andquestions from internal committee members in each area of responsibility.

Yasumori: Seven Sustainability Promotion Committee meetings were held in FY2021. There
were many discussions on information disclosure in line with the TCFD recommendations,and we were able to accumulate knowledge from many experts on environmental issues.
In the years to come, I hope that our employees will take the Company’s approach to theenvironment, which has been decided through these discussions, as their own.
Otsuka: I believe that Credit Saison’s business is of a highly social nature. My parents once
told me to flee in the event of an earthquake or other disaster, taking my credit card with
me. A credit card guarantees your identity, so you can stay overnight and purchase food.
From this point of view, the social nature of the Company itself is high. I therefore thinkthat the areas that will need further strengthening in the years ahead will probably be theenvironment and DE&I.
In this year’s Climate Change
Strategy Promotion WG, we collaborated
with Wastebox. To be honest, I was
surprised that the TCFD information
disclosure was promoted in such a shortperiod of time, overcoming differences of
opinion. The recognition of Akagi Nature
Park, which conducts wonderful activities,
is also limited, and there was the problem
that the current TCFD standards could not
be evaluated well. Nevertheless, I think it
was a fruitful result that we were able toshare with everyone and have a positive
discussion on how to change things.

Q What are the distinctive features of Credit Saison’s sustainability?

Mizuno: I believe that the most important aspect of sustainability for the Company is totake on challenges that defy conventional assumptions to help resolve the problems of ourcustomers in a customer-focused manner. In the 1980s and 1990s, when the Company was
founded, Credit Saison overturned the regulation concept that credit cards were a payment
tool for male managers and above at listed companies. Issuing credit cards to women
who are active consumers was a credit revolution. Currently, in our overseas business,
we are adhering to the principle of good nature, while adhering to certain standards,
and providing funds and credit to people who do not have bank accounts to cover theirliving expenses. This is extremely difficult, but facing difficulties is a manifestation of Credit
Saison’s social nature and is truly our “founding business.”
Yasumori: Sustainability is meaningless if it merely takes place in a box called a company.
I believe that it is all about ensuring that our employees are healthy both physically andmentally and that they want to continue working for us.
In addition, considering how much our credit cards can help our customers in the eventof a disaster, we believe that, for example, it is necessary to continue to make decisions
on our own, such as the temporary suspension of collection of receivables, before being
instructed to by the government.
Otsuka: Speaking from the perspective of diversity, Credit Saison has several uniqueemployees, and the Company is supportive of their outside activities. There are not many
companies that find employees with edgy personalities interesting and listen to them. I
think that Credit Saison’s corporate culture, which emphasizes individuality, is unique andgood from an outside perspective.

kind of people are participating as members of the Sustainability Promotion
Q WhatCommittee? Also, please tell us about their roles.
Mizuno: I serve as the chairperson of the committee, and the committee is composedof members, men and women, who possess both internal and external perspectives, andglobal perspectives, so discussions are held from diverse perspectives. As one of themembers, my priority is to listen to what the others have to say.
Otsuka: A director (and senior managing executive officer) from Singapore participatesin the committee online, which is rare among other companies. Diversity is, of course,
important, but it is also important to secure a perspective from overseas. As an outside57

Three-way Discussion on Sustainability Governance

Q What are the issues for the future and your plans for Sustainability Promotion

Committee activities? Also, do you have any messages you would like to convey toyour stakeholders?

Yasumori: At a Sustainability Promotion Committee meeting, we discussed the results ofa survey that showed that about 80% of new female employees join the Company with
the intention of becoming a manager, but after a few years the ratio reverses to those who
no longer want to work. The ratio of female managers in our company is just under 25%,
which is high in the financial industry, but after joining the Company, I think that leads to
the reversal and a certain sense of unease. I would like us to deepen our discussion on
measures to address these issues at next year’s committee meetings.
In addition, regarding climate change, I think the challenge for the discussions within
this committee is how to connect climate change to the work employees are doing now. To
cite one example, when a natural disaster occurs, we must enclose a letter of sympathy inthe payment reminders to customers in the affected area, and everything must be done byhand. Communicating to employees by familiar examples such as “this activity was causedby climate change,” I would like to strengthen our activities to bring home the reasons fortackling climate change. By grassroots movements in which the president himself visitseach site and ascertains the actual situation of employees, we are continuing our activities
to instill the significance of sustainability. I would like the executive officers to visit the front
lines more often and make sustainability a big movement that touches the hearts of allof our approximately 4,000 employees. I would like to take this opportunity to seek theunderstanding and cooperation of all stakeholders in this regard.

Otsuka: I too think it is important to involve all employees. It was good that many
departments were involved in the work for TCFD disclosure. In the past, many people
might have thought that environmental issues had nothing to do with their departments,
but I think it was an important step that they were able to start to have an awareness of the
problem and say that “Maybe this is an issue that will have a bearing on my work after all.”Also, people are moved by stories. If we can improve our storytelling and communicate
our sustainability initiatives, I believe that progress will be made in gaining theunderstanding of more stakeholders inside and outside the Company. I would like to ask all
our stakeholders to expect great things from Credit Saison.
Mizuno: As part of our global business development, members in Singapore have plannedand started impact investment. I would like local employees who are involved in impact
investment to talk at this committee about the financial inclusion in which the Company
should be involved, and at the same time I would like to take on new challenges.
Our employees, customers, and investors alike recognize the significance of our futureoriented existence or, in other words, we are increasingly being expected to contribute tosociety through our business while clarifying our purpose. To live up to their expectations,
we would like to move forward toward the future. I ask for the ongoing support of our
stakeholders.

58Sustainability

Corporate GovernanceOur basic view on corporate governanceTo realize our basic management policy of obtaining
the understanding and consent of our shareholders bycontinuously improving corporate value over time andcreating innovative services, the Credit Saison Groupis implementing a variety of initiatives to improve andstrengthen our corporate governance in recognition of
the enormous importance of bolstering management
supervisory functions to attain business objectives andenhance management transparency.
 or details, please see
F
our Corporate Governance Report.
https://corporate.saisoncard.co.jp/en/
sustainability/governance/pdf/governance_
report_202209EG.pdf

Matters concerning composition of
governing bodies and organization
management
Governance System
Number of directors stipulated by the Articles

Term of office for directors stipulated by the
ArticlesChairman of the Board of Directors
Number of directors (of which are outside
Directors)
Outside directors on the Board
Of outside directors, the number who are“independent directors”
Number of Audit & Supervisory Board
members stipulated by the Articles
Number of Audit & Supervisory Board
members (of which are outside Audit &Supervisory Board members)
Number of outside Audit & Supervisory Board
members who are “independent directors”

Company with
Audit & Supervisory
Board Members
25

Corporate Governance Structure
General Meeting of Shareholders
Appointment and dismissal
Appointment and dismissal
Independent Cooperation
Audit &Audit

Auditor1 yearPresident

Audit

9 (3)

Supervisory Board

Cooperation

Guidance

Appointed

Report3

Audit

Internal Audit Ofﬁce

4 (3)Monitoring

ReportAppointment/
Consultation

Report/Advice

Nomination & Remuneration Committee

Consultation, etc.

Important Committees(e.g., Risk Management Committee, Compliance Committee)

Timely report ofmanagement risk
and ﬁnancial
condition

Delegation/Supervision

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

Guarantee ofeffectiveness3

Management/Executive system
Credit Saison (the Company) has adopted the Audit &Supervisory Board (ASB) model, with ASB members, for its
corporate governance system. To ensure that we retain theconfidence of our shareholders and other investors, we strive toimprove and strengthen corporate governance by nominating
outside directors and outside ASB members. The Boardof 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 coordinating with directors, executive officers, and othersfrom the Internal Audit Office and the unit responsible for thesupervision of internal controls. Since March 2020, we havereviewed the director composition of our Board of Directors
and introduced our executive officer system, to strengthen
our corporate governance system through separation
between operational execution and management supervision.
With these changes, we aim to exercise more appropriate
management supervision functions while developing anefficient business execution system.

Representative Directors

Consultation

Sustainability
Promotion Committee

5

Board of Directors

Appointment/
Election/Delegation/
Delegation/Supervision
Supervision

Audit

Audit

Appointment and dismissal

Composition of the Directors
Outside (3)Changes in the Governance Structure

33.3%

2006 Enforcement of the Companies Act

2014 Formulation of the Stewardship Code

Independence

2015 Application of the Corporate Governance Code

2006

2015

2016

2018

Assurance of transparency forappointment/dismissal of directors
and for ofﬁcer remuneration, etc.

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

2019

2020

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

Separation ofmanagement
and execution
Nomination &Remuneration
Committee

2017

Improvement anddisclosure of Board of
Directors functions

59

Internal (6)(ratio of
Outside Directors)

2021

Male (8)Female (1)66.7% 11.1%

88.9%

Diversity(ratio of women)

2022

Nomination & Remuneration Committee
As an advisory body to the Board of Directors, the Nomination& Remuneration Committee has five members, the majority ofwhom are outside directors. The Committee is chaired by theCompany’s Representative Chairman and CEO, and its members
are appointed by resolution of the Board of Directors. The
Committee consults with the Board of Directors about mattersrelated to the appointment and dismissal of directors and theformulation of remuneration policies for directors, deliberates
them, and submits reports about such matters to the Board of
Directors.

Corporate Governance

Skill matrix of Directors, Audit & Supervisory Board Members,
and Executive Officers

Effectiveness of the Board of Directors

Credit Saison visualizes the management skills of our directors, Audit & Supervisory Board
members, and executive officers as a skill matrix. To conduct flexible management in
uncertain times, management composes members with diverse skills and expertise.
Position

Name

Representative, Chairman
Hiroshiand CEO
Rinno
Representative, Executive
KatsumiPresident and COO
MizunoRepresentative, Executive Vice Naoki
President and CHO
Takahashi
Director, Senior Managing
YoshiakiExecutive Officer
Miura
Director, Senior Managing
Kazutoshi
Executive Officer and CTO, CIO Ono
Director, Senior Managing Kosuke
Executive Officer
Mori
Naoki
Outside Director
Togashi
Nana
Outside Director
Otsuki
Hitoshi
Outside Director
YokokuraStanding Audit &HaruhisaSupervisory Board Member Kaneko
Standing Audit &MunehiroSupervisory Board Member HaradaStanding Audit &HiroakiSupervisory Board Member Igawa
Audit & Supervisory Board Chie
MemberKasahara
TatsunariManaging Executive Officer Okamoto
Managing Executive Officer Shingo
Baba
and CFO
ShunjiManaging Executive Officer Ashikaga
Kazue
Managing Executive Officer Yasumori
Naoki
Managing Executive Officer Nakayama
MasakiManaging Executive Officer Negishi
YasuyukiExecutive Officer
Isobe
Kaori
Executive Officer
ShimadaRyuki
Executive Officer
TabataYuichi
Executive Officer
Kawahara
Naoki
Executive Officer
MisakaCorporate
management Global
●

●

●

●

●

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

●
●

●

●

●

●

●

●
●

●

●

●

●

●

●

●

●

●

●

●
●
●

●

●

●

●
●

●
●

●
●

●

●

About Director remuneration

●

●
●

●

●

●

●

●

■ Basic policy on Director remuneration●

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

●
●

●

●

●

●
●

●
●

●
●
●

●

●

●

●

●
●

●

We have confirmed that the Board of Directors is operating at a generally properlevel and that the effectiveness of the Board of Directors has been secured.
When discussing the direction in which Credit Saison should proceed(formulating the Medium-term Management Plan and corporate strategy), bycreating opportunities for executive officers to participate in discussions atmanagement meetings attended by directors and Audit & Supervisory Board
members, we seek to create diverse opinions and cultivate recognition for theCompany’s direction. By providing advance explanations (including individual
projects) and including the details of discussions in the preliminary deliberations of
the Executive Officers Committee in the composition of materials for the Board of
Directors meetings, we share various opinions within our Company and strive toenhance information, thereby enabling the Board of Directors to make more
substantive decisions.
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.

●

●

●

●

●

●

Summary ofAssessment
Results

●

●

●

●

●

●

●

●

●

●
●

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

●

●

●

Assessment
Items

ESG
●

●

●

●
●

●

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
and Audit & Supervisory Board members (including retirees before the expiration of
their term of office) elected in the previous year. A questionnaire is given to eachdirector and Audit & Supervisory Board member covering the following items, with
the Board of Directors conducting discussions based on feedback from the results.

●

●
●

●

Notes:
1. The data presented in this table do not reflect all the skills possessed by the Board of Directors, Audit & Supervisory Board
members, and executive officers. Up to six of the major skills and other attributes are marked.
2. To transform into a comprehensive life services group, we are placing particular focus on global, digital/IT, and new
businesses/M&A skills for our business strategy.

60

Corporate Governance■ Remuneration structure

to the acquisition of restricted shares. As a measure for the Chairman of the Board to properly
exercise this authority, the Nomination & Remuneration Committee has established standards for the
remuneration received by directors. Based on these standards, the Chairman of the Board makes
decisions within the scope delegated by the Board of Directors.
In determining the actual issued amount of remuneration for individual directors in FY2021,
the Board of Directors determined that it would be possible to make an appropriate evaluation
while taking a bird’s-eye view of the performance of the Company as a whole. Representative,
Chairman and CEO Hiroshi Rinno will be entrusted with the determination of the amount of basic
remuneration for each director and the allocation amount of monetary remuneration claims related
to the acquisition of restricted stock. He will also be entrusted with the evaluation allocation of
performance-based remuneration (bonuses) for each director.

The remuneration structure for executive directors is composed of basic remuneration, performancebased remuneration (bonus), and restricted stock compensation. For outside directors and Audit &Supervisory Board members, remuneration is basic remuneration only.
Furthermore, the Nomination & Remuneration Committee considers the ratio of remuneration bytype for executive directors based on the remuneration levels of companies, industries, etc., of similar
size to Credit Saison. The ratio of each type of remuneration, etc., is based on a 7:2:1 ratio of basic
remuneration : performance-based remuneration, etc. (bonuses) : non-monetary remuneration, etc.
(restricted stock compensation).
Eligible officers

Executive
directors

Outside directors
ASB members

Basic remuneration(monetary remuneration)

Performance-based remuneration,etc. (bonuses)
Amount calculated by multiplying
Amount calculated as fixed monthly the amount of the basic bonus byremuneration after setting annual position, etc., considering the
remuneration levels for eachretention rate, etc., by the
position and considering theperformance-based coefficient*2 forquantitative indicators*1 and thepresence or absence ofperformance-based coefficient for
representation rights, etc.
qualitative evaluation*3
Fixed remuneration only−
Fixed remuneration only*5−

Non-monetary remuneration, etc.

■ Total amount of remuneration, etc., for each officer category, total amount of

Amount calculated as restricted stockcompensation*4 after setting annual
remuneration levels for each positionand considering the presence orabsence of representation rights, etc.

remuneration, etc., by type, and number of eligible officers

The total amount of remuneration, etc., for each officer category of the Company, the total
amount of remuneration, etc., by type, and the number of eligible officers in FY2021 are as
follows.

−−*1 Quantitative indicators: Non-consolidated ordinary income (excluding temporary factors, etc.) growth rate and planachievement rate.
*2 Performance-based coefficient: Based on a 50:50 ratio between the quantitative performance indicator growth rate and the planachievement rate, while comprehensively considering the occurrence of large-scale disasters, pandemics, etc.
*3 Qualitative evaluation: This is the result of evaluating each degree of contribution to improving the Company’s businessperformance and corporate value by all directors, including the relevant director.
*4 Restricted stock compensation: Please refer to the Securities Report for details of the conditions.
*5 Audit & Supervisory Board member remuneration: The amount of remuneration for each Audit & Supervisory Board member isdetermined through deliberations by the Audit & Supervisory Board within the total amount resolved at the General Meeting of
Shareholders.

Set according to position
and management responsibility level

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

Business performance for the ﬁscal year
and degree of contribution to business performance

Total remuneration(Millions of yen)

Performance-based remuneration, etc.

Non-monetary remuneration, etc.

Number ofpeopleDirectors (excluding
outside directors)
ASB members (excluding
outside ASB members)

Basic remuneration

293

196

70

27

6

16

16

−

−

1

24

24

−

−

3

Outside ASB members

36

36

−

−

3

Outside directors

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. The numbers above include the eight directors (of which, one outside director) who retired.
3. Performance-based remuneration, etc., lists the planned payment amount of performance-based remuneration (bonuses) for thecurrent fiscal year.
4. The content of non-monetary remuneration, etc., is the common stock of the Company, and the conditions for allotment are as
described in i through vi on page 58.
5. As of March 31, 2021, there were eight directors and four Audit & Supervisory Board members.

Remuneration coefficient of executive directors
Basic remuneration[approx. 70%]

Total amount of remuneration by type (Millions of yen)Classification

Non-monetary
remuneration,etc.
[approx. 10%]

Restricted Stock
Compensation

Cross-shareholdings

In calculating the planned amount of performance-based remuneration (bonuses) for FY2021,
we comprehensively considered the impact of factors such as COVID-19 and set the expected
performance-based coefficient for quantitative indicators at 100% and the expected performancebased coefficient for qualitative indicators of each director to 80%–120%.
The amount of remuneration for each individual can be entrusted to the Chairman of the Board
based on a resolution of the Board of Directors. The scope or remuneration is the amount of basic
remuneration for each director, the evaluation allocation of performance-based remuneration(bonuses) for each director, and the allocated amount of monetary remuneration claims related

Regarding cross-shareholdings, Credit Saison only holds shares of companies that are transaction(investment) partners necessary for our Group’s business strategy and that are rational to hold.
When verifying the rationality of holdings, we properly ascertain the risks and costs associatedwith holdings and the returns from holdings, including from a medium- to long-term perspective,
and comprehensively verify profitability and other matters at the Board of Directors and othercommittees. As a result of verification, while considering factors such as the impact of the market, we
promptly sell stocks that are judged to have little rationality to hold.

61

Corporate GovernanceConsolidated net assets ratio for cross-shareholdings（%）
20

declaration on how the Company should conduct its activities and organized the ways inwhich officers and employees should conduct themselves as standards of conduct. As afurther means of strengthening our compliance system, we have disclosed this declarationand standards of conduct on the Company’s employee website, inform employees about
our compliance help desk, and hold compliance training sessions to ensure rigorous
adherence to these standards.

20.0
16.6

15

10.0

10

11.6

10.4

Risk management system/compliance system

50Board of Directors
2017

2018

2019

2020

2021

Delegation(FY)

Overall

Determination ofbasic policy

Overall

Drafting/proposal of basic
policyMonitoring of response status

Strengthening the compliance and risk management systems
To achieve sustainable improvement of corporate value, we position the enhancementof corporate governance as a key management initiative. To this end, we are improving
internal control systems, strengthening risk management systems, ensuring thoroughcompliance, and creating mechanisms based on diversity, equity, and inclusion.
In establishing internal control systems, the Board of Directors decides on basic
policies for such, with the aim of building systems that ensure appropriate and efficient
operations mainly in the Corporate Planning Department, which is the unit responsible foroverseeing internal controls. As for internal controls on financial reports, the Corporate Risk
Management Department leads the way in promoting the establishment of internal controls
in the Company and at our consolidated Group companies, while the Internal Audit Officecarries out independent monitoring.
Regarding risk management, the Risk Management Committee and the Corporate
Risk Management Department lead the way in preventing risks from materializing andin working to minimize the effects on the Company when they do arise. Accordingly, we
strive to maintain our risk management framework by holding regular internal training
sessions for employees in accordance 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 Officeof the Corporate Planning Department leads the way in monitoring business execution atGroup 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 assigning compliance responsibilities to employees in each department, we issued a

Identiﬁcation of risk
Preventive Analysis/evaluation
measures Review of measures
Implementation/monitoring

Risk Management Committee/Compliance Committee
ReportReportGuidance

Guidance

Corporate Risk Management Department(Committee Secretariat)
ReportGuidance

Departments in charge of risk(head of each department)
ReportGuidance

Departments(head of each department)

Cooperation
Cooperation

Group companies

Dialogue with shareholders and investors (IR activities)
Credit Saison endeavors to convey corporate information to all shareholders and investors
in a prompt, fair, and easy-to-understand manner, and actively discloses business results,financial conditions, strategies, and other matters that the Company believes to be effective
in providing a better understanding of the Company. We also actively disclose sustainability
initiatives that can only be implemented by Credit Saison aimed at achieving a sustainable
society. In addition to continuing to participate in results briefings, conferences hosted by
securities companies, and briefings for individual
Results of IR Activities in FY2021
investors, we are actively engaging in dialogue
with shareholders and investors, such as by
Financial Results Briefing
2
holding business strategy briefings on our global
Securities company organized2business and CSDX strategy, which attracted a lot
conferencesof attention during discussions.
Individual meetings with
The Company will continue to promote IR
sell-side analysts/institutional
196
activities with an awareness of shareholder andinvestors
investor needs.
Investor briefing for individuals

621Sustainability

Messages from Outside Directors
The Roles of Outside Directors and Their Efforts in Further Strengthening GovernanceOutside Director (Independent)
Representative Director Partner,
TG Partners Inc.
Director, NAGAHORICORPORATION
Trustee, Japan Association of
Corporate Executives

Naoki Togashi

I can draw on more than 40 years of experience and knowledge
that have included the monitoring of risk regulation and financial
institution management at the Bank of Japan, a wide range ofconsulting on strategy, governance, and IT for various domestic andforeign financial companies, and serving as an outside director at a
global financial institution. I have proactively made proposals froma “governance in conformity with business strategy” perspectiveat venues that have included meetings of boards of directors andvarious committee meetings.
At the present time, Credit Saison is stepping on the accelerator
toward growth with the aim of becoming a “comprehensive life
services group.” Its activities are revolving around the evolution of
its card payment business, the development of a finance businessthat meets the needs of the times, and the development of an Asiacentric global finance and payment business.
In cases such as this, I recognize three areas as forming
important issues in terms of governance: the effective allocation andproper management of risk capital; the enhancement of humancapital, including external recruitment, integrated management
and evaluation, and the verification of the appropriateness of the
remuneration system; and the increased sophistication of all forms ofrisk management in overseas business.
I will monitor business execution from these three perspectives,
while exchanging opinions more closely than ever not only withthe members of the Board of Directors and the Nomination
and Remuneration Committee but also with each operational
department and Audit & Supervisory Board member.

Outside Director (Independent)
Professor, Nagoya University ofCommerce and Business Graduate
SchoolAudit & Supervisory Board Member,
Tokio Marine Holdings, Inc.
Trustee, Nishogakusha
Director, Mochida PharmaceuticalCo., Ltd.
Senior Fellow, Pictet AssetManagement (Japan) Ltd.

Nana Otsuki

Credit Saison’s Board of Directors is made up of officers fromextremely diverse backgrounds, from both inside and outside
the Company. The discussions often get heated, merely because
there are so many different points of view and ways of thinking.
I don’t think I have ever attended a Board meeting where every
agenda item has ended with a simple chorus of “No objection.”
As I was originally an analyst, I am used to putting questions
to companies. By asking multifaceted questions, I try to act as acatalyst for such lively discussions. For executive officers, it mightsometimes take them time to do some research. However, I do
feel that unexpected risks can come to light through that kind ofprocess.
The problems will arise from now on. People’s payment
methods and lifestyles are undergoing drastic changes, and theCompany is also being required to boldly take on challenges
in uncharted fields. How can the Board of Directors, including
myself, encourage, oversee, and sometimes advise on thesekinds of challenges? Bearing in mind that this is a criticaljuncture, I would like to contribute to the creation of the best
business model in Credit Saison’s history by engaging in
discussions that are more heated than ever before.

63

Outside Director (Independent)
Attorney at Law of Waseda Legal
Commons, LPC (Partner)
Audit & Supervisory Board
Member, ITO EN, LTD.

Hitoshi Yokokura
The Company has started its new Medium-term Management
Plan from FY2022. In aiming to achieve further growth bytransforming each business portfolio, the Company is making
headway by strengthening its management base, such as thedigital technology, branding, and human resources that will
underpin that aim. While looking at the direction at which theCompany is aiming, active discussions are held at Board of
Directors’ meetings with an awareness of how each topic is
positioned in relation to strategies, medium-term management
plans, budgets, etc., and how the topic will be developed.
We outside directors receive detailed explanations about
the proposals in advance, but at that time we work out any
unclarified issues from each of our standpoints and holdfrank discussions with the executives of each department. Asa lawyer and certified public accountant, I have been seeing
many companies. What I have cultivated there are the skills
and mindset to see things from perspectives that include
what is truly important from among the many facts, whether
it is supported by high-quality evidence and a proper review
process has been followed, and whether the content of the
discussion is ethical. I would like to continue to engage in further
strengthening governance and contribute to the sound andsustainable growth of Credit Saison.

Sustainability

Board of Directors/Audit & Supervisory Board Members/Executive Officers (As of October 1, 2022)
Board of Directors
Hiroshi Rinno

Born in 1942

Representative, Chairman and CEO
Corporate strategy, branding,comprehensive life services group strategy
Mar. 1982
Apr. 1983
June 2000
Mar. 2019

Joined Credit Saison Co., Ltd. General Manager,
Credit Business Planning Dept.
Director
President and CEO
Representative, Chairman and CEO

Naoki Takahashi

Joined Credit Saison Co., Ltd. Advisor
Managing Director
Representative, Executive Vice President
Representative, Executive Vice President and CHO

Kazutoshi Ono

Born in 1976

Director, Senior Managing Executive Officer and
CTO, CIO
Group-wide promotions of DX strategies,
Why SAISON strategy,
Head of CSDX Development Dept.,
Customer Success Division,
In charge of Full Life Business Dept.,
General Manager, CSDX Development Dept.,
Technology Center
Mar. 2019
June 2019
Mar. 2020
June 2021

Joined Credit Saison Co., Ltd. as CTO,
General Manager, Technology Center
Director
Director, Managing Executive Officer
Director, Senior Managing Executive Officer and
CTO, CIO

Nana Otsuki

Born in 1964

Outside Director (Independent)
June 2017
Apr. 2018
June 2018
Sept. 2019
June 2021
Sept. 2022
Front row (from left): Katsumi Mizuno, Hiroshi Rinno, Naoki Takahashi
Middle row (from left): Kosuke Mori, Yoshiaki Miura, Kazutoshi Ono
Back row (from left): Nana Otsuki, Naoki Togashi, Hitoshi Yokokura

64

Born in 1969

Representative, Executive President and COO
Overall management execution, global strategy
Head of Branding Strategy Dept.,
Corporate Planning Dept.,
Payment Business Division
Apr. 1992
June 2013
June 2020
Mar. 2021

Joined Credit Saison Co., Ltd.
Director
Director, Senior Managing Executive Officer
Representative, Executive President and COO

Born in 1950

Representative, Executive Vice President and CHO
Promotions of strategies, new business management,
Head of Audit Office, Finance Division
Apr. 2005
June 2005
Mar. 2016
Mar. 2020

Katsumi Mizuno

Outside Director, Credit Saison Co., Ltd.
Professor, Nagoya University of Commerce andBusiness Graduate School
Audit and Supervisory Board Member,
Tokio Marine Holdings, Inc.
Trustee, Nishogakusha
Director, Mochida Pharmaceutical Co., Ltd.
Senior Fellow, Pictet Asset Management (Japan) Ltd.

Yoshiaki Miura

Born in 1966

Director, Senior Managing Executive Officer
Operation business management
Head of Credit Division
Apr. 1990
June 2016
June 2020

Joined Credit Saison Co., Ltd.
Director
Director, Senior Managing Executive Officer

Kosuke Mori

Born in 1977

Director, Senior Managing Executive Officer
Head of Global Business Division
July 2013
June 2022

Joined Credit Saison Co., Ltd.
Director, Senior Managing Executive Officer

Naoki Togashi

Born in 1960

Outside Director (Independent)
Apr. 2007
June 2014
June 2017
June 2022

Trustee, Japan Association of Corporate Executives
Director, NAGAHORI CORPORATION
Outside Director, Credit Saison Co., Ltd.
Representative Director Partner, TG Partners Inc.

Hitoshi Yokokura

Born in 1969

Outside Director (Independent)
Mar. 1995
Dec. 2007
Apr. 2014
June 2020
July 2021

Registered as certified public accountant
Admitted to Japanese Bar, Tokyo Bar Association
Attorney at law of Waseda Legal Commons,
LPC (Partner)
Outside Director, Credit Saison Co., Ltd.
Audit & Supervisory Board Member, ITO EN, LTD.

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

Audit & Supervisory Board Members
Haruhisa Kaneko

Born in 1956

Standing Audit & Supervisory
Board Member
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.

Chie Kasahara

Munehiro Harada

Born in 1954

Hiroaki Igawa

Born in 1958

Standing Audit & Supervisory
Board Member (Outside/
Independent)

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.

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

Born in 1968

Audit & Supervisory Board
Member (Outside/Independent)
Apr. 2000 Registered as an attorney at law, Dai-Ichi Tokyo Bar Association
June 2015 Audit & Supervisory Board Member (Outside), Credit Saison
Co., Ltd.

From left: Hiroaki Igawa, Chie Kasahara, Haruhisa Kaneko,
Munehiro HaradaJan. 2019 Senior Partner, Atsumi & Partners (Present Atsumi & Sakai)Dec. 2020 Audit & Supervisory Board Member of MTI Ltd.
June 2022 Director (Audit Committee Member) of Achilles Corporation

Executive Officers
Tatsunari Okamoto Born in 1967

Shingo Baba

Managing Executive Officer
Head of General Affairs Dept.,
In charge of Leasing Business Dept.,
MF Business Development Dept.

Managing Executive Officer and CFO
Financial & capital strategy, IR, M&A
Head of Public Relations Office,Corporate Risk Management Dept.,
Treasury & Accounting Dept.

Kazue Yasumori

Born in 1973

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

Yasuyuki Isobe

Born in 1969

Executive Officer
Collection & Research Businessstrategy
General Manager, Credit Division

Yuichi Kawahara

Born in 1975

Executive Officer
General Manager, Customer
Success Division,
Digital Marketing Dept.
Front row (from left): Kazue Yasumori, Shunji Ashikaga, Tatsunari Okamoto, Shingo Baba
Middle row (from left): Kaori Shimada, Yuichi Kawahara, Yasuyuki Isobe, Naoki Nakayama
Back row (from left): Masaki Negishi, Ryuki Tabata, Naoki Misaka

65

Naoki Nakayama

Born in 1971

Born in 1965

Managing Executive Officer
General Manager,
Finance Division

Kaori Shimada

Born in 1966

Executive Officer
Head of CS Planning Dept., In
charge of New Business
Development Dept., General
Manager, CS Planning Dept.

Naoki Misaka

Born in 1975

Executive Officer
In charge of Strategic Planning
Dept.,
General Manager,
Strategic Planning Dept.

Shunji Ashikaga

Born in 1971

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

Masaki Negishi

Born in 1972

Managing Executive Officer
General Manager, Global Business
Division, In charge of Corporate
Planning Dept., Processing Sales
Dept., Processing Planning Dept.

Ryuki Tabata

Born in 1967

Executive Officer
Credit card joint ventures affairs
management
General Manager, Payment
Business Division, In charge ofProcessing Development Dept.,
General Manager, Card Joint
Venture Planning Dept.

Data Section

11-Year Summary of Selected Financial Data
JGAAP*1/IFRS*2

FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019(Millions of yen)

FY2020

FY2021

Financial Data
Consolidated
Operating revenues/Net revenue

244,009244,405

247,577

259,076

269,919

278,944

292,183

304,855

311,410282,625

299,017

Selling, general and administrative expenses

192,184

187,170

197,852

206,192

221,553

236,661

241,740

220,974

236,910202,380

222,541

Impairment losses on financial assets
For the year

̶

̶

̶

̶

̶

̶

̶

34,08839,376

31,867

24,575

Financial costs

19,95814,922

13,38812,722

11,772

11,069

9,671

9,878

10,471

11,266

11,461

Operating income

31,86542,31236,33640,161

36,59331,213

40,771̶̶̶̶

Ordinary income/Business profit

38,59053,214

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

52,336

Net income attributable to owners of the parent/
Profit attributable to owners of the parent
At year-end

Per share data
(yen)

9,453

32,77025,552

12,62826,16342,25338,32930,51722,86336,13235,375

Total equity

355,727

394,868

422,829447,082

418,988446,882

480,669

491,741

485,476

532,057

563,738

Total assets

2,155,906

2,141,802

2,285,943

2,373,299

2,550,990

2,720,051

2,940,022

3,212,465

3,357,229

3,409,247

3,610,778

Interest-bearing debt

1,409,802

1,359,856

1,468,740

1,557,836

1,729,066

1,857,477

1,957,244

2,203,818

2,413,565

2,429,488

2,569,040

51

178

139

69

147

259

235

187

143

231

226

1,921

2,132

2,283

2,424

2,564

2,725

2,933

3,006

3,102

3,397

3,598

2.7

8.8

6.3

2.9

6.1

9.8

8.3

6.2

4.7

7.1

6.5

0.4

1.5

1.2

0.5

1.1

1.6

1.4

1.0

0.7

1.1

1.0

16.4

18.3

18.3

18.8

16.4

16.4

16.3

15.3

14.4

15.6

15.6

Net income per share/Basic net income per
share
Equity per share/Equity attributable toowners of the parent per share

Return on equity (ROE)
Key financial ratios
Return on assets (ROA)(%)
Equity ratio
Non-Consolidated

For the year

At year-end

Operating revenues

210,207204,121205,873219,336

228,713238,637

249,865

259,018

268,020

251,307

252,416

Selling, general and administrative expenses

153,505

149,844

160,927

169,899

186,492

203,038

207,093

215,726

235,794

208,269

219,371

Financial costs

18,80916,882

15,11914,066

12,62011,282

9,872

9,748

10,535

11,53011,381

Operating income

37,89337,39429,82635,37029,59924,31632,90033,543

21,69031,507

21,663

Ordinary income

41,001

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

39,634

28,34838,02630,421

Net income

5,613

24,147

18,637

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

29,931

21,909Total equity

322,502349,202367,808

388,470

359,428

374,477

396,831407,533

404,809441,683

456,739

Total assets

2,059,435

2,051,908

2,200,459

2,287,986

2,468,797

2,623,644

2,831,296

3,107,284

3,210,925

3,280,302

3,444,915

Interest-bearing debt

1,368,154

1,337,201

1,457,001

1,551,189

1,725,891

1,852,551

1,953,740

2,202,839

2,378,701

2,413,154

2,536,247

1.8

7.2

5.2

3.0

6.8

5.7

5.8

6.4

8.2

7.1

4.9

0.3

1.2

0.9

0.5

1.1

0.8

0.8

0.9

1.1

0.9

0.7

15.7

17.0

16.7

17.0

14.6

14.3

14.0

13.1

12.6

13.5

13.3

3,402,494

3,547,050

3,852,980

4,089,389

4,258,284

4,476,608

4,683,038

4,788,537

4,946,908

4,500,366

4,823,174

266,904

260,089

264,092

277,025

267,723

253,837

248,156

242,980

237,555

155,004

160,622

2,112,431

2,166,062

2,303,998

2,434,824

2,522,242

2,671,710

2,873,183

3,014,831

2,985,255

2,609,412

2,737,512

Lease business total

96,852

105,356

114,694

106,801

106,000

108,101

114,569

115,589

127,178

114,885

113,159

Credit guarantee

92,837

115,297

126,281

137,335

150,101

159,914

131,922

114,277

101,51070,28384,586

Real estate mortgage loans

11,144

11,571

46,78050,45982,420125,629

160,762

207,779

175,621

141,698

124,417

Other (finance business)

49,604

48,20175,96980,633

114,043

180,286

241,949

287,830

341,131322,366

332,180

Other

27,62528,04033,63337,73737,90735,88332,11927,35130,26026,696

26,7886,059,891

6,281,666

6,818,427

7,214,203

7,538,720

8,011,968

8,485,698

8,799,174

8,945,420

7,940,715

8,402,442

Return on equity (ROE)

Key financial ratios
Return on assets (ROA)(%)
Equity ratio
Credit card business
Credit card cash advanceBusiness agency
Transaction
volumeTotal volume of new contracts*1 Japanese standards were applied until FY2017.

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

66

Data Section

Segment Highlights/5-Year Non-financial Data (As of March 31, 2022)
JGAAP*1/IFRS*2*3(Millions of yen)

FY2017FY2018FY2019FY2020

FY2021

Payment Segment

220,320

228,518

232,441

209,130

211,979

Lease Segment

12,885

12,586

12,26912,29011,837

Finance Segment

35,41739,231

43,112

43,412

48,313

Real Estate–related Business
Segment

15,472

18,113

17,227

14,59522,704

Operating revenues/Net revenue

Entertainment Business Segment

9,288

8,761

8,822

5,536

6,407

Adjustment(1,200)(2,357)(2,462)(2,340)(2,224)

Total net revenue

292,183

304,855

311,410282,625

299,017

Payment Segment

12,71916,915

6,297

22,332

14,016

Lease Segment

4,349

5,720

2,951

4,706

5,805

Finance Segment

16,213

19,20918,004

17,66419,922

Real Estate–related Business Segment

6,401

8,305

6,957

5,390

12,350Entertainment Business Segment

1,082

2,078

1,969

(1,745)237

Operating income/Business profit

Adjustment
Total business profit

3

3

3

3

3

40,771

52,23336,18448,352

52,336

Breakdown of income from payment business segment
Card shopping

131,827

136,464

140,579

131,029

132,081

Cash advances

34,74533,08432,932

28,882

26,106Loans on deeds

1,329

1,071

844

654

517

Processing/transactions handled onbehalf of other companiesʼ cards

27,03428,22731,01427,402

27,437

Agency services

15,045

15,896

12,491

5,069

5,061

Payment-related income

8,969

11,507

12,297

13,684

18,403

208

852

767

1,024

987

Intersegment revenue or transfers

Finance income

1,158

1,415

1,512

1,384

1,383

Total credit service business income

220,320

228,518

232,441

209,130

211,979

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

2,440

2,110

1,800

1,250

1,520

Total membership (thousands of members)

26,95026,79026,39025,70025,400

Active membership (thousands of members)

14,98014,90014,96013,95013,890Transaction volume(billions of yen)

4,931.1

5,031.5

5,184.4

4,655.3

4,983.7

Shopping

4,683.0

4,788.5

4,946.9

4,500.3

4,823.1

Cashing

248.1

242.9

237.5

155.0

160.6

631.3

640.5

645.7

573.0

557.3

Card shopping revolving credit balance

414.2

422.5

426.8

388.8

383.3

Cashing

217.1

218.0

218.8

1,842

173.9

Balance (billons of yen)

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

E: Environment
Total CO2 emissions (tons of CO2)
Subtotal of Scope 1 + Scope 2 (market base)
Subtotal of Scope 1 + Scope 2 (location base)
Scope 3
Energy usage amount (power consumption) (kwh)
Paper usage (CSDX Strategy Index)
S: Society
Number of employees (persons)(number of women)(number of men)
Ratio of female managers (%, department head positions)
Number of overseas employees*4
Employment ratio of persons with disabilities
Average length of service (years, total of men and women)(length of service by women)(length of service by men)
Ratio of men taking childcare leave (%)
Number of people taking long-term care leave(persons, total of men and women)(number of women taking long-term care leave)(number of men taking long-term care leave)
Average annual salary (thousand of yen, total)(for managers)(for non-managers)(for women)(for men)
Monthly average overtime working hours (hours)
Amount invested in human resource development (thousand of yen)
Training/challenge system
LGBT Manners Training
Number of people/number of times
Universal Manners Training
Number of people/number of times
SWITCH SAISON
Number of projects
Dementia Supporter Training Workshop Number of people/number of times
Average days of paid leave taken (days)
Acquisition rate (%)
Turnover (%)(by women)(by men)
Number of visitors to Akagi Nature Park (persons)Total amount of point donations (thousand yen)
G: Governance
Number of meetings of the Board of Directors
Attendance rate of outside directors (%)
Number of directors(number/ratio of outside directors)(number/ratio of independent outside directors)(number/ratio of female directors)
Number of executive officers(number/ratio of female executive officers)
Number of Audit & Supervisory Board members(number/ratio of female Audit & Supervisory Board members)
Number of serious legal violations
Expenditures for preventing corruption

FY2017FY2018FY2020

FY2021

ー
ー
ー
ー
ー

ー
ー
ー
ー
ー

ー
ー
ー
8,807,000ー

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

Currently being calculated

3,297
2,483
814
21.2
11
1.71
10.4
10.0
11.6
0.0

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

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

4,319
3,250
1,069
24.3
126
2.33
12.4
12.1
13.4
4.9

4,084
3,058
1,026
24.5
272
2.31
13.3
13.1
14.0
10.3

Currently being calculated
Currently being calculated

8,296,000
138,400,569

5

27

24

36

26

5
0
5,040
1054
475
440
711
11.1
ー

26
1
5,180
1056
481
457
722
10.2
460,610

23
1
5,340
1051
487
467
728
10.8
445,560

35
1
5,170
1026
472
457
709
9.3
483,300

23
3
5,190
1016
477
458
707
10.1
514,130

ー
ー
ー
ー
10.0
56.8
4.1
4.4
3.0
73,36820,543

ー
ー
ー
ー
13.4
75.7
7.6
8.0
6.4
89,78057,523

ー
13/4
308
ー
15.0
82.5
3.3
5.6
5.9
70,34537,312

12/4
26/7
489
496/15
13.1
72.4
3.6
4.4
3.3
59,17337,782

19/4
25/5
182
307/14
14.0
73.5
7.8
7.4
6.6
74,161
17,8892182.3
16
3/18.82/12.5
1/6.3−−
3
1/33.3
0
0

18
90.7
15
3/20.03/20.02/13.3−−
4
1/25.0
0
0

19
98.2
9
3/33.3
3/33.3
1/11.110
2/20.04
1/25.0
0
0

19
100.0
9
3/33.3
3/33.3
1/11.110
2/20.04
1/25.0
0
0

19
100.0
9
3/33.3
3/33.3
1/11.111
2/18.2
4
1/25.00
0*3 Figures for net revenue and business profit represent the amounts before appropriation of inter-segment transactions.
*4 Total of six consolidated subsidiaries

67

FY2019

Data Section

List of Affiliated Companies (As of October 1, 2022) Note: In the order of the Japanese syllabaryMain consolidated subsidiaries

Major equity-method affiliates

Atrium Co., Ltd.

Comprehensive real estate business, servicing
business

Eplus Inc.

Tickets sale

Omnibus K.K.

Internet advertisement agency business,marketing consulting business

Idemitsu Credit Co., Ltd.

Credit card business, prepaid card business,finance business

CASALAGO CO., LTD.

Import and sales of lifestyle goods

Shizugin Saison Card Co., Credit cards and credit guarantees, prepaid cardbusinessLtd.

KURASHINO SAISON Co.,Ltd.

Cleaning, security, property maintenance services

Concerto Inc.

Amusement services, amusement business, realestate rental business

SAISON ASSET MANAGEMENT CO., LTD.

Asset management

Saison Personalplus Co., Ltd.

Temporary staffing business and contracting
business

新社名ロゴタイプデザイン案

Type A

カラー 4CSAISON PARTNERS CO.,LTD.

Major operating companies:
JPN COLLECTION SERVICE CO.,LTD.
CMYK：C 100
RGB ：R 29#1D4293

M 80
G 66

Y0

B 147

K0

CMYK：C 100
RGB ：R 0＃00974B

M0

G 151

Y 100
B 75

K0

セゾンビジネスサポート

C

BUSINESS SUPPORTBUSINESSManagement of subsidiaries such as debt
collection agencies, and other related operations

Saison Fundex Corporation

Real estate financing business, credit guarantee
business, and personal loan business

Saison Ventures Co., Ltd.

Identification and investment in startups

Saison Insurance Service Inc.

Life/non-life insurance agency businessResearch Institute of Brain Activation

Development and provision of the Brain
Assessment

Motionpicture Co.,Ltd.

Provision of online ticket system and payment
services associated with the system

Wine&Wine Culture Co.,Ltd.

Operation of the SAKURA Japan Womenʼs WineAwards and provision of training for popularizing
wine

Kisetsu Saison Finance（India）Pvt. Ltd.

Digital lending operations in India

PT. Saison Modern FinanceDigital lending and lease business in Indonesia

Saison Capital Pte. Ltd.

Financing of and investment in overseas startups

Saison International Pte. Ltd.

Overseas business development and regional
headquarters

Saison Investment Management Pte. Ltd.

Impact investment business overseas

SUPPORT

Saison Information
Systems Co., Ltd.

Information processing services

Saison BusinessSupport,Inc.

Sales agent for payment and finance products
and sale of information security and office disasterprevention related services, etc.

Seven CS Card Service
Co., LTD.

Credit card business

Daiwa House Financial
Co., Ltd.

Credit card business, loaning business, andcashless payments promotion businessTakashimaya Financial
Partners Co., Ltd.

Credit card business, insurance business,investment trust business, and trust businessYamada Financial Co., Ltd. Credit card business

68

ReSAISON Co., Ltd.

Recirculation and recycling through repatriationand sale of assets and material recycling

Resona Card Co., Ltd.

Credit cards and credit guarantees

CASM, Inc.

Marketing business utilizing credit card payment
data, etc.

Fintertech Co.,Ltd.

Loaning business (crypto-assets and mortgage
collateral), cloud funding business, and Nagesen(online tipping) SaaS business

STOCK POINT, Inc.

System development and services related tostock-price-linked bonus point management

HD SAISON Finance
Company Ltd.

Finance business in Vietnam

Siam Saison Co., Ltd.

Provision of digital credit and settlement services
in Thailand

Data Section

Corporate Information/Investor Relations Information (As of September 30,2022)
Stock information

Shareholders memo

Common Stock Authorized

300,000 thousand shares

Common Stock Outstanding

185,444 thousand shares

Number of Shareholders

19,039Securities Companies 0.73%

Individual Investors, others 4.08%
Financial
Institutions 35.20%

Other
Corporations 13.24%
Treasury
Stock15.66%

Compositionof Shareholders
ForeignInvestors 31.10%

Major shareholders (Top 10)
Equity stake
Number of shares(thousands)

Ownership
percentage(%)

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

37,555

24.01

Custody Bank of Japan, Ltd. (trust account)

18,071

11.55

Daiwa Securities Group Inc.

8,050

5.15

City Index Eleventh Co., Ltd.

7,543

4.82

HSBC BANK PLC A/C M AND G（ACS）

6,679

4.27

BNYMSANV AS AGENT/CLIENTS LUX UCITS NON
TREATY 1

6,381

4.08

Mizuho Bank, Ltd.

3,000

1.92

STATE STREET BANK AND TRUST COMPANY
505103

2,514

1.61

JP MORGAN CHASE BANK 385781

2,069

1.32

Seven & i Holdings Co., Ltd.

2,050

1.31

Institution

Notes: 1.The 29,037,748 treasury shares held by Credit Saison are not included in
the above list of major shareholders.
2.Ownership percentages are based on the number of outstanding shares
excluding treasury shares.

Corporate profile

Fiscal Year

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

Ordinary General Meetingof Shareholders

Convened each year in June

Record Date

Ordinary general meeting of shareholders andyear-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

1. Payment Segment

Mailing Address

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

3. Finance Segment

Telephone Inquiries(9:00–17:00 excluding weekends and holidays)

URL

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

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

Stock Listing

Tokyo Stock Exchange（Prime）

Securities Code8253

[Notice of Address Change, etc., and Inquiries Relating to Shares] Shareholders
who have an account with a securities company are asked to contact the relevant
securities company regarding address change and other notices, as well as inquiries.
Shareholders who do not have an account with a securities company are asked tocall 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 sharecertificate system, an account (special account) has been opened at Sumitomo Mitsui
Trust Bank Limited above as the transfer agent. Inquiries on special accounts should bedirected to the transfer agent at the number indicated above for telephone inquiries.
[Information on Additional Purchase System/Buy Back System for Shares Less Than
One Unit] Our Company has established a system in which shareholders who own
shares less than one unit (100 shares) can purchase additional shares at the market
price (Additional Purchase System) and a system in which shareholders can sellshares less than one unit back to our Company (Buy Back System). For shares lessthan one unit recorded in a special account, please contact the telephone inquiry
number listed above. For shares less than one unit deposited with a financial
securities firm, please contact the financial securities firm where you have an account.

69

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(credit card business, servicing (loan collection agency) business, etc.)

2. Lease Segment(lease business)

Business(credit guarantee business and finance-related business)

4. Real Estate–related Segment(real estate business, real estate leasing business, and servicing (loancollection agency) business, etc.)

5. Entertainment Segment(amusement business, etc.)

Paid-in Capital¥75,929 million

Numberof Regular
Employees

4,066

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
1,692 (based on conversion to a 7.5-hour workday).

Data Section

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

Information disclosure tools

On Publishing the Credit Saison Integrated Report 2022

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

As a leading-edge service company, the term adopted in ourManagement Philosophy, the Credit Saison Group is aiming for asustainable society that is even more convenient and prosperous
than today’s. We will help to achieve this by leveraging ourunique know-how, management resources, and the experienceof our employees to contribute to solving social issues throughour businesses in ways that only Credit Saison can.
All involved have again worked hard to produce Credit
Saison Integrated Report 2022, the fourth we have publishedsince March 2020, in a reader-friendly format. We thus divided
the sections in accordance with the elements that we wanted toconvey, such as the deeply rooted philosophy in our Group andanswering the question “What are Credit Saison’s strengths andunique characteristics?”
My hope is that this report will help readers to gain anunderstanding of the initiatives advanced by the Sustainability
Promotion Committee, which was established in August 2021,
and the Group’s efforts toward its third founding period, as
exemplified by the New Medium-term Management Plan that welaunched in FY2022.
As the executive officer responsible for editing, I hereby
declare that the preparation process was properly carried out andthat the details listed herein are accurate.
Despite the impact of COVID-19, global affairs, and otherfactors, we will continue to value dialogue with our stakeholders,
including our shareholders and investors, and would like todevise ways to enhance disclosure and transparency whileworking on improvements to make the report even better. We
would thus definitely appreciate receiving your unreserved
opinions.
Finally, I would like to take this opportunity to express myheartfelt gratitude to all the readers who have obtained a copy ofthis report and to all those persons involved in its production andpublication.

Corporate Information

Business

Sustainability

IR Information

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

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

Shingo Baba

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

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

Editor’s postscript

Managing Executive Officer
and CFO
Financial & capital strategy,
IR, M&A
Head of Public Relations
Office,Corporate Risk Management
Dept.,
Treasury & Accounting Dept.

Thank you for reading Credit Saison Integrated Report 2022 to the end.
This, the fourth edition of our integrated report, was created with a greater emphasison two points: our New Medium-term Management Plan and sustainability. Particularlyin the case of sustainability, as information disclosure relating to human capital is gaining
widespread attention, we expanded non-financial information and content. We also devised
ways to communicate the kind of value that we are trying to create.
To further deepen communications with our stakeholders in the years to come, we willcontinue to appreciate receiving frank opinions from our readers while making further
enhancements to the report’s content.

Having won awards at the International ARC
Awards, an annual report competition in the
United States, the Credit Saison Integrated Report
2021 even received high acclaim overseas.

70

International ARC Awards
Summary/Annual Report Review category/Honors award
PDF Version Annual Report category/Silver 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 2022
For the Year Ended March 31, 2022

Basis of Presentation
The consolidated financial statements are stated in Japanese yen, the currency of the country inwhich the Company is incorporated and operates. The translations of Japanese yen amounts into
U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been
made at the rate of ¥122.41 to $1, the approximate rate of exchange at March 31, 2022. Suchtranslations should not be construed as representations that the Japanese yen amounts could be
converted into U.S. dollars at that or any other rate.

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

-1-

-2-

FY2021(As of March 31, 2022)
Thousands ofMillions of yen
U.S. dollars

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FY2021(As of March 31, 2022)
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¥108,970$890,207

2,794,545
128,462
52,992
72,431
14,59730,342
12,364
162,317
94,763

22,829,389
1,049,448
432,906
591,711
119,250
247,875
101,011
1,326,016
774,151

86,914710,031

41,377
10,697

338,027
87,390$29,497,418¥3,610,778

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-3-¥244,349$1,996,157

8,884
2,569,040
19,373
13,038118,368
24,0661,574
974
47,3683,047,040

72,57920,987,180
158,271
106,513966,983
196,609
12,865
7,962
386,963
24,892,086

562,387
75,92985,152442,550

4,594,292
620,287695,629
3,615,315

62,737

512,521

21,492
1,351
563,738

175,581
11,0394,605,331$29,497,418¥3,610,778-4-

CONSOLIDATED STATEMENT OF INCOME

RECONCILIATION FROM PROFIT BEFORE TAX TO BUSINESS PROFITFY2021(April 1, 2021 toMarch 31, 2022)
Thousands ofMillions of yen
U.S. dollars

Revenues

FY2021(April 1, 2021 toMarch 31, 2022)
Thousands ofMillions of yen
U.S. dollars$407,947¥49,936

Profit before tax

Income from the payment business¥209,608$1,712,345

Reconciliations (Impairment losses on financial assets)

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

11,83548,31359,341
32,866989
362,955
108,337

96,684
394,684
484,780
268,495
8,085
2,965,076
885,041

Reconciliations (Other income)

37,47826,45963,937
299,017
222,541
24,575
11,461
4,588
6,259
1,349
49,936
14,343¥35,593

306,174
216,151
522,325
2,442,751
1,817,997
200,765
93,63337,484
51,132
11,023407,947
117,171$290,775¥35,375$288,994

218

1,781
$290,775

Total
Of interest income
Cost of sales
Cost of sales for the real estate-related business
Cost of sales for the entertainment business
Total
Net revenue
Selling, general, and administrative expenses
Impairment losses on financial assets
Finance costs
Share of profit of investments accounted for using equity method
Other income
Other expenses
Profit before tax
Income tax expense
ProfitReconciliations (Other expenses)
Adjustments for the application of the effective interest method tofinancial assets
SubtotalBusiness profit

Profit attributable to
Owners of parent
Non-controlling interests
Profit¥35,593

-5-

-6-

1,364

11,150

228

1,866

1,068

8,730

194

1,586

2,399

19,599$427,547¥52,336

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FY2021 (April 1, 2021 to March 31, 2022)

SharecapitalBalance as of April 1,
2021¥75,929

Millions of yen
Equity attributable to owners of parent
Other
CapitalRetained
Treasurycomponents
surplusearnings
sharesof equity¥85,198 ¥414,260 ¥ 62,808¥18,392 ¥530,971

35,375

ProfitOther comprehensive
income35,375Comprehensive income
Purchase of treasury
shares
Disposal of treasury
sharesShare-based paymenttransactions

0
125

Transfer from othercomponents of equity toretained earnings
Obtaining of control ofsubsidiaries

218

3,051

3,051

10

3,061

3,051

38,426228

38,655

Balance as of March 31,
2022

0

0

0

0

71

197

Share
capitalBalance as of April 1,
2021

172

7,085

70

Transfer from othercomponents of equity toretained earnings
Obtaining of control ofsubsidiaries

3

36

6,974

¥1,351 ¥563,738

Noncontrollin
g interests

Total

133

3

Total

$8,872 $4,346,516

288,994

1,781 290,775

0
1,027

24,92524,92524,925313,920

1,868 315,788

3

3

3

1

0

0

581

1,609

57,473

Dividends

38

513,101 $150,249 $4,337,644

288,994

Comprehensive income

7,010¥21,492 ¥562,387

288,994

Other comprehensive
incomePurchase of treasury
shares
Disposal of treasury
sharesShare-based paymenttransactions

49

Thousands of U.S. dollars
Equity attributable to owners of parent
Other
CapitalRetained
Treasurycomponents
surplusearnings
sharesof equity$620,287 $696,007 $3,384,200 $

198
7,035

49

¥85,152 ¥442,550 ¥ 62,737

Profit

1

7,035

172

¥75,929

35,593

0

Other

46

¥1,086 ¥532,057

049

Total transactions withownersTotal

35,375

7,035

Dividends

Noncontrollinginterests

Total

86

11

57,473406

25,012

1,620
57,473

406

1,405

1,405

317
29

29

57,272299

56,973

Other
Total transactions withowners378

Balance as of March 31,
2022$620,287 $695,629 $3,615,315 $

57,880

579

406

1,087

512,521 $175,581 $4,594,292 $11,039 $4,605,331

-7-

-8-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Notes on important matters forming the basis for preparation of consolidated financial statements)
1. BASIS FOR PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
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.

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

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)

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
determines such classification at the time of initial recognition.
The Group recognizes financial assets on the transaction date when it becomes a party to thecontract on such financial instruments.

36

All financial assets are measured at fair value plus any transaction costs, except for thoseclassified as financial assets measured at fair value through profit or loss.

SAISON FUNDEX CORPORATION

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

JPN COLLECTION SERVICE CO.,LTD.
SAISON ASSET MANAGEMENT CO., LTD.

The assets are held within a business model whose objective is to hold the assets in order tocollect contractual cash flows.

Atrium Servicing Co., Ltd.
Saison Personalplus Co., Ltd.

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.

Atrium Co., Ltd.

Financial assets other than those measured at amortized cost are classified as financial assets
measured at fair value.

Concerto Inc.
L-BLUE

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
is applied consistently after the initial recognition.

Kisetsu Saison Finance(India)Pvt. Ltd.
Credit Saison Asia Pasific Pte. Ltd.

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:

Saison Capital Pte. Ltd.
PT. Saison Modern Finance

The financial assets are held within a business model whose objective is achieved by bothcollecting contractual cash flows and selling financial assets.

3. ACCOUNTED FOR USING EQUITY METHOD
Number of companies accounted 40
for using equity method
Names of principal companies
Saison Information Systems Co., Ltd.

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

IDEMITSU CREDIT CO.,LTD.
Resona Card Co., Ltd.
Shizugin Saison Card Co., Ltd.
Daiwa House Financial Co., Ltd.

2)

Subsequent measurement

Takashimaya Financial Partners Co., Ltd.

After initial recognition, financial assets are measured as follows, depending on theirclassifications:

Seven CS Card Service Co., Ltd.

(i) Financial assets measured at amortized costeplus inc.
HD SAISON Finance Company Limited

Financial assets are measured at amortized cost using the effective interest method.
(ii) Debt instruments measured at fair value through other comprehensive income
A gain or loss on debt instruments measured at fair value through other comprehensive income
is recognized in other comprehensive income, except for impairment gains or losses andforeign exchange gains and losses, until the debt instrument is derecognized or reclassified.
When the financial asset is derecognized, cumulative gain or loss previously recognized in-9-- 10 -

derivatives and financial guarantee liabilities. The classification is made at the time of initialrecognition.

other comprehensive income is reclassified to profit or loss.
(iii) Financial assets measured at fair value through profit or loss

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

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

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

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.

4)

If the credit risk on financial assets at the end of the reporting period has not increased
significantly since initial recognition, allowance for doubtful accounts is measured at an amountequal to the amount of expected credit losses from possible defaults in the next 12 months after
the end of the reporting period (12-month expected credit losses). In this case, 12-month expectedcredit losses are collectively estimated to measure the allowance for doubtful accounts based on
information such as the probability of default, subsequent collection rates, and other reasonable
and supportable information, including forward-looking data.
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
life of such financial assets (lifetime expected credit losses). In this case, allowance for doubtful
accounts is determined by estimating the lifetime expected credit losses related to the collection ofsuch financial assets based on information such as the probability of default, future recoverable
amounts, and other reasonable and supportable information, including forward-looking data. In
principle, it is presumed that the credit risk on financial assets has increased significantly whencontractual payments are more than 30 days past due. In assessing whether the credit risk has
increased significantly, the Group considers reasonably available and supportable information in
addition to past due information.
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 since initial recognition.

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.

(c)Presentation of financial assets and financial liabilities
Financial assets and financial liabilities offset each other with the net amount presented in the
consolidated statement of financial position only if the Group has a legal right to offset and has theintention to either settle amounts on a net basis or realize the assets and settle the liabilities
simultaneously.

(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 datewhen 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.
A hedging relationship is considered to be effective when it meets all the following requirements:
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
the hedged item that the Group actually hedges and the quantity of the hedging instrument that
the Group actually uses to hedge that quantity of hedged item.

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.

The Group prospectively assesses whether the hedging relationships will be effective on an
ongoing basis. Hedge ineffectiveness may arise when the fair value change on the hedging
instrument exceeds or falls below that of the hedged item.

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.

Hedge ratio is appropriately determined based on an economic relationship between the hedged
item and hedging instrument, as well as the Group’s risk management strategies.

(b) Financial liabilities
1)

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.

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.

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

Initial recognition and measurement
The Group classifies financial liabilities as subsequently measured at amortized cost, except for- 11 -

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.
- 12 -

component of property, plant and equipment. Land and construction in progress are not subject todepreciation.

Hedges that qualify for hedge accounting are classified and accounted for as follows:
1)

Fair value hedges

The estimated useful lives of main assets are as follows:

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
or loss in the consolidated statement of income with the carrying amounts of the hedged items
being adjusted.
2)

Cash flow hedges

5 to 6 years

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.

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

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 acquisitioncost. Depreciation is recognized in profit or loss over the estimated useful life of each asset, otherthan land, by mainly using the straight-line method.

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

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

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

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

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.

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.

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

Valuation standards and methods for inventories

Software5 to 15 years

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.

Other

5 to 20 years

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

Valuation standards and methods for property, plant, and equipment, and depreciation methods(a)

39 to 50 years

Other

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.

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.

(e)

Buildings

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
by deducting 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 each- 13 -

Leases(a)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 a period 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 lease- 14 -

unit is first allocated to reduce the carrying amount of goodwill allocated to the unit andsubsequently allocated to reduce other assets of the unit on a pro -rata basis, based on the carrying
amount of each asset in the unit.

agreements.
After initial recognition, the right-of-use asset is depreciated over the shorter of the useful life or
the lease 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 associateddepreciation and amortization expenses).

Lease payments are allocated to finance costs and repayments of lease liabilities based on theinterest 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 the time value of money is significant, the estimated future cash flows are discounted to theirpresent value by using a pretax discount rate that reflects the time value of money and risks specificto the liability. Unwinding of the discounted amount arising from the passage of time is recognizedin 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
statement of financial position and recognizes lease payments to be received as income over thelease term under the straight-line method in the consolidated statement of income.

(a)Goodwill

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.

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).
Goodwill is not amortized but is tested for impairment in each reporting period or each time when
there is an indication of impairment.

(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.

Impairment losses of goodwill are recognized in the consolidated statement of income and notreversed subsequently.
Goodwill is stated at cost less accumulated impairment losses in the consolidated statement offinancial position.

(c)

The recoverable amount of an asset or a cash-generating unit is the higher of value in use or fairvalue less 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 the smallest cash-generating unit that generates cash inflows through continuing use that arelargely 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 canbe associated. Goodwill acquired in a business combination is allocated to each cash-generating unitthat is expected to benefit from synergies of the combination.

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

Impairment of non-financial assets
At the end of each reporting period, the Group reviews the carrying amount of non-financial assets
to determine whether there is any indication of impairment. If any such indication exists, therecoverable amount of the asset is estimated. Recoverable amounts of goodwill and intangible assets
with indefinite 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.

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 amountof credit card purchases for a variety of items. Points granted to members have no expiry date.

Employee benefits(a)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
the defined contribution pension plans are recognized in profit or loss in the period in which
employees render the related services.

(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.

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- 15 -- 16 -

Financial instruments, (e) Financial guarantee liabilities .”Revenue
Centering on the card business, the Group engages in multiple business domains, such as the Internet
business, lease business, and finance business. For the purpose of segment reporting, the Group’sbusinesses are divided into five reportable segments: Payment business, Lease business, Financebusiness, Real estate-related business, and Entertainment business. Revenue recognition criteria bysegment are as follows:(a)

Payment business

Credit card shopping

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)

Revenue is recognized at the time when a credit card is used, which is when service iscompleted and the performance obligation is satisfied under the contracts with affiliated stores,
who are customers of the Group.

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 leasearrangements under IFRS 16:s
Customer fees mainly represent fees received from cardholders for using revolving payments
and other services. As stated in Note “5. ACCOUNTING POLICIES, (1) Financial instruments,(a) Financial assets, 2) Subsequent measurement ,” revenue is recognized under IFRS 9,“Financial Instruments” (“IFRS 9”), using the effective interest method.
(iii) Annual membership fees, etc.
Revenue is recognized over a certain period determined under the contracts with cardholders
to which performance obligation arises for the membership fees received.

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

4)

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
for processing and use of the Company’s ATMs, for which the Company receives fees from its
partner companies. Business agency refers to receivables collection businesses and temporary
staffing businesses, which receive fees from their partner companies. Revenue is recognized whenservice is rendered, and the performance obligation is satisfied on a contractual basis.

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

Step 1:

Identify contract(s) with a customer

Step 2:

Identify the performance obligations in the contract

Step 3:

Determine the transaction price

Step 4:

Allocate the transaction price to performance obligations in the contract

Step 5:

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

Revenue recognized under IFRS 15 is based on contracts with customers, and the amount ofrevenue containing variable consideration is immaterial. No significant financing component isincluded in the amount of promised consideration.

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

3)Entertainment business
Revenue is recognized primarily when services are rendered at stores engaged in amusementbusiness, which is when a performance obligation is satisfied.

(i) Affiliated store fees

2)

Finance-related business
Fees are directly received from customers who obtain loans directly from the Group. As stated in
Note “5. ACCOUNTING POLICIES, (1) Financial instruments, (a) Financial assets, 2)
Subsequent measurement ,” revenue is recognized under IFRS 9 using the effective interest
method.

(d) Real estate-related business

The payment business provides services such as credit card shopping, credit card cash advance,
term loans, and processing/agency for other companies’ credit cards and business agency. Revenue
recognition criteria by service are as follows:1)2)

Foreign currency translation(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 aretranslated into the functional currency using the exchange rate at the date when the fair value wasmeasured.
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.

(c)Finance business

1)

Credit guarantees

Exchange differences arising from the translation of financial statements of foreign operations arerecognized in other comprehensive income.

Fees are received when the Group guarantee loans provided by their partner financial institutions.
Revenue is recognized under IFRS 9. For details, see Note “5 ACCOUNTING POLICIES, (1)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.

- 17 -- 18 -

(Notes on changes in accounting policies)
The Group started applying the following standards from the current fiscal year.
Standards
IFRS 7IFRS 9Standard namefinancial instruments
disclosure
financial instruments

Description of new standard and amendments
Revised to address the financial reporting implications that arise
when replacing an existing interest rate index with an alternativeinterest rate index in the context of IBOR reform

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 are not expected torecover in March 2023, but gradually recover from March 2024 onward. Therefore, the Groupcalculates 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 these estimates are best available at the time of preparation of the consolidated financial
statements, there is a high degree of uncertainty in the assumptions used in the estimates. In the eventthat COVID-19 spreads or accompanying changes in the economic situation occur in the future, theestimates may be revised in the consolidated financial statements from the next fiscal year.
(a)

The adoption of the above standards did not have a material impact on the Group's consolidated financial
statements.

The Group recognizes expected credit losses for financial assets measured at amortized cost anddebt instruments measured at fair value through other comprehensive income as the present valueof differences between contractual future cash flows that it will receive in accordance with thecontract and future cash flows that it expects to receive.

(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:
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

Millions of yen

Thousands of U.S. dollars¥2,794,545$22,829,389
34,317
247,875
101,011
1,326,016
774,151
338,027
72,57922,271
966,983

4,200
30,342
12,364
162,317
94,763
41,377
8,884
2,726
118,368¥24,066

In estimating future cash flows, the Group takes into account not only historical information, suchas 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 each reporting 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.
(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 amountof credit card purchases for a variety of items. Points granted to members have no expiry date.

$196,609

The above amounts for "Trade and other receivables" and "Other financial assets" are net of theallowance for doubtful debts; the amounts are ¥50,329 million (U.S. $411,156 thousand) and ¥9 million(U.S. $77 thousand), respectively.

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. These estimates and assumptions may significantly affect provision amounts if
assumed circumstances change.

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
amounts of assets and liabilities in the following fiscal year are as follows:
Although the outbreak of the novel coronavirus disease (COVID-19) has started over 2 years ago, theinfection is spreading in different forms, including epidemics of mutant strains. Currently, thegovernment and others continue to implement various supporting measures; however, the uncertainty
remains as to when the impact on the economy will be resolved. Under these circumstances, dependingon 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 asignificant impact on the Group's performance and financial position. COVID-19 has various impacts,
particularly with regard to the credit risk on receivables held by the Group and the risk of 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
- 19 -

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)(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 determined- 20 -

based on management’s best estimates and judgments; however, the assumptions may be affectedby results 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)

1. ACCUMULATED DEPRECIATION AND ACCUMULATED IMPAIRMENT LOSSES OF
PROPERTY, PLANT, AND EQUIPMENT
31,764
Millions of yen

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)(NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recoverability of deferred tax assets
Deferred tax assets and liabilities are recognized for temporary differences between the carrying
amounts of assets and liabilities in the consolidated statement of financial position and their tax
bases. Deferred tax assets and deferred tax liabilities are calculated using the tax rates expected tobe applicable at the time when the relevant deferred tax assets are realized or deferred tax liabilities
are settled in accordance with laws and regulations enacted or substantially enacted at the end of
the reporting 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 Groupwill earn sufficient 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 bybusiness plans approved 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.

259,494
Thousands of U.S. dollars

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

50,329Millions of yen
9Millions of yen

Other financial assets

411,156
Thousands of U.S. dollars
77
Thousands of U.S. dollars

3. ASSETS PLEDGED AS COLLATERAL AND LIABILITIES RELATED TO COLLATERAL
Assets pledged as collateral
Type
Ending Balance
Trade and other receivables(Accounts receivable –installment)(Finance lease receivables)

177,992 Millions of yen
1,454,071 Thousands of
U.S. dollars

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

175,869 Millions of yen
1,436,728 Thousands of
U.S. dollars

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

12,343 Thousands of
U.S. dollars

1,604 Millions of yen
Other financial liabilities(Deposits received)

13,106 Thousands of
U.S. dollars

179,503 Millions of yen
Total

1,466,415 Thousands of
U.S. dollars

177,474 Millions of yen
Total

1,449,835 Thousands of
U.S. dollars"Long-term loans payable under securitized borrowings" are liabilities arising from the securitization of
instalment receivables and finance lease receivables.
"Guarantee deposits" are deposited as guarantee money for issuance, etc., in accordance with Article 141 of the Law Concerning Funds Settlement.
4. INVESTMENT SECURITIESInvestment securities of ¥1,431 million (U.S. $11,690 thousand) are subject to stock lending
agreements.
5. CONTINGENCIES

Debt guarantee
Customers related to retail loans provided by partner financial
institutions
Customers related to loans with pictures pledged as collateral provided
by partner financial institutions
Customers related to rent guarantee business
Customers related to mortgage loans provided by partner financial
institutions
Customers related to housing loans provided by partner financial
institutions
Total- 21 -- 22 -

Millions of yen

Thousands of U.S.
dollars¥210,589$1,720,358

33

271

140,478

1,147,603

138,604

1,132,297

961

7,853

¥490,666$4,008,384

6. COMMITMENTS(NOTES TO CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

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 unconsolidated subsidiaries and associates is as follows:
Millions of yen¥4,034,559
176,369¥3,858,189

Total loan commitments
Balance of loans taken out
Net amountThousands of U.S. dollars$32,959,392
1,440,813$31,518,578

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.
(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

Thousands of U.S. dollars$2,450,780¥300,000$2,450,780(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.

Thousands of U.S. dollars

Reconciliations (Impairment losses on financial
assets)¥1,364$11,150

Allowance for doubtful accounts accumulated due tomalfeasance by business partners (*1)

1,364

11,150Reconciliations (Other income)

228

1,866

Gain on sale of fixed assets

137

1,123

Gain on change in equity

64

525

Other

26

216

1,068
418
365
201

8,730
3,420
2,987
1,644

23

188

59

489

194

1,586

¥2,399$19,599*1 As a result of the fraudulent acts of a business partner, there was doubt about the collectability of a portionof the Company's receivables, and the Company recorded an allowance for doubtful accounts for theestimated uncollectible amount. The amount of the impairment of financial assets incurred as a result of thisis considered as an adjustment item to business profit.
*2 Mainly reversal of effective interest rate adjustments, such as loan administration fees and transaction costs.

- 23 -

2. DIVIDENDSDividends 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 23, 2021

¥7,035*$57,473¥45*$0.36

Record date

Effective date

March 31, 2021

June 24, 2021

Resolution (planned)

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

Ordinary general
meeting ofshareholders held on
June 22, 2022

Commonstock

Retainedearnings¥8,600*$70,260¥55*$0.44

Record date

Effective date

March 31, 2022

June 23, 2022

(NOTES TO FINANCIAL INSTRUMENTS)
Policy on financial instruments

Millions of yen

Loss on disposal of fixed assets
Loss on sale of fixed assets
Impairment losses on non-financial assets
Loss on valuation of investment securities(stocks, etc.)
Other
Adjustments for the application of the effective interest
method to financial assets(*2)
Total

185,444,772 shares

1. STATUS OF FINANCIAL INSTRUMENTS

Given the nature and frequency of income and expenses, reconciliations are determined based on ajudgement of whether they can help provide effective comparative information on the Group’s
performance and appropriately reflect how the businesses are managed.
The breakdown of reconciliations is as follows:

Reconciliations (Other expenses)

Common stock

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

Millions of yen¥300,000

Net amount

1. TYPE AND NUMBER OF SHARES ISSUED AS OF MARCH 31, 2022

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, 2022,
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- 24 -

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.

liabilities 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, 2022, rises by one basis point (0.01%), profit before tax for the fiscal
year ended March 31, 2022, would increase by ¥7 million (U.S. $57 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, 2022, would decrease by ¥7 million (U.S. $57 thousand). The effectassumes that risk variables other than interest rates remain constant and that there are nocorrelations between interest rates and other risk variables. When actual interest rates go beyond
the reasonably estimated range, it could have a greater impact on profit or loss compared to theestimated amount.

Risk management system for financial instruments
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.
Market risk management(i) 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 (operational)investment securities by implementing preliminary investigations, setting
a cap on investment amounts, and also implementing ongoing monitoring for potential
investments. Additionally, stocks held for the purpose of promoting business through business orcapital alliances are monitored by relevant departments of the Group for issuers’ market
environments, financial conditions, and other risk factors.
Relevant departments are responsible for regularly reporting to the ALM Committee and othermanagement.
(iii) Derivative transactions
Regarding the derivative transactions, relevant departments are responsible for executing
derivative transactions in accordance with procedures specified in internal control regulations
stipulated by the Board of Directors, and the total transaction limit and the range of the hedge
ratios are authorized by the Board of Directors in advance. The status of major derivativetransactions is reported to the Board of Directors on a quarterly basis.
Consolidated subsidiaries enter into derivative transactions in accordance with control
regulations stipulated by each subsidiary. Subsidiaries are required to report to the Company on aquarterly basis regarding the hedging relationships between derivatives and corresponding
receivables/payables, counterparties, transaction amounts, remaining periods, and the fair valuesof transactions.
(iv) Quantitative information about market risk
Financial instruments affected by interest rate risk, the main risk variable of the Group, mainly
consist of trade and other receivables, bonds and borrowings, and interest rate swap transactions.
Quantitative analysis for the management of interest rate fluctuation risks for such financial
assets and liabilities is conducted by reasonably estimating changes in interest rates over the next
year or so after the end of the reporting period and the effect on profit or loss for the year due tothe change. To determine the effect on profit or loss, the Group classifies financial assets and- 25 -

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.
Supplementary explanation of matters concerning fair value of financial instruments
The fair values of financial instruments include values based on quoted market prices and also
include reasonably estimated values in case there are no quoted market prices. Since certain
assumptions are used in the calculation of such values, the values may differ if different
assumptions are used. In addition, the contract amounts of derivative transactions in "2. Fair Valueof Financial Instruments" do not indicate the market risk associated with derivative transactions.
2. MATTERS RELATED TO THE FAIR VALUE OF FINANCIAL INSTRUMENTS
Classification based on fair value hierarchy
The Group analyses financial assets and financial liabilities measured at fair value or those whose
fair value is disclosed in the notes. The following shows the classification of fair value from Level
1 to Level 3 based on the fair value hierarchy.
The levels under the fair value hierarchy are defined as follows:
Level 1:

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

Level 2:

Fair value, other than Level 1, that is determined by directly or indirectly using theobservable price

Level 3:

Fair value determined by using valuation techniques that incorporate unobservable
inputsFair Value Calculation Methodology
The fair value of financial instruments is calculated as follows:
Assets1) Trade and other receivables(a) Accounts receivable – installment
Accounts receivable – installment with variable interest rates reflect market interest rates in the
short term and are stated at carrying amount given that the carrying amount approximates the fairvalue, unless the credit status of debtors changes significantly in later periods. In contrast, the fairvalue is determined for accounts receivable – installment with fixed interest rates by discounting
credit risk-adjusted future cash flows from the group of financial assets classified by the type ofloans and maturity terms, using a risk-free market interest rate. The fair value of certain
delinquent receivables is measured by deducting the estimated amount of loss allowance from thecarrying amount of receivables at the end of the reporting period, assuming that the calculated
amount approximates the fair value.
The fair value of certain receivables without a due date but with other limitations, such as limiting- 26 -

the loan amount to the value of collateralized asset, is measured at the carrying amount, assumingthat the carrying amount approximates the fair value 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 theprincipal and interests arising from respective lease periods and subtracting debtor’s credit risk,
which is then discounted using a risk-free market rate.
2) Operational investment securities and investment securities
The fair value of operational investment securities and investment securities is determined asfollows: listed stocks are valued at prices on the stock exchanges; bonds are valued at prices on theexchange markets or information provided by counterpart financial institutions, or at prices that arereasonably calculated based on the value of underlying assets; and investment trusts are based on thedisclosed 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 longas they can be fair valued. 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, price-earnings ratio, and price-book value ratio, are used.
3)

Other financial assets
Since these are settled in a short period of time, the carrying amount approximates the fair value, andis therefore stated at that carrying amount.

(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.”(e) Long-term loans payable under securitized borrowings
Long-term loans payable under securitized borrowings will not be affected by ups and downs in
the Company’s creditworthiness; therefore, the fair value measurement of such payables only
takes into account changes in market interest rates. The fair value of Long-term loans payable
under securitized borrowings is determined by discounting the aggregate amount of principal andinterests of the borrowings compartmentalized by certain periods of time at interest rates thatwould be offered for similar borrowings.
3) Other financial liabilities
Since these are settled in a short period of time, the carrying amount approximates the fair value,
and is therefore stated at that carrying amount.
4)

Financial guarantee liabilities
The fair value of financial guarantee liabilities is determined by discounting future cash outflows
for guarantees 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 ¥499,550 million(U.S. $4,080,963 thousand). The liability amount recognized in the consolidated statement offinancial position is ¥8,884 million (U.S. $72,579 thousand) and the fair value is ¥27,451 million(U.S. $224,258 thousand) (asset).

Liabilities
1) Trade and other payables
Trade and other payables are stated at carrying amount as the carrying amount approximates thefair value due to the short settlement period.
2) Bonds and borrowings(a) Short-term loans payable
Short-term loans payable are stated at the carrying amount as the carrying amount approximates
the fair value due to the short settlement period.
(b) Commercial papers
Commercial papers are stated at the carrying amount as the carrying amount approximates the fairvalue due to the short settlement period.
(c) Long-term loans payable
Long-term loans payable with variable interest rates only take a change in credit spread into
account as variable interest rates reflect market interest rates in a short period. The current credit
spread is determined by referring to a credit spread that would be offered by financial institutions
if the Group was to newly obtain finance with similar terms and conditions for the averageremaining maturity for the outstanding borrowings. To calculate the difference between the
carrying amount and the fair 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-term loans payable with fixed interest rates is determined by discounting
the aggregate amount of principal and interest of the long-term loans compartmentalized bycertain periods of time at interest rates that would be offered for similar borrowings.
- 27 -- 28 -

(2)Financial instruments measured at fair value
Financial instruments measured at fair value and the breakdown by level of the fair value hierarchy are
as follows:
Level 1
AssetsMeasured at fair value through profit
or loss
Trade and other receivables
Operational investment securities
Investment securities
Other financial assets
Equity instruments measured at fairvalue through other comprehensive
incomeInvestment securities
Debt instruments measured at fairvalue through other comprehensive
incomeTrade and other receivables
Total
Liabilities
Measured at fair value through profit
or loss
Other financial liabilities
Total

Level 2¥–

¥19,657
–
3,261
1,191

¥–
52,992
16,503–¥19,657–––

47,917

4,149

599

52,666(3)

Fair value(Thousands of
U.S. dollars)¥47,350$386,817

Valuationtechniques

Capitalization
methodNet asset value
Discounted cashflow

52,992
19,764
1,191

Investment securities

15,656

127,900

Market prices ofcomparable
companies
Net asset value

Unobservable
inputsRange

Capitalization
3.4% – 5.3%
rate––
weighted
3.45% –
average cost of
12.38%
capital(WACC)
price-earnings
14.0 – 22.8
ratio(PER)
price bookvalue ratio
1.1 – 2.3
(PBR)
–
–

Measured at fair value throughother comprehensive income–
47,917–28,2592,839
72,935

2,839
149,112

–

2,726

–

2,726

¥–

¥2,726¥–¥2,726

Level 1
AssetsMeasured at fair value through profit
or loss
Trade and other receivables
Operational investment securities
Investment securities
Other financial assets
Equity instruments measured at fairvalue through other comprehensive
incomeInvestment securities
Debt instruments measured at fairvalue through other comprehensive
incomeTrade and other receivables
Total
Liabilities
Measured at fair value throughprofit or loss
Other financial liabilities
Total

Measured at fair value throughprofit or loss
Operational investment
securities(Millions of yen)
Total

Level 3

Fair value(Millions ofyen)Level 2

Trade and other receivables(4)$160,588–
26,642
9,730$–
432,906
134,821–$160,588
432,906
161,464
9,730

391,454

33,894

4,897

430,246–
391,454–
230,856

23,199595,825

23,1991,218,137–$–

22,271$22,271–$–

22,271$22,271

Quantitative information on financial instruments classified as Level 3

23,199

2.98% –
12.17%–

Discount rate

Reconciliation of financial instruments classified as Level 3 from the beginning to the end of theperiodThe reconciliation of financial instruments measured at fair value classified as Level 3 is as follows:(Millions of yen)
Financial assets measured Financial assets measured
at fair value through profit at fair value through otheror loss
comprehensive income
Balance at beginning of period¥65,474¥7,651
Total gains and losses
6,560
2,149
Profit or loss (Note 1)
6,560
195
Other comprehensive income–
1,953
Purchases
8,943
682
Sales
(9,593)(351)
Transfer from Level 3 (Note 2)(2,346)(6,692)Others457–
Balance at end of period
69,495
3,439
Change in unrealised gains orlosses for the period included in
profit or loss for assets held at
1,770
(75)
the end of the reporting period(Note 1)Significant unobservable inputs used to measure the fair value of financial instruments classified as
Level 3 are as follows:- 29 -

Discounted cashflow
Net asset value

Investment securities
599
4,897
–
Total
$542,815¥66,446(Notes) 1. Operational investment securities are mainly composed of investments in funds for real estate.
2. Investment securities are mainly composed of unlisted stocks and investments in funds for unlisted
stocks.
3. In addition to the valuation techniques in the table above, some issues are measured by thetransaction case method.

(Thousands of U.S. dollars)
Level 3
Total

$–
–
–
–

2,839

- 30 -

Total¥73,125
8,709
6,755
1,953
9,625
(9,945)(9,038)457
72,9351,694

(Thousands of U.S. dollars)
Financial assets measured Financial assets measured
at fair value through profit at fair value through otherTotal
or loss
comprehensive income
Balance at beginning of period$534,879$62,504$597,384
Total gains and losses
53,592
17,55971,151
Profit or loss (Note 1)
53,592
1,597
55,190
Other comprehensive–
15,961
15,961incomePurchases
73,057
5,577
78,635
Sales(78,375)(2,868)(81,244)
Transfer from Level 3 (Note 2)(19,165)(54,675)(73,840)
Other
3,739
–
3,739
Balance at end of period
567,728
28,097595,825
Change in unrealised gains orlosses for the period included
in profit or loss for assets held
14,464(619)
13,845at the end of the reporting
period (Note 1)(Notes) 1. The amounts are included in “Revenue from the payment business,” “Revenue from the financebusiness,” “Revenue from the real estate-related business,” “Other income,” as well as “Impairment
losses on financial assets” and “Other expenses” per the consolidated statement of income.
2. The transfer from Level 3 is due to the availability of observable data as a result of the listing.

(5)

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

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

Unfavorable
changes¥11,545¥3,451¥ (2,732)

¥–

¥–

7,317

1,298

(980)

–

–

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

When fair values of operational investment securities, investment securities, and trade and otherreceivables classified as Level 3 are measured through a valuation technique other than the above
using reasonably possible alternative assumptions for unobservable inputs, such fair values would
not be included in the table below if the change in fair value is not material.

Unfavorable
changes$94,316$28,194$(22,320)$–$–

59,781

10,604(8,007)––

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

Level 1

Level 2

Fair value
Level 3

Total

(Millions of yen)
Total carrying
amountAssetsTrade and otherreceivables¥–¥1,799,417¥1,029,067¥2,828,485¥2,772,047

Total

–

1,799,417

1,029,067

2,828,485

2,772,047

Liabilities
Financial guarantee
liabilities (assets)––(27,451)(27,451)

8,884

Bonds and borrowings–

2,569,187–

2,569,187

2,569,040¥–¥2,569,187¥ (27,451)¥2,541,736¥2,577,925

Total(Thousands of U.S. dollars)
Total carrying
amountFair value
Level 2
Level 3

Level 1

Total

AssetsTrade and other receivables$–$14,699,924$8,406,726$23,106,650$22,645,600

Total

–

14,699,924

8,406,726

23,106,650

22,645,600

Liabilities
Financial guarantee
liabilities (assets)––(224,258)(224,258)

72,579Bonds and borrowings–

20,988,382–

20,988,382

20,987,180$–$20,988,382$(224,258)$20,764,123$21,059,759

Total- 31 -(Thousands of U.S. dollars)
Impact on other comprehensive
incomeFavorable
Unfavorable
changeschangesFavorablechanges

Discounted cash flow method: WACC changes within the range of plus/minus 1%
Market price of comparable companies: PBR and PER change within the range of plus/minus
0.1 and plus/minus 1.0, respectively(Millions of yen)
Impact on other comprehensive
incomeFavorable
Unfavorable
changeschangesFavorablechanges

Impact on profit or loss

(7)

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

(6)

Impact on profit or loss

- 32 -

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

2. CONTRACT BALANCE

Millions of yen
Fair value
Note

Thousands of U.S. dollars¥94,763¥124,481

Carrying amountInterest and dividend income is recognized as revenue in accordance with IFRS 9, and income fromthe Lease business, and also from real estate rentals in the Real estate-related business, is recognized
as revenue in accordance with IFRS 16. Revenue recognized in accordance with IFRS 9 amounted to¥133,622 million (U.S. $1,091,601 thousand) for FY2021. Revenue recognized in accordance withIFRS 16 amounted to ¥14,677 million (U.S. $119,902 thousand) for FY2021.

The breakdown of contract balances is as follows:$774,151

Thousands of
U.S. dollars

Millions of yen$1,016,925

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

Beginning of
period(April 1, 2021)

End ofperiod(March 31, 2022)

Beginning of
period(April 1, 2021)

End ofperiod(March 31, 2022)¥97,528¥103,824$796,735$848,166

7,809

8,437

63,79968,929Receivables arising fromcontracts with customers
Trade and other receivables(NOTES TO REVENUE RECOGNITION)

Contract liabilities

1. BREAKDOWN OF REVENUE
The breakdown of revenue recognized from contracts with customers and other sources is as follows:(Millions of yen)
Revenue recognizedfrom contracts withcustomers

Revenue recognizedfrom other sources

None of the revenue recognized in FY2021 arose from performance obligations satisfied (or partiallysatisfied) in previous periods.

Total¥128,180¥81,427

Income from the lease business–

11,835

11,835

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

48,31348,31353,607

5,734

59,341

32,866–32,866

–

989

989

¥214,654¥148,300¥362,955

Income from the payment business

Finance income
Total

Contract liabilities mainly represent a deferred portion of annual membership fees. The amounts ofrevenue recognized in FY2021 that was included in the beginning balance of contract liabilities were
¥5,765 million (U.S. $47,100 thousand).

¥209,608
3. TRANSACTION PRICE ALLOCATED TO REMAINING PERFORMANCE OBLIGATIONSThe Group has adopted a practical expedient and omitted information on remaining performanceobligations, given that there were no significant transactions for which an individual estimatedcontract period exceeds one year.

(Thousands of U.S. dollars)
Revenue recognizedfrom contracts withcustomers
Income from the payment business$665,203$1,712,345–

96,684

96,684–

394,684

394,684

437,935

46,845484,780

268,495–

268,495

–

8,085

8,085

$1,753,572$1,211,504$2,965,076

Finance income
Total

Total

$1,047,141

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

Revenue recognizedfrom other sources

Revenue recognized from other sources includes interest and dividend income based on IFRS 9 andlease income based on IFRS 16.

- 33 -(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.

- 34 -¥3,598.22$29.39¥226.35$1.85

(TRANSLATION)(TRANSLATION)
INDEPENDENT AUDITOR'S REPORTMay 12, 2022

In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.

To the Board of Directors of
Credit Saison Co., Ltd.:

Responsibilities of Management and Audit & Supervisory Board Members and the Audit &Supervisory Board for the Consolidated Financial Statements
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Engagement Partner,
Certified Public Accountant:Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting standards prescribed pursuant to the provisions of the second
sentence of the first paragraph of Article 120 of the Ordinance on Company Accounting that omit a part ofthe disclosures required under International Financial Reporting Standards, and for such internal control as
management determines is necessary to enable the preparation of consolidated financial statements thatare free from material misstatement, whether due to fraud or error.

Mitsuo Kimura
Designated Engagement Partner,
Certified Public Accountant:Takeshi Ishisaka
OpinionPursuant to the fourth paragraph of Article 444 of the Companies Act, we have audited the consolidated
financial statements of Credit Saison Co., Ltd. and its consolidated subsidiaries (the "Group"), namely, theconsolidated statement of financial position as of March 31, 2022, and the consolidated statement ofincome and consolidated statement of changes in equity for the fiscal year from April 1, 2021 to March 31,
2022, and the related notes.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as of March 31, 2022, and its consolidated financial
performance for the year then ended in accordance with accounting standards prescribed pursuant to theprovisions of the second sentence of the first paragraph of Article 120 of the Ordinance on Company
Accounting that omit a part of the disclosures required under International Financial Reporting Standards.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our otherethical responsibilities as auditors. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Other Information
Management is responsible for the other information. Audit & Supervisory Board members and the Audit &Supervisory Board are responsible for overseeing the Directors' execution of duties relating to the designand operating effectiveness of the controls over the other information. The other information comprises theinformation included in the Business Report and the accompanying supplemental schedules.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.

-1-

In preparing the consolidated financial statements, management is responsible for assessing the Group's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting standards prescribed pursuant to the provisions of the second sentence of thefirst paragraph of Article 120 of the Ordinance on Company Accounting that omit a part of the disclosuresrequired under International Financial Reporting Standards.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the
Directors' execution of duties relating to the design and operating effectiveness of the controls over theGroup's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's reportthat includes our opinion. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks. The procedures
selected depend on the auditor's judgment. In addition, we obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion.
Obtain, when performing risk assessment procedures, an understanding of internal control relevant tothe audit in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group's ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor's report to therelated disclosures in the consolidated financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However, future events or conditions may cause the Group to cease to continue as agoing concern.

-2-

(TRANSLATION)
Evaluate whether the overall presentation and disclosures of the consolidated financial statements are inaccordance with accounting standards prescribed pursuant to the provisions of the second sentence ofthe first paragraph of Article 120 of the Ordinance on Company Accounting that omit a part of thedisclosures required under International Financial Reporting Standards, as well as the overall
presentation, structure and content of the consolidated financial statements, including the disclosures,and whether the consolidated financial statements represent the underlying transactions and events in amanner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We areresponsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding,among other matters, the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statementthat we have complied with relevant ethical requirements regarding independence, and communicate withthem all relationships and other matters that may reasonably be thought to bear on our independence, andwhere applicable, related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required tobe disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Readers of Independent Auditor's Report
This is an English translation of the independent auditor's report as required by the Companies Act ofJapan for the conveniences of the reader.

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