Aiful : Annual Report

Corporate Philosophy

Earn the trust of society through corporate activity based in integrity

We defined our vision, mission, and value for embodying our corporate philosophy.

The AIFUL Group has upheld the corporate philosophy: "Earn the trust of society through corporate activity based in integrity" as an unalterable underlying philosophy, and in April 2021, we defined our vision, mission, and value as concrete goals suited for the present age for redeveloping the system of our philosophy.

V I S I O N MISSION VALUE

VISION

For realizing a society in which your traits will shine

Your originality in your daily life and work. AIFUL hopes to brighten our society further with the characteristics of individuals. So that all kinds of people can envision a future in which they will be able to be themselves, we value individuality.

MISSION

Unification and utilization of our group brands

●In July 2022, the names of domestic group companies, excluding some companies, were renamed to include "AG" in their new names.

●We aim to improve the performance of the entire corporate group, by enhancing a sense of unity as a corporate group and taking full advantage of the popularity of AIFUL.

Toward customers

Let's go beyond the expectations of customers

Go beyond

Requirements

• To understand customers
• To think from the viewpoint of customers
• To give a proposal while foreseeing future trends

We always think from the viewpoint of customers and keep exceeding the expectations of customers with our swift services while devoting the utmost effort.

Toward society

Let's create a better tomorrow

Step forward

Requirements

• To create a happy tomorrow for everyone
• To continue our efforts to improve things

By improving things on a daily basis, we will contribute to the happy tomorrow of many people.

Toward our staff

We respect the characteristics of each other

Be unique

Requirements

• To exert one's individuality
• To recognize each other

While respecting the characteristics of each other, we will keep creating a variety of values.

Contents

Forward-Looking Statements

The figures contained in this Annual Report with respect to AIFUL's plans and strategies and other statements that are not historical facts are forward-looking statements about the future performance of AIFUL, which are based on management's assumptions and beliefs in light of the information currently available to it and involve risks and uncertainties 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 and changes in the overall market for consumer loans, the rate of default by customers, and the level of interest rates charged by AIFUL.

1967

Yoshitaka Fukuda, AIFUL CORPORATION's current chairman, establishes a sole proprietorship as a consumer finance company

1978

Established Marutaka, Inc. (now AIFUL CORPORATION) and began business with three branches in Kyusyu and one in Kyoto

1982

Marutaka, Inc. absorbs three related companies

Name simultaneously changed to AIFUL CORPORATION

1984

Start of ATM operations

1985

Introduced first Scoring System (automated credit check system)

1994

Opened Heartful Center (now Contact Center)

1995

Completed installation of "Ojidousan", an automated loan agreement machine, at Kanda north exit branch and Ikebukuro west exit branch

1997

Over-the-counter registration of company's stock with the Japan Securities Dealers Association

2000

2002

Established Compliance Committee

2003

Received "Listed Company Disclosure Commendation" from the Tokyo Stock Exchange

2004

Converted KOKUSAI Capital Co., Ltd. into 100% subsidiary

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

2007

Revised management philosophy. The new management philosophy is "Earn the trust of society through corporate activity based in integrity"

2009

Transferred all shares of 4 consolidated subsidiaries to NEOLINE CAPITAL Co., Ltd.

2010

LIFE Co., Ltd. established a wholly owned subsidiary for the credit card business and credit guarantee business, called Life Card Co., Ltd.

2011

Under the group reorganization, credit sales business as well as the

2013

New Frontier Partners Co., Ltd. (a consolidated subsidiary) acquired all shares in BUSINEXT CORPORATION owned by the Company and Sumitomo Mitsui Trust Bank Limited and made it a wholly-owned subsidiary

2014

LIFE GUARANTEE CO., LTD. (now AIFUL GUARANTEE CO., LTD.) commenced installment sales and credit guarantee business.

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

2015

AIRA & AIFUL Public Company Limited commenced the consumer finance business in Thailand with the A Money brand

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

2016

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

2017

The 50th anniversary of AIFUL's establishment

2018

Established AsTry Partners Corporation (now AIFUL Partners Corporation), which manages the corporate turnaround & restructuring business

2020

Established AG Miraibarai Co., Ltd., which manages the Postpay settlement business

Established Aiful Medical Finance Co., Ltd., which manages the business of medical fee-type secured loans

AIFUL Group companies below have been renamed as follows:

BUSINEXT CORPORATION to AIFUL BUSINESS FINANCE CORPORATION; AsTry Loan Services Corporation to AG Loan Services Corporation; and LIFE GUARANTEE CO., LTD. to AIFUL GUARANTEE CO., LTD.

2021

Aiful Medical Finance Corporation changed its name to AG Medical Corporation

2022

Established AG Smile Leaseback Corporation, which manages leaseback business.

Changed the listing market to the Prime Market

Listed on First Section, Tokyo Stock Exchange and First Section,

Osaka Securities Exchange

2001

Established business finance company Businext Co., Ltd. (now AIFUL BUSINESS FINANCE Corporation) through a joint venture with Sumitomo Trust and Banking Co., Ltd.

Transferred the head office to Shimogyo-ku, Kyoto (current location)

Converted LIFE Co., Ltd., into 100% subsidiary

Established servicer company AsTry Loan Services Corporation (now AG Loan Services Corporation) in joint venture with Aozora Bank, Ltd.

credit guarantee and insurance businesses of LIFE Co., Ltd. was transferred to LIFE CARD Co., Ltd. by way of corporate spinoff and merger

Furthermore, four consolidated subsidiaries including LIFE Co., Ltd. (following its spin-off) were merged into AIFUL

Changedthe listing market tothe Prime Market

Establishment of AG Medical Corporation

Entryinto overseas markets

To Our Investors and Shareholders

To Our Investors and Shareholders

Introduction

There are concerns about an economic slowdown due to price increases because of soaring energy and raw material prices against a backdrop of a weakening yen and the worsening situation in Ukraine. On the other hand, COVID-19 vaccinations are spreading throughout society. This is leading to a normalization of social and economic activities. The trend for recovery is continuing in the consumer finance industry. For example, the number of new contracts concluded by major companies increased compared to the previous year. Nevertheless, interest repayment claims are susceptible to changes in the external environment. Therefore, we need to continue to be vigilant.

The AIFUL Group's consolidated results for fiscal 2021 are as follows: operating revenue was 132 billion yen (up 3.6% year-on-year), operating profit was 11.2 billion yen (down 35.9% year-on-year), ordinary profit was 12.2 billion yen (down 36.5% year-on-year) and profit attributable to

Summary of financial results for fiscal 2021

owners of parent was 12.3 billion yen (down 33.1% year-on-year). The main reason for the increase in revenue and the decrease in profit was that we recorded a 19.9 billion yen in provision for loss on interest repayment, so operating expenses increased by 10.9 billion yen to 120.8 billion yen (up 9.9% year-on-year). The environment surrounding the AIFUL Group is changing at bewildering pace. For instance, there are new entrants to the market from different industries, changes in lifestyles due to the spread of COVID-19 and the acceleration in the pace of digital transformation. Accordingly, we need to respond to changes swiftly. We will build a high-income structure by reforming to a company that obtains strong support from our stakeholders and by working to improve productivity and reform our income structure through IT and digital utilization. We will do this by establishing the AIFUL Group brand and increasing the sophistication of data utilization to respond to the changing environment.

Two-yearmid-term management plan

In June 2022, we formulated a two-yearmid-term management plan to end in fiscal 2023 to indicate even more concretely the growth potential of our group.

●Consolidated balance of operating receivables (on an operating receivable basis)

●Major consolidated profit figures (accounting base)

Indicators of Reliability/Profitability/Growth Potential in AIFUL Group