During this consolidated fiscal year, Japanese economy turned into recovery phase reflecting recovery in export and production and improving corporate profits. However, it is still in severe condition due to employment condition and deflation.

The consumer finance industry has strengthened the business management. It was urged to revise and improve efficiency of business earning structure, reacting to introduction of cap on total borrowing amount due to full enactment of Money Lending Business Act and requests for interest repayment.

The Great East Japan Earthquake which struck Japan in March, 2011 not only damaged the directly stricken areas, but also tremendously affects economic activities all over Japan with additional problems of electric power supply resulting from nuclear power plants incidents.

The Company expresses our heartfelt condolences to all victims of the disaster and prays for earliest recovery of stricken areas.

The Company immediately established headquarters for disaster control after occurrence of the Great East Japan Earthquake. It swiftly devises and takes measures for customers and outlet management such as gathering damage information. We will continue to react promptly to aid stricken customers as we recognize the damages done to them.

As mentioned above, the environment surrounding us remained severe. However, the Group held the vision of "aiming to become the leading company that gives prime satisfactions to as many customers as possible and trusted in the consumer loan market." In domestic region, the Group mainly promoted the operations in loan, credit guarantee, and loan servicing business. In overseas region, the Group also promoted operations in loan business in the Kingdom of Thailand and banking business in Indonesia.

ACOM mainly worked on preparations for revised Money Lending Business Act, expansion of management and earnings basis, promotion of reforming cost structure, conversion of business model for our loan business, and promotion of our business alliance with MUFG Group.

Compared to prior consolidated fiscal year, operating revenue for this consolidated fiscal year decreased by 32,964 million yen, to 245,831 million yen (down 11.8% year-on-year) due primarily to a decline in interest on operating loans.

Although provision of allowance for doubtful accounts and other operating expenses decreased, 243,456 million yen of provision for loss on interest repayment was booked for possible loss on interest repayment in the future. Operating expenses, therefore, increased by 157,885 million yen to 430,617 million yen (up 57.9% year-on-year). As a result, operating loss and ordinary loss were 184,785 million yen and 183,506 million yen, respectively.

16,740 million yen was booked in extraordinary loss due to booking of loss on valuation of stocks of parent company, loss on valuation of investment securities and loss on adjustment for changes of accounting standard for asset retirement obligations. Therefore, 202,648 million yen of net loss was booked.

In the loan business, we have focused on extensive preparations to response to the full-scale enforcement of the Money Lending Business Act, revised on June 18, 2010, concurrently with an emphasis on the reform of our sales business models to improve credit screening model and management method for loan portfolio, and increase new customers. As a part of value-added service to loan customers, ACOM issued credit card.

For the response to the full-scale enforcement of the Money Lending Business Act, ACOM changed the computer system and operations in loan business. ACOM also tried to reduce the burden of the customers who cannot make new borrowings due to the revised act. ACOM offered the reduction of monthly minimum payment amounts and extension of monthly payment date if needed.

Requests for interest repayment that has direct impact on revenue decreased in the first half. However, it increased again and stayed at high level due to the large consumer finance company that filed for bankruptcy.

EASY BUY Public Company Limited, which mainly operates loan business in the Kingdom of Thailand, was anxious about an increase in NPL due to the political instability. However, based on sound credit screening measures, it maintained the quality of its loan portfolio and proactively undertake other sales activities

During this consolidated fiscal year under review, accounts receivable-operating loans declined by 201,215 million yen to stand at 972,329 million yen (down 17.1% year-on-year), while interest on operating loans was 192,654 million yen (down 16.9% year-on-year).

ACOM strengthened cooperation with existing business partners and stepped taken to find new business partners. During this fiscal year under review, the Company newly commenced guarantee business for personal loan provided by The Iyo Bank, Ltd. in July 2010 and The Daisan Bank, Ltd in November, 2010.

Moreover, the company succeeded a part of unsecured card loan guarantee business of Mitsubishi UFJ NICOS Co., Ltd. as part of the business reorganization within the MUFG Group. ACOM started succeeded guarantee business from October, 2010.

As a result, the number of our partners for the guarantee business reached 19 banks in this consolidated fiscal year. The amount of guaranteed receivables increased by 126,220 million yen from the end of prior consolidated fiscal year, to 443,460 million yen (up 39.8% year-on-year), while revenue from credit guarantee was 20,477 million yen (up 64.9% year-on-year) and revenue from guarantee business, including commissions for credit guarantee, was 22,461 million yen (up 57.1% year-on-year).

IR Loan Servicing, Inc., which operates servicing business, worked to maximize the synergy effect to improve the collection capability function within the Group. It also worked to reduce its holdings of purchased claims secured by real estate, to strengthen purchase and collection capability, and to strengthen efficiency and revenue basis.

In this consolidated fiscal year, the amount of consolidated collection from purchased receivables was 8,278 million yen (down 32.5% year-on-year) while the revenue from loan servicing business including the commissions was 8,945 million yen (down 30.4% year-on-year).