(Securities Code 8515)

June 4, 2025

(Commencement date of electronic provision measures: May 30, 2025)

To Shareholders with Voting Rights:

Mitsuhide Fukuda

President and Representative Director

AIFUL CORPORATION

381-1, Takasago-cho, Gojo-Agaru, Karasuma-Dori, Shimogyo-ku, Kyoto

NOTICE OF CONVOCATION OF

THE 48TH ANNUAL GENERAL MEETING OF SHAREHOLDERS

Dear Shareholders:

We would like to express our appreciation for your continued support and patronage.

The 48th Annual General Meeting of Shareholders of AIFUL CORPORATION (the “Company” or “AIFUL”) will be held for the purposes as described below.

Electronic provision measures have been taken for the convocation of this General Meeting of Shareholders, and the matters subject to electronic provision measures are posted on the following website on the Internet.

Company’s website: https://www.aiful.co.jp/group/en/ir/investor/stock/meeting.html

In addition to the above, this information is also posted on the following website on the Internet.

Tokyo Stock Exchange website (Listed Company Search):

https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show

Please review the Reference Documents for the General Meeting of Shareholders included in the matters subject to electronic provision measures, follow the “Exercise of Voting Rights” and “Instructions for Voting via the Internet, etc.,” and cast your vote by 6 p.m. on Monday, June 23, 2025 Japan time.

Exercise of Voting Rights

Following are the methods for exercising voting rights. Please review the Reference Documents for the General Meeting of Shareholders included in the matters subject to electronic provision measures, and exercise your voting rights.

Date and Time of Annual General Meeting of Shareholders: 10 a.m. on Tuesday, June 24, 2025 Japan time (The reception desk is scheduled to open at 9 a.m.)

Please submit the enclosed Voting Rights Exercise Form to the reception. (No need to be stamped)

Exercise deadline: Arrival by 6 p.m. on Monday, June 23, 2025 Japan time

Please indicate your vote for or against the proposals on the enclosed Voting Rights Exercise Form and return it without postage stamp. If there is no indication of your vote for or against any proposal on the Voting Rights Exercise Form, it will be treated as an indication of approval.

Exercise deadline: Input until 6 p.m., Monday, June 23, 2025 Japan time

Please access the designated voting rights exercise website and indicate your vote for or against the proposals by the exercise deadline.

(The voting rights exercise website: https://www.web54.net)

Please see the last page for details.

Reference Documents for the General Meeting of Shareholders

Proposals and References

Proposal No. 1: Approval of the Share Transfer Plan

It was resolved at the May 19, 2025 meeting of the Company’s Board of Directors that the Company would establish, through a sole share transfer of the Company’s shares (hereinafter, the “Share Transfer”), the holding company Muninova Holdings Inc. (wholly owning parent company; hereinafter, the “Holding Company”) by April 1, 2026 (tentative).

This proposal is presented to request shareholders’ approval of the share transfer plan for the Share Transfer (hereinafter, the “Share Transfer Plan”). The reasons for making the Share Transfer, the content of the Share Transfer Plan, and other details are as follows.

The AIFUL Group strives as a whole to improve its services supporting the sound consumer and business activities of customers, with the aim of enabling them to realize the concept of “For Colorful Life” for themselves.

The non-bank finance industry in which the Group operates is experiencing an upward trend in loans outstanding that is being driven by vigorous demand for financing. At the same time, however, pressures such as rising finance and personnel costs due to inflation require the Group to redesign the loan business-focused business model and profit structure that it has used for some time.

In this environment, the Group, seeking to strengthen its competitiveness in the future, is working to improve its profit levels mainly through its four core businesses (personal loans, loans for business operators, credit guarantee, and installment sales finance). Going forward, the Group will strive to achieve ROE of over 15% and ordinary profit of 100.0 billion yen by using the profits generated by these businesses to expand the its profit levels and diversify its business portfolio through growth-driving M&A.

Against this backdrop, we believe it is necessary to further strengthen the Group’s control functions, and have decided that it is desirable to transition to a pure holding company structure. By having a holding company perform management and supervisory functions on a Group-wide basis, we will work to construct a new, well-balanced business model and to maximize synergies across the Group, without overly favoring the current core businesses. Furthermore, we will clearly define the authority and responsibilities of each Group company to promote their autonomous management, with the goal of strengthening the competitiveness of the Group as a whole.

Under this new structure, the Holding Company will lead the execution of an M&A strategy for diversifying the Group’s businesses, and in so doing further advance our transformation into a Group that is not limited to the traditional non-bank finance business.

Following the establishment of the Holding Company, the Company plans to reposition its subsidiaries as subsidiaries of the holding company.

As a result of the Share Transfer, the Company will become a wholly owned subsidiary, and accordingly its shares will be delisted. Regarding the shares of the Holding Company that will be delivered to the Company’s shareholders, the Company plans to apply to Tokyo Stock Exchange, Inc. (hereinafter, the “Tokyo Stock Exchange”) for initial listing of those shares on the Prime Market (as a technical listing). The date of listing depends on review by the Tokyo Stock Exchange, but is tentatively planned for the date that the Share Transfer takes effect, April 1, 2026.

The details of the Share Transfer are as described in “Share Transfer Plan (Copy)” on the following pages.

(Annex)

Articles of Incorporation of Muninova Holdings Inc.

Chapter 1 – General Provisions

Article 1 (Trade Name)

The name of the Company shall be “Muninoba Horudingusu Kabushiki Kaisha” in Japanese and “Muninova Holdings Inc.” in English.

Article 2 (Purpose)

The purpose of the Company shall be to engage in the following businesses or hold shares or interests in companies that engage in the following businesses, and thereby control and manage the business activities of the companies involved.

Article 3 (Head Office Location)

The Company’s Head Office shall be located in Kyoto City.

Article 4 (Method of Public Notice)

Article 5 (Organs)

The Company shall be a company with an audit and supervisory committee, and shall have, in addition to its general meeting of shareholders and its Directors, a Board of Directors, an Audit and Supervisory Committee, and an Accounting Auditor.

Chapter 2 – Shares

Article 6 (Total Number of Authorized Shares)

The total number of authorized shares of the Company shall be 1,136,280,000.

Article 7 (Number of Shares per Share Unit)

The Company’s number of shares per share unit shall be 100.

Article 8 (Shareholder Registry Administrator)

Article 9 (Share Handling Rules)

The handling of the Company’s shares and the fees pertaining to them shall be governed by the share handling rules established by the Board of Directors, in addition to laws and regulations or these Articles of Incorporation.

Article 10 (Rights to Shares Less Than One Share Unit)

The Company’s shareholders may not exercise rights other than those specified below with regard to the portion of the shares they hold that are less than one share unit.

Article 11 (Demands for Purchase of Additional Shares Less than One Share Unit)

Shareholders who hold shares less than one share unit shall be entitled to demand, as provided for by the share handling rules, that the Company sell to them additional shares in an amount that makes one share unit when combined with said shares held.

Chapter 3 – General Meetings of Shareholders

Article 12 (Timing of Convocation)

The Company’s Annual General Meeting of Shareholders shall be convened every June, and extraordinary general meetings of shareholders shall be convened whenever necessary.

Article 13 (Record Date for General Meeting of Shareholders)

The record date for voting rights for the Company’s Annual General Meeting of Shareholders shall be March 31 every year.

Article 14 (Convener and Chair)

General meetings of shareholders shall be convened and chaired by the President and Director. In cases where the President and Director is unable to so act, this duty shall be performed by another Director, in accordance with the order of succession pre-established by the Board of Directors.

Article 15 (Measures for Electronic Provision, etc.)

Article 16 (Requirements for Resolutions)

Article 17 (Proxy Voting)

Shareholders may exercise their voting rights by having another shareholder of the Company with voting rights serve as their proxy. To do so, the shareholder or proxy must submit to the Company a written letter attesting to the proxy’s authority.

Chapter 4 – Directors and Board of Directors

Article 18 (Members)

Article 19 (Election)

Article 20 (Term of Office)

Article 21 (Representative Directors and Directors with Titles)

Article 22 (Convener and Chair of Board of Directors Meetings)

Meetings of the Board of Directors shall be convened and chaired by the President and Director, except where otherwise provided for by laws or regulations. In cases where the President and Director is absent or unable to so act, this duty shall be performed by another Director, in accordance with the order of succession pre-established by the Board of Directors.

Article 23 (Notice of Convocation of the Board of Directors)

Article 24 (Omission of Resolution at Board of Directors Meeting)

The Company may, where the conditions stated in Article 370 of the Companies Act are met, deem as a resolution of the Board of Directors the adoption of a proposal passed otherwise.

Article 25 (Regulations of Board of Directors)

Matters pertaining to the Board of Directors shall be governed by the Regulations of the Board of Directors established by the Board of Directors, in addition to laws and regulations or these Articles of Incorporation.

Article 26 (Delegation of Execution of Important Operations)

The Company may, in accordance with Article 399-13, Paragraph 6 of the Companies Act and through a resolution by the Board of Directors, delegate to the Board of Directors decisions on the execution of important operations (excluding those listed in all items of Paragraph 5 of said Article).

Article 27 (Remuneration, etc.)

Remuneration, bonuses, and other financial benefits received by Directors from the Company in consideration for the execution of their duties shall be decided by resolutions of general meetings of shareholders, with a distinction made between Directors who are Audit and Supervisory Committee Members and Directors who are not.

Article 28 (Exemption of Directors from Liability)

Chapter 5 – Audit and Supervisory Committee

Article 29 (Notice of Convocation of Audit and Supervisory Committee)

Article 30 (Regulations of Audit and Supervisory Committee)

Matters pertaining to the Audit and Supervisory Committee shall be governed by the Regulations of the Audit and Supervisory Committee established by that Committee, in addition to laws and regulations or these Articles of Incorporation.

Chapter 6 – Accounting Auditor

Article 31 (Agreement Limiting Liability of Accounting Auditor)

The Company may, in accordance with the provisions of Article 427, Paragraph 1 of the Companies Act, enter into an agreement with the Accounting Auditor that limits the latter’s liability for damages arising from negligence in its duties, where the maximum liability under the agreement shall be the amount prescribed by laws and regulations.

Chapter 7 – Accounts

Article 32 (Business Year)

The Company’s business year shall commence on April 1 of each year and end on March 31 of the following year.

Article 33 (Organ Deciding Dividends of Surplus, etc.)

Dividends of surplus and other matters provided for by the provisions of all items of Article 459, Paragraph 1 of the Companies Act shall be decided by resolutions of the Board of Directors, not resolutions of general meetings of shareholders.

Article 34 (Record Date for Dividends of Surplus)

Article 35 (Dividend Payment Exemption Threshold)

In cases where dividend property is in cash, the Company shall be exempted from the obligation to pay the dividends if they remain unclaimed after three full years elapse from the date the payments begin.

Supplementary Provisions

For a period from the date of receipt of allotment to the date on which the Eligible Director retires from the position of either Director or Executive Officer of the Company (hereinafter, the “Transfer Restriction Period”), concerning common stock of the Company allotted by the Allotment Agreement (hereinafter, the “Allotted Shares”), Eligible Directors are prohibited to transfer the shares, create a security interest, or operate any other disposition of the shares (hereinafter, the “Transfer Restriction”).

If Eligible Directors retire or resign from the positions of officers and employees of the Company or its subsidiaries within the positions specified by the Board of Directors of the Company before the expiration of the Transfer Restriction Period, the Company acquires the Allotted Shares without consideration due to the retirements or resignations, other than in cases where the term of office expires, death, or other legitimate reasons.

Notwithstanding the provisions of (1) above, with the condition that during the Transfer Restriction Period, Eligible Directors must continue in in positions of officers and employees of the Company or its subsidiaries within the positions specified by the Board of Directors of the Company, the Company will lift the Transfer Restriction at the time of expiration for all Allotted Shares. However, if said Eligible Directors retire or resign from the position specified in (2) above before the Transfer Restriction Period expires due to the expiration of the term specified in (2) above, death, or other legitimate reasons, the number of Allotted Shares to be lifted from the Transfer Restriction and the shall be reasonably adjusted as necessary. In addition, at the time immediately after the lifting of the Transfer Restriction in accordance with the provisions above, the Company shall naturally acquire at no cost Allotted Shares for which the Transfer Restriction has not been lifted.

Notwithstanding the provision of (1) above, if, during the Transfer Restriction Period, a merger agreement in which the Company becomes the Company Disappearing, Share Exchange agreements in which the Company becomes a wholly owned subsidiary, a Share Transfer Plan, or other matters related to organizational restructuring, etc., are approved at the General Meeting of Shareholders of the Company (however, if said organizational restructuring, etc., does not require approval at the General Meeting of Shareholders of the Company, by the Board of Directors), according to a resolution by the Board of Directors of the Company, in regard to the number of Allotted Shares reasonably determined based on the period from the start date of the Transfer Restriction Period to the date said organizational restructuring, etc., is approved, the Transfer restriction will be lifted prior to the effective date of the organizational restructuring etc. In addition, the Company will naturally acquire Allotted Shares for which the Transfer restriction has not been lifted immediately after lifting the Transfer restriction in the case specified above, without consideration.

Other matters related to the Allotment Agreement shall be determined by the Company’s Board of Directors.

These Articles of Incorporation have been prepared by AIFUL CORPORATION (headquartered at 381-1 Takasago-cho, Gojo-Agaru, Karasuma-Dori, Shimogyo-ku, Kyoto City) for the incorporation of the Company and the associated transfer of shares.

The Share Transfer is a sole share transfer that will establish one holding company as a wholly owning parent company, and there will be no change in the shareholder composition of the Company or the Holding Company at the time of the Share Transfer. Accordingly, it has been decided that shares in the Holding Company will be allotted and delivered to Company shareholders at a rate of one common share per common share held in the Company, with top priority given to not disadvantaging the shareholders. Consequently, the share transfer ratio has not been calculated by a third-party institution.

The number of new shares to be delivered by the Holding Company in the Share Transfer is planned to be 484,620,136. However, this number is subject to change if the total number of issued shares in the Company changes before the Share Transfer takes effect. Company shares will also be allotted and delivered for the treasury shares held by the Company at the time that the Share Transfer takes effect.

The amounts of the capital and reserves of the Holding Company have been set within the scope of laws and regulations, and are deemed appropriate in light of, among other considerations, the purpose and size of the Holding Company and its capital policy after its establishment.

There currently are no matters that will materially affect the status of the Company’s assets after the final day of the final fiscal year, including with regard to the disposal of major assets or the assumption of major liabilities.

The Directors of the Holding Company (excluding Directors who are Audit and Supervisory Committee Members) will be as follows. In this item, “the Company” refers to AIFUL CORPORATION.

The Directors who are Audit and Supervisory Committee Members of the Holding Company will be as follows. In this item, “the Company” refers to AIFUL CORPORATION.

The Accounting Auditor of the Holding Company will be as follows.

As of May 31, 2024

Proposal No. 2: Partial Amendment to the Articles of Incorporation (1)

1. Reasons for the proposal

The Company has established provisions regarding the record date for voting rights for the Annual General Meeting of Shareholders in Article 13 of its Articles of Incorporation pursuant to Article 124, Paragraph 3 of the Companies Act., thus facilitating administrative procedures related to, for example, the convening of the Annual General Meeting of Shareholders. However, if Proposal No. 1, “Approval of the Share Transfer Plan,” is approved and the share transfer (hereinafter referred to as the “Share Transfer”) is implemented on April 1, 2026 (scheduled), the Company will have only one shareholder, the holding company, and the provisions regarding the record date for voting rights for the Annual General Meeting of Shareholders will no longer be necessary. Accordingly, the record date system for voting rights for the Annual General Meeting of Shareholders will be abolished, with Article 13 (record date for the General Meeting of Shareholders) deleted and each of the numbers of the articles from 14 onwards moved up by 1.

This amendment to the Articles of Incorporation will take effect on March 31, 2026, provided that Proposal No. 1, “Approval of the Share Transfer Plan,” is approved as proposed, the share transfer agreement relating to the Share Transfer remains effective until the day before March 31, 2026, and the Share Transfer has not been canceled.

2. Details of changes

(The underlined parts indicate the changes.)

(Reference)

The Company plans to pay the dividends of surplus (year-end dividend) for the fiscal year ending March 31, 2026 (April 1, 2025 to March 31, 2026) to the shareholders or registered pledgees of shares listed or recorded in the final shareholder register as of March 31, 2026, in accordance with Article 33 (Record date for dividends of surplus) of the amended Articles of Incorporation.

Proposal No. 3: Partial Amendment to the Articles of Incorporation (2)

The Company will create a new position of Directors with Titles, Vice Chairman and Director, to strengthen and enhance the management structure.

(The underlined parts indicate the changes.)

Proposal No. 4: Election of Six Directors (Excluding Directors Who Are Audit and Supervisory

Committee Members)

The term of office of Directors (excluding Directors who are Audit and Supervisory Committee Members; the same applies below in this proposal) Mitsuhide Fukuda, Yoshitaka Fukuda, Keiji Masui, Masayuki Sato, and Akira Kamiyo will expire at the conclusion of this year’s General Meeting of Shareholders. Accordingly, the election of six Directors is proposed, thus adding one more Director to further strengthen the management structure.

Additionally, regarding this proposal, the Audit and Supervisory Committee has judged that all of the candidates for Director are qualified for the position.

The candidates for Directors are as follows:

Proposal No. 5: Election of Three Directors Who Are Audit and Supervisory Committee Members

The term of office of Directors Hitoshi Shimura, Keiichiro Okawa, and Haruichi Suzuki, who are Audit and Supervisory Committee Members, will expire at the conclusion of this year’s General Meeting of Shareholders. Accordingly, the election of three Directors who are Audit and Supervisory Committee Members is proposed.

The Audit and Supervisory Committee has previously given its approval to this proposal.

The candidates for Directors who are Audit and Supervisory Committee Members are as follows:

(Notes)   1.   No material conflict of interest exists between each candidate and the Company.

(Reference)

Skills / Experiences of Directors (Including Directors Who Are Audit and Supervisory Committee Members) after this Annual General Meeting of Shareholders

In order to continuously improve supervising functions that the Board of Directors of the Company should carry out, the matrix of diverse skills Directors possess is created and disclosed as follows:

Skill item		Explanation
	Corporate Management	A person who has been appointed Executive Director or has work experience that requires specialized knowledge of corporate management at the Company (including subsidiaries) and other companies, and is recognized as having insight / experience in Corporate Management.
	Legal Risk Management	A person who is highly specialized in law and risk management. Or a person who is qualified as an attorney and is recognized as having insight / experience in law and compliance.
	Finance, Accounting	A person who has expertise in finance and accounting. Or a person who is qualified as a certified public tax accountant or having experience as an analyst and is recognized as having insight / experience in finance and accounting.
	Global	A person who has experience developing overseas businesses, has experience as an officer of an overseas subsidiary, or has experienced overseas assignment, and is recognized as having management insight / experience in a global environment.
	Human Resource Development	A person who has expertise in personnel and labor and is recognized as having insight / experience on the appropriate allocation of employees, who are management resources, human resources development, diversity, working style, etc.
	Credit Screening, Marketing	A person who has specialized knowledge and experience in “Credit screening,” the essence of finance, and is recognized as having insight / experience that will contribute to the maximization of profit by marketing based on data analysis.
	IT, Digital, DX	A person who has specialized knowledge in the IT digital field, DX, and information systems, and is recognized as having insight / experience that will contribute to the maximization of profit by reforming new service provisions and business structures.
	Diversity	A person who is recognized as having insight / experience that contributes to the innovation of the AIFUL Group through various backgrounds that are not bound by common sense and experience in the Company such as academic knowledge (as an attorney or a doctoral degree, etc.), important posts of government offices, gender, internationality, etc.

(Reference)

Standards of Independence for AIFUL Outside Officers

The Company designates all Outside Officers who meet the qualifications for independent director/auditor as such, and has determined the criteria for independence of Independent Outside Directors as follows:

1. If none of the following attributes applies, and if the person is someone for whom there is no constant risk of a substantial conflict of interest occurring for any other reasons, then the Company judges that the person is sufficiently independent from the Company.

2. Even if a person falls under any of the categories in the above item 1., if it is a person whom the Company believes is suitable as an Independent Director of the Company in light of his or her character, insight, etc., then the Company may make him or her an Independent Director of the Company, provided that he or she meets the criteria for Outside Directors set forth in the Companies Act, and that the Company provides an explanation to external parties of the reasons it is believed that he or she is suitable as an Independent Director of the Company.

(Appendix)

Business Report

(April 1, 2024 - March 31, 2025)

I.       Overview of the Company Group

1.       Business Progress and Results

In the non-bank industry surrounding the AIFUL Group, the number of new contracts in the personal loan business has continued to increase steadily against a backdrop of brisk capital needs, and the operating loan balance has continued to increase. In addition, interest repayment claims have been steadily decreasing, while the situation still requires some monitoring as it is easily affected by changes in the external environment.

Against this backdrop, the Group has set a 10-year long-term vision of “Transformation Toward an IT Company - Aiming to Become a Company that Lasts 100 Years -” and has formulated a three-year Medium-term Management Plan finishing in the fiscal year ending March 2027. With “Try Harder - Toward a New Stage of Growth -” as the theme of the Medium-term Management Plan, the Group has strived to improve the profit level of the entire Group through balance growth in its core businesses such as the loan business, credit guarantee business, and the credit business, as well as cost structure reforms. We are also promoting aggressive investment in M&A and businesses with high growth rates as we move toward a new stage of growth.

FPC Co., Ltd., a non-consolidated subsidiary to which the equity method was applied until the previous fiscal year, became a consolidated subsidiary from the beginning of the fiscal year under review due to an increase in its materiality.

In addition, in the fiscal year under review, the Company acquired shares of BitCash Inc. on June 28, 2024, to include the company in the scope of consolidation. The deemed acquisition date was June 30, 2024.

(Overview of the Results)

In the fiscal year under review, AIFUL Group’s operating revenue amounted to 189,054 million yen (up 15.9% year on year). The principal components were 106,590 million yen in interest on loans receivable (up 11.7% year on year), 22,891 million yen in revenue from the credit card business (up 5.9% year on year) and 21,526 million yen in revenue in the credit guarantee business (up 10.9% year on year).

Operating expenses amount to 163,751 million yen (up 15.3% year on year). The principal components were 9,512 million yen in financial expenses (up 31.3% year on year), 18,557 million yen in advertising expenses (up 4.3% year on year), and 56,904 million yen in provision for doubtful accounts (up 8.3% year on year).

Due to the increase in the number of consolidated subsidiaries, insurance revenue and commission income under operating revenue increased to 4,728 million yen and 3,127 million yen respectively, and insurance expenses under operating expenses increased to 3,582 million yen.

As a result of the above, AIFUL Group’s operating profit for the fiscal year under review was 25,302 million yen (up 20.1% year on year), and ordinary profit was 26,817 million yen (up 21.5% year on year). Profit attributable to owners of the parent was 22,516 million yen (up 3.2% year on year) as a result of posting extraordinary losses, including an impairment loss of 1,582 million yen due to a review of system development policy, bad debt write-offs of 498 million incurred as a result of phishing scams, and a provision of allowance for doubtful accounts of 366 million yen for loans to subsidiaries.

.

The results by business segment are as follows.

(AIFUL CORPORATION)

Loan business

In the loan business, in addition to effective and efficient advertising strategies using TV commercials and web advertising, the Company has continued its efforts to improve UI/UX and customer satisfaction, such as speedy responses to customer needs through in-house production in the digital field, including improvements to official websites, smartphone apps, and application forms.

As a result, in the fiscal year under review, the number of new contracts for unsecured personal loans was 325,000 (down 3.9% year on year) and the contract rate was 33.2% (down 2.7 points year on year).

At the end of the fiscal year under review, unsecured personal loans outstanding were 597,976 million yen (up 9.0% year on year), secured loans outstanding were 1,385 million yen (down 24.5% year on year), unsecured small business loans outstanding were 14,860 million yen (up 18.7% year on year), and the total balance of operating loans in the loan segment was 614,222 million yen (up 9.1% year on year) (788 million yen in off-balance sheet operating loans from the securitization have been included).

Credit guarantee business

In the credit guarantee business, AIFUL has leveraged its know-how related to credit screening for individuals and small- and medium-sized enterprises as well as its unique strengths as an independent entity to increase the credit guarantee balance by promoting the diversification of credit guarantee products and increasing the number of guarantee partners.

As a result, in the credit guarantee business, loans outstanding for personal loan guarantee for the credit guarantee business at the end of the fiscal year under review was 195,024 million yen (up 20.2% year on year), and loans outstanding for business loan guarantee for the credit guarantee business was 69,552 million yen (up 23.8% year on year).

Of the credit guarantee for the business loans, 2 million yen comes from lease guarantees, and 904 million yen comes from guarantees provided to AG BUSINESS SUPPORT CORPORATION.

As a result of the above, in the fiscal year under review, AIFUL posted operating revenue of 109,927 million yen (up 5.8% year on year), operating profit of 20,391 million yen (down 16.2% year on year), ordinary profit of 23,996 million yen (down 11.6% year on year), and profit of 19,562 million yen (down 21.7% year on year).

(LIFECARD Co., Ltd.)

Credit business (credit card business)

In the credit business, LIFECARD has aimed to acquire new members and increase the number of active members through the issuance of new tie-up cards, the addition and improvement of application functions according to customer needs, expansion of courtesy services, development of newly acquired sales channels.

As a result of the above, the transaction volume for the fiscal year under review was 771,942 million yen (up 4.1% year on year), and the balance of installment receivables for the credit business at the end of the fiscal year under review was 115,491 million yen (up 3.4% year on year) (6,032 million yen in off-balance sheet operating loans from the securitization have been included).

Card Cashing

The total amount of loans outstanding at the end of the fiscal year under review in LIFECARD’s loan business was 21,766 million yen (down 4.1% year on year) (1,626 million yen in off-balance sheet operating loans from the 0securitization have been included).

Credit guarantee business

In the credit guarantee business, LIFECARD leveraged its know-how related to credit screening for individuals and small- and medium-sized enterprises, as well as its unique strengths as an independent entity, to increase the credit guarantee balance by promoting the diversification of credit guarantee products and increasing the number of guarantee partners.

As a result, loans outstanding for personal loan guarantee for the credit guarantee business at the end of the fiscal year under review was 27,070 million yen (down 3.4% year on year), and loans outstanding for business loan guarantee for the credit guarantee business was 1,856 million yen (up 21.0% year on year).

As a result of the above, LIFECARD Co., Ltd. recorded operating revenue of 38,471 million yen (up 2.1% year on year), operating profit of 563 million yen (down 31.0% year on year), ordinary profit of 682 million yen (down 28.0% year on year), and profit of 772 million yen (up 112.3% year on year).

(Other)

Eight consolidated subsidiaries (AIRA & AIFUL Public Company Limited, AG BUSINESS SUPPORT CORPORATION, AG Loan Services Corporation, AG Capital Co., Ltd., AG Payment Service, CO., LTD, AG Medical Corporation, FPC Co., Ltd., and BitCash Inc.), which are not included in reported segments for the fiscal year under review, posted operating revenue of 41,134 million yen (up 53.1% year on year), operating profit of 1,796 million yen (compared to operating loss of 1,716 million yen in the previous fiscal year), ordinary profit of 1,805 million yen (compared to ordinary loss of 1,686 million yen in the previous fiscal year), and profit of 1,834 million yen (compared to a loss of 2,377 million yen in the previous fiscal year).

In addition, due to the increase in the number of consolidated subsidiaries, insurance revenue and commission income under operating revenue increased to 4,728 million yen and 3,127 million yen respectively, and insurance expenses under operating expenses increased to 3,582 million yen.

2.       Capital Investments

Capital investments by the AIFUL Group in the fiscal year under review (consolidated basis) totaled 25,760 million yen. The main items were, 303 million yen for facilities at the head office and other locations, 988 million yen for facilities at business offices, 4,011 million yen in systems investments to upgrade core systems, 414 million yen for upgrading web systems, and 308 million yen in credit-related investments. Main items were office equipment investments of 18,571 million yen for the acquisition of the Tokyo office as a base facility (LIFE CARD Ginza bldg.), 303 million yen for facilities at the head office and 988 million yen for facilities at business offices, and system investments of 4,011 million yen for updating core systems, 414 million yen for updating WEB system, and 308 million yen for credit card-related investments.

The AIFUL Group requires funds for operating activities such as providing financing for customers and capital investments, and procures funds via borrowings from financial institutions, etc., and the issuance of bonds, etc.

The balance of short-term borrowings was 102,782 million yen (up 0.2% year on year), the balance of long-term debt was 576,834 million yen (up 19.6% year on year), the balance of corporate bonds was 110,000 million yen (up 37.5% year on year), and the balance of fund procurement was 789,617 million yen (up 18.8% year on year).

4.       Issues to be Addressed

Issues to be addressed as a priority in the implementation of the Group’s management policies and strategies are as follows:

(Restructuring of business portfolio)

AIFUL Group places importance on safety of management and is diversifying the Group’s finance business and business portfolio with a focus on the loan, credit and credit guarantee businesses. While maintaining the current growth of the loan business, we are further expanding the credit and credit guarantee businesses, and we are restructuring our business portfolio by creating new business areas through aggressive M&A in our efforts to enhance safety.

(Cost structure reforms)

Under the basic policies of the Medium-term Management Plan, the Group is promoting cost structure reforms by various initiatives, such as improving the productivity of the contact center division, promoting in-house production by in-house engineers, and closing unmanned branches. The goal of these efforts is to improve the ratio of operating expenses to operating revenue and adapt quickly to changes in the business environment.

(Securing IT human resources)

The Group has set a long-term vision of “Transformation Toward an IT Company - Aiming to Become a Company that Lasts 100 Years -” and is aiming to offer flexible responses to customers’ needs through in-house production of systems and UI/UX. Given the need to respond swiftly to changes in the business environment surrounding the Group, we will strive to secure IT personnel through M&A, targeting SES business companies, and active recruitment.

(Stabilization of financial base)

AIFUL Group’s main business is financial services, and we procure funds necessary for business expansion from external sources. Taking into account the rise in interest rates resulting from the change in the Bank of Japan’s monetary easing policy, from a safety perspective and to build a robust procurement base, we are diversifying our financing by conducting both indirect finance from financial institutions and direct finance such as corporate bonds.

(Interest repayment claims)

The number of claims for repayment of interest due to the Supreme Court ruling in 2006 has decreased significantly for various reasons, including the fact that 18 years have passed since the ruling, which means that many of the claims for repayment have been longer valid due to the passage of the extinctive prescription period. While it is expected that the number of such claims will continue to decrease, the situation still requires some monitoring given its susceptibility to changes in the external environment.

5.       Trends in Assets and Income of the Corporate Group

6.       Significant Subsidiaries (as of March 31, 2025)

In addition, in the fiscal year under review, the Company acquired shares of BitCash Inc. on June 28, 2024, to include the company in the scope of consolidation.

No relevant matters

7.       Principal Business (as of March 31, 2025)

8.       Principal Business Locations (as of March 31, 2025)

9.       Employees (as of March 31, 2025)

2. The number of employees does not include 1,305 temporary employees shown in parentheses.

10.       Major creditors (as of March 31, 2025)

Syndicated loan (6,000 million yen) from 2 financial institutions

Syndicated loans (6,000 million yen) from 2 financial institutions

II. Status of the Company

1.       Status of Shares (as of March 31, 2025)

(1) Total number of shares authorized to be issued     Common stock       1,136,280,000 shares

(2) Total number of issued shares                                                              484,620,136 shares

(including 5,789,904 shares of treasury stock)

(3) Number of shareholders                                                                              19,810 persons

(4) Major shareholders (top ten)

2.       Status of Stock Acquisition Rights, etc.

(1) Stock acquisition rights issued and outstanding held by Directors (as of March 31, 2025)

No relevant matters

(2) Status of stock acquisition rights issued during the fiscal year under review

No relevant matters

(3) Other important matters concerning stock acquisition rights, etc.

No relevant matters

3.       Company Officers

The Company has concluded an agreement on limitation of liability with Mr. Hitoshi Shimura, Mr. Haruichi Suzuki and Mr. Shinichiro Maeda, Outside Directors who are Audit and Supervisory Committee Members, based on Article 28, Paragraph 2 of the Articles of Incorporation of the Company. The agreement prescribes that if an Outside Director is liable for damages arising in the Company due to negligence of duties, as per Article 423, Paragraph 1 of the Companies Act, the liability of the Outside Director shall be limited to the minimum amount of liability prescribed in Article 425, Paragraph 1 of the Companies Act, if said Outside Director acted in good faith and without gross negligence in performing his duties.

The Company has concluded a directors and officers liability insurance contract that insures Directors and Executive Officers with an insurance company.

The insurance covers damages that may arise when the insured assumes liability for the execution of his or her duties or receives a claim related to the pursuit of such liability. However, there are certain exemptions, such as in case of actions taken with the knowledge that such actions are in violation of laws and regulations.

The Company bears the entire premium for all the insured.

[Decision policy of remuneration and other payments to each Director]

The Company has established a policy on the determination of the amount of officers’ remuneration and its calculation method. The policy is to ensure that remuneration for Directors, etc. will act not merely as remuneration for the fulfillment of their duties but also effectively as an incentive for medium- and long-term improvement in corporate financial results and corporate value, on the basis of its management philosophy of Earn the trust of society through corporate activity based in integrity.

Specifically, remuneration and other payments of Directors (excluding Directors who are Audit and Supervisory Committee Members and Outside Directors) shall consist of base remuneration as fixed remuneration, Non-monetary remuneration, etc., as the performance-linked remuneration (Restricted Stock Compensation). Remuneration and other payments of Outside Directors and Directors who are Audit and Supervisory Committee Members shall consist of only base remuneration as fixed remuneration in consideration of their independence.

The Board of Directors and the Audit and Supervisory Committee have the authority to decide the policy for determining the amount of officers’ remuneration and its calculation method. The policy is decided in view of the business environment and business performance, the remuneration structure and level are reviewed as needed, and the allocation of remuneration among the Directors is decided according to the magnitude of each post as well as the content and responsibilities of the entrusted work and the duties of each person.

In addition, at the 38th Annual General Meeting of Shareholders held on June 23, 2015, the amount of remuneration and other payments paid to Directors (excluding Directors who are Audit and Supervisory Committee Members) was approved at an annual amount not to exceed 500 million yen (salaries paid to employees of directors serving concurrently as employees are not included). The number of Directors (excluding Directors who are Audit and Supervisory Committee Members) was eight when the proposal was resolved. Furthermore, at the 45th Annual General Meeting of Shareholders held on June 21, 2022, within the scope of the above compensation limits, the total amount of monetary claims as Restricted Stock to be paid to Directors (excluding Directors who are Audit and Supervisory Committee Members, Outside Directors, and non-residents of Japan) shall be not more than 50 million yen per annum (salaries for employees paid to directors serving concurrently as employees are not included), and the total number of shares of common stock issued or disposed of by the Company shall be not more than 333 thousand shares per annum. The number of Directors (excluding Directors who are Audit and Supervisory Committee Members, Outside Directors, and non-residents of Japan) was five when the proposal was resolved.

In addition, at the 38th Annual General Meeting of Shareholders held on June 23, 2015, the amount of remuneration and other payments paid to Directors who are Audit and Supervisory Committee Members was approved at an annual amount not to exceed 80 million yen. The number of Directors who are Audit and Supervisory Committee Members was three when the proposal was resolved.

Base remuneration (fixed amount) for Directors (excluding Directors who are Audit and Supervisory Committee Members) of the Company is fixed remuneration on a monthly basis, and a remuneration table is determined for each remuneration rank. The base remuneration is based on the remuneration rank, which is based on a certain standard established for each position.

The performance-linked remuneration is intended to boost the motivation to increase the share price and the financial results, as well as to expand corporate value. Indicators for the performance-linked remuneration (variable amount) are calculated by multiplying the standard amount for the remuneration rank by a factor based on the appraisal of each Director and a factor based on the corporate financial results. The remuneration is paid at a certain time every year. To reflect the results of the division that each Director is in charge of, the factor based on the appraisal of each Director and the factor based on the corporate financial results are determined based on the business environment, as well as other key indicators which include operating indicators, such as operating assets and the status of loan collection for each business that the Director is in charge of, and management indicators, such as operating revenue, ordinary profit, and ROA. For each Director, performance against the goal of the division that the Director is in charge of is evaluated, and the amount of the performance-linked remuneration is determined, as stated above, after adequate deliberations and response by the Personnel Committee that decides the treatment of Directors (established to ensure fairness and transparency of evaluation, comprised of Directors nominated by the President and Representative Director).

The major management indicators in the consolidated fiscal year under review are as follows. As for the operating results, please see “I. Overview of the Company Group 1. Business Progress and Results” in the Business Report in this notice of convocation.

The Company heightens the link between the performance and the share price by paying the performance-linked remuneration as Non-monetary remuneration (Restricted Stock Compensation), etc. Specifically, the Company provides Restricted Stock to Eligible Directors by the method in which monetary remuneration paid as performance-linked remuneration determined by the above process shall be contributed in kind within the upper limit on remuneration determined by a resolution of the General Meeting of Shareholders. The transfer restriction period shall be the period from the date of receipt of the allotment to the date on which the Eligible Director retires from the position of either Director or Executive Officer of the Company”.

The Personnel Committee reviews the remuneration rate for Directors of the Company based on the remuneration standards benchmarked to our competitors having the same operational scale, industry, and business formats as the Company. The President and Representative Director, entrusted according to 5, determines remuneration for individual Directors along with the response from the Personnel Committee.

The President and Representative Director, and Chief Executive Officer Mitsuhide Fukuda will be entrusted by the Board of Directors to decide the specific content of remuneration for individual Directors. The content of its authority includes evaluations of the distribution of performance-linked remuneration based on the amount of base remuneration for each Director and the performance of businesses that the Director is in charge of. The Company entrusts these authorities to the President and Representative Director, and Chief Executive Officer because it believes that the President and Representative Director, and Chief Executive Officer understands the performance of each Director’s business and so is qualified to make evaluations in line with their duties.

To ensure that the President and Representative Director will exercise the authority properly, the Board of Directors consults with the Personnel Committee to receive a response to a draft of the amount of the performance-linked remuneration and also seeks opinions from the Audit and Supervisory Committee. The President and Representative Director entrusted as stated above shall decide the specific amounts of remuneration in line with the said response and opinions.

The Board of Directors judged that the remuneration, etc. for each Director in the fiscal year under review is in line with the decision policy, based on the result that the decision method and content of remuneration, etc. for each Director follow the policy resolved at the Board of Directors’ meeting, and the response and opinions of the Personnel Committee and the Audit and Supervisory Committee.

[Remuneration, etc. for Directors]

Main activities and roles during the fiscal year

(1)       Accounting Auditor’s Name

Deloitte Touche Tohmatsu LLC

(2)       Accounting Auditor’s Remuneration, etc. for the Fiscal Year Ended March 31, 2025

In the event that the Accounting Auditor is deemed to fall under any of the grounds set forth in the provisions of Article 340, Paragraph 1 of the Companies Act, the Audit and Supervisory Committee, after consultation by the Committee, shall terminate the appointment of the Accounting Auditor subject to the unanimous consent of the Audit and Supervisory Committee Members. In such case, the Audit and Supervisory Committee Members selected by said Committee shall report the purpose and reason for termination of the appointment of the Accounting Auditor at the first regular General Meeting of Shareholders convened after such termination.

In the event that reasonable circumstances arise that are deemed to hinder the due performance of duties by the Accounting Auditor, a proposal for dismissal or non-reappointment of the Accounting Auditor shall be submitted to the General Meeting of Shareholders based on the decisions of the Audit and Supervisory Committee.

The Audit and Supervisory Committee received necessary reports from the Directors, relevant internal offices and the Accounting Auditor and discussed the audit plan, the performance of duties of the Accounting Auditor in the previous fiscal year, and bases for calculation and other factors of the estimate for remuneration. As a result, the Audit and Supervisory Committee has determined that the amount of remuneration, etc. is appropriate and given consent as provided by Article 399 of the Companies Act.

Based on the above systems, the following resolutions were passed by the Board of Directors

Basic Views on Overall Internal Control

The AIFUL Group understands that a key objective of corporate governance is to achieve corporate management with transparency, impartiality and efficiency by conducting corporate activities premised on compliance in accordance with 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 to gain the trust of society.

With the aim of steadily realizing the principle and objectives by taking into account all the circumstances surrounding the AIFUL Group, including the market environment, economic trends, the revision of related laws and regulations and other business environments, the Company establishes a basic policy for the development of an internal control system as follows.

Moreover, the Board of Directors shall review the basic policy in an appropriate manner in accordance with changes in the business environment and other factors, and shall make continual efforts to maintain and improve the effectiveness of the basic policy.

6)   Audit system

The return of profits to shareholders is a management priority at the AIFUL Group. The Group’s basic policy calls for a return of profits in line with business results. The Group aims to maximize shareholder value while simultaneously securing stable internal reserves through medium to long-term profit growth.

With regard to the year-end dividend for the fiscal year under review, it has been set to 1 yen per share.

For the next fiscal year, we plan to pay an annual dividend of 12 yen per share (6 yen per share at the mid-term, 6 yen per share at the end of the fiscal year).

Internal reserves are to be utilized flexibly and efficiently for M&A promotion with a view to generating future profits and for stable and continuous shareholder returns in accordance with the medium-term management plan for the fiscal year ended March 2025 through the fiscal year ending March 2027 with targets of an “equity ratio of 15% or more” and “total return ratio of approximately 20%”

The Company stipulates in its Articles of Incorporation that “In accordance with the provisions of Article 459, Paragraph 1 of the Companies Act, the Company may pay dividends of surplus by resolution of the Board of Directors” and that “Interim dividends may be paid by resolution of the Board of Directors, with September 30 of each year as the record date.”

Consolidated Balance Sheets

(As of March 31, 2025)

(Millions of yen)

Consolidated Statements of Income

(April 1, 2024–March 31, 2025)

(Millions of yen)

Accounting Auditor’s Audit Report on the Consolidated Financial Statements

(English Translation)

Independent Auditor’s Report

May 14, 2025

To the Board of Directors of
AIFUL CORPORATION

Deloitte Touche Tohmatsu LLC

Kyoto Office

Tomoyuki Suzuki

Certified Public Accountant

Designated Limited Liability Partner

Engagement Partner

Hideki Yasuda

Certified Public Accountant

Designated Limited Liability Partner

Engagement Partner

Audit Opinion

Pursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the consolidated financial statements of AIFUL CORPORATION (the “Company”), namely, the Consolidated Balance Sheet, Consolidated Statements of Income, Consolidated Statements of Change in Shareholders’ Equity and the Notes to Consolidated Financial Statements for the fiscal year from April 1, 2024 to March 31, 2025.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position and results of operations of the Company and its consolidated subsidiaries that make up the corporate group for the period for which the consolidated financial statements were prepared, in conformity with accounting principles generally accepted in Japan.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those standards are as described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section in this report. We are independent of the Company and its consolidated subsidiaries in accordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities an auditor. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Statements

Other statements are a business report and the accompanying supplemental schedules. Management is responsible for preparation and presentation of other statements. In addition, the Audit and Supervisory Committee is responsible for monitoring the Directors’ performance of their duties in the development and operation of the reporting process for other statements.

Our audit opinion on the consolidated financial statements does not cover other statements, and we express no opinion on them.

In auditing the consolidated financial statements, we are responsible for reading other statements completely, examining in the process whether there is any material discrepancy between the other statements and the consolidated financial statements and/or knowledge we obtain in the audit process, and for paying attention to see whether there is any sign of material error in the other statements other than such material discrepancy.

If we conclude there to be material errors in the other statements based on the work we have performed, we are required to report the fact.

There is no information we are required to report on the other statements.

Responsibilities of Management and Audit and Supervisory Committee for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in Japan, and for the maintenance and operation of such internal control as management determines is necessary to enable the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing whether it is appropriate to prepare the consolidated financial statements based on the assumption of a going concern, and in accordance with accounting principles generally accepted in Japan, for disclosing, as necessary, matters related to going concern.

The Audit and Supervisory Committee is responsible for overseeing the Directors’ execution of duties relating to the maintenance and operation of the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our responsibilities are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that expresses our opinion on the consolidated financial statements based on our audit from an independent point of view. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

We communicate with the Audit and Supervisory Committee regarding the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit process, and other matters required by auditing standards.

We also provide the Audit and Supervisory Committee with a statement that we have complied with the regulations on professional ethics in Japan regarding independence, and communicate with them all matters that may reasonably be thought to bear on our independence, and where applicable, countermeasures to eliminate factors that may hinder our independence or related safeguards to mitigate such factors to an acceptable level.

Interests Required to Be Disclosed by the Certified Public Accountants Act of Japan

Neither our firm nor any of the engagement partners has any interest in the Company and its consolidated subsidiaries as required to be disclosed herein under the provisions of the Certified Public Accountants Act.

Audit Report by Audit and Supervisory Committee (English Translation)

Audit Report

May 15, 2025

Audit and Supervisory Committee

AIFUL CORPORATION

Hitoshi Shimura, Standing Audit and Supervisory Committee Member Seal

Keiichiro Okawa, Standing Audit and Supervisory Committee Member Seal

Haruichi Suzuki, Audit and Supervisory Committee Member Seal
Shinichiro Maeda, Audit and Supervisory Committee Member Seal

The Audit and Supervisory Committee has conducted an audit of the duties performed by the Directors during the 48th fiscal year from April 1, 2024 to March 31, 2025. A report on the auditing method and results is as follows.

With regard to the resolution of the Board of Directors concerning the matters stipulated in Article 399-13, Paragraph 1, Item 1, (b) and (c) of the Companies Act, as well as the system (the internal control system) developed based on such resolution, the Audit and Supervisory Committee received reports regularly and requested explanation as necessary from the Directors, employees, etc. on the establishment and operation of such system, expressed its opinion, and conducted audit by the following methods.

Based on the aforementioned method the Audit and Supervisory Committee reviewed the business report and supplemental schedules thereto for this fiscal year, the non-consolidated financial statements for this fiscal year (non-consolidated balance sheet, non-consolidated statement of income, non-consolidated statement of changes in equity and notes to non-consolidated financial statements) and supplemental schedules thereto and the consolidated financial statements for this fiscal year (consolidated balance sheet, consolidated statement of income, consolidated statement of changes in equity and notes to consolidated financial statements).

2. Results of Audit

(1) Audit Results on the Business Report, etc.

(2) Results of Audit of the Non-consolidated Financial Statements and Supplemental Schedules

In our opinion, the method and results of the audit employed and rendered by Deloitte Touche Tohmatsu LLC

are fair and reasonable.

(3) Results of Audit of the Consolidated Financial Statements

In our opinion, the method and results of the audit employed and rendered by Deloitte Touche Tohmatsu LLC

are fair and reasonable.

(Note) Standing Audit and Supervisory Committee Member Hitoshi Shimura, and Audit and Supervisory Committee Members Haruichi Suzuki and Shinichiro Maeda are Outside Directors as stipulated in Article 2, Item 15 and Article 331, Paragraph 6 of the Companies Act.

Commencement date of electronic provision measures: May 30, 2025

OTHER MATTERS SUBJECT TO ELECTRONIC PROVISION MEASURES
FOR THE 48TH ANNUAL GENERAL MEETING OF SHAREHOLDERS

(MATTERS EXCLUDED FROM PAPER-BASED DOCUMENTS
DELIVERED TO SHAREHOLDERS)

Consolidated Statements of Change in Shareholders’ Equity

Notes to Consolidated Financial Statements

(From April 1, 2024, to March 31, 2025)

AIFUL CORPORATION

Consolidated Statements of Change in Shareholders’ Equity

(April 1, 2024–March 31, 2025)

(Millions of yen)

Notes to Consolidated Financial Statements

1. Significant items for the preparation of consolidated financial statements

1) Status of consolidated subsidiaries

FPC Co., Ltd., a non-consolidated subsidiary to which the equity method was applied until the end of the previous fiscal year, became a consolidated subsidiary from the beginning of the fiscal year under review due to an increase in its materiality.

In addition, the Company acquired shares of BitCash Inc. on June 28, 2024 to include the company in the scope of consolidation. The deemed acquisition date was June 30, 2024.

2) Status of non-consolidated subsidiaries

1) Status of affiliated companies accounted for using the equity method

2) Status of non-consolidated subsidiaries or affiliated companies not accounted for using the equity method

Of the consolidated subsidiaries, the closing date of AIRA & AIFUL Public Company Limited is December 31.

In preparing the consolidated financial statements, the financial statements as of the above date were used and the necessary adjustments for consolidation were made for important transactions occurring between said date and the consolidated closing date.

1) Basis and method for valuation of significant assets

2) Depreciation method for significant depreciable assets

Overseas consolidated subsidiaries, which prepare financial statements based on the International Financial Reporting Standards, have adopted the International Financial Reporting Standard 16 Leases (hereinafter referred to as “IFRS 16”). The lessees book all leases on their balance sheets as assets and liabilities in accordance with IFRS 16. Right-of-use assets booked as assets are depreciated using the straight-line method.

3) Recognition criteria for major allowances

4) Other significant items for the preparation of consolidated financial statements

2. Changes in Accounting Policies

(Application of Accounting Standard for Current Income Taxes)

Effective from the beginning of the fiscal year under review, the Company has applied “Accounting Standard for Current Income Taxes” (ASBJ Statement No. 27, October 28, 2022; hereinafter referred to as the “Revised Accounting Standard 2022”).

As a result, the Company has changed the classification of income taxes to be charged on other comprehensive income and the treatment of tax effects related to the sale of shares of subsidiaries when the corporate group tax system is applied.

In addition, with regard to revisions related to the classification of income taxes (taxation on other comprehensive income), the Company follows the transitional treatment in the proviso of Paragraph 20-3 of the Revised Accounting Standard 2022 and the transitional treatment in Paragraph 65-2 (2) of the “Guidance on Accounting Standard for Tax Effect Accounting” (ASBJ Guidance No. 28, October 28, 2022).

There are no impacts on the consolidated financial statements for the fiscal year under review.

3. Changes in Presentation Method

(Consolidated Balance Sheets)

“Accrued receivables,” included in “other” under “current assets” in the previous consolidated fiscal year, is presented separately from the current consolidated fiscal year due to an increase in its monetary materiality.

“Provision for directors’ bonuses,” presented separately in the previous consolidated fiscal year, is included in “other” under “current liabilities” from the fiscal year under review due to a decrease in its monetary materiality.

(Consolidated Statements of Income)

“Commission income,” included in “Other” under “operating revenue” in the previous consolidated fiscal year, is presented separately from the fiscal year under review due to an increase in its monetary materiality.

4. Notes to Accounting Estimates

(1) Allowance for doubtful accounts

• Amount recognized in the fiscal year under review: 102,675 million yen

• Other useful information to understand the contents of estimates