The year ended March 31, 2019

ANNUAL REPORT
2019

Corporate Philosophy

Earn the trust of society throughcorporate activity based in integrity
AIFUL was founded by President and CEO Yoshitaka Fukuda in 1967 as a sole
proprietorship consumer finance business and established as a corporation in1978 to bolster its creditworthiness. In 1982 the corporate name was changed
to the current AIFUL CORPORATION. AIFUL has grown into a comprehensive
financial group handling such diverse businesses as credit cards, small business
lending, credit guarantees, loan servicing and venture capital in addition to
consumer finance.
Based on the corporate philosophy “Earn the trust of society throughcorporate activity based in integrity” AIFUL aims to be a company that is truly
trusted by society.

Origin of our company name AIFULWe chose AIFUL as our company name after asking our employees for theirsuggestions. The winning idea takes the first letter from each of the key words inthe following sentence:“A company with Affection, Improvement, and Faithfulness in carrying out its
operations, filled with the spirit of Unity and Liveliness.”

Contents
To Our Investors and Shareholders2

Corporate Governance

14

Five-Year Summary

4

20

AIFUL Group at a Glance

5

Board of Directors and
Executive Officers

Management’s Discussion and 
Analysis of Operations

6

Group Network24

Business Data

10

Consolidated Financial Statements25

CSR Activities

12

Investor Information71

History22

Forward-Looking Statements
The figures contained in this Annual Report with respect to AIFUL’s plans and strategies and other statements thatare not historical facts are forward-looking statements about the future performance of AIFUL, which are basedon management’s assumptions and beliefs in light of the information currently available to it and involve risks anduncertainties and actual results may differ from those in the forward-looking statements as a result of various factors.
Potential risks and uncertainties include, without limitation, general economic conditions in AIFUL’s market andchanges in the overall market for consumer loans, the rate of default by customers, and the level of interest rates
charged by AIFUL.

AIFUL Group Long-Term Vision
Our aim is to become a global financial group that provides products
and services surpassing customer expectations, and is trusted andneeded in Japan and around the world.
By practicing management consistent with its corporate philosophy and the essence of the finance business, the AIFULGroup strives to become a global financial group that is trusted and needed domestically and around the world.

We practice management based on our corporate philosophy.
The corporate philosophy, conscience guidelines, conduct guidelines and mindset of the AIFUL Group incorporates adirection to be continually pursued.
To achieve the corporate philosophy, we will continue to provide products and services that surpass customer
expectations and strive to be a global financial group that is trusted and needed by customers in Japan and overseas.

We practice management based on the essence of the finance business.
The essence of the finance business lies in business risk management.
Risk management in the finance industry means striking a balance between profitability, safety, growth potential andworkforce, so as to continually adapt to environmental changes.
To achieve this, the AIFUL Group pursues financial diversification and actively expands overseas in an effort to establish
a global financial group.

The future vision of a global financial group

Establishingmanagement based on
robust Group unity

Vision for Stakeholders
Customer

We will continue to provide customers in Japan and overseas with products and services
that exceed their expectations, earning ‘trust’ and ‘need’, and attaining the No. 1
customer satisfaction in the industry.

Society

As a company that satisfies consumption and funding demands, we will fulfill our
mission as a financial system that supports the consumption and economic activities ofindividuals and the self-employed.

Business Partners

Through fair and honest trade, we will build a relationship conducive to prosperous
coexistence with all business partners.

Shareholders andInvestors

We will achieve sustainable profit growth and shareholder return, and strive to enhance
corporate value.

Employees

We will achieve a workplace in which employees experience both company and personal
growth, and can enjoy a purpose in life through their day-to-day work.

AIFUL CORPORATION Annual Report 20191

To Our Investors and Shareholders
The AIFUL Group implements business management in line withthe corporate philosophy of “Earn the trust of society throughcorporate activity based in integrity.” It aspires to be a global
financial services group that is trusted and needed byinternational society through the diversification of its financial
business portfolio and further expansion of its operating assets.
We are truly grateful to our stakeholders for their continued support. Below please find a report on thebusiness overview and financial results for the fiscal year ended March 31, 2019.
In the current business environment, we expect steady growth in both the AIFUL Group’s domestic
financial services businesses, including the loan business for consumers and business operators and thecredit card business; and its overseas business, mostly in the ASEAN region. In addition, interest
repayment claims, the current major business risk facing the consumer finance industry, have declined
significantly from their peak and the downward trend has become more apparent. However, we stillneed to keep a close watch on developments.
Against this backdrop, the AIFUL Group continues to work to become a global financial services
group trusted and needed in Japan and abroad in line with its corporate philosophy “Earn the trust ofsociety through corporate activity based in integrity.”

Financial results for the consolidated fiscal year ended March 31, 2019
In the consolidated fiscal year ended March 31, 2019, while dealing with interest repayment claims as
the principal issue for management, the AIFUL Group endeavored to manage its business with anemphasis on balancing safety, profitability and growth. To achieve this it focused on diversifying its
financial services business and expanding operating assets on a Group-wide basis.
With respect to revenues, while steady growth in operating assets particularly in our mainstay loanbusiness contributed to an increase in revenue, operating revenue remained almost flat at 115.3 billion
yen (down 0% year on year) due to sales from software development (12.8 billion yen) that had been
temporarily accounted for in the previous consolidated fiscal year.
Furthermore, with respect to expenses, given the lower-than-expected decrease in interest
repayment claims, interest repayment-related expenses equivalent to 13.2 billion yen were recorded in
the year under review. However, cost of sales of 11.2 billion yen for software development was
accounted for in the consolidated fiscal year ended March 2018. Consequently, operating expenses were112.2 billion yen (down 0% year on year).
As a result, operating profit was 3.0 billion yen (up 21% year on year) and ordinary profit was 4.1
billion yen (up 45% year on year). Profit attributable to owners of parent was 9.3 billion yen (up 136%
year on year) after a 0.6 billion yen impairment loss on the valuation of investment securities, negative

2

AIFUL CORPORATION Annual Report 2019

5.6 billion yen in income taxes-deferred due to deferred tax assets, and 1.1 billion yen in loss attributable
to non-controlling interests.

Plan for the consolidated fiscal year ending March 2020
The AIFUL Group expects steady growth in both domestic and overseas businesses, forecasting 124.3
billion yen in operating revenue (up 7% year on year) in contrast to 109.8 billion yen in operating
expenses (down 2% year on year) for the consolidated fiscal year ending March 31, 2020. As a result,
we estimate operating profit of 14.4 billion yen (up 375% year on year), ordinary profit of 15.4 billion
yen (up 274% year on year) and profit attributable to owners of parent of 14.4 billion yen (up 54% year
on year).
Going forward, while dealing with interest repayment claims as the principal management issue, theAIFUL Group will endeavor to reinforce its financial foundation by diversifying fund procurement
methods and improving business efficiency on a Group-wide basis. At the same time, we will rebalance
our business portfolio by diversifying our financial services business and increasing operating assets. As
far as our corporate governance is concerned, we will endeavor to enhance the compliance system while
continuing to reinforce the internal rules and control systems to precisely respond to any future changes
in the business environment.
We will continue to make our utmost efforts to meet the expectations of all our stakeholders. In
doing so, we hope to count on your continued support and encouragement.

Yoshitaka Fukuda
President and CEO
Representative Director

AIFUL CORPORATION Annual Report 20193

Five-Year Summary
AIFUL CORPORATION and Consolidated Subsidiaries
Years Ended March 31, 2019, 2018, 2017, 2016 and 2015

Thousands of
U.S. Dollars*Millions of Yen

2019

2018

2017

2016

2019

2015

For the Year:
115,328¥ 115,389

86,352$ 1,038,991

112,297

112,897

84,44081,032125,914

1,011,685

30,62820,497

20,744

16,126

2,234

275,928

Ordinary profit (loss)

4,110

2,823

7,399

6,860

(36,498)

37,027

Net income (loss) attributable toowners of the parent

9,346

3,958

7,276

7,044

(36,499)

84,198521,823¥ 472,018¥ 412,649¥ 376,224¥ 350,017$ 4,701,108

79,29471,51566,401

66,15870,418714,360

Loans in legal bankruptcy

26,167

27,14728,712

31,10532,908

235,739

Nonaccrual loans

33,11828,31425,53022,263

23,819298,360

7,043

5,792

4,407

3,349

2,829

63,45012,965

10,261

7,750

9,439

10,861

116,802

Total assets

760,587

682,645616,651

567,514560,323

6,852,135

Allowance for doubtful accounts

70,46966,95970,172

72,64379,708634,856

Total liabilities

632,570

563,238

505,002463,263

462,848

5,698,829

Interest-bearing debt

418,708

365,836

300,223

249,060

226,955

3,772,144

Total equity

128,016

119,407

111,649

104,250

97,475

1,153,297

Operating revenue¥

Operating expenses
Provision for doubtful accounts¥

91,450¥87,708¥At Year-End:Loans*¥

Nonperforming loans

Accruing loans contractually past		 due three months or more		 as to principal or interest
		payments
Restructured loans

Per Share Data
(Yen/U.S. dollars):
Basic net income (loss)

¥

19.32

¥

8.18

¥

15.05

¥

14.59

¥

(75.74)

0.17

—

—

15.04

14.57

—

—

256.45236.13228.94214.16200.45

2.31

—

—

—

—

—

—

Equity ratio

16.3

16.7

18.0

18.2

17.3

ROE

7.8

3.5

6.8

7.0

(31.8)

ROA

0.6

0.4

1.2

1.2

(6.4)

Diluted net income
Total equity
Cash dividends

Ratios (%):

Other Data:
Number of shares outstandingat year-end
Number of employees
at year-end

484,620,136 484,620,136 484,619,136 483,794,536 483,506,536
2,273

2,503

1,473

1,433

1,350

Notes: 1. The U.S. dollar amounts have been translated, for convenience only, at ¥111=$1, the approximate rate of exchange at March 31, 2019.
2. Figures in the financial section are based on Japanese GAAP.
* Receivables outstanding including off-balance sheet amount.

4$

AIFUL CORPORATION Annual Report 2019

REVIEW OF OPERATIONSAIFUL Group at a Glance(As of March 31, 2019)

Loan Business

Credit Card Business■ Companies■ Companies■ Share of receivable■ Share of receivable

67.9%

14.2%

2019

2019

499.3

104.6

billion yen

billion yen■ Key numbers■ Key numbers

Unsecured loan outstanding

423.3 billion yen

Installment recievables

1,046 billion yen+9%

Small business loan outstanding

55.6 billion yen+4%Transaction volume697.8 billion yen+18%

Credit Guarantee Business+0%

Overseas Business■ Companies■ Companies■ Share of receivable■ Share of receivable

13.5%

3.1%

2019

2019

98.9

22.4

billion yen

billion yen■ Key numbers■ Key numbers

Credit guarantee for individuals

Number of customer accounts

+17%

+21%

85.3 billion yen

Credit guarantee for small business operator

13.5 billion yen+20%

364 thousand

Loan outstanding

22.4 billion yen+40%

AIFUL CORPORATION Annual Report 20195

Management’s Discussion and Analysis of Operations
Current Business Environment
The AIFUL Group, based on its management philosophy“Earn the trust of society through corporate activity based in
integrity,” works with the aim of becoming a global financialgroup trusted and needed in Japan and abroad. We aim toachieve this goal by emphasizing business risk management,a core tenet of the financial services business, and byproviding services and products that surpass customer
expectations. Furthermore, to flexibly respond to future
market changes, we aim to establish a strong and integrated
Group management structure, while promoting financial
diversification and striking a balance between profitability,
stability, growth and human resource capabilities. In thisway, we will continue our efforts to grow with society bybuilding trust with all our stakeholders and meeting their
expectations.
Toward the realization of our philosophy, we strive todiversify our operations centering on four key business areas:
the loan business, for consumers and business operators; thecredit card business; the credit guarantee business; and theoverseas business.
In the fiscal year ended March 2019, all of our businesses
showed generally steady growth backed by market

expansion, robust advertising growth and various othermeasures.
In the unsecured consumer loans market, the balance ofloans remained flat year on year at 10.5 trillion yen as ofMarch 31, 2019, mainly due to Japanese banks’ voluntarydecision to reduce advertising for bank card loans. However,the balance of loans for consumer financing-dedicatedlenders continued to increase steadily by 4% year on year, to
2.5 trillion yen reflecting steady growth in the number of
new contracts by leading players.
In the small business loans market, which is a key area of
focus for us, the balance shrank to 228.8 billion yen in thefiscal year ended March 31, 2015, due to the lack of major
players. However, the balance recovered to 297.5 billion yen
as of March 31, 2018, a year-on-year increase of 12%.
In the credit card market, transaction volumes expanded
significantly in fiscal 2018 to 66 trillion yen, a year-on-yearincrease of 14%. This was mainly attributable to increases in
e-commerce and cashless payments as well as governmentled initiatives to promote cashless settlements.
In the overseas market, strong demand for borrowing
backed by economic growth and rising consumption led to

Unsecured consumer loans market
Consumer finance(Trillion yen)

Credit card companies

Financial institutions

20.0
Money Lending
Business Act

15.0

Bottom
out

10.0

9.2

9.7

10.2

10.5

10.5

6.4

6.3

1.7

1.7

5.0

0

2009

2010

2011

2012

2013

2014

2015

2016

2017

2.4

2.5

2018

2019

Source: Consumer finance and Credit card companies: Statistic by the Japan Financial Services Association.
Financial institutions: Statistic by The Bank of Japan. (Consumer loan outstanding at domestic banks and credit unions)Interest repayments claims at three major companies (ACOM, SMBC-CF and AIFUL)(Number)Number of Interest Repayment Claims

60,000Feb 2011:
47,20050,00040,00030,000FY2018: 90,300
FY2019: 65,000
YOY : -27.8%

20,000Mar 2019:
5,100

10,000
0

2009

2010

2011

2012

2013

Source: Complied by AIFUL from financial data of each company

6

AIFUL CORPORATION Annual Report 2019

2014

2015

2016

2017

2018

2019

Management’s Discussion and Analysis of Operations

personal loan growth in Thailand, where one of the Group’s
consumer finance companies operates. As a result, personalloans increased by 8% year on year, to 1.3 trillion yen, out of
which non-bank loans also expanded steadily by 9% year on
year, to 735.6 billion yen.
For fund procurement, operating asset increases andprofit growth have lowered the Group’s procurement costs
against the backdrop of ongoing negative interest rates. In
June 2019, AIFUL Corporation issued publicly offered straightbonds for the first time in 12 years, reflecting significant
improvements in the fund procurement environment.
Interest repayment claims remain a key business risk forthe industry. While more than 10 years have passed since theoriginal Supreme Court judgment and the number of claims
has fallen to only a tenth of its peak, we remain cautious assome lawyers and judicial scrivener offices continue toactively advertise the issue.
Under these circumstances, the AIFUL Group strove toexpand its operating assets, diversify its financial services
business, and emphasized the balance between safety,
profitability and growth in business management. All thewhile it has responded to interest repayment claims as themost important challenges of the management.

AIFUL Group Business Overview
Loan BusinessIn the loan business, which is our core business, we aremaking efforts to develop and distribute products thatquickly meet customers’ funding needs, as well as conducting
effective advertising. In the fiscal year ended March 31, 2019,loans outstanding for the entire AIFUL Group grew steadily,rising 10% year on year, to 521.8 billion yen.

Loans outstanding (Consolidated)(Billion yen)

600
500

55.6

47.0

400

20.9

20.2

300
200

404.0

445.8

480.1

100

Unsecured loan businessIn the unsecured loan business, in addition to effective
advertising centering on AIFUL’s new TV and website
commercials, we focused on customer service improvements
including the introduction of cardless transactions to increase
both new contracts and the balance of operating loans.
As a result, in fiscal 2018, the number of new unsecured
loan applications for AIFUL moved 2% higher year on year,
to 440,000, and the number of new contracts rose 1% year
on year, to 199,000. The balance of unsecured loans for
AIFUL alone rose 11% year on year, to 379.3 billion yen,while the balance of unsecured loans for the entire Group
increased 10% year on year, to 445.8 billion yen.
Small business loans
In our small business loans operations, we provide products
and services tailored to the needs of sole proprietors andsmall- and medium-sized companies by using the Group’s
credit know-how for business operators mainly at BUSINEXTCORPORATION and AIFUL.
As a result, in fiscal 2018, the balance of small businessloans for BUSINEXT increased 15% year on year, to 46.9
billion yen, while for AIFUL it surged 35% year on year, to 7.9
billion yen. The balance for the entire Group rose 18% year
on year, to 55.6 billion yen.

0

2015

2016

2017

2018

Unsecured Loan

2019
2020
(Estimated)
Small Business Loan

Secured Loan

Number of applications and new accounts (AIFUL)(Thousands)

500
433.0

440.4

400
300
197.5

200

199.3

100
0

2015

2016

2017

Applications

2018

2019

New accounts

Credit card businessIn the credit card business, we made efforts to expand new
applications for credit cards by actively using affiliate
advertising. We also launched new tie-up cards and issued
co-branded credit cards affiliated with hospitals, whichremove the need for cardholders to wait at the accounting
window. At the same time, we increased credit limits forexisting members and added a point privilege exchange
program and other initiatives designed to improve
convenience.
As a result, in fiscal 2018, credit card transaction volumesrose 0.2% year on year, to 697.8 billion yen, while thebalance of installment accounts receivable increased 4% year
on year, to 104.6 billion yen.

AIFUL CORPORATION Annual Report 20197

Management’s Discussion and Analysis of Operations

Credit Card transaction volume (LIFECARD)(Billion yen)

800

696.4

697.8

2018

2019

600
400
200
0

2015

2016

2017

Installment receivable (Consolidated)(Billion yen)

116.0

120
100.4

104.6

80

40

0

2015

2016

2017

2018

2019

2020
(Estimated)

Credit guarantee businessIn the credit guarantee business, we endeavor to increase theguarantee balance by utilizing our strengths, such as ourcredit know-how accumulated over many years and theflexibility and speed we gain from our status as anindependent company. To that end, we are also working toextend our sales activities to potential guarantee partners, aswell as proposing new products and offering support formarketing promotions in the business-related loan segment.
As a result, in fiscal 2018, AIFUL entered into new tie-ups
with four financial institutions. For the entire Group, thebalance of credit guarantees for individuals increased 17%
year on year, to 85.3 billion yen. For business operators, thebalance rose 20% year on year, to 13.5 billion yen. The totalbalance moved 18% higher year on year, to 98.9 billion yen.

(Consolidated subsidiaries)
Thailand: AIRA & AIFUL Public Company Limited (A&A)
In December 2014, A&A was jointly established with acompany based in Thailand. Since September 2015, A&A has
engaged in the consumer finance business under the “A
Money” brand.
In fiscal 2018, A&A achieved steady growth due to brisk
demand for funds against the backdrop of economic growth
and rising consumption in Thailand. As of December 31,
2018, the number of accounts grew 21%, to 364,000 andthe operating loan balance increased 40%, to 22.4 billion
yen, from a year earlier, respectively (A&A’s fiscal year ends
in December. Therefore, both accounts and loans
outstanding are shown as of December 31, 2018).
(Non-consolidated subsidiaries)
Indonesia: REKSA FINANCE
The AIFUL Group has been participating in the managementof REKSA FINANCE, which manages the used car auto loanbusiness in Indonesia, by acquiring the shares in May 2017.
REKSA FINANCE aims to expand its operating assets whilebuilding a high quality loan portfolio.
China: SANSHU SHANGHAI
Established in July 2012, SANSHU engages in the leasebusiness in Shanghai, China, and became a member of the
AIFUL Group in April 2015.

Branch of A&A

Credit Guarantee Outstanding (Consolidated)

Non-performing Loans and write-offs(Billion yen)

160
121.5

120

101.0
86.4

80
83.7

40
0

2015

2016

2017

Credit guarantee

2018

98.9

2019

120.0

2020
(Estimated)

Other

Overseas business
The AIFUL Group engages in the consumer finance businessin Thailand, the used car auto loan business in Indonesia andthe leasing business in China.

8

AIFUL CORPORATION Annual Report 2019

In fiscal 2018, the ratio of non-performing loans (NPLs) to
unsecured loans outstanding was 10.4%, a year-on-yearincrease of 1.0 percentage points. The rise is mainly due toan increase in intervention in debt workouts, requiring acertain period of time to settle, which was offset by adecrease in interest repayment claims through theintervention of independent specialists. In other words, NPLs
are temporarily trending upward as the composition of NPLs
is currently changing.
Against this backdrop, even though the NPLs ratio isincreasing, the resulting write-off ratio (general bad debts
excluding debt forgiveness arising from interest repayment
claims) remains low at 3.3%, a slight increase from theprevious year, as the ratio of bad debts likely to be written
off has not changed significantly.

Management’s Discussion and Analysis of Operations

Non-performing loans (NPL) (Consolidated)(%)(Billion yen)

120
90

60
9

79.2

71.5

60

3

0

0

2016

2017

2018

25.8

2019

40
15.7

25.3

20

20

14.3

10
0

Ratio of unsecured loans NPL

Non-performing loans (NPL)

60

40
30

30

2015

80

50

6

46.5

37.9

(Thousands)(Billion yen)

12

10.4%

9.4%

Interest repayments and waiver of principal(Consolidated)

2015

2016

Interest repayments

Unsecured loans NPL

2017

2018

2019

Number of interest repayment claims

Waiver of principal related to interest repayment

Total receivables write-offs (Consolidated)(Billion yen)

(%)

60

6.0
4.5

45

3.5%

3.4%

30

3.0%

15
0

3.3%
2.6

19.9
2015

2016

2017

2018

1.4

24.3

2019

Bad debt

Write-offs due
to interest repayment

Ratio to operating loan

Bad debt ratio except write-offs
related to interest repayment

3.0
1.5
0.0

Interest repayment claims
Interest repayment claims during the fiscal year ended March
31, 2019, continued their visible downward trend, as it has
now been more than a decade since the original Supreme
Court judgment. For AIFUL alone, the number of claims fellby 39% year on year, to 157,000, and the amount of transferfrom allowance fell by 44%, to 13.2 billion yen.
Notwithstanding the drop, we remain cautious aroundthe outlook for interest repayment claims as several lawyers
and judicial scrivener offices continue to actively advertise
this issue. As a result, in the fiscal year ended March 31,
2019, we posted 11.5 billion yen in provisions for losses oninterest repayment and 1.7 billion yen in allowance for
doubtful accounts from debt forgiveness due to loss oninterest repayment, for a total of 13.2 billion yen in additional
allowances. As of March 31, 2019, the balance of allowances
totaled 25.4 billion yen consisting of 22.9 billion yen inprovisions for losses on interest repayment and 2.5 billion
yen in allowance for doubtful accounts for debt forgiveness.

Future Outlook
With respect to the business environment surrounding the
AIFUL Group, the retail finance market such as loans andcredit cards and the overseas markets mainly in ASEAN
region are in an expansion phase. Stable growth is expected
in all the businesses conducted by the AIFUL Group. Looking
ahead, the Group will continue to respond to interest
repayment claims while working to expand overall operating
assets. Also, the Group will endeavor to diversify the financebusiness and will place emphasis on the balance of safety,
profitability and growth in business management.
In the fiscal year ending March 31, 2020, the Group plans
to expand its operating assets as a whole by 10%. In detail,the Group expects an 8% increase in the balance of loans, to564.2 billion yen; 10% growth in its balance of installment
accounts receivable, to 116.0 billion yen; and a 21% surge incredit guarantees outstanding, to 120.0 billion yen.
As a result, we expect operating revenue to expand by
7% year on year, to 124.3 billion yen.
Meanwhile, we anticipate a 2% year-on-year drop in
operating expenses, to 109.8 billion yen, mainly due toincreases in bad debt-related expenses arising from theincrease in operating assets, and other selling, general andadministrative expenses, although allowance for losses oninterest repayment will not be carried over.
As a result, operating profit and ordinary profit are each
expected to soar by 375% and 274% year on year to 14.4
billion yen and 15.4 billion yen, respectively. Profit
attributable to owners of parent will increase by 54% year
on year, to 14.4 billion yen.
The AIFUL Group sets the improvement of return on
assets (ROA) as one of the most important indicators ofmanagement profitability and stability. Average total assets inthe fiscal year ended March 31, 2019, increased by 11% year
on year, to 721.6 billion yen, due to an increase in operating
assets. Conversely, ordinary profit remained at 4.1 billion yen,mainly due to the posting of expenses relating to interest
repayment claims. As a result, ROA for the fiscal year ended
March 31, 2019, was 0.6%. However, we aim to improve
ROA to 2% in the fiscal year ending March 31, 2020. Overthe medium term, we will endeavor to further improve ROA
by increasing revenues from diversified business portfolio andraising profitability by changing our cost structure.

AIFUL CORPORATION Annual Report 20199

Business Data
AIFUL GROUPTOTAL RECEIVABLES OUTSTANDING (Including off-balance outstanding) FUNDING COST
(Millions of yen/%)

(%)

2017

2018

2019

YOY

591,528

665,669

735,219

10.4

412,649

472,018

521,823

10.6

Indirect		Unsecured

346,411404,056445,866

10.3

Direct		Secured

24,04420,923

20,285(3.1)

		Small Business18.4

Total Receivable Outstanding
Loans

42,19247,03755,670Installment Receivables

97,134100,460

104,645

4.2

Guarantee

75,74786,465101,00716.8

		 Credit Guarantee Business

72,20383,734

98,971

18.2

		Other

3,543

2,730

2,036

(25.4)

5,997

6,725

7,744

15.1

Other Operating Receivables

OPERATING REVENUE/PROFIT(Millions of yen/%)

2017

2018

2019

YOY

Operating revenue

91,450115,389

115,328(0.1)

Interest on Loans

16.3

Average Funding Cost

Long-term prime rate (reference)

2018

2019

YOY

2.37

1.87

1.64

-0.23 ppt

2.08

2.17

1.90

-0.27 ppt

2.69

1.50

1.39

-0.11 ppt

0.95

1.00

1.00

-0.00 ppt

NUMBER OF CUSTOMER ACCOUNTS(Thousands/%)

2017

2018

2019

YOY

916

1,299

1,437

10.7

Unsecured

879

1,259

1,394

10.7

Secured9

7

6(17.3)

Number of Customer Accounts

Small Business

28

32

36

14.7

Credit Card Holders

5,883

5,771

5,777

0.1

47,86956,30565,456

		Unsecured

42,892

51,94961,058

17.5

		Secured

3,206

2,597

2,285

(12.0)

		Small Business

1,769

1,758

2,112

20.2

Installment Receivables

15,436

16,03816,472

2.7

Credit Guarantees

12,494

12,992

13,953

7.4

Total Assets

Other

15,65030,052

19,446(35.3)ROA (%)

7,276

3,958

9,346

136.1

Profit attributatable to ownersof parent

2017

TOTAL ASSETS/ROA/TOTAL EQUITY/ROE

Total Equity
ROE (%)(Millions of yen/%)

2017

2018

2019

616,651

682,645

760,587

YOY
11.4

1.2

0.4

0.6

0.2 ppt

111,649

119,407

128,016

6.8

3.5

7.8

2017

2018

2019

YOY

721

802

876

9.2

7.2
4.3 ppt

Note: Italic Font = Increase or Decrease

AIFUL CORPORATIONTOTAL RECEIVABLES OUTSTANDING (Including off-balance outstanding) NUMBER OF CUSTOMER ACCOUNTS(Millions of yen/%)(Thousands/%)

2017

2018

2019

YOY

408,259454,316

503,38210.8

322,087

360,031396,540

10.1

Unsecured

707

788

861

9.3

		Unsecured

301,063341,777

379,317

11.0

Secured8

6

5(21.5)

		Secured

16,447

12,4039,306(25.0)

Small Business

5

6

9

33.1

		Small Business

4,575

5,850

7,915

35.3

2017

2018

2019

YOY

14.7

14.7

14.8

0.1 ppt

Total Receivables Outstanding
Loans

857

503

402

(20.1)

80,03987,97099,69413.3

		 Credit Guarantee Business

76,49585,23997,65814.6

		Other

3,543

2,730

2,036

(25.4)

Installment Receivables
Guarantees

Other Operating Receivables

5,275

5,811

6,745

Number of Customer Accounts

AVERAGE YIELD

16.1
Average yield

OPERATING REVENUE/PROFIT
2017

2018

2019

58,33964,66370,991

9.8

Interest on Loans

40,29245,881

51,96013.2

		Unsecured

37,31843,51050,026

15.0

		Secured

2,547

1,862

1,325

(28.8)

YOY

426

507

608

19.8

Credit Guarantees

11,106

10,976

11,246

2.5

Other

6,941

7,806

7,785

(0.3)

4,823

2,437

5,208

113.7

Profit10(Millions of yen/%)Operating revenue

		Small Business

AIFUL CORPORATION Annual Report 2019(%)

AMOUNT OF WRITE-OFFS/RATIO OF WRITE-OFFS(Millions of yen/%)

2017

2018

2019

17,717

17,926

18,795

4.9

13,071

13,90915,270

9.8

Ratio of Total Receivables
Write-offs (%)

4.3

3.9

3.7

-0.2 ppt

Ratio of Unsecured Loans
Write-offs (%)

4.3

4.1

4.0

-0.1 ppt

Total Receivables Write-offs
Unsecured Loans Write-offs

YOYBusiness Data

AIFUL CORPORATIONNEW ACCOUNTS
New Accounts
Unsecured Loans(Accounts/%)

TOTAL ASSETS/ROA/TOTAL EQUITY/ROE

2017

2018

2019

YOY

182,778

197,826

199,637

0.9

Total Assets

182,604

197,565

199,353

0.9

ROA (%)

45.3

45.6

45.3

Contract Rate of Unsecured
Loans (%)

-0.3 ppt

Total Equity(Millions of yen/%)

2017

2018

2019

439,840

500,262

556,450

11.2

1.0

0.2

0.3

0.1 ppt

83,91985,54891,200

6.0

2.9

5.9

ROE (%)

YOY

6.6
3.0 ppt

Note: Italic Font = Increase or Decrease

LIFECARD CO., LTD.
TOTAL RECEIVABLES OUTSTANDING (Including off-balance outstanding) TRANSACTION VOLUME(Millions of yen/%)(Millions of yen/%)

2017

2018

2019

YOY

2017

2018

2019

YOY

163,571

169,632

173,153

2.1

Transaction Volume681,362

696,435

697,8540.2

Installment Receivables

96,27699,956104,242

4.3

Card Shopping

640,598

655,990

657,5090.2

Loan (Cash Advance)

45,56446,72844,849(4.0)

Cashing

40,76340,44440,345(0.2)

Credit Guarantees

21,00722,032

23,063

4.7

722

914

998

9.2

2017

2018

2019

5,883

5,771

5,777

0.1

Proper Card

1,795

1,739

1,700

(2.2)

Affinity Cards

4,088

4,032

4,077

1.1

Total Receivables

Other

Number of Cardholders

OPERATING REVENUE/PROFIT(Millions of yen/%)

2017

2018

2019

YOY

28,89042,99132,850(23.6)

Installment Receivables

15,361

15,96016,391

2.7

Loan (Cash Advance)

5,603

5,649

5,556

(1.6)

Credit Guarantees

1,272

1,348

1,398

3.7

Other

6,653

20,0339,504(52.6)

3,031

2,746

2,822

2.8

Operating Revenue

ProfitNUMBER OF CARDHOLDERS(Thousands/%)

AMOUNT OF WRITE-OFFS/ RATIO OF WRITE-OFFS

YOY(Millions of yen/%)

2017

2018

2019

YOY

Total Receivables Write-offs

3,090

3,345

3,767

12.6

Ratio of Total Receivables
Write-offs (%)

1.8

1.9

2.1

0.2 ppt

Note: Italic Font = Increase or Decrease

AIFUL CORPORATION Annual Report 201911

CSR Activities
AIFUL Groups’ Social Contribution/Coexistence with the Community and Approach to environmental Issues

Society
We promote social contribution activities from the perspective of “what we can do for our customers and for society.”

AIFUL Run, a Program to Support Citizen Runners
In 2013, we launched AIFUL Run, a program to support
the challenging spirit of citizen runners. Through theprogram, we hope to bring smiles to many people andmake the world a brighter place.
We sponsored a total of 89 running events. In the
period ending in March 2019, we supported six running
events, including the Osaka Castle Park Night Run andthe Tokyo Bay Area Night Run, where AIFUL employees
participated as volunteers at water supply stations.

Sponsoring Hackathons for University Students
Aiming to enhance the relationship with society and local communities by
supporting human resource development in a variety of fields andconducting cooperative work, we sponsored a hackathon program for
Kyoto University students in March 2019.
“Hackathon” is a term coined from “hack” and “marathon.” In one
event, teams of computer programmers compete with each other byintensively devising programs and services over a given period of time on agiven theme. At the Kyoto University event, a total of 19 undergraduate andgraduate students from the university participated in five teams.

Blood Donation Drives
AIFUL regularly conducts blood donation drives for employees in response torequests from the Japanese Red Cross Society to cooperate in their efforts tosecure a stable blood supply. In the fiscal year ending March 2019, a total offour blood donation drives were conducted at AIFUL Headquarters and theContact Center.
In 2017, we received a letter of appreciation from the Governor of Shiga
Prefecture in recognition of our continued activities.

12

AIFUL CORPORATION Annual Report 2019

CSR Activities

Environment
As a member of society, we value the global environment and voluntarily work to conserve it.

Cool Biz Warm Biz Initiatives
We are working on “Cool Biz and Warm Biz” activities to prevent global warming. Since starting in 2006, we havemade it a company-wide activity, where we share the same regulations on dress codes and temperature-setting
when using air conditioning.

“Eco Cap Program”
Through the “Eco Cap Program,” we collect PET bottle caps for recycling. The money earned through sales of thecaps is donated to send polio vaccines to developing countries.
In the fiscal year ending March 2019, we donated approximately 55 kg of caps to Iki Corporation, which supports
the activities of the NPO, the Japan Committee, Vaccines for the World’s Children (JCV).

PETG Cards
In the AIFUL Cards (the cashing cards we issue to customers), we use PETG resin, an environmentally friendly material
that does not emit dioxins even when incinerated.

AIFUL CORPORATION Annual Report 201913

Corporate Governance1. ‌Basic Views and Basic Policy on Corporate
Governance
The AIFUL Group understands that a key objective ofcorporate governance is to achieve corporate managementwith transparency, impartiality, and efficiency by conducting
corporate activities premised on compliance in accordancewith our management philosophy of “Earn the trust of society
through corporate activity based in integrity” to contribute to
the development of the economy and society and thereby togain the trust of society.
AIFUL will undertake enhancements to upgrade ourcorporate governance in accordance with the Basic Policy on
Corporate Governance set out below.
(1) W e will respect the rights of shareholders and ensure theirequality.
(2) We will work on appropriate collaboration with all
stakeholders including shareholders.
(3) W e will appropriately disclose our financial, non-financial,and other corporate information to ensure transparency.
(4) Our Board of Directors will recognize its fiduciary
responsibility to shareholders and fulfill its roles and duties,
including making and keeping its function of effectively
supervising business execution.
(5) We will hold constructive dialogues with shareholders forthe sake of achieving continued growth and a medium andlong-term increase in corporate value.

2. Overview of Corporate Governance
Structure Reasons for the Current Structure(1) Overview of the Corporate Governance Structure
In order to strengthen the supervisory function of the Boardof Directors and to enhance corporate governance, we madethe change from a company with a Board of Auditors to acompany with an Audit and Supervisory Committee. Thischange went into effect on June 23, 2015.
Audit and Supervisory Committee and Directors
Belonging to the Committee
The Audit and Supervisory Committee consists of three
directors (including two outside directors: Satoru Toda andHaruichi Suzuki). It determines items such as the audit policy
and plan, and discusses and decides on important audit
matters based on the reports it receives. In addition to
performing these duties, it also audits legitimacy andappropriateness through the use of the internal control
system. A meeting will generally be held every month, withextraordinary meetings held when necessary.
The directors who are members of the Audit andSupervisory Committee will cooperate with the Internal
Auditing Department and the accounting auditors to enhance
management’s supervisory functions. They will also share
information with the auditors of affiliated companies in an

14

AIFUL CORPORATION Annual Report 2019

effort to strengthen the auditing structure for the operationsof the entire Group.
To improve these audit functions, the Group will establish
an Audit and Supervisory Committee Office (Audit Office) as
the exclusive body for supporting the duties of directors who
belong to the Audit and Supervisory Committee. It will also
take the necessary steps to secure independence, such as byrequiring that the Audit Office does not follow any directions
or orders from directors (other than directors belonging to the
Audit and Supervisory Committee) when carrying out theirduties.
Board of Directors and Directors
The Board of Directors consists of 10 directors (as of the date
the Annual Securities Report was submitted): seven directors(President, Representative Director and Chief Executive Officer
Yoshitaka Fukuda, Masayuki Sato, Mitsuhide Fukuda,
Kazumitsu Oishi, Tsuguo Nakagawa, Hiroshi Uemura and Keiji
Masui) who are not members of the Audit and Supervisory
Committee, and three directors who are members of the
Audit and Supervisory Committee. It discusses and makes
decisions on matters that cannot be delegated to directors orothers under laws and regulations and the Articles ofIncorporation, such as basic management policies and basic
policies associated with the internal control system, and otherimportant matters for execution of operations under the rulesof the Board of Directors, including business plans, personnel
policies, and capital policies. The Board of Directors delegatesauthority over the execution of operations in line with thepolicies on which the Board of Directors has made resolutions,and the disposal of property worth less than a specified
amount to executive officers and others within an appropriate
range in accordance with regulations for administrative
authority and other rules. In addition to delegating thisauthority, it supervises the execution of operations. It generally
holds semimonthly meetings and extraordinary meetings
when necessary.
Outside Directors
Two of the three directors in the Audit and Supervisory
Committee are outside directors (as of June 29, 2016). We
have developed a structure in which they can attend
management meetings and other important meetings andcommittees to express their views.
Executive Officers
The Company introduced an executive officer system to speed
up the decision-making process and the performance of
duties, and enhance the separation of supervisory andexecutive functions. The Board of Directors appoints executive
officers and delegates its business by establishing the divisionof duties and authority.
Management Committee
The Management Committee comprises all the directors andexecutive officers (Katsumi Amano, Shinichiro Okuyama,Corporate GovernanceKazuhiko Tsuda, Katsuhiko Nagasue, Atsushi Suda, Hideaki
Minamizawa, Akitaka Domoto, Toshiaki Ando, Ikuo Yamauchi,
and Takayuki Nakata). It strives to promote information
sharing and consensus on matters to be submitted to theBoard of Directors, as well as on issues and strategies, etc.
based on policies resolved at Board of Directors meetings. The
committee aims to ensure that disagreements do not arise
regarding decisions or the performance of duties. It generally
holds meetings on a weekly basis.
Compliance Committee
The Compliance Committee is placed as an advisory bodyunder the direct control of the Board of Directors. The head of
this committee is the officer in charge of Corporate Risk
Management Department (Director, Senior Managing
Executive Officer Tsuguo Nakagawa) and the Compliance
Committee comprises outside experts, directors also serving
as members of the Audit and Supervisory Committee, andexecutive officers of related organizations.
Its objectives are to create a corporate culture in which
compliance is emphasized, to establish corporate ethics, andto draw up compliance programs. It develops programs for theverification of issues and educational programs, and delivers
reports to the Board of Directors as required. In addition to
general bimonthly meetings, it holds extraordinary meetings
as necessary.
Risk Management Committee
AIFUL has a Risk Management Committee, which is under the
direct control of the Board of Directors. Headed by thepresident and representative director, it comprises all the
directors. For the purposes of preventing risks and mitigating
losses in the event of a crisis by constructing a reasonable risk
management structure, it regularly receives risk status reports
to enable it to be constantly aware of risks and continuously
reviews the risk management system to submit reports todirectors. In addition to general quarterly meetings, it holds
extraordinary meetings as necessary.
(2) Reasons for the Current Structure
As we have an auditor system, we appoint two outside
directors for our three directors who are members of the
Audit and Supervisory Committee. We have ensured
independent audits by developing a system where all directors
who are members of the Audit and Supervisory Committee
attend Board of Directors meetings and other important
meetings and committee meetings, including Management
Committee meetings, to express their opinions. We have also
ensured the independence of audits by establishing an Audit
Office as the exclusive body for supporting the duties of
directors also serving as members of the Audit and Supervisory
Committee.
Further, we separate management’s supervisory andbusiness execution functions by implementing an executive
officer system and strengthening supervisory functions by
establishing a Compliance Committee including outside

experts and a Risk Management Committee, etc. We haveadopted our current system to achieve transparent, fair, andefficient corporate management.

3. O ther Matters Relating to Corporate
Governance(1) Status of Establishment of Internal Control System(Including Status of Establishment of Systems for
Ensuring Proper Business Operations at Subsidiaries)
Based on its corporate philosophy of “Earn the trust of society
through corporate activity based in integrity,” the AIFULGroup recognizes that an important objective of corporate
governance is to contribute to the development of theeconomy and society through business activities founded oncompliance, and thereby to become a company that is trusted
by both stakeholders and the rest of society and to ensurecorporate management that is transparent, fair, and efficient.
The Company aims to steadily achieve the above
philosophy and objective, and prescribes the following basic
policy concerning the establishment of an internal control
system in light of the market environment, economic trends,
amendments to relevant laws and regulations, as well as allother aspects of the business environment surrounding the
AIFUL Group.
The Board of Directors shall revise this basic policy
whenever pertinent to reflect changes etc. in the businessenvironment, and shall make unceasing efforts to maintainand enhance its effectiveness.
(2) Development of a Risk Management Framework
A Risk Management Committee has been set up to gain anunderstanding of the Group’s risk factors and hold discussions
to determine responses. The Risk Management Committee
has a system in place whereby it collects risk information fromthe Compliance Committee and other divisions on a regularbasis and conducts crisis management in coordination withdirectors and other relevant divisions. AIFUL CORPORATION
and AIFUL Group have established an action plan and manualin preparation for large-scale disasters and failure of core IT
system, issues relating to personal or corporate information,and other risk events so as to be able to respond to potential
emergencies appropriately and promptly.
(3) Development of a Compliance Framework
A Compliance Committee (meeting on a regular basis), withan outside member (a lawyer), has been set up to establish
and manage compliance programs, engage in both analysis
and discussion to improve the internal control system, collectinformation and implement other preventative measures, anddetermine policies for employee training. In addition, theAIFUL Group Compliance Committee has been established todisseminate a set of unified corporate ethics throughout theentire Group and form a compliance framework for the Group
as a whole. In addition, the Group has launched both internal

AIFUL CORPORATION Annual Report 201915

Corporate Governanceand external hotlines offering consultations on any violationsof the Group’s management principles, norms, and otherstandards, as well as an internal whistle-blowing system, in aneffort to develop a corporate environment that encourages
reporting and discussion of violations.

4. Functions and Roles of Outside Directors
The Company has two outside directors who express opinions

and provide advice from a perspective outside the Company,
drawing upon their considerable experience and extensive
knowledge, to maintain an objective and neutral oversightfunction from an external perspective.
Director Satoru Toda, who is a member of the Audit
Committee, possesses a considerable knowledge of financeand accounting, having worked for the National Tax Agency
for many years. We have determined that he will be able toleverage the experience and knowledge acquired as acorporate auditor at Tokyo Metro Co., Ltd. to properly

General Meeting of Shareholders
Audit and supervisory committee

Board of Directors
auditing

3 Directors who serve as audit
and supervisory committee members(Including 2 outside directors)

auditing

10 Directors
7 Directors other than who serve as audit
and supervisory committee members
3 Directors who serve as audit andsupervisory committee members

Independent
Auditing Firm

auditing
cooperation

Audit and supervisory committee Office(advisory body under the
direct control of Board of
Directors)

reporting(under directcontrol ofBoard of Directors)

reportingsharing information

Group Compliance Committee
Compliance Committee

Risk Management Committee

Chairperson: Executive Officer in charge of the
Corporate Risk Management Dep.
Members: Directors who also serve as members of the
Audit and Supervisory Committee, and Outside experts,
executive officers of related organizations

Chairperson: President andRepresentative Director
Members: All directors

reportingreportingreportingExternal Compliance Reporting Desk

supervisionadvising/replying

Managementof Operations

Attorneys andOthersManagement Committee(Directors and Executive Officers)
reportingdirection

direction
direction

cooperation

Corporate Risk Management Dep.
(Internal Control Department, Information Management Office)Subsidiary Management Dep.

cooperation

sharing Information

In-house
Compliance
Reporting Desk

gathering and sharing
informationquestions/advice/complaints

sharing Information

General Affairs Dep.
(Customer Service Center)

Customers

Finance Dep.
(P.R. and I.R. section)

Investors andOthersdiscloseInternal Auditing
Internal Auditing Dep.
Group Internal Auditing Dep.
reportingInternal Auditing
Subsidiaries
cooperation

auditing

Subsidiaries Auditors

16

AIFUL CORPORATION Annual Report 2019

cooperation

Corporate Governancedischarge the duties of an outside director who is a memberof the Audit Committee, and have therefore elected him as an
outside director. He holds 608 shares in the Company, butother than that, he and the Company have no humanrelationship, capital relationship, material business relationship,or any other shared interests.
The Company also deemed Audit and Supervisory
Committee Member, Haruichi Suzuki, to be qualified as an
outside director, and thus has appointed him as such,expecting him to provide advice as an outside director from afair and neutral standpoint by drawing upon his extensive
knowledge and considerable experience as a lawyer. He andthe Company have no human relationship, capital relationship,
material business relationship, or any other shared interests.
(Standards for independent outside directors)
AIFUL’s standards for independent outside directors areprescribed as follows:
1. A person who falls under none of the items below andpermanently and substantially has no potential conflict ofinterest for any other reasons shall be deemed to havesufficient independence from AIFUL.
(1) The person is an executive director, etc.*1 at AIFUL or anyof its subsidiaries (hereinafter collectively referred to as“the AIFUL Group”), or the person served as an
executive director, etc. at the AIFUL Group during the
10-year period before assuming the post or, if theperson used to be a non-executive director*2 or a
corporate auditor at any time within the 10-year period
before assuming the post.
(2) The person is currently a major shareholder*3 of AIFUL,or if the major shareholder is a juridical person, is or wasa director, corporate auditor, accounting advisor,
executive officer, manager or other employee at the
major shareholder, its parent company or any of its
significant subsidiaries in the past five years.
(3) The person is currently a director, corporate auditor,
accounting advisor, executive officer, manager or other
employee at a company of which AIFUL is a major
shareholder*3.
(4) The person is or was an executive director, executive
officer, manager or other employee of a party of which
the AIFUL Group is or was a major business partner*4, of
its parent company, or of any of its significant
subsidiaries, whether or not it is a company.
(5) The person is or was an executive director, executive
officer, manager or other employee of a party that is amajor business partner*4 of AIFUL, its parent company or
any of its significant subsidiaries, whether or not it is acompany.
(6) The person is a director, limited to a person engaging inbusiness execution, or another person such as an officer,
member or employee engaging in business execution of
any organization (e.g., a public interest incorporated
foundation or association and a not-for-profit
corporation), which receives donations or financial

support exceeding a predetermined level*5 from the
AIFUL Group.
(7) The person is a director, corporate auditor, accounting
advisor or executive officer of a company, its parent
company or any of its subsidiaries that accepts a full-timeor part-time director from the AIFUL Group.
(8) The person is a director, corporate auditor, accounting
advisor, executive officer, manager or other employee ata financial institution or any other large creditor that is
indispensable to AIFUL in fund procurement and on
which AIFUL is so dependent that it is irreplaceable(hereinafter “large creditor, etc.”), or was, in the past
three years, a director, corporate auditor, accounting
advisor, executive officer, manager or other employee ata large creditor, etc., or its parent company or any of its
significant subsidiaries.
(9) The person is currently an accounting auditor, or amember, partner or employee of the auditing
corporation or the tax accountant corporation for the
AIFUL Group, or was an accounting auditor, or amember, partner or employee of the auditing
corporation or the tax accountant corporation for the
AIFUL Group in the past three years who actually did
auditing work, excluding assisting involvement, for the
AIFUL Group, irrespective of whether the person stillworks for, or in, or has already retired from any of thecorporations mentioned above.
(10) The person is a lawyer, certified public accountant, tax
accountant or other consultant who does not fall underitem (9) above who (a) has received a monetary or otherproperty benefit worth 10 million yen or more per year
on average over the past three years from the AIFULGroup in addition to the offer remuneration, or who (b)is a member, partner, associate or employee of a firm ofwhich the AIFUL Group is a major business partner(which refers to a firm that receives a payment from the
AIFUL Group that has made up at least two percent of
its average consolidated total sales over the past threebusiness years).
(11) The person is a close relative*6 of the person that falls
under any of items (1) to (10) above.
2. E ven if he or she falls under any of the items in 1. above, aperson deemed by AIFUL to be appropriate in terms of
personality, views, and suchlike as an independent director
for AIFUL may be appointed as such on the condition thatthe person fulfills the requirements for outside directors
under the Companies Act and that the grounds forregarding the person as appropriate as an independent
director for AIFUL are explained externally.
*1 An executive director, etc. refers to an executive director, executive
officer, manager or other employee.
*2 A non-executive director refers to any director who is not an
executive director.
*3 A major shareholder refers to a shareholder who holds at least 10
percent of the voting rights.

AIFUL CORPORATION Annual Report 201917

Corporate Governance*4 A major business partner refers to a party receiving an amount thatis two percent or more of its annual consolidated sales for its mostrecent business year from the AIFUL Group, either in the mostrecent business year or in the three business years before the mostrecent year (i.e., a party of which the AIFUL Group is a major
business partner) or a party that paid an amount that is two percent
or more of AIFUL’s annual total sales for its most recent businessyear either in the most recent business year or in the three businessyears before the most recent one (i.e., a party that is a major
business partner of the AIFUL Group).
*5 A predetermined level refers to either the average amount of 10
million yen per year over the past three business years or theamount equivalent to 30 percent of the average annual total
expenses of the organization in question, whichever is the larger.
*6 A close relative refers to either a spouse or a relative within thesecond degree of consanguinity; provided, however, that item (1) in
1. applies to those that fall thereunder within the last five years.

5. Officers’ Compensation(1) Policy Concerning Officers’ Compensation andCalculation Thereof
The Company has prescribed a policy concerning thedetermination of the amount of officers’ compensation etc.
and the calculation method thereof. This policy, which is basedon the corporate philosophy of “Earn the trust of society
through corporate activity based in integrity,” aims to ensurethat compensation etc. functions as a reward for the
performance of roles and as an effective incentive for
improving corporate performance and increasing corporate
value over the medium to long term.
Furthermore, regarding the method of determination,compensation for each director (excluding members of the
Audit Committee) is determined by the President andRepresentative Director after first seeking the opinions of the
Audit Committee. Compensation for members of the Audit
Committee is determined through consultations by themembers of the Audit Committee.
The date of the shareholders meeting resolution
concerning compensation etc. for officers of the Company
was June 23, 2015. This resolution prescribed that the amountof compensation for directors (excluding members of the
Audit Committee) should not exceed 500 million yen per year
and that the amount of compensation for directors who aremembers of the Audit Committee should not exceed 80
million yen per year.
The bodies with the authority to determine the policy
concerning the determination of the amount of officers’
compensation etc. and the calculation method thereof are theBoard of Directors and the Audit Committee. When
determining such matters, they shall review the compensation
structure and compensation level as necessary in light of theoperating environment, financial performance, etc. and decideon the allocation to each individual based on the size of theirrole, the administrative tasks they are entrusted with, thenature of their duties, and the scope of their responsibilities.
Regarding officers’ compensation at the Company, thecompensation structure for directors (excluding members of
the Audit Committee) comprises basic compensation (fixed

18

AIFUL CORPORATION Annual Report 2019

amount) and performance-linked compensation (variable
amount), and a compensation table is determined for eachcompensation rank. Furthermore, prescribed standards that
determine the compensation rank are determined for eachpost, and the basic compensation is an amount based on eachrank. The compensation structure for directors who aremembers of the Audit Committee comprises only basic
compensation, with no variation based on performance etc. inorder to maintain their independence.
Regarding indicators for performance-linked compensation,
calculations are based on applying the evaluation multiplier(based on the evaluation of each director) and the company
performance multiplier (determined by the Board of Directors
and based on the operating environment, financial
performance, etc.) to the standard amount for thecompensation rank. Indicators reflecting the achievements ofthe departments that the directors (excluding members of the
Audit Committee) are in charge of are also selected. As a result,for each director (excluding members of the Audit Committee),a performance evaluation based on the targets of thedepartment they are in charge of is performed. Performancelinked compensation is determined by the Personnel Committee(comprising the President and Representative Director,
Representative Directors, and directors nominated by the
President), which ensures the fairness and transparency ofevaluations. In addition, a certain percentage of basic
compensation is provided in the form of stock in the Company.
This amount, which is determined by each director and isgenerally at least 5% of monthly basic compensation but lessthan one million yen per month, is contributed to the Officers’
Shareholding Club. As this acquired stock in the Company isheld throughout the director’s term of office, it more closely
links compensation with the Company’s stock price.
Performance-linked compensation, which is not paid in theactual business year under review, aims to increase corporate
value by enhancing motivation to increase the stock price andimprove performance.
(2) Total Compensation for Each Officer Category

Officer category

Total amount of each type ofcompensation (million yen)
Total amount ofcompensation
Performance- No. of
etc.
linkedofficers
Fixed(million yen) compensation compensation subject

Directors (excluding membersof the Audit Committee)(excluding outside directors)

80

80

—

6

Directors (members of Audit
Committee)(excluding outside directors)

8

8

—

1

Outside officers

16

16

—

2

(3) Total Consolidated Compensation for Each Officer
No officer receives a total amount of consolidated
compensation etc. of 100 million yen or more, so suchamounts are not presented.

Corporate Governance

6. Stock Ownership

Specific portfolio stocks(1) Standards and Approaches Concerning Portfolio
Stock Categories
Portfolio stock can be categorized as either portfolio stock
held for purposes other than pure investment or portfolio
stock held for the purpose of pure investment. Portfolio stock
held for purposes other than pure investment can be definedas stock held based on the judgement that such holding willcontribute to the medium- to long-term development of theCompany through the maintenance and strengthening of
stable and medium- to long-term business relationships withbusiness partners. The Company does not, in principle, holdportfolio stock other than portfolio stock held for purposes
other than pure investment.
(2) P ortfolio Stock Held for Purposes Other than Pure
Investment(1) Holding policy and methods of verifying the rationality ofholding and verification by the Board of Directors etc.
concerning the appropriateness of holding specificissues.
When stock in listed companies is held, each year the
Board of Directors carefully examines whether the
purpose of holding specific stocks is appropriate,
whether the benefits and risks associated with holding
specific stocks is reasonable given the cost of capital,
etc., conducts investigations from the perspective of
maintaining and strengthening relationships withbusiness partners, and thereby ascertains theappropriateness of the holding.

Issue
AIRA
Capital PublicCompany
LimitedThisbusiness year

Previousbusiness year

No. of shares

No. of shares

112,000,000

112,000,000 Held for the purposes ofbuilding a medium- tolong-term strategic
799 partnership and obtaining acertain level of influenceNo

100 Held for the purpose ofmaintaining andstrengthening a medium- to
0 long-term business
relationship

No

Whethersharesin theAmountAmountCompany
Purpose of holding,presented on presented on quantitative effect of holding, held bybalance sheet balance sheet and reason for increase in investee(million yen) (million yen)
company
no. of shares held

570
100

ACOM
Co., Ltd.

0

Note: It is difficult to describe the quantitative effect of holding. Regarding
the rationality of holding, each year, the Board of Directors conducts
a comprehensive investigation as to whether the benefits and risks
associated with holding specific stocks is reasonable given the cost ofcapital, etc., taking into account qualitative assessments such as
various effects on the Company’s business and the strategic
importance of holding.

Quasi-portfolio securities
Not applicable.
(3) Portfolio Stock Held for Pure Investment Purposes
Not applicable.

(2) Number of issues and amounts presented on balance
sheet
Total amount presented
on the balance sheet(million yen)

No. of issues
Unlisted stock3

377

Stock other than unlisted stock2570(3) Information concerning the number of shares held by
issue (in the case of specific portfolio stocks) and quasiportfolio stocks, amounts presented on the balance
sheet, etc.

AIFUL CORPORATION Annual Report 201919

Board of Directors and Executive Officers(As of Jun 25, 2019)

Directors
Yoshitaka Fukuda

Kazumitsu Oishi

President and Representative Director

Director

Chief Executive Officer

Senior Managing Executive Officer

Apr. 1967: Founded Matsubara Sangyo as a sole proprietorship consumer
finance company

Mar. 1979: Joined Marutaka, Inc. (currently AIFUL CORPORATION)

Apr. 1980: Director of Marutaka, Inc.
(established in 1978, currently AIFUL CORPORATION)

Jun. 2007: Executive Officer

May. 1982: President and Representative Director of the Company due tomerger of three related companies(Oasa, Inc., Yamakatsu Sangyo, Inc., Maruto, Inc.)

Jun. 2012: Director and Managing Executive Officer

Jun. 2007: President and Representative Director, Chief Executive Officer
Jun. 2011: Chairman and Representative Director of LIFECARD Co., Ltd(Current position)
May. 2019: President and Representative Director, Chief Executive Officer,
Chairperson of the Risk Management Committee, In charge of
Administrative Information Office, Internal Auditing Department andGroup Internal Auditing Department (Current position)

Masayuki Sato
Representative Director
Senior Managing Executive Officer
Aug. 1982: Joined AIFUL CORPORATION
Jun. 1999: Director of the Company
Jun. 2008: Director and Managing Executive Officer
Jun. 2010: Director of Chintai Anshin Guarantor Service Co., Ltd(currently Anshin Guarantor Service Co., Ltd.) (Current position)
Jun. 2011: Director and Senior Managing Executive Officer

Jun. 2001: Director of the Company
Jun. 2011: Managing Executive Officer
Jun. 2016: Director and Senior Managing Executive Officer
Apr. 2019: Director and Senior Managing Executive Officer, In charge of
Subsidiary Management Department, Corporate Sales Promotion
Department, Eastern Japan Loan Business Department and WesternJapan Loan Business Department (Current position)

Tsuguo Nakagawa
Director
Senior Managing Executive Officer
Mar. 1976: Joined Oasa Inc. (Yoshitaka Fukuda’s sole proprietorship)
Jun. 2006: Director of the Company
Jun. 2007: Executive Officer
Jun. 2011: Managing Executive Officer
Jun. 2012: Director and Managing Executive Officer
Jun. 2016: Director and Senior Managing Executive Officer
Apr. 2019: Director and Senior Managing Executive Officer, Chairperson ofCompliance Committee, In charge of Accounting Department,
Corporate Risk Management Department, General Affairs
Department and Personnel Department (Current position)

Jun. 2014: Representative Director and Senior Managing Executive Officer
Jan. 2015: Authorized Director of AIRA & AIFUL Public Company Limited(Current position)

Hiroshi Uemura

Apr. 2018: Representative Director and Senior Managing Executive Officer,
Senior General Manager of Management Planning Division(Current position)

Director

Mitsuhide Fukuda
Representative Director
Senior Managing Executive Officer

Executive Officer
Apr. 1985: Joined The Nippon Credit Bank, Limited.
(currently Aozora Bank, Ltd.)
Sep. 2005: Senior Relationship Manager of Group 11 of Corporate Business
Division 1 of Corporate Banking Division, Senior RelationshipManager of Corporate Business Department 1, Sapporo Branch,
Corporate Banking Division of Aozora Bank, Ltd.

Apr. 2003: Joined Daiwa Securities Co. Ltd.

Aug. 2010: General Manager of Workout Division of Aozora Bank, Ltd.

Apr. 2009: Joined OGI Capital Partners, Ltd.

Apr. 2015: Executive Officer of the Company

Jun. 2011: Executive Officer of the Company

Jun. 2015: Director and Executive Officer

Jun. 2012: Director and Executive Officer

Jun. 2016: Director and Executive Officer, In charge of Finance Department(Current position)

Jun. 2014: Director and Managing Executive Officer
Jun. 2016: Director and Senior Managing Executive Officer
Jun. 2019: Representative Director and Senior Managing Executive Officer,
Senior General Manager of Loan Business Division, Credit
Management Division and Guarantee Business Division, In charge of
Credit Governance Department (Current position)

Keiji Masui
Director
Executive Officer
Aug. 1983: Joined AIFUL CORPORATION
Apr. 2014: Executive Officer of the Company
Jun. 2016: Director and Executive Officer (Current position)

20

AIFUL CORPORATION Annual Report 2019

Board of Directors and Executive Officers

Directors, Audit and Supervisory Committee Members
Satoru Toda
Director (outside)
Audit and Supervisory Committee Member
Apr. 1978: Joined Ministry of FinanceJul. 2007: Regional Commissioner, Fukuoka Regional Taxation Bureau, National
Tax Agency

Apr. 2012: Sales Manager, Division 6, the Main Branch of The Sumitomo Trust& Banking Co., Ltd.
Apr. 2015: Executive Officer of the Company
Jun. 2015: Director and Executive Officer
Jun. 2019: Corporate Auditor of LIFECARD Co., Ltd (Current position)
Jun. 2019: Director of the Company (Audit and Supervisory Committee
member) (Current position)

Jul. 2008: Deputy Director-General of National Tax Tribunal National Tax
AgencyHaruichi Suzuki

Jun. 2009: Full-time Auditor of Tokyo Metro Co., Ltd

Director (outside)

Jun. 2017: Corporate Auditor of LIFECARD Co., Ltd (Current position)

Audit and Supervisory Committee Member

Jun. 2017: Director of the Company (Audit and Supervisory Committee
member) (Current position)

Yoshiaki Tanaka
Director
Audit and Supervisory Committee Member
Apr. 1983: Joined The Sumitomo Trust & Banking Co., Ltd. (currently Sumitomo
Mitsui Trust Bank, Limited)

Apr. 1997: Joined the SHIGEKAZU UEMATSU Law Office(currently UEMATSU/ SUZUKI Law Office)Sep. 1999: Lecturer at Ritsumeikan University Graduate School of Law
Jan. 2008: Director of UEMATSU/ SUZUKI Law Office (Current position)
Jun. 2015: Director of the Company (Audit and Supervisory Committee
member) (Current position)
June. 2017: Outside Director of KYOTO TOOL CO., LTD (Audit and Supervisory
Committee member) (Current position)

Sep. 2006: Sales Manager, Division 6, Tokyo Branch of The Sumitomo Trust &Banking Co., Ltd.

Executive Officers
Katsumi Amano

Hideaki Minamizawa

Senior Managing Executive Officer

Executive Officer

In charge of Group Digital Promotion Department,

Responsible for Personnel Department,

Senior Advisor attached to Group Systems Division

General Manager of Personnel Department(President of BUSINEXT CORPORATION)

Shinichiro Okuyama
Managing Executive Officer

Akitaka Domoto

Responsible for Credit Governance Department

Executive Officer
Assistant Senior General Manager of Loan Business Division,

Kazuhiko Tsuda

General Manager of Credit Management Promotion Department

Managing Executive Officer
Responsible for Accounting Department,

Toshiaki Ando

General Affairs Department and Administrative Information Office,Executive Officer

General Manager of Accounting Department

Katsuhiko Nagasue
Executive Officer
Senior General Manager of Group Systems Division

Atsushi Suda
Executive Officer
Assistant Senior General Manager of Guarantee Business Division,
Responsible for Corporate Risk Management Department(President of AsTry Loan Services Corporation)

Special Mission on Management Planning Division

Ikuo Yamauchi
Executive Officer
Responsible for Overseas Business Department,
General Manager of Overseas Business Department

Takayuki Nakata
Executive Officer
Assistant Senior General Manager of Group Systems Division,
General Manager of Information Systems
Development Department

AIFUL CORPORATION Annual Report 201921

History
1967
Apr

2000
Yoshitaka Fukuda, AIFUL CORPORATION’s
current president, established sole
proprietorship as a consumer finance company

1978
Feb

Mar

Listed on the First Section of the Tokyo Stock
Exchange, and the First Section of the Osaka
Securities Exchange

2001
Established Marutaka, Inc. (now AIFULCORPORATION) with capital of 9.0 million yen,in Sakyo-ku, Kyoto
Began unsecured consumer loan businessJan

Established business finance company BUSINEXTCORPORATION

Feb

Completed new headquarters building

Mar

Converted LIFE Co., Ltd.
into 100% subsidiary

Jul

Issued LIFE ETC CARD

Nov

Established servicer company AsTry Loan
Services Corporation

Nov

Changed the form of invoicing (statement ofcharges) sent to cardholders to electronic andlaunched the LIFE-Web
Desk service
for card holders

1982
May

Marutaka, Inc. absorbs three related companies(Oasa, Inc., Yamakatsu Sangyo, Inc., andMaruto, Inc.) and increases its equity capital to500.0 million yen
Name simultaneously changed to
AIFUL CORPORATIONJul

Began providing unsecured loans to sole
proprietors

1984
Feb

Start of ATM operations

Mar

Registration of money lenders based onenactment of the Money-Lending BusinessControl Law

Oct

Began sales of real estate-secured loans

1994
Nov

Opened Heartful Center

1995
Mar

Installed automatic contract acceptancemachine, “Ojido-san”

Nov

Started a website

1997
Jul

Oct

Over-the-counter registration of company’s
stock with the Japan Securities Dealers
Association
Began full-scale sales of commercial loans to
consumers

22

Apr

Established Compliance Committee

Sep

Opened a contact center

Oct

Converted business finance company,
City’s Co. Ltd., into 100% subsidiary

2003
Jan

Registered as certified finance corporation
based on the Law Concerning the Issuance ofCorporate Bonds in the Financial Industry Loan
Business

AIFUL CORPORATION Annual Report 2019

Received Listed Company Disclosure
Commendation from the Tokyo Stock Exchange

2004
Mar

Converted KOKUSAI Capital Co., Ltd. into 100%
subsidiary (currently AG Capital Corporation)

2006
Apr

1999
May

2002

Issued LIFECARD GOLD ;issued LIFECARD
exclusively for students

History

2007

2015

Apr

Revised management philosophy. The new
management philosophy becomes “Earn the trustof society through corporate activity based in
integrity”

Apr

Established Risk Management Committee

Oct

AIRA&AIFUL Public Company Limited (A&A)
commences the consumer finance business inThailand with the A Money brand

Nov

Shares of Anshin Guarantor Service Co., Ltd.,a group company, are listed on the Tokyo
Stock Exchange Mothers

2009
Aug

Opened a shopping mall for members, L–Mall

2016
Apr

2010
Jul

Established LIFECARD Co., Ltd. (now aconsolidated subsidiary) to operate credit cardand credit guarantee businesses, wholly fundedby AIFUL subsidiary LIFE Co., Ltd. (now aconsolidated subsidiary)

2011
Jun

Jul

2017
Apr

The 50th anniversary of its establishment

May

Acquired 40% of shares of REKSA FINANCE,
which manages used cars loan business inIndonesia

Issued V-preca, Japan’s first prepaid Visa card
available exclusively online

Under the Group’s reorganization, the credit sales
business and the credit guarantee and insurance
businesses of LIFE Co., Ltd., were transferred to
LIFECARD Co., Ltd. by way of corporate spinoff
and merger. Also, four consolidated subsidiaries(LIFE Co., Ltd. (following its spin-off), City’s
Corporation, City Green Corporation andMarutoh KK) were merged with AIFUL

2014
Dec

New Frontier Partners Co., Ltd. changed its
corporate name to AG Capital Corporation

2018
Apr

Established AsTry Partners Corporation, which
manages corporate turnaround & restructuringbusiness

AIRA&AIFUL Public Company Limited, a joint
venture, is established with AIRA Capital, an
overseas subsidiary in Thailand

2015
Apr

SANSHU Finance Corporation, which manages
the lease business in Shanghai, China, becomes a
member of the GroupAIFUL CORPORATION Annual Report 201923

Group Network(As of March 31, 2019)

Domestic
Group Companies
AIFUL CORPORATION

LIFECARD CO.,LTD.

BUSINEXT CORPORATIONBusiness Classification*Unsecured loans*Secured loans*Small business loans*‌Credit guarantees(for financial institutions)

Date of theestablishment

Location

WebsiteTop page:https://www.aiful.co.jp/

1978 Feb

Kyoto, Japan*Credit card
*Prepaid card*‌Credit guarantees(for financial institutions)2010 Jul

Kanagawa,
Japan*Secured loans*Small business loans*Factoring

2001 JanTokyo, Japan

http://www.businext.co.jp/*Loan servicing

2001 Nov

Tokyo, Japan

http://www.astry-s.co.jp/*Venture capital

1985 Dec

Tokyo, Japan

http://www.nf-partners.co.jp/*‌Individual credit purchasing
agency business*‌Guarantee (in-houseinstallment)2013 Apr

Tokyo, Japan

http://www.lifeguarantee.co.jp/*‌Corporate turnaround &restructuring

2018 Apr

Tokyo, Japan

http://www.astry-p.co.jp*‌Guarantee (rent liabilities)

2002 Dec

Tokyo, Japan

https://anshin-gs.co.jp/

Business Classification

Date of theestablishment

Location*Consumer finance2014 Dec

Bangkok,Thailandhttp://www.aira-aiful.co.th/*Auto loan

1984 Oct

Jakarta,Indonesia

https://reksafinance.co.id/*Leasing2012 Jul

Shanghai,
China

https://www.sanshu-sh.com/

Investor relations:
https://www.ir-aiful.com/
Top page:
http://www.lifecard.co.jp/
V-preca:
http://vpc.lifecard.co.jp/

AsTry Loan Services Corporation

AG Capital Co.,Ltd

LIFE GUARANTEE CO.,LTD

AsTry Partners Corporation

Anshin Guarantor Service Co.,ltd.

Overseas
Group Companies

Homepage

AIRA & AIFUL Public Company Limited

REKSA FINANCE

SANSHU Finance Corporation

24

AIFUL CORPORATION Annual Report 2019

Consolidated Financial
Statements and Others

Contents
Method of preparation of consolidated financial statements

26

Regarding details of analysis/consideration relating to the operating results andother situations from the perspective of the management

26

Regarding dividend policy

27

Regarding the risk of business, etc.

27

Regarding the audit certificate31

Consolidated Balance Sheets32

Consolidated Statements of Income andConsolidated Statements of Comprehensive Income

34

Consolidated Statements of Change in Shareholders’ Equity

36

Consolidated Statements of Cash Flows

38

Notes to Consolidated Financial Statements 39

Method of preparation of consolidated
financial statements
The consolidated financial statements and notes of AIFUL
Corporation (“AIFUL”) conform to the Financial Instruments
and Exchange Act and the related laws of Japan and thegenerally accepted accounting standards of Japan (“Japanese
GAAP”).
These standards are different from the accounting
processing and the matters of disclosure required by theInternational Accounting Standards in some respects.
In addition, with respect to the consolidated financial
statements and notes of the Annual Report in English for andbefore 2017, the consolidated financial statements prepared inJapan were reclassified into the form that is familiar tooverseas. From the 2018 Annual Report, however, thestatements were changed to those of the consolidated
financial statements and notes in the Securities Report createdaccording to the generally accepted accounting standards ofJapan.

Regarding details of analysis/consideration
relating to the operating results and othersituations from the perspective of the
management
The business environment surrounding the Group is expected
to see stable growth going forward, as both the domestic
financial business, including consumer and small businessloans and credit cards, and the overseas business, such as in
ASEAN countries, are on a growth phase. On the other hand,
while interest repayment claims, the consumer financeindustry’s largest risk, have declined significantly from theirpeak and the downward trend became more apparent, thesituation still requires careful attention.
In this environment, the Group has managed its businesswith emphasis on balancing safety, profitability, and growth,
while dealing with interest repayment claims as its principal
managerial issue and striving to expand its operating assets ona group-wide basis as well as diversifying its financial services
business.
In the consolidated fiscal year under review, operating
revenue dropped 0.1% year on year to 115,328 million yen
due to the posting of 12,803 million yen in softwaredevelopment sales in the previous fiscal year, despite steady
growth of operating assets mainly in the loan business, whichis the core operation of the Group. In terms of costs, operating
expenses dropped 0.5% year on year to 112,297 million yen
since 11,244 million yen of the cost of sales for softwaredevelopment was posted in the previous fiscal year, althoughcosts related to interest repayment were posted in the fiscal
year under review in view of the slower decline of interest
repayment claims than initially estimated.
Meanwhile, the future business management environment
surrounding the AIFUL Group is in the phase of the expansionof the retail finance market such as loans and credit cards andthe overseas market, mainly in ASEAN. Stable growth isexpected in all the business conducted by the AIFUL Group.
The AIFUL Group will continue to work on expanding its

26

AIFUL CORPORATION Annual Report 2019

operating assets on a group-wide basis while responding tointerest repayment claims. In addition, the AIFUL Group will
endeavor to diversify its financial business and place emphasison the balance of “safety,” “profitability” and “growth” inbusiness management.
In addition, the AIFUL Group sets the increase of the ratioof ordinary profit to total assets (return on assets: ROA) as oneof the important indexes from the perspectives ofmanagement profitability and stability. The average total
assets during the consolidated fiscal year under review
increased 11%, to 721,616 million yen, due to an increase in
the operating assets. On the other hand, ordinary profit was
4,110 million yen, due to posting expenses related to interest
repayment. As a result, ROA for the consolidated fiscal year
under review was 0.6%. However, the AIFUL Group will aim
to improve the stability of ROA through structural changes inrevenues and costs through the diversification of the businessportfolio in the future.
(Operating revenue)
In the consolidated fiscal year under review, the AIFULGroup’s consolidated operating revenue was 115,328
million yen (down 0.1% year on year). The principal
components and their movements were interest on loans,which increased 16.3% year on year to 65,456 million yen,revenue from the credit card business, which increased
2.7% to 16,466 million yen, revenue in the credit
guarantee business, which increased 7.4% to 13,953
million yen, the collection from purchased receivables,
which decreased 17.6% to 1,709 million yen, and therecoveries of written off claims, which decreased 1.4% to6,320 million yen.
(Operating expenses)
Operating expenses decreased 599 million yen to 112,297
million yen (down 0.5% year on year). Key contributory
factors included the posting of 11,244 million yen ofsoftware development sales cost in the previous fiscal year
and an 882 million-yen decrease in the provision ofallowance for loss on interest repayment to 11,501 million
yen (down 7.1% year on year) in the fiscal year underreview, while the provision of allowance for doubtful
accounts increased 9,320 million yen to 29,340 million yen(up 46.6% year on year) due in part to the growth ofoperating assets, and that system-related and othercommission fees increased 1,682 million yen to 14,644
million yen (up 13.0% year on year).
(Operating profit)
As a result of the above factors, for the consolidated fiscal
year under review, the AIFUL Group recorded an operating
profit of 3,031 million yen, which was an increase of 539
million yen from the previous consolidated fiscal year (up21.6% year on year).
(Ordinary profit)
Ordinary profit for the consolidated fiscal year underreview increased 1,287 million yen to 4,110 million yen (up45.6% year on year). The main contributory factors were a
539 million-yen increase in operating profit as well as a

785 million-yen increase in non-operating income due inpart to the posting of 458 million yen in a gain on sales ofinvestment securities.
(Profit attributable to owners of parent)
Profit attributable to owners of parent for the consolidated
fiscal year under review increased 5,387 million yen to
9,346 million yen (up 136.1% year on year). The key
contributory factors for the increase were a 1,287 millionyen increase in ordinary profit as well as the posting of-5,621 million yen in corporate tax adjustment due to theadditional posting of deferred tax assets and 1,162 million
yen of loss attributable to non-controlling interests, despite
posting extraordinary losses of 690 million yen following
the booking of impairment loss on investment securities
held by the Company.
(Assets)
Total assets on a consolidated basis increased 77,941
million yen or 11.4% compared to the end of the previous
fiscal year, to 760,587 million yen at the end of the fiscal
year ended March 2019. This was primarily due to anincrease of 45,078 million yen in operating loans.
(Liabilities)
Total liabilities at the end of fiscal year ended March 2019were 632,570 million yen, an increase of 69,331 million
yen or 12.3% compared with the previous fiscal year-end.
The principal factor contributing to this increase was anincrease of 33,756 million yen in borrowings and anincrease of 19,115 million yen in bonds payable.
(Net assets)
Net assets increased 8,609 million yen or 7.2% comparedwith the previous fiscal year-end, to 128,016 million yen.
This was largely attributable to an increase in retained
earnings.

Regarding dividend policy
The return of profits to shareholders is a management priority
for the AIFUL Group. The Group’s basic policy calls for theconsistent return of profits in line with business results. The
Group aims to maximize shareholder returns and shareholder
value while simultaneously securing stable internal reserves
through medium-to long-term profit growth.
However, the financial burden associated with claims forinterest repayments is still heavy, creating difficult conditions
for the distribution of profits. In addition, losses in the
distributable amount continue. The Group therefore regretted
to announce that we were unable to pay any dividends for the
fiscal year under review.
The Company stipulates in its Articles of Incorporation thatthe dividend of surplus may be paid by resolution of the Boardof Directors, and that interim dividends may be paid.

Regarding the risk of business, etc.
Of the matters relating to the business situation and theaccounting situation, etc., the major matters that may have asignificant impact on the judgment of investors include thosedescribed below. The policy of the AIFUL Group is to recognize
the possibility that these risks may arise, and to endeavor to
avoid their occurrence and respond to them if they do arise. In
addition, the statements described below do not include all
the risks of the AIFUL Group’s business, etc. There is apossibility that a new business risk, etc. may arise due tovarious uncertain causes in the future.
In addition, the matters relating to the future included in
the sentences were judged by the AIFUL Group as of the dateof submission of the Securities Report.
Risk due to the causes relating to the management
environment
The financial position and operating results of the AIFULGroup rely to a significant extent on multiple factors. Of thesefactors, the main assumed factors are as follows.
(1) Economic situation and market trends(2) Intensified competition(3) Increase/decrease in multiple debtors(4) Legal regulations(5) Funding(6) Financial soundness(7) Corporate tax burden due to the elimination of tax loss
carryforwards(8) Impairment of securities(9) Disruption, failure and other damage to the information
network system, Internet services, or technical systems(10) The credit guarantee business(11) The overseas business(12) T he holding and disposing of Company shares by the
Representative Director and his/her family members(13) Occurrence of disasters, etc.
(14) F luctuation in costs including fees, advertising costs andpersonnel expenses, and losses (e.g., increases in partner
ATM fees, payments to contractors related to affiliate
advertising, advertising costs due to a rise in the unit costof TV and other media and an increase in ad placements,
and personnel expenses due to an increase in personnel
following the expansion of operations)(15) N egative media reports on the Group or the consumer
finance industry, or the occurrence of scandals (e.g., riskof reputational damage due to negative media reports on
the bank card loan problem, risk of significant damage to
the Group’s brand image due to the uploading of videos
of inappropriate acts by employees on the Internet)
AIFUL established the risk management committee as theorgan under the direct control of the Board of Directors from
April 2007 and established a system to control and supervise
the risk arising in each department and the risk threatening
the corporate activities in a cross-sectional manner, preventthe realization of risk and respond to an emergency. Despite
these actions, however, due to changes in the management
environment, including the strengthening or easing of thelegal regulations, the competition situation, changes in the

AIFUL CORPORATION Annual Report 201927

economy and other causes, the financial position andoperating results of the AIFUL Group may be affected. In
addition, there is a possibility that the AIFUL Group may beforced to review its strategies. Of the above risks, those ofparticular importance are detailed below.
Economic circumstances and market trends
The AIFUL Group operates its businesses not only in Japan,
but also in Southeast Asia. In the lending business forindividuals, the Group faces the following risks: an increasing
number of customers having difficulty with repayments and adecreasing amount of operating loans due to the deteriorationof economic situations in each country, particularly theworsening employment environment and sluggish consumer
spending. These risks, when they become apparent, are likely
to impact the financial situation and management
performance of the AIFUL Group.
Intensifying competition with other companies
The AIFUL Group engages mainly in the consumer financebusiness and the business operator finance business, and islikely to face competition in both markets with banks, credit
card companies, credit sales companies, and others. The
financial situations and management performance of the
AIFUL Group may be affected if the intensification of thiscompetition leads to an impact on the lowering of lending
rates in the consumer finance business and the business
operator finance business, or to an increase in lending tohigh-risk borrowers.
Trend of increase/decrease in multiple debtors
The AIFUL Group has implemented tightened investigations of
repayment ability (including credit monitoring during theperiod of transaction with customers) and credit requirements
based on data from consumer credit information institutions
and its own credit system.
Despite these measures, however, the financial situationand management performance of the AIFUL Group may beaffected if default rates rise as a result of worsening financial
conditions of many customers due to future economic
situations, and a rise in uncollected loans due to the increasein multiple debtors, which may lead to contracted market scaleof this loan industry. Furthermore, if credit costs such as loan
loss write-off increase, it is assumed that the number ofcustomer accounts with the Company will decrease, and theaverage balance of loans per account will shrink, and interest
income will decrease due to the decrease in operating loans.
Legal regulations, etc.
1. System for compliance with laws and regulations
AIFUL established the compliance committee as theadvisory body under the direct control of the Board of
Directors to prevent the violation of laws and regulations
related to the money lending business, information leaks
and other deplorable events. By gathering information
regarding compliance and taking preventive measuresagainst the violation of laws and regulations, thecompliance system is verified/ascertained on a companywide basis. In addition, the AIFUL Group compliancecommittee is established to share the unified corporate

28

AIFUL CORPORATION Annual Report 2019ethics in the entire Group and establish the compliancesystem of the whole Group. Moreover, in April 2007, theinternal control functions were strengthened, including theunified control of the hotline (internal reporting system),the strengthening of the function for gathering
information regarding compliance and the unification of
the function relating to awards and punishment tostrengthen the system for compliance with laws andregulations.
With respect to others, business rules with the functionof enhancing compliance with laws and regulations were
established, knowledge of laws and regulations was
obtained through internal education, the spread of theawareness of compliance with laws and regulations wasstrengthened, the effectiveness of internal audits such as
call monitoring was strengthened, and other similar
measures were taken. In addition, the system for reviewing
such measures, etc. from time to time was established.
Despite these actions, if any wrongdoing or deplorable
event occurs, including acts in violation of laws andregulations, by employees, etc. of the AIFUL Group,
administrative disposition and other legal measures will be
executed and the financial position and operating resultsof the AIFUL Group may be affected.
2. Business regulations, etc.
(1) Business regulations of the Money Lending Business
Act/the Installment Sales Act
With respect to the legal regulations on business, theMoney Lending Business Act is applied to the loanbusiness, including the consumer finance business, whichis the main business of the AIFUL Group. The Money
Lending Business Act imposes various types of businessregulations (prohibited acts, restrictions relating to interest/
guarantee fees, etc., investigation of repayment ability,
prohibition of excessive loans, etc., posting of a notice ofloan conditions, etc., prohibition of the advertisement ofloan conditions and other extravagant advertisements,
delivery of a document before the conclusion of anagreement, delivery of a document at the time of
concluding an agreement, delivery of evidence of receipt,
maintenance of books, inspection of books, regulations on
acts of collection, return of claim deeds, posting of a sign,
regulations on transfer of receivables, etc., duty of
disclosure of the record of transactions, placement ofheads of money lending operations, regulations on
carrying the certificate, etc.).
With respect to others, the credit card business andthe installment sales finance business of the AIFUL Groupare subject to a variety of business regulations(presentation of transaction conditions, delivery of adocument, restriction on the amount of damages, etc. due
to cancellation of the agreement and other causes,
defense against the provider of installment sales finance,
investigation of the estimated amount that can be paid,prohibition of credit exceeding the estimated amount thatcan be paid, prevention of consumer issues related tocontinual service, etc.) because the Installment Sales Act isapplied.

(2) Self-regulation by the Japan Financial Service
Association
The Japan Financial Service Association was established in
December 2007 as the self-regulatory organization set
forth in the Money Lending Business Act that established
the basic rules for self-regulation and stipulated the rules
relating to the prevention of excessive loans, etc. and therules relating to advertisements and solicitation. In
addition, in the rules for operations relating to audits of
the Japan Financial Service Association, to enhance theireffectiveness, the authority of investigation/audit ofmembers of the Association and the authority ofpunishment, such as the imposition of fines for default/
disposition of expulsion on members of the Association
who do not comply with the self-regulations are granted
to the Japan Financial Service Association. AIFUL is amember of the Japan Financial Service Association and istherefore subject to these regulations.
The AIFUL Group endeavors to strengthen thecompliance system through the establishment of its
internal rules and the thorough training of employees
under the laws and regulations described in (1) above andthe matters set forth in various rules established by theJapan Financial Service Association.
However, if administrative disposition is imposed
because of the violation of laws and regulations by
employees, and business regulations are strengthened
through new laws and regulations and the revision ofrules, the financial position and operating results of the
AIFUL Group may be affected.
3. Loan interest rate
On June 18, 2010, the revised Money Lending Business Act
was enforced in full, and the upper limit of the interest rate
under the Act Regulating the Receipt of Contributions, theReceipt of Deposits and Interest Rates (capital subscriptionlaw) was thereby lowered from 29.2% per annum to 20%
per annum, and the deemed repayment system under the
Money Lending Business Act as described below wasabolished.
In response, AIFUL lowered the upper limit of theinterest rate of loans to customers in Japan who enter into
a new agreement and customers who can enter into anagreement according to the new standards for loans on
and after August 1, 2007 before the said enforcement infull of the revised Act. The current upper limit of theinterest rate is 18.0% or less per annum. If the upper limitof the interest rate of the Interest Rate Restriction Act andthe Act Regulating the Receipt of Contributions, theReceipt of Deposits and Interest Rates (capital subscriptionlaw) is lowered further as a result of revisions to the laws
and regulations in future, and if the interest rate withrespect to the interest rate agreement with customers who
have already concluded the agreement has to be lowered
further because of the economic situation and social issueof an increase in consumers who demand protection underlaws, among other cases, there is a possibility that thefinancial position and operating results of the AIFUL Groupmay be affected.

4. Losses from interest repayment
In Paragraph 1, Article 1 of the Interest Rate Restriction
Act, the agreement on interest for loans for consumption
for the purpose of money shall be null and void for thepart exceeding the maximum limit of interest (an amountcalculated at the following interest rates: when theprincipal is less than 100,000 yen, 20% per annum; when
the principal is not less than 100,000 yen and less than 1
million yen, 18% per annum; when the principal is not lessthan 1 million yen, 15% per annum). However, under theInterest Rate Restriction Act before the enforcement in fulldescribed above, when a debtor voluntarily pays the said
excess part, the return thereof may not be demanded.
In addition, in Article 43 of the Money Lending
Business Act before the said enforcement in full describedabove, when the document, etc. set forth in Article 17 of
the Money Lending Business Act is delivered to a debtor,
etc. at the time of the loan of money and the debtor
voluntarily pays the said excess part as interest, if the
document set forth in Article 18 of the Money Lending
Business Act is delivered immediately at the time of
payment and the said payment is the payment under theagreement whose document, etc. as set forth in Article 17of the Money Lending Business Act is delivered,irrespective of the provisions of Paragraph 1, Article 1 ofthe Interest Rate Restriction Act, it shall be deemed as
being the effective repayment of interest obligations (thepayment according to the said provisions shall behereinafter referred to as the “deemed repayment”).
However, in the judgment of the Supreme Court ofJanuary 13, 2006, the special provisions that demand the
lump-sum repayment of the remaining obligations when
the repayment of the agreed interest including the partexceeding the upper limit of the interest rate of the Interest
Rate Restriction Act is delayed is practically forcing thepayment of the part exceeding the maximum limit of theinterest rate set forth in Paragraph 1, Article 1 of theInterest Rate Restriction Act, and is not the case that a
debtor voluntarily makes payment unless there are special
circumstances. In addition, in the said judgment, Paragraph
2, Article 15 of the Ordinance for Enforcement of the
Money Lending Business Act, whereby the statement of
the date of the agreement, etc. in the evidence of receipt
may be replaced with the agreement number, is null andvoid because it exceeds the scope of delegation by an act.
The AIFUL Group accepted the said judicial judgmentwith sincerity and took actions such as switching to theagreement reflecting it. The agreed interest rate of someof the loan products that the AIFUL Group currently
provides includes the part exceeding the maximum limit of
the interest rate set forth in the Interest Rate Restriction
Act. In this regard, in our industry, multiple lawsuits
demanding the return of such excess part were brought
due to deficiency in the matters stated in the agreement as
set forth in the Money Lending Business Act, among otherreasons, and the judgment approving it was also rendered.
Such multiple lawsuits demanding the return of excessinterest were brought against the AIFUL Group. There is acase where the claim of the plaintiff that the AIFUL Group,
which engages in the money lending business, does not

AIFUL CORPORATION Annual Report 201929

meet the requirements necessary for the application of thedeemed repayment under the Money Lending Business
Act, was approved, or that an excess rate was returned bysettlement. Such interest repayment claims have decreased
steadily from their peak; however, uncertainty still
continues. If interest repayment claims increase beyond theassumptions of the AIFUL Group in the future or if a
judicial judgment that is disadvantageous to the money
lenders is rendered, there is a possibility that the financial
position and operating results of the AIFUL Group may beaffected.
In addition, on October 13, 2006, the JapaneseInstitute of Certified Public Accountants publicly
announced “treatment in audit relating to the posting ofprovisions related to losses from interest repayment claimsof consumer finance companies, etc.” (Industry-SpecificCommittee Report No. 37 (hereinafter referred to as the“No. 37 report”)), which would be applied to the audits
for the interim consolidated fiscal period and the interim
fiscal period ending on and after September 1, 2006
(including the audits for the consolidated fiscal year andthe business year that includes the said interim
consolidated fiscal period and the said interim fiscal
period).
The AIFUL Group also posted the provisions for losses
on interest repayment according to the No. 37 report(including the estimated amount of return included in theallowance for doubtful accounts because preferential
appropriation to operating loans was estimated).
However, accounting estimates were made based on
the actual records of repayment in the past and the recent
situations of repayment, and thus if repayment beyond thelevel of the assumptions of those estimates is claimed,
there is a possibility that the financial position andoperating results of the AIFUL Group may be affected.
5. Restrictions on total lending
On June 18, 2010, the revised Money Lending Business Act
was enforced in full and the so-called restrictions on total
lending were introduced. It prohibited loans beyond
repayment ability, such as loans whose total loan balanceexceeds one third of annual income, in principle. AIFUL
extended loans according to the loan standards that weremade stricter with the introduction of the restrictions on
total lending in sight before the said enforcement in full of
the revised Act. However, if the interest income and loanbalance decrease beyond the assumption, there is apossibility that the financial position and operating resultsof the AIFUL Group may be affected.
6. Other legal relations(1) The Act on the Protection of Personal Information andtreatment of personal information
On April 1, 2005, the Act on the Protection of Personal
Information (hereinafter referred to as the “Personal
Information Protection Act”) and various guidelines
relating to the protection of personal information
established by each ministry and government officeaccording to the said Act (hereinafter referred to as the“Guidelines”) were enforced. In the Personal Information

30

AIFUL CORPORATION Annual Report 2019

Protection Act, a certain duty to report when it is judged
necessary is imposed on business operators handlingpersonal information, and if a certain duty of the said Act
is violated and the necessity is approved to protect therights and interests of individuals, the competent ministermay recommend or order that the necessary actions
should be taken. In addition, in the Guidelines, to notify/
clearly indicate/publicly announce the purpose of use of
personal information, to obtain consent relating to thehandling, etc. of personal information from debtors
according to necessity, to supervise the persons to whom
the handling of personal information is contracted out, if
any, to establish the system as safety control measuresfrom organizational/human/technological perspectives,
and to publicly announce the basic policy relating to thehandling of personal information, among others, arerequired.
According to these requirements, the AIFUL Group
conducted a review, etc. of the situation of handling of
personal information, among others, and established theprivacy policy. It also took measures to prevent any leak of
personal information from the AIFUL Group. However, if aleak of personal information should occur due to any
reasons and if it receives a recommendation or order fromthe competent minister, there is a possibility that thefinancial position and operating results of the AIFUL Groupmay be affected.
(2) Other impact of revision to laws
If the Bankruptcy Act, the Civil Rehabilitation Act, the Act
on Special Conciliation for Expediting Arrangement ofSpecified Debts and other various laws and regulations arerevised, depending on what is revised, there is a possibility
that the financial position and operating results of the
AIFUL Group may be affected.
Funding
The Group’s funding consists of borrowings and syndicatedloans from financial institutions and the securitization ofbonds and receivables, among others. Any difficulty infunding due to the market environment, a drop in the
Company’s credit or a change in its rating may have aneffect on the Group’s financial state and business results.
Furthermore, since some funding contracts include
financial covenants or early redemption clauses, the Groupmay become immediately due and payable if its financial
state, business results or the details of receivables such as
operating loans change significantly, which may have an
impact on cash flows, the Group’s financial state, orbusiness results.
Financial soundness
The consumer finance industry has faced an increase ininterest repayment claims following the decision of theSupreme Court on January 13, 2006 and revision of thelaw. This has had a large impact on the Group’s financial
state and business results, with its managerial indicatorssuch as shareholders’ equity ratio and net assets, whichindicate the Group’s financial soundness, not yet
recovering to the level before the Supreme Court’s
decision. Therefore, if business risk events of the Groupoccur in the future and impact its financial state andbusiness results, the Group’s financial state may not be
sufficient to respond to such impact, hindering thecontinuity of the Group’s business activities.
Corporate tax burden due to the elimination of tax loss
carryforwards
Corporate tax on the Group has been reduced since tax
loss carryforwards exists at present. However, if tax losses
are eliminated due to expiry of the tax loss carry forward
period, the Group will face a corporate tax burden, which
may have an effect on the Group’s financial state, businessresults, and cash flows.
Impairment of securities
In order to provide products and services that suitcustomers’ needs, the Group seeks to diversify its financial
services business into the loan business (consumer financeand small business finance), credit card business, guarantee
business, and overseas business, among others, by holding
investment securities of subsidiaries and affiliates.
However, if such investment securities are feared to resultin impairment loss due to subsidiaries, etc. remaining
unprofitable for longer than estimated, it may have aneffect on the Group’s financial state and business results.
Furthermore, the Group holds listed and unlisted
investment securities. The Group’s financial state andbusiness results may be affected in the case where thevalue of such assets is feared to result in impairment loss
due to damage caused by deterioration of profitability, etc.
Regarding confusion, failures and other damage caused
to the information network system, the Internet service,
etc. or the technological system
The AIFUL Group relies on the information/technology
systems either inside or outside to manage business. To
manage various kinds of information that constitute thebusiness of the AIFUL Group, including the network ofoffices and stores and data of accounts, reliance on
software, systems and networks has been deepening.
There is a possibility that hardware and software used by
the AIFUL Group may be affected by damage orsuspension, etc. due to human error, natural disaster,
power failure, computer virus, external cyber-attack orsimilar events or the suspension, etc. of support services
from telephone companies, Internet providers and otherthird parties.
Such confusion, faults, delays or any other failures of
the information/technology systems may cause a decreasein the number of accounts opened and a delay in therepayment of the outstanding balance, and the trust of
consumers in the business of the AIFUL Group may
therefore decrease. As a result, there is a possibility thatthe financial position and operating results of the AIFULGroup may be affected.
Credit guarantee business
The Group is engaged in the credit guarantee business,with credit guarantee revenues from the said credit
guarantee business constantly accounting for more than

10% of consolidated operating revenue as a result ofcarrying out sales activities to increase the number ofguarantee partners, proposing new products, andproviding support for marketing promotions. The Group’s
financial state and business results may be affected if thecredit guarantee business does not grow as expected.
Overseas business
The Group operates not only in Japan but also in Southeast
Asia. Business expansion into such overseas markets carries
inherent risks of unexpected changes in laws or regulations
that are different from Japan’s, an economic recession, adrop in consumer demand, political turmoil, and exchange
rate fluctuations. The Group’s financial state and businessresults may be affected if such events occur.
Regarding holding and disposal of the shares of AIFULby the representative director and his relatives, etc.
As of the end of the fiscal year under review, AIFUL’srepresentative director, Yoshitaka Fukuda and his founding
families are the shareholders with about 39% of the issued
shares of AIFUL, together with those of the affiliatedcorporations. As a result, they can exercise an influence on
important decision-making that affects the businessactivities of AIFUL, including important corporatetransactions, such as the transfer of the right of control of
AIFUL, business reconstruction and reorganization,
investment in other business or assets, and conditions for
future fund raising.
In addition, these shareholders have maintained stableshareholdings; however, if they dispose of part of theirshares in the future, the supply of the shares of AIFUL on
the market will increase. As a result, there is a possibility
that the stock price of AIFUL may be affected.
Regarding the occurrence of a disaster, etc.
The AIFUL Group endeavors to perform the maintenanceof facilities and implement measures at normal times sothat the business can be operated in a stable manner if a
disaster or emergency occurs. However, if a disasterbeyond the forecast occurs and the facilities cannot be
used in a normal manner, and if the expenses for bad
debts written off increase because the situations ofcustomers who incur damage due to a disaster worsened,
among other similar cases, there is a possibility that thefinancial position and operating results of the AIFUL Groupmay be affected.

Regarding the audit certificate
The consolidated financial statements and notes presented inthis Annual Report are the changed forms of the statementsof the Securities Report and are not audited by the accounting
auditor.
In addition, the Securities Report is audited with respect tothe consolidated financial statements for the consolidated
fiscal year (from April 1, 2017 to March 31, 2018) by Deloitte
Touche Tohmatsu LLC according to the provisions of Paragraph
1, Article 193-2 of the Financial Instruments and Exchange Act.

AIFUL CORPORATION Annual Report 201931

Consolidated Financial Statements and Others

Consolidated Balance Sheets
As of March 31
AIFUL CORPORATION and Consolidated Subsidiaries(Millions of yen)
2019

2018

AssetsCurrent assets
		Cash and deposits¥ 36,112¥ 29,327

		Operating loans

457,785

412,706		

Accounts receivables - installment

101,584

97,252

		Operational investment securities

1,209

940

		

Customers’ liabilities for acceptances and guarantees

140,343

124,883		

Other operating receivables

7,744

6,725

2,472

2,874

		Purchased receivables
		Other

16,88914,688

		Allowance for doubtful accounts(46,135)(41,344)		Total current assets

718,006

648,053

			Buildings and structures

24,147

24,357

				Accumulated depreciation(18,260)(17,933)

				Buildings and structures, net

5,887

6,424

Non-current assets
		Property, plant and equipment

			Machinery and equipment

416

419

				Accumulated depreciation

(322)

(305)

94

113

				Machinery and equipment, net
			Furniture and fixtures

6,724

6,993

				Accumulated depreciation(5,560)(5,261)

				Furniture and fixtures, net

1,163

1,732

			Land

8,899

8,899

			Leased assets

1,399

1,378

				Accumulated depreciation

(787)

(508)

				Leased assets, net

611

870

			Construction in progress

102

93

16,75818,133

			Software

3,192

3,094

			Other

105

103

3,297

3,198

			Investment securities

5,643

4,052

			

26,981

27,787

			Total property, plant and equipment

		Intangible assets

			Total intangible assets
		

Investment and other assets
Claims provable in bankruptcy

			Deferred tax assets

6,054

627

			

1,744

1,911

Lease and guarantee deposits

			Other

6,433

4,496

			

Allowance for doubtful accounts(24,332)(25,614)

			Total investments and other assets

22,524

13,260		

Total non-current assets

Total assets

32

AIFUL CORPORATION Annual Report 201942,581

34,592¥ 760,587¥ 682,645

Consolidated Balance Sheets(Millions of yen)
2019

2018

Liabilities
Current liabilities
		

Notes & accounts payable-trade¥ 21,076¥ 16,196

		

Acceptances and guarantees

140,343

124,883		

Short-term loans payable

86,562

83,325		Current portion of bonds

7,370

1,300

		

Current portion of long-term loans payable

98,72853,482

		

Income taxes payable

1,116

544

		

Allowance for bonuses

1,320

991

		

Provision for point card certificates

2,950

2,807

		

Deferred installment income

508

440

		Other

20,30023,368		

380,277

307,340

		Bonds payable

20,2457,200

		

Long-term loans payable

205,803

220,529

		

Deferred tax liabilities

7

334

		

Provision for loss on interest repayment

22,96324,331

3,273

3,503

252,292

255,898

632,570

563,238

		Capital stock

143,454

143,454

		Capital surplus

13,948

13,948

		Retained earnings(30,485)(40,208)

		Treasury shares(3,110)(3,110)123,807

114,083

(23)

(184)

Total current liabilities

Non-current liabilities

		Other		

Total non-current liabilities

Total liabilities
Net Assets
Shareholders’ equity

		

Total shareholders’ equity

Accumulated other comprehensive income		Valuation difference on available-for-sale securities		

Foreign currency translation adjustment

261

315

		

Total accumulated other comprehensive income

238

130

230

234

Shares acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

3,741

4,957

128,016

119,407¥ 760,587¥ 682,645

AIFUL CORPORATION Annual Report 201933

Consolidated Financial Statements and Others

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Years ended March 31
AIFUL CORPORATION and Consolidated Subsidiaries

Consolidated Statements of Income(Millions of yen)
2019
(Apr. 1, 2018 to Mar. 31, 2019)2018(Apr. 1, 2017 to Mar. 31, 2018)

Operating revenue
Interest on loans receivable¥ 65,456¥ 56,305

Revenue from credit card business

16,466

16,025

Revenue from credit guarantee

13,953

12,992

9

13
2,074

Other financial revenue
Other operating revenue		Collection from purchased receivable

1,709

		

Recoveries of written off claims

6,320

6,411

		

Sales of software development—

12,803		Other

11,4128,761

		

19,44330,052

115,328

115,389

6,630

5,783

377

813

940

963

7,949

7,560

1,166

1,497

Total other operating revenue

Total operating revenue
Operating expenses
Financial expenses
		Interest expenses		Interest on bonds

		Other		

Total financial expenses

Cost of sales		

Cost of purchased receivable		

Cost of sales of software development

		Other		

Total cost of sales—

11,244

131

73

1,298

12,815

2,950

2,807

14,644

12,962—(2)

Other operating expenses
		Provision for point card certificates		Commissions
		Provision of allowance for investment loss		Provision of allowance for doubtful accounts

29,34020,020		Provision for loss on interest repayment

11,501

12,384

		

Employees’ salaries and bonuses

11,711

11,409		

Provision for bonuses

1,279

972

		

Retirement benefit expenses

484

474

		

Sales promotion expenses

7,719

8,841

		Other

23,41822,650		

103,049

92,520Total other operating expenses

Total operating expenses
Operating profit

34

AIFUL CORPORATION Annual Report 2019112,297

112,897¥   3,031¥   2,492

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Millions of yen)
2019
(Apr. 1, 2018 to Mar. 31, 2019)2018(Apr. 1, 2017 to Mar. 31, 2018)

Non-operating income
Interest on loans receivable¥     155¥      65

Share of profit of entities accounted for using equity method

81—

Foreign exchange gains

214

68

Rent on real estate

82

73

Gain on sales of investment securities

458

—

Other

153

152

1,145

359

Interest expenses

6

1

Provision for doubtful accounts

148

Total non-operating income
Non-operating expenses

Loss on withdrawal of guarantee deposits received

31

—

Other

13

17

Total non-operating expenses

66

28

4,110

2,823

Gain on reversal of shares acquisition rights—

703

Total extraordinary income—

703

Loss on valuation of investment securities

690—

Total extraordinary losses

690

—

3,420

3,527

Ordinary profit
Extraordinary income

Extraordinary losses

Profit before income taxes
Income taxes - current

858

437

Income taxes - deferred(5,621)

144

Total income taxes(4,763)

581

Profit

8,183

2,945

Profit (loss) attributable to non-controlling interests(1,162)(1,012)¥   9,346¥   3,958

Profit attributable to owners of parent

Consolidated Statements of Comprehensive Income(Millions of yen)
2019
(Apr. 1, 2018 to Mar. 31, 2019)

Profit¥   8,183

2018(Apr. 1, 2017 to Mar. 31, 2018)¥   2,945

Other Comprehensive income
Valuation difference on available-for-sale securities

160

40

Foreign currency translation adjustment

(107)

583

Share of other comprehensive income of entities accounted for using		equity method

Total other comprehensive income
Comprehensive income

(0)

—

53

623

8,237

3,569

9,453

4,289

¥   (1,216)¥     (719)Comprehensive income attributable to
Owners of parent
Non-controlling interests

AIFUL CORPORATION Annual Report 201935

Consolidated Financial Statements

Consolidated Statements of Change in Shareholders’ Equity
Years ended March 31
AIFUL CORPORATION and Consolidated Subsidiaries

2019(Millions of yen)
Shareholders’ equity

Balance at April 1, 2018

Capitalstock

CapitalsurplusRetainedearnings

Treasuryshares¥ 143,454¥ 13,948¥ (40,208)¥ (3,110)

—

—

Total
shareholders’equity¥ 114,083

Changes during the period
Issuance of new shares-exercise of		 shares acquisition rights
Profit attributable to owners of parent

—
9,346

Purchase of treasury shares

9,346
(0)

Change in scope of consolidation(0)—

Change in scope of equity method

377

377

Capital increase of consolidated subsidiaries—

Net changes in accounts other than
		shareholders’ equity
Total change during fiscal year
Balance at March 31, 2019

—

—

9,723

(0)

9,723

¥ 143,454¥ 13,948¥ (30,485)¥ (3,110)¥ 123,807(Millions of yen)
Accumulated other comprehensive income

Balance at April 1, 2018

Valuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment¥ (184)

¥ 315

Total
¥ 130

Sharesacquisitionrights

Noncontrollinginterests

Total
net assets¥ 234¥ 4,957¥ 119,407

Changes during the period
Issuance of new shares-exercise of		 shares acquisition rights—

Net income attributable to owners of parent

9,346

Purchase of treasury stock

36

(0)

Change in scope of consolidation—

Change in scope of equity method

377

Capital increase of consolidated subsidiaries—

Net changes in accounts other than
		shareholders’ equity

160

(53)

107

(4)

(1,216)(1,113)

Total change during fiscal year

160

(53)

107

(4)

(1,216)

8,609

Balance at March 31, 2019

¥ (23)

¥ 261

¥ 238

¥ 230

¥ 3,741¥ 128,016

AIFUL CORPORATION Annual Report 2019

Consolidated Statements of Change in Shareholders’ Equity

2018(Millions of yen)
Shareholders’ equity

Balance at April 1, 2017

Capitalstock

CapitalsurplusRetainedearnings

Treasuryshares¥ 143,454¥ 13,953¥ (43,332)¥ (3,110)

0

0

Total
shareholders’equity¥ 110,964

Changes during the period
Issuance of new shares-exercise of		 shares acquisition rights
Profit attributable to owners of parent

0
3,958

Purchase of treasury shares

3,958
(0)

Change in scope of consolidation

(1)

(834)

(0)
(835)

Change in scope of equity method—

Capital increase of consolidated subsidiaries

(3)

(3)

Net changes in accounts other than
		shareholders’ equity
Total change during fiscal year
Balance at March 31, 2018

0

(4)

3,123

(0)

3,119

¥ 143,454¥ 13,948¥ (40,208)¥ (3,110)¥ 114,083(Millions of yen)
Accumulated other comprehensive income

Balance at April 1, 2017

Valuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment¥ (225)—Total¥ (225)

Sharesacquisitionrights

Noncontrollinginterests

Total
net assets

¥ 910

—

¥ 111,649

Changes during the period
Issuance of new shares-exercise of		 shares acquisition rights

0

Profit attributable to owners of parent

3,958

Purchase of treasury shares(0)Change in scope of consolidation(835)

Change in scope of equity method—

Capital increase of consolidated subsidiaries(3)

Net changes in accounts other than
		shareholders’ equity

40

315

356

(675)

4,957

4,638

Total change during fiscal year

40

315

356

(675)

4,957

7,757

Balance at March 31, 2018

¥ (184)

¥ 315

¥ 130

¥ 234

¥ 4,957¥ 119,407

AIFUL CORPORATION Annual Report 201937

Consolidated Financial Statements

Consolidated Statements of Cash Flows
Years ended March 31
AIFUL CORPORATION and Consolidated Subsidiaries(Millions of yen)

Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for investment loss
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for point card certificates
Increase (decrease) in allowance for loss on interest repayment
Interest and dividend income
Interest expenses
Loss (gain) on sales investment securities
Loss (gain) on valuation of investment securities
Share of loss (profit) of entities accounted for using equity method
Gain on reversal of shares acquisition rights
Decrease (increase) in interest on loans receivable
Decrease (increase) in accounts receivable – installment
Decrease (increase) in other operating receivable
Decrease (increase) in purchased receivable
Decrease (increase) in claims provable in bankruptcy
Decrease (increase) in work in process
Decrease (increase) in other current assets
Increase (decrease) in other current liabilities
Other
SubtotalInterest and dividend income
Interest expenses paid
Income taxes refund
Income taxes paid
Cash flow from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Other
Cash flows from investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from issuance of common shares
Proceeds from share issuance to non-controlling shareholders
Purchase of treasury shares
Other
Cash flows from financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from merger
Cash and cash equivalents at end of period

38

AIFUL CORPORATION Annual Report 20192019
(Apr. 1, 2018 to Mar. 31, 2019)2018(Apr. 1, 2017 to Mar. 31, 2018)¥   3,420
2,653
—
3,531
328
143
(1,367)
(179)
6
(458)
690
(81)
—
(45,284)(4,332)(1,018)401806—(2,487)
1,865(139)(41,500)
192
(6)
10
(462)
(41,765)¥   3,527
2,384(2)(3,667)78(493)(10,308)
(101)
1
—
—
—
(703)
(54,585)(2,979)
(728)
67
1,536
7,305
(2,789)(7,639)(671)(69,769)
101
(2)
6
(558)
(70,221)

(201)
(959)
(1,085)506(2,478)(4,219)(1,189)
(983)
(417)
—
(956)
(3,546)874,947(871,631)
132,470(101,940)
20,500(1,385)
—
—
(0)
(303)
52,657111
6,784
29,323—¥ 36,108

898,299(888,878)
127,758(47,659)
7,200(31,400)
0
2,460
(0)
(219)
67,560244(5,963)33,5601,726¥ 29,323

Notes to Consolidated Financial Statements
AIFUL CORPORATION and Consolidated Subsidiaries

Basic important matters for the preparation of the consolidated financial statements
1. Matters regarding the scope of consolidation(1) Number of consolidated subsidiaries: five companies
Names of consolidated subsidiaries
LIFECARD CO., LTD., BUSINEXT CORPORATION, AsTry Loan
Services Corporation, AIRA & AIFUL Public Company Limited,and one other company(2) Name, etc. of the non-consolidated subsidiaries
Sumishin Life Card Company, Limited. and ten othercompanies(Reasons for exclusion from the scope of consolidation)
Each non-consolidated subsidiary is small in scale and each of
the total assets, operating revenue, profit or loss
(corresponding to equity) and retained earnings(corresponding to equity) of those eleven companies inaggregate has an insignificant impact on the consolidated
financial statements, and thus those subsidiaries are excluded
from the scope of consolidation.
2. Matters regarding application of the equity method(1) Non-consolidated subsidiaries or affiliates that are accounted
for under the equity method: one company
Name of company
Anshin Guarantor Service Co., Ltd.
Anshin Guarantor Service Co., Ltd., which was not an
affiliate that is accounted for under the equity method in theprevious consolidated fiscal year, is included in the scope ofequity method affiliate from the fiscal year under review dueto an increase in its importance.
(2) Name, etc. of the non-consolidated subsidiaries and affiliatesthat are not accounted for under the equity method
Sumishin Life Card Company, Limited. and ten othercompanies(Rationale for not applying the equity method)
Each of the eleven non-consolidated subsidiaries and affiliatedcompanies to which the equity method is not applied are smallin scale and each of the total profit or loss (corresponding toequity) and retained earnings (corresponding to equity) of
those eleven companies has an insignificant impact on the
consolidated financial statements, and thus those subsidiaries
and affiliated companies are excluded from the scope of
application of the equity method.
3. Matters regarding the fiscal year, etc. of the consolidated
subsidiaries
Of the consolidated subsidiaries, the closing date of AIRA & AIFUL
Public Company Limited is December 31.
In the preparation of the consolidated financial statements,
the financial statements as of the said date were used, and forimportant transactions occurring between the said date and theclosing date on a consolidated basis, the adjustments necessary
for consolidation were made.

4. Matters regarding the accounting policy(1) Valuation standards and valuation method for important
assets(i) Securities
Other securitiesThose that have a market value
The market value method based on the market value, etc.
on the consolidated closing date (The valuation difference isposted directly into net assets, and the cost of securities
sold is calculated using the moving average method.)Those that do not have a market value
Moving average cost method
In addition, with respect to investments in capital ofinvestment limited partnerships and other similar
partnerships (those that are deemed to be securities underParagraph 2, Article 2 of the Financial Instruments andExchange Act), they are based on the latest statements ofaccounts available according to the date of the report of thefinancial statements set forth in the partnership agreement,
and the method of incorporating the net value
corresponding to the equity is applied.
(ii) Derivatives
Market value method(iii) Purchased receivables
Cost method based on the actual cost method(2) Method of depreciation of significant depreciable assets(i) Property, plant and equipment (exclusive of leased assets)
AIFUL and its consolidated subsidiaries adopted thedeclining balance method.
However, the consolidated subsidiaries adopted thestraight-line method for the buildings (excluding
appurtenant facilities) acquired on and after April 1, 1998.
In addition, the main service life is as shown below.
Buildings and structures
2 to 62 years
Machinery and equipment 4 to 17 years
Furniture and fixtures
2 to 20 years(ii) Intangible assets (exclusive of leased assets)
The straight-line method is adopted.
In addition, with respect to software for internal use,
amortization is based on the internal usable period (fiveyears).
(iii) Leased assets
Leased assets in relation to the finance lease transaction
with transfer of the ownership right
The method of depreciation applied to self-owned property,
plant and equipment is used.
Leased assets in relation to the finance lease transaction
without transfer of the ownership right
The lease period is treated as the service life, and thestraight-line method in which the residual value is madezero is adopted.

AIFUL CORPORATION Annual Report 201939

(3) Standards for posting significant provisions(i) Allowance for doubtful accounts
To prepare for loans and other uncollectible receivables, forgeneral accounts receivable, the amount considerednecessary taking into account the loan loss ratio, etc. is
examined, and for doubtful accounts receivable and otherspecific receivables, recoverability is examined individuallyand then the estimated uncollectible amount is posted.
(ii) Allowance for bonuses
To prepare for the payment of the bonus payable to staff
workers, of the estimated future payment amount, theamount of the burden for the consolidated fiscal year underreview is posted.
(iii) Provision for point card certificates
Under the point system for the purpose of the promotion of
the use of cards, the estimated amount of future use for the
consolidated fiscal year under review is posted to prepare
for the use of points granted to the card members.
(iv) Provision for loss on interest repayment
To prepare for future interest repayment, the amount of
repayment is reasonably estimated and posted based on theactual repayments in the past and considering the latest
repayment situation.
(4) Standards for posting important revenues and expenses(i) Interest on loans receivable
Interest on loans receivable is recorded on an accrual basis.
In addition, with respect to the accruals of interest in
relation to “Operating loan,” either the interest rate underthe Interest Rate Restriction Act or the contract interest
rate, whichever is lower, is used in posting.
(ii) S tandards for posting revenue in relation to installment
salesWith respect to the add-on type of customer fees andmember store commissions, they are collectively posted in“Deferred installment income” in a lump sum, and revenue
is posted when the time for charging the fee occurs. With
respect to the customer fees that are charged on the
declining balance and the revolving-type customer fees,
revenue is posted when the time for charging the fee
occurs. In addition, the method of the allocation of revenueof the department using the add-on type is the method
called the 78 allocation method.
(iii) Revenue from credit guarantee
Revenue is posted according to the method of charging on
the declining balance.
(iv) S tandards for posting revenues and expenses in relation to
the development of software to be produced on a built-toorder basis
The completed contract basis is applied.
(v) Account processing of interest on loans
With respect to interest on loans, the portion corresponding
to financial credits is processed as “Operating expenses”

40

AIFUL CORPORATION Annual Report 2019(financial expenses), and the rest is processed as “Nonoperating expenses” (interest expenses).
(5) S tandards for translation of important assets or liabilities
denominated in foreign currency into the currency of Japan
Monetary claims and liabilities denominated in foreign
currency are translated into Japanese yen at the spot exchange
rate on the consolidated closing date, and translation
adjustments are processed as gains or losses. In addition, theassets and liabilities of controlled foreign corporations, etc. aretranslated into Japanese yen at the spot exchange rate on the
consolidated closing date, their revenues and expenses aretranslated into Japanese yen at the average rate during the
fiscal period, and the translation adjustments are included in
the foreign currency translation adjustment and noncontrolling interests under net assets.
(6) Important hedge accounting method- Method of hedge accounting
With respect to the interest cap trading, the requirements
for special treatment are met and thus the special
treatment is adopted.
- Means of hedge and items to be hedged
Means of hedge --- interest cap trading
Items to be hedged --- loans with variable interest rates- Policy for hedge
With respect to the interest cap trading, according to the
management rules of AIFUL, the risk of interest rate
fluctuations in relation to the items to be hedged ishedged.
- Method of evaluation of the effectiveness of the hedge
With respect to the interest cap trading for which thespecial treatment is applied, the evaluation of theeffectiveness is omitted.
(7) Scope of cash in the consolidated statement of cash flows
With respect to the scope of cash in the consolidated
statement of cash flows, it consists of cash on hand, demand
deposits and short-term investments whose liquidity is high,since the date of maturity occurs within three months from thedate of acquisition, which can be easily realized and which
involves little risk of a change in value.
(8) Account processing of consumption taxes, etc.
In the account processing of consumption taxes, etc., taxes are
not included. However, the consumption taxes, etc. not to be
deducted that are related to assets are posted in “Other”
under “Investments and other assets” and are amortizedaccording to the equal installment method over five years.
(9) Application of the consolidated tax return filing system
The consolidated tax return filing system is applied.

Notes to Consolidated Financial Statements

Accounting standards, etc. not applied- ASBJ Statement No. 29 Accounting Standard for Revenue Recognition, etc. (March 30, 2018)- ASBJ Guidance No. 30 Implementation Guidance on Accounting Standard for Revenue Recognition (March 30, 2018)(1) Outline
They are comprehensive accounting standards in relation to
the recognition of revenues. Revenues are recognized byapplying the following five steps.
Step 1:	Identify agreements with customers.
Step 2:	Identify the obligation of performance under theagreement.
Step 3:	Calculate the transaction price.
Step 4:	Allocate the transaction price to the obligation of
performance under the agreement.
Step 5:	Recognize revenues when the obligation of
performance is fulfilled or according to theprogress of such fulfilment.

(2) Scheduled date of application
The accounting standards above are planned to be applied
from the beginning of the fiscal year ending March 31, 2022.
(3) Impact of application of those accounting standards, etc.
The amount of impact is assessed at the time of the
preparation of these consolidated financial statements.

Changes in the method of presentation(Changes due to the adoption of “Partial Amendments to
Accounting Standard for Tax Effect Accounting”)
The Company has adopted the “Partial Amendments to
Accounting Standard for Tax Effect Accounting” (ASBJ Statement
No. 28; February 16, 2018) from the beginning of theconsolidated fiscal year under review. Following the adoption,deferred tax assets are indicated under investments and otherassets, deferred tax liabilities are indicated under non-current
liabilities, and the notes to tax effect accounting have beenchanged.
As a result, deferred tax assets of 627 million yen that were
presented under current assets in the consolidated balance sheets

for the previous fiscal year are presented as deferred tax assets of
627 million yen under investments and other assets.
Furthermore, matters stated in Note 8 (excluding the sum ofvaluation allowances) and Note 9 of the “Accounting Standard forTax Effect Accounting” provided in paragraphs 3 to 5 of thePartial Amendments to Accounting Standard for Tax EffectAccounting have been added in the notes to tax effectaccounting. However, matters related to the previous fiscal year
have not been stated in accordance with transitional treatments
provided in paragraph 7 of the Partial Amendments to AccountingStandard for Tax Effect Accounting.

Changes in Accounting Estimates(Changes in accounting estimate of allowance for doubtful
accounts)
As to allowance for doubtful accounts of LIFECARD Co., Ltd. oneof the Company's consolidated subsidiaries, the accounting
estimate has been changed in consideration of a more precise
estimate having become possible, reflecting the advancement andimprovement of data accumulation on the historical write-off rateby year. As a result, operating profit, ordinary profit and profit
before income taxes in the consolidated fiscal year under review
increased by 1,328 million yen compared with those calculatedusing the past method of estimate.

AIFUL CORPORATION Annual Report 201941

Consolidated Balance Sheets
1. An increase of 18,693 million yen (includes 13,900 million yen in recognized evaluation differences for shares of subsidiaries during theprocess of capital consolidation) in legal capital surplus were included in capital surplus which was resulted from a simple exchange of shares.
2. Assets pledged as collateral and corresponding liabilities(1) Assets pledged as collateral(1) Assets pledged as collateral(Millions of yen)

(Millions of yen)

As of March 31, 2019

As of March 31, 2018
¥ 298,670

Operating loans

Operating loans¥ 311,939

Accounts receivable - installment

62,574

Accounts receivable - installment

61,264

Buildings and structures

3,999

Buildings and structures

4,244

Machinery and equipment

12

Machinery and equipment

14

Furniture and fixtures

25

Furniture and fixtures

32

Land

8,523

Land

8,523

Total

¥ 373,805

Total¥ 386,018(2) Corresponding liabilities(2) Corresponding liabilities(Millions of yen)

(Millions of yen)

As of March 31, 2019
Short-term borrowings

As of March 31, 2018
¥ 73,570

Short-term borrowings¥ 68,580

Current portion of long-termborrowings

67,010Current portion of long-termborrowings

36,351Long-term borrowings

156,415

Long-term borrowings

182,742

Total¥ 296,996i) The amounts above at the end of the fiscal year under review
include amounts associated with the securitization of receivables(operating loans of 179,719 million yen current portion of longterm borrowings of 27,616 and long-term borrowings of 118,653
million yen).
ii) Parts of operating loans and installment receivables are amounts
at the time of registration of the transfer of receivables.

Total¥ 287,674i) The amounts above at the end of the fiscal year under review
include amounts associated with the securitization of receivables(operating loans of 140,294 million yen, current portion of
long-term borrowings of 4,181 and long-term borrowings of
112,121 million yen).
ii) Parts of operating loans and installment receivables are amounts
at the time of registration of the transfer of receivables.

3. Unsecured personal loans included in operating loans(Millions of yen)

(Millions of yen)

As of March 31, 2019

As of March 31, 2018
¥ 421,078¥ 376,504

4. Shares and other securities issued by non-consolidated subsidiaries and affiliated companies(Millions of yen)

As of March 31, 2019

(Millions of yen)

As of March 31, 2018

Investment securities (shares)¥ 2,918

Investment securities (shares)¥ 1,097

Investment securities (other securities)¥ 1,190

Investment securities (other securities)¥ 1,212

5. Accounts receivable - installment(Millions of yen)

(Millions of yen)

As of March 31, 201942

As of March 31, 2018

Credit card business¥ 101,413

Installment sales finance business
Total

AIFUL CORPORATION Annual Report 2019

Credit card business¥ 97,044¥     170

Installment sales finance business¥    207¥ 101,584

Total¥ 97,252

Notes to Consolidated Financial Statements

6. Deferred installment income(Millions of yen)

(Millions of yen)

As of March 31, 2019

As of March 31, 2018
Balance atthebeginningof FY

Current
fiscal year
receipts

Actualcurrent
fiscal year
balance¥ 407¥ 15,691¥ 15,670

¥ 427
(30)

Installment
sales finance

—

—

—

—
(—)

9
(—)

Creditguarantee

15

5,618

5,621

12
(—)

—
(—)

—

1,621

1,621

Loans

—
(—)

¥ 423

¥ 22,930¥ 22,913

¥ 440
(30)

Balance atthebeginningof FY

Current
fiscal year
receipts

Actualcurrent
fiscal year
balance¥ 427¥ 16,168¥ 16,097

¥ 498
(30)

Credit card
shopping

Installment
sales finance

—

—

—

—
(—)

Creditguarantee

12

1,410

1,410

—

5,693

5,693

Credit card
shopping

Balance atthe end of
FY

Loans
Total

¥ 440

¥ 23,272¥ 23,205

¥ 508
(30)

Total

Balance atthe end of
FY

Note: Figures in parenthesis indicate member store commissions

7. Securitization of claims removed from the balance sheet(Millions of yen)

(Millions of yen)

As of March 31, 2019

As of March 31, 2018

Operating loans outstanding¥ 64,037

Operating loans outstanding¥ 59,311

Accounts receivable - installment¥ 3,060

Accounts receivable - installment¥ 3,208

8. Contingent liability
Guarantee obligation
The Company guarantees borrowings from financial institutions for the Company’s non-consolidated subsidiary, LIFE GUARANTEE CO., LTD
The Company’s consolidated subsidiary, LIFECARD Co., Ltd. guarantees obligations related to the credit card payment operations, etc. for
the Company’s non-consolidated subsidiary, Sumishin Life Card Company, Limited.
(Millions of yen)
(Millions of yen)

As of March 31, 2019

As of March 31, 2018¥   900

LIFE GUARANTEE CO., LTD.

2,365

Sumishin Life Card Company, Limited
Total¥ 3,265

LIFE GUARANTEE CO., LTD.

¥     —

Sumishin Life Card Company, Limited

2,385

Total

¥ 2,385

9. Non-performing loans
Status of Non-performing loans (NPL) of operating loans and claims in bankruptcy are as follows(Millions of yen)

(Millions of yen)

As of March 31, 2019

Loans in legal bankruptcy
Nonaccrual loans
Loans in 3-months+ inarrears
Restructured loans
Total

As of March 31, 2018
Unsecuredloans

Other thanunsecured
loans

Total

¥    531¥ 26,616¥ 27,147

Nonaccrual loans

22,4095,904

28,314

7,043

Loans in 3-months+ inarrears

5,589

203

5,792

Restructured loans

Unsecuredloans

Other thanunsecured
loans

Total

¥    711¥ 25,456¥ 26,167

27,194

5,923

33,118

6,798

244

11,870

1,095

12,965¥ 45,575¥ 32,719¥ 79,294

Loans in legal bankruptcy

Total

9,374

887

10,261¥ 37,904¥ 33,611¥ 71,515

AIFUL CORPORATION Annual Report 201943

The loan categories in the table above are as follows.
(Loans in legal bankruptcy)
Loans in legal bankruptcy are loans in which payment of principal or interest remain past due for a considerable period and accruals ofinterest are discontinued, with the conditions stipulated under (a) through (e) of sub-paragraph 3, paragraph 1, Article 96 or sub-paragraph
4 of the same paragraph of the Corporation Tax Law Enforcement Ordinance (Enforcement Ordinance No. 97 of 1965) arise. Any amounts
deemed necessary to cover possible losses on an individual accounts basis of the Claims in bankruptcy is posted in the allowances for
doubtful accounts.
(Nonaccrual loans)
Nonaccrual loans are loans in which accruals of interest is discontinued, other than loans in legal bankruptcy, as well as loans receiving
regular payments in the case of granting deferral of interest payment to the debtors in financial difficulties to assist them in their recovery.
(Loans three months or more in arrears)
Loans three months or more in arrears are loans for which payments of principal or interest have not been received for a period of threemonths or more beginning with the next business day following the last due date for such payments. Loans classified as loans in legal
bankruptcy and nonaccrual loans are excluded from loans three months or more in arrears.
(Restructured loans)
Restructured loans are loans on which creditors grant concessions (e.g., reduction of the stated interest rate, deferral of interest payment,
extension of maturity date, waiver of the face amount, or other concessive measures) to the debtors in financial difficulties to assist them intheir recovery and eventually enable them to pay creditors. Loans classified as loans in legal bankruptcy, nonaccrual loans and loans threemonths or more in arrears are excluded.
10. Loan commitments related to operating loans(Previous fiscal year)
Of operating loans including off-balance sheet loans resulting from securitization, 372,237 million yen is loans under revolving credit
agreements. Under revolving credit agreements, customers may get additional loans up to a specified maximum amount that does notexceed an amount requested by them.
Outstanding loan commitments under revolving credit agreements were 760,837 million yen (including 12,305 million yen under secured
revolving credit agreements and revolving credit agreements with businesses).
The Group reviews revolving credit agreements and takes steps to preserve credit after the conclusion of revolving credit agreements if itconsiders that taking steps are necessary due to changes in customers’ credit standing and other reasons.
The outstanding loan commitments include commitments to customers who do not have any outstanding loan commitments and who
have not requested any loans after the conclusion of credit agreements. Many revolving credit agreements expire with no loans being
given. Outstanding loan commitments themselves therefore do not necessarily affect the Group’s future cash flows.
(Fiscal year under review)Of operating loans including off-balance sheet loans resulting from securitization, 422,993 million yen is loans under revolving credit
agreements. Under revolving credit agreements, customers may get additional loans up to a specified maximum amount that does notexceed an amount requested by them.
Outstanding loan commitments under revolving credit agreements were 777,976 million yen.
The Group reviews revolving credit agreements and takes steps to preserve credit after the conclusion of revolving credit agreements if itconsiders that taking steps are necessary due to changes in customers’ credit standing and other reasons.
The outstanding loan commitments include commitments to customers who do not have any outstanding loan commitments and who
have not requested any loans after the conclusion of credit agreements. Many revolving credit agreements expire with no loans being
given. Outstanding loan commitments themselves therefore do not necessarily affect the Group’s future cash flows.
11. Of the allowances for doubtful accounts, following amount in estimated interest repayment is expected to have priority application in
operating loans.
(Millions of yen)
(Millions of yen)

As of March 31, 2019

As of March 31, 2018
¥2,53444

AIFUL CORPORATION Annual Report 2019¥2,238

Notes to Consolidated Financial Statements

Consolidated Statements of Comprehensive Income
Reclassification adjustment and tax effect of other comprehensive income(Millions of yen)
2019
(Apr. 1, 2018 to Mar. 31, 2019)2018(Apr. 1, 2017 to Mar. 31, 2018)¥ (205)

¥ 169

233

(21)

Valuation difference on available-for-sale securities
Amount arising during the fiscal year
Reclassification adjustment

27

147

		Tax effects

133

(106)

		

160

40

(107)

583

(0)

—

¥   53¥ 623

		Before tax effect adjustment
Valuation difference on available-for-sale securities

Foreign currency translation adjustment
Amount arising during the fiscal year
Share of other comprehensive income of entities
accounted for using equity method
Amount arising during the fiscal year
Total other comprehensive income

Consolidated Statements of Change in Shareholders’ Equity
Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
1. Matters regarding class and total number of issued shares and class and number of treasury shares

Number of shares at
Decrease in the
Increase in the
Number of shares atthe beginning of the number of shares for number of shares for the end of the fiscal
year under review
the fiscal year under the fiscal year underfiscal year under(shares)review (shares)
review (shares)
review (shares)
Issued shares
Common stock		Total484,619,136

1,000

―

484,620,136

484,619,136

1,000

―

484,620,136

916,964

174―

917,138

916,964

174―

917,138

Treasury shares
Common stock (Note)
		Total(Outline of the causes for change)
1. T he increase in the number of common stock of the issued shares, which is 1,000 shares, resulted from the exercise of the rights inrelation to the share acquisition rights.
2. The increase in the number of common stock of the treasury shares, which is 174 shares, resulted from the purchase of shares of lessthan one unit.
2. Matters regarding the share acquisition rights

Number of subject shares (shares)

Category
Submitting
company

Breakdown

Beginningof the fiscal
year underClass ofreviewsubject shares

Increase forthe fiscal
year underreview

Decreasefor thefiscal year
under
review

End of the
fiscal year
under
review

Balance atthe end of
the fiscal year
under review(million yen)

Share acquisition rights
as stock options for 2013

―

―

―

―

―

¥   ―

Share acquisition rights
as stock options for 2015

―

―

―

―

―

234
(3)

―

―

―

―

¥ 234
(3)

Total

Note: With respect to the treasury stock acquisition rights, they are shown in parentheses.

AIFUL CORPORATION Annual Report 201945

3. Matters regarding dividends
Not applicable
Fiscal year ended March 31, 2019 (from April 1, 2018 to March 31, 2019)
1. Matters regarding class and total number of issued shares and class and number of treasury shares

Number of shares at
Decrease in the
Increase in the
Number of shares atthe beginning of the number of shares for number of shares for the end of the fiscal
year under review
the fiscal year under the fiscal year underfiscal year under(shares)review (shares)
review (shares)
review (shares)
Issued shares
Common stock		Total484,620,136――

484,620,136

484,620,136――

484,620,136

917,13844―

917,182

917,13844―

917,182

Treasury shares
Common stock (Note)
		Total(Outline of the causes for change)
The increase in the number of common stock of the treasury shares, which is 44 shares, resulted from the purchase of shares of less than
one unit.
2. Matters regarding the share acquisition rights

Number of subject shares (shares)

Category

Breakdown

Submitting
company

Share acquisition rights
as stock options for 2015

Increase forthe fiscal
year underreview

Decreasefor thefiscal year
under
review

End of the
fiscal year
under
review

Balance atthe end of
the fiscal year
under review(million yen)

―

―

―

―

230
(7)

―

―

―

―

¥ 230
(7)

Beginningof the fiscal
year underClass ofreviewsubject shares

Total

―

Note: With respect to the treasury stock acquisition rights, they are shown in parentheses.

3. Matters regarding dividends
Not applicable

Consolidated Statements of Cash Flows
1. R
 elationships between the balance of cash and cash equivalents at the end of the consolidated fiscal year and the amounts of accounttitles shown on the consolidated balance sheet(Millions of yen)

2019
(Apr. 1, 2018 to Mar. 31, 2019)
Cash and deposits accountTime deposit with maturity over three months
Cash and cash equivalents

46

AIFUL CORPORATION Annual Report 2019

¥ 36,1122018(Apr. 1, 2017 to Mar. 31, 2018)¥ 29,327(3)(3)¥ 36,108¥ 29,323

Notes to Consolidated Financial Statements

Financial instruments
Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
1. Matters regarding the situations of financial instruments(1) Business policy for financial instruments
The AIFUL Group mainly engages in the financial business;
specifically, the consumer finance business, the real estate
mortgage finance business, the business operator financebusiness, the credit sales business, the credit guarantee
business, the receivables management and collection business,
etc. Direct finance by corporate bonds is used in raising funds to
conduct these businesses by adjustment to the market situationand the long-term and short-term balance, in addition toindirect finance by bank loans. In this way, AIFUL has financial
liabilities that involve interest rate fluctuations and thus
conducts derivative transactions to prevent any
disadvantageous impact of interest rate fluctuations. In
addition, when a derivative transaction is conducted, it is limited
to the transaction that involves actual demand, in principle, andthe policy of AIFUL is not to use derivative transactions solely inorder to gain trading profits in the short term.
(2) Types of financial instruments and their risks
The financial assets of the AIFUL Group are mainly loans andaccounts receivable - installment against individuals andcorporations, and these are both exposed to credit risk thatwill be caused by customers defaulting on the agreement. In
addition, operational investment securities and investment
securities are mainly stocks and investments in partnership
capital, which are held mainly for the purpose of businesspromotion. Each of them involves the risk of the credit ofissuers and the risk of market price fluctuations. In addition,
financial assets denominated in foreign currency are exposedto the risk of exchange rate fluctuations.
Financial liabilities such as loans and corporate bonds are
exposed to the risk of liquidity where payment may not beable to be made on the due date under certain circumstances,including the case where the AIFUL Group cannot use themarket. In addition, funds are raised at a variable interest rate,
which is exposed to the risk of interest rate fluctuations.
Derivative transactions involve the risk of market interest
rate fluctuations and counterparty risk.
(3) System for management of risk in relation to financial
instruments(i) Management of credit risk
The AIFUL Group manages the credit risk according to thevarious management rules of AIFUL. With respect to themajor financial assets, such as loans, accounts receivable- installment and customers’ liabilities for acceptances andguarantees, a credit examination is conducted for each case
based on the data of the personal credit bureaus and
AIFUL’s own credit system, and the system relating to credit
management is established and operated, including thechange of the limit amount and the creation of guarantees
and security. In addition, with respect to the credit risk ofissuers of securities, it is managed by regularly ascertaining
credit information and the market values.
With respect to the counterparty risk of derivativetransactions, the party to the contract is financial
institutions in and outside Japan. It is recognized that thecredit risk is low. In addition, the management of such risks
is evaluated/analyzed/measures are considered by eachdepartment in charge, and they are reported to the boardof directors as appropriate.
(ii) Management of market riski) Management of interest rate risk
The AIFUL Group manages the interest rate risk according
to the risk management manual that was developed byobtaining approval at the meeting of the Risk
Management Committee, which is an organ directly
under the board of directors. Toward this risk, a report isprovided from the Finance Department, which is thedepartment in charge, to the Internal Control
Department, and the risk assessment and the adequacy
and appropriateness of the countermeasures are verified
and a report is provided to the board of directors as
appropriate. In addition, derivative transactions are used
to hedge the risk of interest rate fluctuations.
ii) Management of price fluctuation risk
Many of the shares held by the AIFUL Group are held forthe purpose of business promotion, including business/
capital alliances. The market environment and financial
position of customers, among others, are monitored andmeasures are considered in the department in charge,
and a report is provided to the board of directors as
appropriate.
In addition, the AIFUL Group does not have financial
instruments for the purpose of trading.
iii) Derivative transactions
With respect to derivative transactions, the risk ismanaged according to the various management rules of
AIFUL.
An internal check is conducted, specifically theappropriate execution of transactions, the evaluation of
the effectiveness of hedges and administration in thedepartment in charge, and a report is made to the
Accounting Department.
iv) Quantitative information relating to the market risk
The AIFUL Group does not conduct quantitative analysis.
(Interest rate risk)
For the AIFUL Group, the major financial instruments
whose market value changes due to fluctuations in theinterest rate, which is the major risk variable, are loans,installment accounts receivable, borrowings andcorporate bonds.
In addition, AIFUL has ascertained that in the accounttitles whose market value is calculated at the market
interest rate, the estimated amount of impact on the net
value (of assets) after setting off the financial assets inquestion against the financial liabilities in question whenthe market interest rate at the end of the consolidated
fiscal year changes by 1 basis point (0.01%) is a decrease

AIFUL CORPORATION Annual Report 201947

of 52 million yen in the present value of the financial
instruments that are affected by the interest rate
fluctuations when it is assumed that the interest rate for
the Japanese yen increases by 1 basis point (0.01%) and anincrease of 52 million yen in the said value when it isassumed that the interest rate for the Japanese yen falls by
1 basis point (0.01%). However, in the trial calculation of
the amount of the impact, it is assumed that there is nochange in the risk variables other than the market interest
rate.
(iii) Management of the liquidity risk relating to fund raising
The AIFUL Group manages the liquidity risk mainly byadjusting the balance of procurement between the long term
and the short term considering diversification of the means ofraising funds and the market environment, in addition to thetimely funds management of the entire Group.
(4) S upplementary explanation about the matters regarding themarket value, etc. of financial instruments
The market value of financial instruments includes the value
based on the market value and the value that is reasonably
calculated when the market value is not available. In thecalculation of such values, certain assumptions and otherconditions are adopted, and thus if any different assumptions
and other conditions are used, such values may vary.

2. Matters regarding the market value, etc. of financial instruments
The amounts recorded on the consolidated balance sheet, the market values and the differences between them on March 31, 2018 are asshown below. In addition, cases where it is considered extremely difficult to ascertain the market value are not included in the table below(refer to Note 2).
(Millions of yen)

Category

Amount recorded on
the consolidatedbalance sheet(1) Cash and deposits¥ 29,327(2) Operating loans

412,706

Allowance for doubtful accounts and provision for loss oninterest repayment (*1)

Market value¥ 29,327

Difference¥—(28,500)
384,205

446,026

61,821

92,32093,110789(4) Operational investment securities and investment securities(including the shares of affiliated companies)

1,746

3,594

1,848

(5) Claims provable in bankruptcy

27,787
2,246

2,246

―

¥ 509,846¥ 574,306¥ 64,459(1) Short-term borrowings

83,32583,325―(2) Bonds payable

8,500

8,500

―

(3) Installment accounts receivable

97,252

Deferred installment income (*2)(397)

Allowance for doubtful accounts (*3)

(4,534)

Allowance for doubtful accounts (*3)
Total assets(25,541)(3) Long-term borrowings (*4)

274,011

273,866(145)¥ 365,836¥ 365,691¥    (145)(1) Those to which hedge accounting is applied

―

―

―

(2) Those to which hedge accounting is not applied

―

―

―

Total liabilities
Derivative transactions (*4)

Total derivative transactions

¥

—

¥

—

¥

—

(*1) The estimated amount of interest repayment that is expected to be preferentially appropriated to operating loans, which is included in the allowance for
doubtful accounts in relation to operating loans and the provision for loss on interest repayment, is deducted.
(*2) The deferred installment income (liability account) in relation to installment accounts receivable is deducted.
(*3) Installment accounts receivable and claims provable in bankruptcy and the allowance for doubtful accounts corresponding to them respectively are
deducted.
(*4) T he derivative transactions to which hedge accounting is applied are processed together with the long-term borrowings to be hedged as one, and thus
their market values are included in the market value of the said long-term borrowings in the statement.

48

AIFUL CORPORATION Annual Report 2019

Notes to Consolidated Financial Statements

Notes: 1. Matters regarding the method of calculation of the market value of financial instruments
Assets(1) Cash and deposits
Deposits are all short term, and thus the market value is close to the book value. Accordingly, the said book value is used.
(2) Operating loans
In the calculation of the market value of operating loans, such present value of the amount obtained by deducting the estimated amount ofcollection expenses from the estimated amount of principal and interest to be received, which reflects the recoverability as discounted at anextremely safe interest rate corresponding to the remaining period, is used.
(3) Installment accounts receivable
With respect to the credit card business included in installment accounts receivable, most transactions are a one-time payment in the following
month and the market value is close to the book value, and thus the said book value is used. In addition, the market value of the installment sales
finance business is calculated using this present value of the amount obtained by deducting the estimated amount of collection expenses from theestimated amount of principal and fees to be received, which reflects the recoverability as discounted at an extremely safe interest rate
corresponding to the remaining period.
(4) Operational investment securities and investment securities (including the shares of affiliated companies)
With respect to the market value of these securities, for stocks and bonds, the price on the exchange is used.
(5) Claims provable in bankruptcy
With respect to the claims provable in bankruptcy, the estimated amount of bad debts is calculated based on the estimated amount of collection
by security, etc., and thus the market value is close to the amount obtained by deducting the current estimated amount of bad debts from thevalue on the balance sheet on the consolidated closing date. Accordingly, the said value is used in calculation.
Liabilities(1) Short-term borrowings
They are settled in the short term, and thus the market value is close to the book value. Accordingly, the said book value is used.
(2) Bonds payable
Of those whose market value is calculated, the calculation is undertaken based on the market price if the market price is available and, for those
whose market value is not available, using the present value of the total sum of principal and interest that is discounted at the interest rate taking
into account the remaining period and credit risk of the bonds in question.
(3) Long-term borrowings
Of those whose market value is calculated, the market value of borrowings that are settled within one year is close to the book value, and the said
book value is used. Of the other borrowings, for those to which the fixed interest rate is applied, the present value of the total sum of principal andinterest that is discounted at an interest rate assumed in the case of a new loan under the same conditions is used in the calculation. For those towhich the variable interest rate is applied, the market interest rate and the credit risk are reflected in a short period of time, and thus the market
value is considered to be close to the book value. Accordingly, the said book value is used.
2. Financial instruments whose market value is considered extremely difficult to ascertain(Millions of yen)
Category

Amount recorded on the consolidated balance sheet

Operational investment securities and investment securities(1) Unlisted stock¥ 2,001(2) Investment in capital of investment limited partnership, etc.

1,244

Total

¥ 3,246

With respect to these financial instruments, it is considered extremely difficult to ascertain the market value, and thus they are not included in “assets(4) operation investment securities and investment securities.”
3. Estimated amount of redemption of monetary claims and securities with maturity after the consolidated closing date(Millions of yen)
Category

Due in one year or less

Cash and deposits¥ 29,327

Operating loans

159,228

Installment accounts receivable
Total

Due after one year
through five years

Due after 5 years

—

¥

—

¥

241,341

12,13593,5643,665

21¥ 282,121¥ 245,007¥ 12,157

The amount of 27,787 million yen is not included because the estimated amount of redemption is not expected, such as claims provable inbankruptcy.
4. Plan for repayment of bonds payable, long-term borrowings, lease obligations and other interest-bearing debts after the consolidated closing date(Millions of yen)

Category
Bonds payable

Due in one year
or less

Due after one
year throughtwo years

Due after two
years throughthree years—¥—

Due after four
years throughfive years¥—

Due after five
years
¥

—

¥ 1,300¥ 7,200

Finance lease obligations

300

285

179

140

34

7

Long-term borrowings

53,482

67,112

91,37037,59721,092

3,355¥ 55,083¥ 74,597¥ 91,549¥ 37,737¥ 21,127¥ 3,363

Total¥

Due after three
years throughfour years

AIFUL CORPORATION Annual Report 201949

Fiscal year ended March 31, 2019 (from April 1, 2018 toMarch 31, 2019)
1. Matters regarding the situations of financial instruments(1) Business policy for financial instruments
The AIFUL Group mainly engages in the financial business;
specifically, the consumer finance business, the real estate
mortgage finance business, the business operator financebusiness, the credit sales business, the credit guarantee business,the receivables management and collection business, etc. Direct
finance by corporate bonds is used in raising funds to conduct
these businesses by adjustment to the market situation and thelong-term and short-term balance, in addition to indirect financeby bank loans. In this way, AIFUL has financial liabilities thatinvolve interest rate fluctuations and thus conducts derivativetransactions to prevent any disadvantageous impact of interest
rate fluctuations. In addition, when a derivative transaction isconducted, it is limited to the transaction that involves actual
demand, in principle, and the policy of AIFUL is not to use
derivative transactions solely in order to gain trading profits inthe short term.
(2) Types of financial instruments and their risks
The financial assets of the AIFUL Group are mainly loans andaccounts receivable - installment against individuals andcorporations, and these are both exposed to credit risk that will
be caused by customers defaulting on the agreement. In
addition, operational investment securities and investment
securities are mainly stocks and investments in partnership
capital, which are held mainly for the purpose of businesspromotion. Each of them involves the risk of the credit of issuers
and the risk of market price fluctuations. In addition, financial
assets denominated in foreign currency are exposed to the riskof exchange rate fluctuations.
Financial liabilities such as loans and corporate bonds are
exposed to the risk of liquidity where payment may not be able
to be made on the due date under certain circumstances,including the case where the AIFUL Group cannot use themarket. In addition, funds are raised at a variable interest rate,
which is exposed to the risk of interest rate fluctuations.
Derivative transactions involve the risk of market interest rate
fluctuations and counterparty risk.
(3) System for management of risk in relation to financial
instruments(i) Management of credit risk
The AIFUL Group manages the credit risk according to thevarious management rules of AIFUL. With respect to themajor financial assets, such as loans, accounts receivable- installment and customers’ liabilities for acceptances andguarantees, a credit examination is conducted for each case
based on the data of the personal credit bureaus and AIFUL’s
own credit system, and the system relating to credit
management is established and operated, including thechange of the limit amount and the creation of guarantees
and security. In addition, with respect to the credit risk ofissuers of securities, it is managed by regularly ascertaining
credit information and the market values.
With respect to the counterparty risk of derivativetransactions, the party to the contract is financial institutions

50

AIFUL CORPORATION Annual Report 2019

in and outside Japan. It is recognized that the credit risk islow. In addition, the management of such risks is evaluated/
analyzed/measures are considered by each department incharge, and they are reported to the board of directors as
appropriate.
(ii) Management of market riski) Management of interest rate risk
The AIFUL Group manages the interest rate risk according
to the risk management manual that was developed byobtaining approval at the meeting of the Risk Management
Committee, which is an organ directly under the board of
directors. Toward this risk, a report is provided from the
Finance Department, which is the department in charge, tothe Internal Control Department, and the risk assessment
and the adequacy and appropriateness of thecountermeasures are verified and a report is provided tothe board of directors as appropriate. In addition, derivativetransactions are used to hedge the risk of interest rate
fluctuations.
ii) Management of price fluctuation risk
Many of the shares held by the AIFUL Group are held forthe purpose of business promotion, including business/
capital alliances. The market environment and financial
position of customers, among others, are monitored andmeasures are considered in the department in charge, anda report is provided to the board of directors as
appropriate.
In addition, the AIFUL Group does not have financial
instruments for the purpose of trading.
iii) Derivative transactions
With respect to derivative transactions, the risk is managed
according to the various management rules of AIFUL.
An internal check is conducted, specifically theappropriate execution of transactions, the evaluation of theeffectiveness of hedges and administration in thedepartment in charge, and a report is made to the
Accounting Department.
iv) Quantitative information relating to the market risk
The AIFUL Group does not conduct quantitative analysis.
(Interest rate risk)
For the AIFUL Group, the major financial instruments
whose market value changes due to fluctuations in theinterest rate, which is the major risk variable, are loans,installment accounts receivable, borrowings and corporate
bonds.
In addition, AIFUL has ascertained that in the accounttitles whose market value is calculated at the market
interest rate, the estimated amount of impact on the net
value (of assets) after setting off the financial assets inquestion against the financial liabilities in question whenthe market interest rate at the end of the consolidated fiscal
year changes by 1 basis point (0.01%) is a decrease of 56
million yen in the present value of the financial instrumentsthat are affected by the interest rate fluctuations when it isassumed that the interest rate for the Japanese yen
increases by 1 basis point (0.01%) and an increase of 56
million yen in the said value when it is assumed that theNotes to Consolidated Financial Statementsinterest rate for the Japanese yen falls by 1 basis point(0.01%). However, in the trial calculation of the amountof the impact, it is assumed that there is no change in therisk variables other than the market interest rate.
(iii) Management of the liquidity risk relating to fund raising
The AIFUL Group manages the liquidity risk mainly byadjusting the balance of procurement between the longterm and the short term considering diversification of themeans of raising funds and the market environment, in
addition to the timely funds management of the entire
Group.

(4) S upplementary explanation about the matters regarding themarket value, etc. of financial instruments
The market value of financial instruments includes the value
based on the market value and the value that is reasonably
calculated when the market value is not available. In thecalculation of such values, certain assumptions and otherconditions are adopted, and thus if any different assumptions
and other conditions are used, such values may vary.

2. Matters regarding the market value, etc. of financial instruments
The amounts recorded on the consolidated balance sheet, the market values and the differences between them on March 31, 2019 are asshown below. In addition, cases where it is considered extremely difficult to ascertain the market value are not included in the table below(refer to Note 2).

(Millions of yen)

Category

Amount recorded on
the consolidatedbalance sheet(1) Cash and deposits¥ 36,112(2) Operating loans

457,785

Allowance for doubtful accounts and provision for loss oninterest repayment (*1)

Deferred installment income (*2)
Allowance for doubtful accounts (*3)(4) Operational investment securities and investment securities(including the shares of affiliated companies)(5) Claims provable in bankruptcy
Allowance for doubtful accounts (*3)
Total assets(1) Short-term borrowings

Difference¥ 36,112¥    —

485,747

61,351

96,611

97,134

522

1,503

2,507

1,003

2,720

2,720

—

¥ 561,343¥ 624,221¥ 62,877

86,562

86,562—(33,389)424,395(3) Installment accounts receivable

Market value

101,584(467)(4,505)26,981(24,260)(2) Bonds payable

27,61527,615—(3) Long-term borrowings (*4)

304,531304,62089¥ 418,708¥ 418,798¥     89———

Total liabilities
Derivative transactions (*4)
(1) Those to which hedge accounting is applied(2) Those to which hedge accounting is not applied
Total derivative transactions

—

—

—

¥      —

¥      —

¥     —(*1) The estimated amount of interest repayment that is expected to be preferentially appropriated to operating loans, which is included in the allowance for
doubtful accounts in relation to operating loans and the provision for loss on interest repayment, is deducted.
(*2) T he deferred installment income (liability account) in relation to installment accounts receivable is deducted.
(*3) Installment accounts receivable and claims provable in bankruptcy and the allowance for doubtful accounts corresponding to them respectively are
deducted.
(*4) T he derivative transactions to which hedge accounting is applied are processed together with the long-term borrowings to be hedged as one, and thus
their market values are included in the market value of the said long-term borrowings in the statement.

AIFUL CORPORATION Annual Report 201951

Notes: 1. Matters regarding the method of calculation of the market value of financial instruments
Assets(1) Cash and deposits
Deposits are all short term, and thus the market value is close to the book value. Accordingly, the said book value is used.
(2) Operating loans
In the calculation of the market value of operating loans, such present value of the amount obtained by deducting the estimated amount ofcollection expenses from the estimated amount of principal and interest to be received, which reflects the recoverability as discounted at anextremely safe interest rate corresponding to the remaining period, is used.
(3) Installment accounts receivable
With respect to the credit card business, the market value is calculated using this present value of the amount obtained by deducting the estimatedamount of collection expenses from the estimated amount of principal and fees to be received, which reflects the recoverability as discounted at
an extremely safe interest rate corresponding to the remaining period.
(4) Operational investment securities and investment securities (including the shares of affiliated companies)
With respect to the market value of these securities, for stocks and bonds, the price on the exchange is used.
(5) Claims provable in bankruptcy
With respect to the claims provable in bankruptcy, the estimated amount of bad debts is calculated based on the estimated amount of collection
by security, etc., and thus the market value is close to the amount obtained by deducting the current estimated amount of bad debts from thevalue on the balance sheet on the consolidated closing date. Accordingly, the said value is used in calculation.
Liabilities(1) Short-term borrowings
They are settled in the short term, and thus the market value is close to the book value. Accordingly, the said book value is used.
(2) Bonds payable
Of those whose market value is calculated, the calculation is undertaken based on the market price if the market price is available and, for those
whose market value is not available, using the present value of the total sum of principal and interest that is discounted at the interest rate taking
into account the remaining period and credit risk of the bonds in question.
(3) Long-term borrowings
Of those whose market value is calculated, the market value of borrowings that are settled within one year is close to the book value, and the said
book value is used. Of the other borrowings, for those to which the fixed interest rate is applied, the present value of the total sum of principal andinterest that is discounted at an interest rate assumed in the case of a new loan under the same conditions is used in the calculation. For those towhich the variable interest rate is applied, the market interest rate and the credit risk are reflected in a short period of time, and thus the market
value is considered to be close to the book value. Accordingly, the said book value is used.
2. Financial instruments whose market value is considered extremely difficult to ascertain(Millions of yen)
Category

Amount recorded on the consolidated balance sheet

Operational investment securities and investment securities(1) Unlisted stock¥ 4,147(2) Investment in capital of investment limited partnership, etc.

1,201

Total

¥ 5,349

With respect to these financial instruments, it is considered extremely difficult to ascertain the market value, and thus they are not included in “assets(4) operation investment securities and investment securities.”
3. Estimated amount of redemption of monetary claims and securities with maturity after the consolidated closing date(Millions of yen)Due in one year or lessDue after one year
through five years

Cash and deposits¥ 36,112¥       ―

¥      ―

Operating loans

183,698

269,104

4,981

Installment accounts receivable

97,6523,931―¥ 317,463¥ 273,036¥ 4,981Category

Total

Due after 5 years

The amount of 26,981 million yen is not included because the estimated amount of redemption is not expected, such as claims provable inbankruptcy.
4. Plan for repayment of bonds payable, long-term borrowings, lease obligations and other interest-bearing debts after the consolidated closing date(Millions of yen)

Category
Bonds payable

Due after one
year throughtwo years

Due after two
years throughthree years

Due after three
years throughfour years

Due after four
years throughfive years

Due after fiveyears

¥   7,370¥ 5,170¥ 15,075¥      ―

¥     ―

¥     ―

Finance lease obligations

289

183

144

39

8

―

Long-term borrowings

98,72891,51770,50931,280

8,335

4,160

¥ 106,387¥ 96,871¥ 85,729¥ 31,319¥ 8,344¥ 4,160

Total

52

Due in one year
or less

AIFUL CORPORATION Annual Report 2019

Notes to Consolidated Financial Statements

Securities
Fiscal year ended March 31, 2018 (as of March 31, 2018)
1. Other securities(Millions of yen)

Category

Amount recorded on
the consolidatedbalance sheet

Acquisition cost

Difference

Those whose amount recorded on the consolidated balance sheet
exceeds the acquisition cost
Shares¥   569¥     67

¥ 502

569

67

502

799

1,260

(460)

SubtotalThose whose amount recorded on the consolidated balance sheet
does not exceed the acquisition cost
SharesSubtotal

799

1,260

(460)

Total

¥ 1,369¥ 1,327¥ 41

Note: With respect to unlisted stocks, etc. (whose amount recorded on the consolidated balance sheet is 2,526 million yen), the market price is not available
and it is considered extremely difficult to ascertain the market value, and thus they are not included in the table above.

2. Other securities sold during the consolidated fiscal year under review (from April 1, 2017 to March 31, 2018)(Millions of yen)Amount of sale
Shares¥    26

Total amount ofgains on sale¥  4

Total amount oflosses on sale¥  (5)

Fiscal year ended March 31, 2019 (as of March 31, 2019)
1. Other securities(Millions of yen)

Category

Amount recorded on
the consolidatedbalance sheet

Acquisition cost

Difference

Those whose amount recorded on the consolidated balance sheet
exceeds the acquisition cost
Shares¥Subtotal

111

¥ 19

¥ 92

111

19

92

570

570

―

Those whose amount recorded on the consolidated balance sheet
does not exceed the acquisition cost
SharesSubtotal
Total

¥

570

570

―

681

¥ 589

¥ 92

Note: With respect to unlisted stocks, etc. (whose amount recorded on the consolidated balance sheet is 3,253 million yen), the market price is not available,
and it is considered extremely difficult to ascertain the market value, and thus they are not included in the table above.

AIFUL CORPORATION Annual Report 201953

2. Other securities sold during the consolidated fiscal year under review (from April 1, 2018 to March 31, 2019)(Millions of yen)

SharesAmount of sale

Total amount ofgains on sale

Total amount oflosses on sale

¥ 569

¥ 489

¥―

3. Other securities whose impairment loss is processed
In the consolidated fiscal year under review, for other securities, there was an impairment loss of 690 million yen.
In addition, in the impairment of securities, when the market value falls 50% or more below the acquisition cost, impairment is declared
when it is not considered to be likely to recover to the acquisition cost level, and when the market value falls 30% or more but less than
50% below the acquisition cost, an amount judged necessary is processed as impairment loss, considering the financial position, operating
results and trends of stock prices, among others.

Derivative transactions
Fiscal year ended March 31, 2018 (as of March 31, 2018)
1. Derivative transactions to which hedge accounting is not applied
Not applicable
2. Derivative transactions to which hedge accounting is applied(Millions of yen)
Method of hedge
accounting

Types, etc. of
derivativetransactions

Special treatment ofinterest rate cap

Interest rate cap
transaction

Main items to behedgedContract amount,etc.

Contract amount,etc. over 1 year

¥ 41,300¥ 41,300

Long-term
borrowings

Market value(Note)

Note: The interest rate cap treated in the special manner is processed together with the long-term borrowings to be hedged as one, and thus its market
value is included in the market value of the said long-term borrowings in the statement.

Fiscal year ended March 31, 2019 (as of March 31, 2019)
1. Derivative transactions to which hedge accounting is not applied
Not applicable
2. Derivative transactions to which hedge accounting is applied(Millions of yen)
Method of hedge
accounting

Types, etc. of
derivativetransactions

Special treatment ofinterest rate cap

Interest rate cap
transaction

Main items to behedgedLong-term
borrowings

Contract amount,etc.

Contract amount,etc. over 1 year

¥ 75,564¥ 60,404

Market value(Note)

Note: The interest rate cap treated in the special manner is processed together with the long-term borrowings to be hedged as one, and thus its market
value is included in the market value of the said long-term borrowings in the statement.

Retirement benefits
1. Outline of the retirement benefit plan adopted
The AIFUL Group, except for some consolidated subsidiaries, uses both the defined contribution pension plan and the prepaid retirement
benefits plan.
In addition, the overseas consolidated subsidiaries adopt the defined benefit plan.
The overseas consolidated subsidiaries apply the International Financial Reporting Standards and apply IAS No. 19 “Employee Benefits”
in account processing.

54

AIFUL CORPORATION Annual Report 2019

Notes to Consolidated Financial Statements

2. Defined benefit pension plan
(1) Table for adjustment of beginning balance and ending balance of retirement benefit obligations(Millions of yen)
2019
(Apr. 1, 2018 to Mar. 31, 2019)
Beginning balance of retirement benefit obligations
Service cost2018
(Apr. 1, 2017 to Mar. 31, 2018)

¥ 11

¥ 2

5

3

Interest expense

00Actuarial gain or loss

(3)

4

Foreign currency translation adjustment(0)0

OthersEnding balance of retirement benefit obligations

—

(0)

¥ 13

¥ 11

(2) Table for adjustment of the ending balance of retirement benefit obligations and pension assets and the retirement benefit liabilities andassets recorded on the consolidated balance sheet(Millions of yen)

As of March 31, 2019

As of March 31, 2018¥     —

¥     —

—

—

—

—

Retirement benefit obligations under the funded type plan
Pension assets

13

11

¥ 13

¥ 11

Retirement benefit liabilities

13

11

Retirement benefit assets

—

—

¥ 13

¥ 11

Retirement benefit obligations under the unfunded type plan
Net value of liabilities and assets recorded on the consolidated balance sheet

Net value of liabilities and assets recorded on the consolidated balance sheet(3) Amount of retirement benefit expenses and their sub-items(Millions of yen)
2019
(Apr. 1, 2018 to Mar. 31, 2019)2018(Apr. 1, 2017 to Mar. 31, 2018)¥   5¥    3

Interest expense

00

Others

—

(0)

¥   5

¥    3Service cost

Retirement benefit expenses relating to the defined benefit plan(4) Matters regarding the assumptions in actuarial computation
Major assumptions in actuarial computation

2019(Apr. 1, 2018 to Mar. 31, 2019)
2.6%

Discount rate

2018
(Apr. 1, 2017 to Mar. 31, 2018)
3.1%

3. Defined contribution pension plan and prepaid retirement benefits plan

(Millions of yen)
2019
(Apr. 1, 2018 to Mar. 31, 2019)
Amount of prepaid retirement benefits
Amount of contribution paid to the defined contribution pension plan
Retirement benefit expenses

2018(Apr. 1, 2017 to Mar. 31, 2018)

¥ 147

¥ 124

331

346

¥ 478

¥ 470

AIFUL CORPORATION Annual Report 201955

Stock options, etc.
Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
1. Amount and account title of expenses posted during the consolidated fiscal year under review
Other operating expenses
28 million yen
2. Amount posted as income due to the lapse from the non-exercise of the right during the consolidated fiscal year underreview
Gain on reversal of share acquisition rights 703 million yen
3. Details, scale and changes of stock options(1) Details of stock options

2013 stock options

2015 stock options

Title and number of grantees

Employees of AIFUL: 1,418 persons
Employees of the consolidated subsidiaries:
44 persons
Employees of the non-consolidated
subsidiaries: 18 persons

Employees of AIFUL: 1,352 persons
Employees of the consolidated subsidiaries:
31 persons

Number of stock options

Common stock 2,947,100 shares

Common stock 1,583,850 shares

Grant date

May 27, 2013

June 30, 2015

Conditions for vesting

The fact of working continually after thedate of the grant (May 27, 2013) until thedate when the rights became final andbinding (April 30, 2015); however, in thecase of retirement at the mandatory
retirement age, any other treatment may
be applied.

The fact of working continually after thedate of the grant (June 30, 2015) until thedate when the rights became final andbinding (June 30, 2017); however, in thecase of retirement at the mandatory
retirement age, any other treatment may
be applied.

Requisite service period

From May 27, 2013
To April 30, 2015

From June 30, 2015
To June 30, 2017

Exercise period

From May 1, 2015
To April 30, 2017

From July 1, 2017
To June 30, 2019

Note: For the share acquisition rights according to the resolution passed at the meeting of the board of directors held on April 26, 2013, the period of
exercise of the rights expired on April 30, 2017.

(2) Scale of stock options and situations of their changes
The stock options that existed in the consolidated fiscal year (ended March 31, 2018) are included in the scope here. With respect to thenumber of stock options, they are translated into the number of shares in a statement.
(i) Number of stock options

2013 stock options

2015 stock options

Before vesting (shares)
Previous consolidated fiscal year-end—

1,583,850

Granted——Forfeited——

Vested

—1,583,850

Unvested——

After vesting (shares)
Previous consolidated fiscal year-end

2,947,100—

Vested

—1,583,850

Exercised

—

1,000

Forfeited

2,947,100——

1,582,850

Unexercised

56

AIFUL CORPORATION Annual Report 2019

Notes to Consolidated Financial Statements(ii) Information on unit price2013 stock options
Exercise price (yen)

¥ 501

¥ 407

—

¥ 396

¥ 261

¥ 157

Average stock price at the time of exercise (yen)Unit fair value (date of grant) (yen)2015 stock options

4. Method of estimating the number of the stock options vested
Basically, it is difficult to make a reasonable estimate of the number of future lapses, and thus the method reflecting only the number ofactual lapses is adopted.
Fiscal year ended March 31, 2019 (from April 1, 2018 to March 31, 2019)
1. Amount and account title of expenses posted during the consolidated fiscal year under review
Other operating expenses— million yen
2. Amount posted as income due to the lapse from the non-exercise of the right during the consolidated fiscal year underreview
Other (Non-operating profit) 4 million yen
3. Details, scale and changes of stock options(1) Details of stock options

2015 stock options
Title and number of grantees

Employees of AIFUL: 1,352 persons
Employees of the consolidated subsidiaries: 31 persons

Number of stock options

Common stock 1,583,850 shares

Grant dateJune 30, 2015

Conditions for vesting

The fact of working continually after the date of the grant(June 30, 2015) until the date when the rights became
final and binding (June 30, 2017); however, in the case ofretirement at the mandatory retirement age, any othertreatment may be applied.

Requisite service period

From June 30, 2015
To June 30, 2017

Exercise period

From July 1, 2017
To June 30, 2019(2) Scale of stock options and situations of their changes
The stock options that existed in the consolidated fiscal year (ended March 31, 2019) are included in the scope here. With respect to thenumber of stock options, they are translated into the number of shares in a statement.
(i) Number of stock options

2015 stock options
Before vesting (shares)
Previous consolidated fiscal year-end—

Granted—Forfeited—

Vested—Unvested—

After vesting (shares)
Previous consolidated fiscal year-end

1,582,850

Vested—Exercised—

Forfeited—

Unexercised

1,582,850

AIFUL CORPORATION Annual Report 201957

(ii) Information on unit price2015 stock options
Exercise price (yen)¥ 407

Average stock price at the time of exercise (yen)—Unit fair value (date of grant) (yen)¥ 157

4. Method of estimating the number of the stock options vested
Basically, it is difficult to make a reasonable estimate of the number of future lapses, and thus the method reflecting only the number ofactual lapses is adopted.

Relating to tax effect accounting
1. Breakdown of deferred tax assets and deferred tax liabilities by major cause(Millions of yen)
As of March 31, 2019

As of March 31, 2018¥    9,873¥    8,723

Provision for loss on interest repayment

7,101

6,996

Bad debt loss

1,781

1,403

Accrued income

1,037

1,174

118,383

165,701

4,391

3,342

Deferred tax assets
Allowance for doubtful accounts

Loss carried forward
Other

142,569

187,341

Valuation allowance for tax loss carryforwards*2(117,965)—

Valuation allowance for the sum of deductible difference, etc.

(18,371)—

Subtotal of deferred tax assets

Valuation reserve(136,336)(186,713)¥    6,232¥      627

Valuation difference on available-for-sale securities

(27)

(154)

Retirement cost corresponding to asset retirement obligations

(157)

(180)

Total deferred tax assets
Deferred tax liabilities

0—

Total deferred tax liabilities¥        (185)¥       (334)

Net value of the deferred tax assets (liabilities)¥    6,047¥      292

Other

Note: 1. V aluation allowance has decreased by 50,377 million yen. This decrease mainly reflects the additional posting of deferred tax assets of 5,605
million yen due to expected taxable income in the future and the writing off of tax loss carryforwards of 47,234 million yen (the amount multipliedby the effective statutory tax rate), which is part of the tax loss carryforwards recorded in the fiscal year ended March 2010, due to the expiry of
the carry forward period.
*2. The amount of tax loss carryforwards and their deferred tax assets by carry forward period
Fiscal year ended March 31, 2019
Less than
1 year

1-2 years

2-3 years

3-4 years

4-5 years

More than
5 years

Total(Millions of yen)Tax loss carryforwards (a)34,677

29,21814,147

5,851

6,261

28,227

118,383

Valuation allowance(34,259)(29,218)(14,147)(5,851)(6,261)(28,227)(117,965)

Deferred tax assets

418

—

—

—

—

—

(b) 418(a) T he amounts of tax loss carryforwards have been multiplied by the effective statutory tax rate.
(b) D eferred tax assets of 418 million yen have been posted for 118,383 million yen of tax loss carryforwards (amount multiplied by the effective
statutory tax rate). The 418 million yen of deferred tax assets recognizes part of the Company’s outstanding tax loss carryforwards of 117,054
million yen (amount multiplied by the effective statutory tax rate). The tax loss carryforwards that posted the said deferred tax assets wereincurred due to the posting of loss before taxes of 70,007 million yen in the fiscal year ended March 2011 and do not recognize valuation
allowances, since they were deemed collectible based on future expectations of taxable income.

58

AIFUL CORPORATION Annual Report 2019

Notes to Consolidated Financial Statements

2. Breakdown of each major item that caused a significant difference between the effective statutory tax rate and the rate ofburden of income taxes, etc. after the application of tax effect accounting

As of March 31, 2019

As of March 31, 2018

30.5%

30.8%

Inhabitant tax on a per capita basis

1.9

1.8

Entertainment expenses and other items permanently excluded from loss

0.4

0.4

Stock-based compensation expenses

0.0

(5.9)

(1,557.9)(536.3)

(6.2)

3.8

Effective statutory tax rate
(adjustment)

Valuation reserve
Downward revision to the ending deferred tax assets due to a change ofthe tax rate

(0.7)

—

1,381.0

512.6

Impact of tax consolidation

(0.6)

(0.8)

Difference in tax rate from that of the parent company

12.3

9.9

Other

0.0

0.2

(139.3)

16.5

Share of loss (profit) of entities accounted for using the equity method
Expiry of the period of loss carried forward

Rate of burden of income taxes, etc. after the application of tax effectaccounting

3. Amendment to the amounts of deferred tax assets and deferred tax liabilities due to changes in income tax rates
The effective statutory tax rate used for the calculation of deferred tax assets and deferred tax liabilities for the consolidated fiscal year
under review has been changed from that used in the previous fiscal year due to the revision of the tax law. The impact of the change tothe effective statutory tax rate is minor.

AIFUL CORPORATION Annual Report 201959

Notes to Segment information
Segment Information
1. Overview of reportable segments(1) Determination of reportable segments
The Company’s reportable segments are the Group’s structural units, for which separate financial information is available. The financial
results for all business segments are periodically reviewed by the Company’s Board of Directors in order to make decisions on the proper
allocation of business resources and to evaluate the business performance of the respective segments.
The Group draws up strategies for the Company and each of its consolidated subsidiaries and conducts business activities
accordingly.
As a result, the AIFUL Group has three reportable segments: the core company AIFUL Corporation, LIFECARD Co., Ltd. and AIRA &AIFUL Public Company Limited.
(2) Types of products and services belonging to each reportable segment“AIFUL Corporation” is mainly involved in the loan business and credit guarantee business, while “LIFECARD Co., Ltd.” is mainly involvedin the credit sales business and the credit guarantee business. “AIRA & AIFUL Public Company Limited” is mainly involved in the loanbusiness.
2. Calculation of operating revenue, profit or loss, assets, liabilities, and other items by reportable segment
The accounting methods applied to the reportable segments are the same as those described in “Basic important matters for the
preparation of the consolidated financial statements.” Profit (Loss) for reportable segments is net income (loss).
Inter-segment operating revenue and transfers are calculated based on the amount equal to the cost to the submitting company.
(Changes in Accounting Estimates)
As stated in Changes in Accounting Estimates, as to allowance for doubtful accounts of LIFECARD Co., Ltd one of the Company’s
consolidated subsidiaries, the accounting estimate has been changed in consideration of a more precise estimate having become possible,reflecting the advancement and improvement of data accumulation on the historical write-off rate by year. As a result, operating profit,
ordinary profit and profit before income taxes in the consolidated fiscal year under review increased by 1,328 million yen compared withthose calculated using the past method of estimate.

60

AIFUL CORPORATION Annual Report 2019

Notes to Consolidated Financial Statements

3. Information‌
relating to operating revenue, profit or loss, assets, liabilities and other amounts for each reportable segment
For the Prior Fiscal year (From April 1, 2017 to March 31, 2018)(Millions of yen)

Reportable segments

AIFUL

LIFECARD

AIRA & AIFUL
PublicCompany
Limited¥ 64,652¥ 42,855¥ 2,977

Subtotal

Other *1

Total

¥ 110,485¥ 4,902¥ 115,388

Operating revenue
Operating revenue from third
partiesInter-segment sales

10

123

—

134

58

192

Total

¥ 64,663¥ 42,979¥ 2,977¥ 110,619¥ 4,962¥ 115,582

Segment profit (loss)

2,437

2,746

(2,013)

3,170

(608)

2,562

Segment assets

500,262

179,419

17,568697,250

33,278730,529

Segment liabilities

414,714

135,848

7,702

558,265

15,193

573,458

Provision for point card certificates

—

2,807

—

2,807

—

2,807

Provision of allowance for doubtful
accounts *2

13,290

4,129

1,346

18,766

1,262

20,029Provision for loss on interest
repayment

12,384——

12,384—

12,384

643

14

—

657

23

681

Other items

Provision for bonuses
Depreciation

1,250

1,020

108

2,380

3

2,384

Interests on loans

247

—

—

247

39

286

Dividends received

23

12

—

35

0

35

Reversal provision for investment
loss

—

—

—

—

2

2

Rent expenses on real estates

149

—

—

149

2

151

Gain on sales of investment
securities

—

—

—

—

—

—

Interest expenses *3

—

—

—

—

34

34

Extraordinary income

703

—

—

703

—

703

[Gain on reversal of sharesacquisition rights]

[703]

[—]

[—]

[703]

[—]

[703]

Extraordinary losses

—

—

—

—

—

—

[Loss in valuation of investment
securities]

[—]

[—]

[—]

[—]

[—]

[—]

Income taxes - current

(736)

992

—

255

181

437

Income taxes - deferred

(17)

523

—

505

—

505

¥   1,034¥ 1,394¥    131¥   2,560¥      0¥   2,561

Increase/decrease in property,
plant and equipment, andintangible assets*1. The other classification comprises businesses not included in reporting segments and encompasses the activities of BUSINEXT CORPORATION, AsTry Loan
Services Corporation and related companies.
2. Provision of allowance for doubtful accounts is the sum total of operating expenses and non-operating expenses.
3. Interest expenses is the amount that is not included in operating expenses but is noted as non-operating expenses.

AIFUL CORPORATION Annual Report 201961

For the Current Fiscal year (From April 1, 2018 to March 31, 2019)(Millions of yen)
Reportable segments

AIFUL

LIFECARD

AIRA & AIFUL
PublicCompany
Limited¥ 70,979¥ 32,698¥ 5,901

Subtotal

Other *1

Total

¥ 109,579¥ 5,749¥ 115,328

Operating revenue
Operating revenue from third
partiesInter-segment sales

12

139

—

151

66

218

Total

¥ 70,991¥ 32,838¥ 5,901¥ 109,731¥ 5,816¥ 115,547

Segment profit (loss)

5,208

2,822

(2,313)

5,717

2,073

7,790

Segment assets

556,450

196,005

21,345

773,801

44,397818,198

Segment liabilities

465,249

149,611

13,900628,761

24,541

653,302

Provision for point card certificates

—

2,950

—

2,950

—

2,950

Provision of allowance for doubtful
accounts *2

22,074

3,287

3,427

28,789565

29,354

Provision for loss on interest
repayment

10,354

1,147—

11,501—

11,501

828

15

—

844

27

871

Other items

Provision for bonuses
Depreciation

1,249

1,294

96

2,640

13

2,653

Interests on loans

620

5

—

625

164

790

Dividends received

23

12

—

36

1

37

Reversal provision for investment
loss

—

—

—

—

—

—

Rent expenses on real estates

154

5

160

154

—

—

Gain on sales of investment
securities

1

—

—

1

457

458

Interest expenses *3

—

—

—

—

35

35

Extraordinary income

—

—

—

—

—

—

[Gain on reversal of sharesacquisition rights]

[—]

[—]

[—]

[—]

[—]

[—]

Extraordinary losses

690

—

—

690

—

690

[Loss in valuation of investment
securities]

[690]

[—]

[—]

[690]

[—]

[690]

Income taxes - current

(655)

994

—

339

518

858

Income taxes - deferred(3,723)(685)—(4,408)(844)(5,252)¥     724¥     881¥      2

¥   1,607¥      —

¥   1,607

Increase/decrease in property,
plant and equipment, andintangible assets*1. The other classification comprises businesses not included in reporting segments and encompasses the activities of BUSINEXT CORPORATION, AsTry Loan
Services Corporation and related companies.
2. Provision of allowance for doubtful accounts is the sum total of operating expenses and non-operating expenses.
3. Interest expenses is the amount that is not included in operating expenses but is noted as non-operating expenses.
4. Each number stated in the reportable segment ‘AIRA & AIFUL Public Company Limited’ is the modified figure adjusted in accordance with the ‘Practical
Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statement’ (ASBJ PITF No. 18).

62

AIFUL CORPORATION Annual Report 2019

Notes to Consolidated Financial Statements

4. ‌The amount and principal details of the difference between the total amount of reporting segments and amounts postedon the Company’s financial statements(Millions of yen)

Operating revenue

2019

2018

¥ 109,731¥ 110,619

Operating revenue categorized in “Other”

5,816

4,962

Inter-segment eliminations

(218)

(192)

¥ 115,328¥ 115,389

Reportable segment total

Operating revenue posted in consolidated financial statements
ProfitReportable segment total

2019¥   5,717¥   3,170

2,073

(608)

325

361

1,230

1,035

¥   9,346¥   3,958

Profit (loss) categorized in “Other”
Inter-segment eliminations
Other adjustment
Profit attributable to owners of parent posted in consolidated financial
statements
AssetsReportable segment total

2019¥ 697,250

44,39733,278(57,611)(47,883)¥ 760,587¥ 682,645

Inter-segment eliminations

Liabilities
Reportable segment total
Profit categorized in “Other”
Inter-segment eliminations
Total liabilities posted in consolidated financial statements

2018¥ 773,801

Profit categorized in “Other”
Total assets posted in consolidated financial statements

2018

2019

2018

¥ 628,761¥ 558,265

24,541

15,193(20,732)(10,219)¥ 632,570¥ 563,238

AIFUL CORPORATION Annual Report 201963

(Millions of yen)
Total of reportablesegment
Other Items

Other

Amount posted in
Consolidated Financial
statements

Adjustment

2019

2018

2019

2018

2019

2018

2019

2018

2,807

2,950

—

—

—

—

2,807

2,950

Other items
Provision for point cardcertificates

—

—

—

—

(2)

—

(2)

—

Provision of allowance for
doubtful accounts *1

18,76628,789

1,262

565

—

—

20,02929,354

Provision for loss on interest
repayment

12,384

11,501————

12,384

11,501

657

844

23

27

291

407

972

1,279

2,380

2,640

3

13

—

—

2,384

2,653

Interests on loans

247

625

39

164

(221)

(634)

65

155

Dividends received

35

36

0

1

—

(13)

35

23

Share of profit of entities
accounted for using equity
method

—

—

—

—

—

81

—

81

Reversal provision forinvestment loss

—

—

2

—

(2)

—

—

—

Rent expenses on real estates

149

154

2

5

(78)

(78)

73

82

Provision for investment loss

Provision for bonuses
Depreciation

Gain on sales of investment
securities

—

1

—

457

—

—

—

458

Interest expenses *2

—

—

34

35

(32)

(28)

1

6

Extraordinary income

703

—

—

—

—

—

703

—

[Gain on reversal of sharesacquisition rights]

[703]

[—]

[—]

[—]

[—]

[—]

[703]

[—]

—

—

—

—

—

690

—

690

[Loss on valuation of
investment securities]

[—]

[690]

[—]

[—]

[—]

[—]

[—]

[690]

Income taxes - current

255

339

181

518

—

—

437

858

Income taxes - deferred

505(4,408)

—

(844)

(361)

(369)

144

(5,621)

Investment amount ofentities accounted for using
equity method

—

—

—

—

—

821

—

821

Increase/decrease in property,
plant and equipment, andintangible assets

2,560

1,607

0

—

—

—

2,561

1,607

Extraordinary losses*1. Provision of allowance for doubtful accounts is the sum total of operating expenses and non-operating expenses.
2. Interest expenses is the amount that is not included in operating expenses but is noted as non-operating expenses.
3. E ach number stated in the “Subtotal of Reportable Segments” is the modified figure adjusted in accordance with the “Practical Solution on Unificationof Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statement” (ASBJ PITF No. 18).

64

AIFUL CORPORATION Annual Report 2019

Notes to Consolidated Financial Statements

Related information
Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
1. Information for each product and service(Millions of yen)

Operating revenue from outside
customers

Loan business

Credit sales
business

Creditguarantee
business

Softwarebusiness

Other

Total

¥ 61,791¥ 16,643¥ 13,299¥ 12,803¥ 10,849¥ 115,389

2. Information for each region(1) Operating revenue
The operating revenue of outside customers of Japan exceeds 90% of the operating revenue shown on the consolidated statements ofincome, and thus the statement is omitted.
(2) Property, plant and equipment
The value of property and equipment located in Japan exceeds 90% of the value of property and equipment shown on the consolidatedbalance sheet, and thus the statement is omitted.
3. Information for each major customer
Of the operating revenue from outside customers, there is no transaction partner accounting for not less than 10% of the operating
revenue shown on the consolidated statements of income, and thus there is no statement.
Fiscal year ended March 31, 2019 (from April 1, 2018 to March 31, 2019)
1. Information for each product and service(Millions of yen)

Operating revenue from outside
customers

Loan business

Credit sales
business

Creditguarantee
business

Softwarebusiness

Other

Total

¥ 70,972¥ 16,935¥ 14,287¥      —

¥ 13,132¥ 115,328

2. Information for each region(1) Operating revenue
The operating revenue of outside customers of Japan exceeds 90% of the operating revenue shown on the consolidated statements ofincome, and thus the statement is omitted.
(2) Property, plant and equipment
The value of property and equipment located in Japan exceeds 90% of the value of property and equipment shown on the consolidatedbalance sheet, and thus the statement is omitted.
3. Information for each major customer
Of the operating revenue from outside customers, there is no transaction partner accounting for not less than 10% of the operating
revenue shown on the consolidated statements of income, and thus there is no statement.
Information relating to impairment loss of non-current assets for each reportable segment
Not applicable
Information relating to amortization of goodwill and unamortized balance for each reportable segment
Not applicable
Information relating to gain on negative goodwill for each reportable segment
Not applicable

AIFUL CORPORATION Annual Report 201965

Information on related parties
1. Transactions with related parties(1) Transactions between the company submitting the consolidated financial statements and the related parties(i) O fficers and major shareholders (limited to individuals) of the company submitting the consolidated financial statements, etc.
Fiscal year ended March 31, 2018

Type
Company
whose
officers
and their
close
relatives
have amajorityof thevotingrightsName ofcompany,etc.

Address

Ratio ofCapitalDescription ownershipstock orof business of voting Relationship Description Transaction
investmentsorrights, etc. with relatedofamount(Million yen) occupation(%)
partiestransaction (Million yen)

Kabushiki Kita-ku,
Kaisha NK Osaka-shi
Kikaku(Note 1)¥     2

Real estatebusiness

None

Account
title

Endingbalance(Millionyen)

Borrowing Borrowingof fundsof funds(Note 2)

¥ 3,310

Short-termborrowing¥ 3,450

Interest
expenses(Operating
expenses)(Note 2)¥     32

Other
current
liabilities¥     33

Notes:	1. The close relatives of officers have 100% of the voting rights.
2. T ransaction conditions and policy for decisions on the transaction conditions
With respect to the interest rate of borrowings, the interest rate is determined in consideration of the market interest rate.

Fiscal year ended March 31, 2019

Type
Company
whose
officers
and their
close
relatives
have amajorityof thevotingrightsName ofcompany,etc.

Address

Kabushiki Ukyo-ku,
Kaisha NK Kyoto-shi
Kikaku(Note 1)

Ratio ofCapitalDescription ownershipstock orof business of voting Relationship Description Transaction
investmentsorrights, etc. with relatedofamount(Million yen) occupation(%)
partiestransaction (Million yen)¥     2

Real estatebusiness

None

Borrowing Borrowingof fundsof funds(Note 2)

¥ 3,420—¥       —Interest
expenses(Operating
expenses)(Note 2)

¥   122—¥       —Notes:	1. The close relatives of officers have 100% of the voting rights.
2. T ransaction conditions and policy for decisions on the transaction conditions
With respect to the interest rate of borrowings, the interest rate is determined in consideration of the market interest rate.

66

AIFUL CORPORATION Annual Report 2019

Account
title

Endingbalance(Millionyen)Notes to Consolidated Financial Statements

Per Share Information
2019(from April 1, 2018 to March 31, 2019)2018(from April 1, 2017 to March 31, 2018)

Net assets per share

256.45 yen

Net assets per share

Profit per share

19.32 yen

Profit per share—

Diluted profit per share

236.13 yen
8.18 yen

Diluted profit per share—

Notes:	‌1. Diluted profit per share omitted because there were no latent shares with a dilutive effect.
2. Basis of calculation of net assets per share is as follows.
(Millions of yen)
2019
(from April 1, 2018 to March 31, 2019)2018(from April 1, 2017 to March 31, 2018)¥ 128,016¥ 119,407

Amount deducted from total net assets

3,971

5,192

(Of which shares acquisition rights)

(230)

(234)

(Of which non-controlling interests)(3,741)(4,957)¥ 124,045¥ 114,214

483,702,954 shares

483,702,998 shares

Total net assets

Net assets related to capital stock at end of fiscal year
Number of shares of capital stock at the end of the fiscal year used in thecalculation of net assets per share		 3. Basis for calculation of profit per share and diluted profit per share is as follows.
Item

2019
(from April 1, 2018 to March 31, 2019)2018(from April 1, 2017 to March 31, 2018)

Profit per share
9,346 million yen

3,958 million yen

9,346 million yen

3,958 million yen

483,702,983 shares

483,702,876 shares

Adjusted profit attributable to owners of parent——

Increase in number of capital stock——

Profit attributable to owners of parent
Amount not attributable to capital stock shareholders
Profit attributable to owners of parent related to common stock
Average number of shares of capital stock during the period

Diluted profit per share(Of which shares acquisition rights)
Outline of stock not included in diluted profit per share due to lack of dilutive
effect(—)(—)

New shares acquisition rights
of Stock options is issued byboard of directors in June 15,2015 (1,465,850 shares).

New shares acquisition rights ofStock options is issued by boardof directors in June 15, 2015
(1,494,850 shares).

AIFUL CORPORATION Annual Report 201967

Significant subsequent events
1. Reduction in the amount of capital stock
The Company resolved at its Board of Directors’ meeting held on May 20, 2019 to submit a proposal for reducing the amount of capitalstock to the Company’s 42nd Annual General Meeting of Shareholders held on June 25, 2019. The proposal was approved at the said
General Meeting of Shareholders.
(1) Reason for the reduction in the amount of capital stock
The amount of capital stock will be reduced and transferred to other capital surplus in accordance with the provision of Article 447
paragraph 1 of the Companies Act with the aim of compensating the loss in retained earnings brought forward currently recorded, andimproving the soundness of the financial position to ensure the dynamism and flexibility of future capital policy.
(2) Details of the reduction in the amount of capital stock(a) Amount of capital stock to be reduced
49,426,208,694 yen of the 143,454,826,525 yen of capital stock will be reduced, resulting in capital stock totaling 94,028,617,831
yen.
(b) Method of reduction in the amount of capital stock
The entire amount reduced from capital stock will be transferred to other capital surplus, with no changes to the number ofoutstanding shares.
(3) Effective date of the reduction in the amount of capital stock
June 25, 2019
2. Appropriation of surplus
The Company resolved at its Board of Directors’ meeting held on June 25, 2019 on the appropriation of surplus as follows:(1) Details of the appropriation of surplus
In accordance with the provisions of Article 452 and Article 459 paragraph 1, item 3 of the Companies Act and Article 33 of theCompany’s Articles of Incorporation, loss will be compensated by transferring other capital surplus to retained earnings carried forward.
(a) Amount of other capital surplus to be reduced
Other capital surplus:
49,426,208,694 yen(b) Amount of retained earnings carried forward to be increased
Retained earnings carried forward: 49,426,208,694 yen(2) Effective date of the appropriation of surplus
June 25, 2019

68

AIFUL CORPORATION Annual Report 2019

Notes to Consolidated Financial Statements

Consolidated supplementary detailed statements
Detailed statements of corporate bonds

Date of issue

Beginningbalance(Million yen)

56th unsecured straightbond

October 11,
2016¥ 1,300

57th unsecured straightbondJuly 14, 2017

7,200

7,200
(7,200)2.400 perannum

Unsecured

January 14,
2020

58th unsecured straightbondJuly 10, 2018

—

415
(170)

0.370 perannum

Unsecured

July 9, 2021

59th unsecured straightbond

September25, 2018—

15,0001.850 perannum

Unsecured

September
24, 2021

60th unsecured straightbond

September25, 2018—

5,000

1.800 perannum

Unsecured

March 25,2021

¥ 8,500

27,615¥ (7,370)———

Company
name

AIFUL

Issue

Total

—

Endingbalance(Million yen)Interest rate(%)

Security

Date ofmaturity¥    —2.000 perannum

Unsecured

October 11,
2018

Notes: 1. The‌amount of the ending balance shown in parentheses is included in the amount shown without parentheses. The said amount is scheduled tobe redeemed within one (1) year from the day immediately following the date of the consolidated balance sheet. In the consolidated balance sheet,the said amount is stated in current liabilities.
2. The scheduled amount of redemption for each year within five years after the consolidated closing date is as shown below.
(Millions of yen)Due in one year or lessDue after one year throughtwo years

7,370

Due after two years throughthree years

5,170

Due after three years
through four years

15,075Due after four years
through five years——

Detailed statements of borrowings, etc.

Beginning balance(Million yen)Ending balance(Million yen)

¥ 83,325¥ 86,562

1.65—

53,482

98,728

1.72

—

300

289

—

—

Long-term borrowings(excluding the current portion)

220,529

205,803

1.33

From April 2020 to
October 2028

Lease obligations(excluding the current portion)

646

376

—

From April 2020 toJanuary 2024

¥ 358,284¥ 391,759——

Category
Short-term borrowings
Current portion of long-term borrowings
Current portion of lease obligations

Total

Average interest rate(%)
Repayment due dateNotes: 1. With‌
respect to the “average interest rate,” the average weighted interest rate on the balance of borrowings at the end of the fiscal year is stated.
2. With‌respect to the average interest rate of lease obligations, the amount of lease obligations before the deduction of the amount equivalent to theinterest included in the total lease fees is recorded on the consolidated balance sheet, and thus the said interest rate is not stated.
3. ‌The scheduled repayment amount of long-term borrowings and lease obligations (excluding the current portion) for each year within five years
from the date of the consolidated balance sheet is as shown below.
Category
Long-term borrowings

Due after one year throughtwo years

Due after two years throughthree years

Due after three years
through four years

Due after four years throughfive years

91,51770,50931,280

8,335

183

144

39

8

Lease obligations

Detailed statement of asset retirement obligations
The amounts of asset retirement obligations at the beginning of the consolidated fiscal year under review and at the end of theconsolidated fiscal year under review are not more than one hundredth (1/100) of the total sums of liabilities and net assets at the
beginning of the consolidated fiscal year under review and at the end of the consolidated fiscal year under review, and thus the statement
is omitted.

AIFUL CORPORATION Annual Report 201969

Others
Quarterly information for the consolidated fiscal year under review(Millions of yen)
(Cumulative period)
Operating revenue

First six months(Second quarter)

First nine months(Third quarter)

Full year (Fiscal year
under review)¥ 27,682¥ 56,425¥ 86,047¥ 115,328

Profit before income taxes

1,773

5,404

11,383

3,420

Profit attributable to owners of the parent

1,840

5,188

10,655

9,346¥   3.80¥ 10.73¥ 22.03¥   19.32

Second quarter

Third quarter

Fourth quarter¥   6.92¥ 11.30¥   (2.71)

Net income per share(yen)(Fiscal period)
Net income (loss) per share

70First three months(First quarter)

AIFUL CORPORATION Annual Report 2019

First quarter(yen)¥   3.80

Investor Information(As of March 31, 2019)

Corporate Overview
Corporate NameAIFUL CORPORATION

Date of Establishment

April 1967

Address of Head Office381-1, Takasago-cho,
Gojo-Agaru, Karasuma-Dori,
Shimogyo-ku,
Kyoto 600-8420, Japan

Paid-in Capital¥143,454 million

Fiscal Year

April 1 to March 31

Number of Employees

Non-consolidated: 1,044
Consolidated: 2,273

Number of Branches

880 branches throughout Japan

Principal Shareholders
Number of Percentage ofTotal Shares
Shares(Thousands) Outstanding
AMG Co., Ltd.

94,81419.56

Mitsuhide Fukuda

62,155

12.83

Marutaka Co., Ltd.

24,543

5.06

GOLDMAN, SACHS& CO. REG

14,648

3.02

Japan Trustee Services Bank, Ltd.
(trust account)

14,423

2.98

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

11,603

2.39

GOLDMAN SACHS INTERNATIONAL

8,975

1.85

J.P. MORGAN SECURITIES PLC FOR AND ON BEHALF
OF ITS CLIENTS JPMSP RE CLIENT ASSETS-SETT ACCT

8,806

1.82

HSBC BANK PLC A/C IB MAIN ACCOUNT

6,905

1.43

Japan Trustee Services Bank, Ltd.
(trust account 5)

5,927

1.22

Stock Information
Composition of Shareholders
Stock Listing

The First Section of
the Tokyo Stock Exchange

Securities CodeFinancial
Institutions
11.02%

8515

Number of Shares

Authorized: 1,136,280,000 shares
Issued and Outstanding: 484,620,136 shares
Number of Shareholders

28,545

Transfer Agent andRegistrar

Sumitomo Mitsui Trust Bank,
LimitedIndependent Auditor

Deloitte Touche Tohmatsu LLC

Individuals
and Others
38.80%
Securities Companies
and Other Corporations
28.19%
Foreign Investors
21.99%

Contact Address
P.R. and I.R. Section
Tokyo Office
2-31-19 Shiba, Minato-ku, Tokyo 105-0014, Japan
E-mail: spokesperson@aiful.co.jp

AIFUL CORPORATION Annual Report 201971

AIFUL CORPORATION
381-1 Takasago-cho, Gojo-Agaru,
Karasuma-Dori, Shimogyo-ku, Kyoto 600-8420, Japan
https://www.ir-aiful.com/english/index.aspx