Note: This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translation and the Japanese original, the Japanese original shall prevail.
J. FRONT RETAILING Co., Ltd. assumes no responsibility for this translation or for direct, indirect or any otherforms of damages arising from the translation.

[Securities code: 3086]
May 7, 2020
To Our Shareholders

YAMAMOTO Ryoichi,
Director, President and Representative
Executive Officer
J. FRONT RETAILING Co., Ltd.
10-1, Ginza 6-chome, Chuo-ku, Tokyo

Notice of Convocation of the 13th Annual Shareholders Meeting
You are hereby notified that the 13th Annual Shareholders Meeting of J. FRONT RETAILING Co., Ltd.
(hereinafter the “Company”) will be held on Thursday, May 28, 2020.
There will be discussion of the current status of the Company’s business and related issues, and the
proposal to be presented at the Shareholders Meeting will be explained.
We look forward to the continued understanding and support of all our shareholders.
To shareholders who will not attend the meeting in person
You may exercise your voting rights in writing or via the Internet. In each case, you are requested
to exercise your voting rights so that your vote is received by 6:00 p.m. on Wednesday, May 27, 2020
(JST).
Date and Time:
Venue:

Thursday, May 28, 2020, at 10:00 a.m. (JST) (Reception opens at 9:00 a.m.)
Event Hall, B2F, Bellesalle Tokyo Nihonbashi
Tokyo Nihonbashi Tower, 7-1, Nihonbashi 2-chome, Chuo-ku, Tokyo

Purpose of the meeting:
Matters to be reported: 1. Business Report, Consolidated Financial Statements, and Non-consolidated
Financial Statements for the 13th fiscal year (from March 1, 2019 to February
29, 2020)
2. Audit reports of the Accounting Auditor and the Audit Committee on
Consolidated Financial Statements for the 13th fiscal year
Matters to be resolved: Proposal:
Election of Thirteen (13) Directors
Decisions made for convocation:
Please refer to Guide to the Exercise of Voting Rights on pages 3 to 4.

* Shareholders considering to attend the meeting in person are requested to check the status of the infections of
the novel coronavirus (COVID-19) on the date of the meeting and take note of your own health condition. We
humbly request that you forgo visiting the venue on the day.
* If you are attending the meeting in person, please submit the enclosed voting form at the reception of themeeting.
Please note that persons who are not shareholders who can exercise voting rights, such as proxies who are notshareholders, and accompanying persons, will not be admitted. (The accompanying persons of shareholders
with disabilities are exempt and will be admitted.)
However, institutional investors who hold shares in the names of trust banks, etc. and do not hold shares intheir own names will be admitted, on condition that they fulfilled the requirements and procedures provided
for in the Company’s Articles of Incorporation and Share Handling Regulations.
* We will not hold live broadcasting sessions at venues in Osaka and Nagoya.

-1-







Of the documents attached to Notice of Convocation of the Annual Shareholders Meeting, Notes toConsolidated Financial Statements and Notes to Non-consolidated Financial Statements are provided
on the Company’s website in accordance with relevant laws and regulations and Article 16 of theCompany’s Articles of Incorporation, hence are not indicated on this Notice of Convocation.
Consolidated Financial Statements and Non-consolidated Financial Statements, which have been
audited by the Audit Committee and the Accounting Auditor, shall include not only the documents
stated in this Notice of Convocation, but also Notes to Consolidated Financial Statements and Notes
to Non-consolidated Financial Statements, which are provided on the Company’s website.
If any amendments to Reference Materials for Shareholders Meeting, Business Report, Consolidated
Financial Statements or Non-consolidated Financial Statements are made, the revised version will be
provided on the Company’s website.
The Company’s website: https://www.j-front-retailing.com/

The webcast of the Annual Shareholders Meeting will be available on the Company’s website after the
meeting.

-2-

Guide to the Exercise of Voting Rights
Attending the Shareholders Meeting in Person
Please submit the enclosed voting form at the reception of the meeting.
There has recently been a rise in the number of people infected by the novel coronavirus (COVID-19). To
help prevent the virus from spreading further, we humbly request that you consider exercising your voting
rights on paper, or via the Internet, and forgo visiting the venue on the day.
https://www.j-front-retailing.com/

If you will not attend the meeting in person, please exercise your voting rights by either of thefollowing methods.
Exercising voting rights by postal mailPlease indicate on the enclosed voting form whether you approve or disapprove of the proposal, and returnthe completed form to us.
Exercise due date: Received by 6:00 p.m. on Wednesday, May 27, 2020 (JST)To institutional investors
To exercise voting rights at this meeting, institutional investors can use the electronic voting rights
exercise platform for institutional investors operated by ICJ, Inc.
Exercising voting rights via the Internet
Please read the following items before exercising voting rights via the Internet.
Exercise due date: Received by 6:00 p.m. on Wednesday, May 27, 2020 (JST)(Instructions concerning the exercise of voting rights via the Internet)
How to scan QR code
You can log in to the voting website without entering your login ID and temporary password printed on thevoting form.
1. Scan QR code printed on the voting form (at right).
*“QR code” is a registered trademark of DENSO WAVE INCORPORATED.
2. Follow the directions that appear on the screen to input approval or disapproval to each proposal.
The QR code can be used for login only one time.
If you need to exercise your voting rights again or exercise your voting rights without using the QR
code, see “How to enter login ID and temporary password.”
How to enter login ID and temporary password
Voting website: https://evote.tr.mufg.jp/
1. Access the voting website.
2. Enter the “Login ID” and the “Temporary password” shown on the voting form and click the “Login”
button.
3. Set a new password.
4. Follow the directions that appear on the screen to input approval or disapproval to each proposal.
To prevent unauthorized access by parties other than shareholders and the alteration of shareholder
votes, shareholders voting via the Internet will be asked to change their “temporary password” on thevoting website.
You will receive a new “Login ID” and a new “temporary password” with each convocation notice fora Shareholders Meeting.
If you exercise your voting rights both in writing and via the Internet, we will only accept the exerciseof your voting rights via the Internet as effective.
If you exercise your voting rights more than once via the Internet, we will only accept the last exerciseof your voting rights as effective. If you exercise your voting rights more than once by using your-3-

personal computer, smartphone and mobile phone, we will only accept the last exercise of your voting
rights as effective.
* Fees for accessing the voting website (Internet access fees, telephone charges, packet communication
fees, etc.) shall be borne by the shareholder.
* Exercising voting rights via the Internet may not be possible depending on your Internet environment,
and settings, including the use of firewall and anti-virus software.
For inquiries about the system, please contact:
Corporate Agency Division (Help Desk)
Mitsubishi UFJ Trust and Banking Corporation(Toll free) 0120-173-027(available 9:00 a.m. – 9:00 p.m., only in Japan)-4-Reference Materials for Shareholders Meeting
Proposal and Reference Information
Proposal: Election of Thirteen (13) Directors
The terms of office of all 13 Directors will expire at the conclusion of this Annual Shareholders Meeting.
Accordingly, based on the decision of the Nomination Committee, the Company has made the number of
Director candidates 13, and proposes the election of those candidates. The candidates for the Directors are
as follows.
Furthermore, of the candidates for Director, please refer to “3. Matters relating to corporate officers” inthe Business Report regarding the status of activities of four Outside Directors who are proposed forreappointment, and “6. Operation of the Board of Directors” and “7. Operations of each Committee” in theBusiness Report regarding the status of operations of the Board of Directors and each committee.
The Company’s approach to the composition of the Board of Directors
In selecting candidates for the Board of Directors, the Company takes the perspective of strengthening
management supervision functions, and, within the scope of the Articles of Incorporation, considers thebalance of the numbers of supervisors and executives. With regard to the composition of the Board of
Directors implied by the proposed candidates for Director, the Company has decided to maintain a total of
13 Directors. In order to promote management from a shareholder-oriented perspective and to continue tofacilitate the appropriate functioning of the Company’s statutory three committees (nomination, audit, andremuneration), the Company has seven Inside Directors and six Outside Directors.
In selecting candidates for Outside Director, the Company selects persons from the point of view ofBoard diversity who have experience as managers not in the retailing industry that forms the core of theCompany’s business but in manufacturing and other non-retail industries, and who have expertise in legal
and other fields, a global perspective, and M&A experience. When selecting new candidates for Director,
the Company pays particular attention to the need for appropriate supervision of the process of generating
further synergies from the transformation to a wholly-owned subsidiary of PARCO, a major businesssubsidiary, and to individuals with abundant knowledge, backed by practical experience, of the drawing up
of succession plans for top management, who through their decision-making have the most significant
impact on the growth of the Company.
With regard to candidates for Inside Director who does not execute business, wide-ranging practicalexperience within the Group and specialized knowledge in fields such as finance are sought by theCompany. As for candidates for Directors who engage in business execution, in addition to the person
responsible for the Group’s core businesses, which are the Department Store and PARCO Businesses, theCompany has selected a person responsible for the Financial Department whose high level of knowledge
will facilitate the execution of the strategic financial policies demanded by our shareholders and investors.

-5-

No.

Name

Reappointment

Non-executive

New

Executive

Independent

OutsideCommittee to belong(The “◎” mark indicates thecandidates of Chairperson.)
Nomination

Audit

1

YAMAMOTO Ryoichi(Note 1) Reappointment Non-executive
Chairperson

2

TSUTSUMI Hiroyuki

Reappointment

Non-executive○

3

MURATA Soichi

Reappointment

Non-executive○

4

ISHII Yasuo

Reappointment

Non-executive

Independent

Outside5

NISHIKAWA Koichiro

Reappointment

Non-executive

Independent

Outside6

UCHIDA Akira

Reappointment

Non-executive

Independent

Outside7

SATO Rieko (Note 2)

Reappointment

Non-executive

Independent

Outside○8

SEKI Tadayuki

NewNon-executive

Independent

Outside○9

YAGO Natsunosuke

NewNon-executive

Independent

Outside10

YOSHIMOTO Tatsuya

Reappointment

Executive

11

SAWADA Taro

New

Executive

12

MAKIYAMA Kozo○

Remuneration

○

◎

○
◎

○

◎

○

○

○

○

(Note 3)
Reappointment

Executive

Executive
13 WAKABAYASHI Hayato Reappointment(Notes) 1. If the election of YAMAMOTO Ryoichi is approved in this proposal, the Company plans to select him as the
Chairperson of Board of Directors at a Board of Directors meeting that is to be held after this Annual
Shareholders Meeting.
2. SATO Rieko is recorded under the name of KAMATA Rieko in the family register.
3. SAWADA Taro retired from the office of Director on May 23, 2019, and was elected as an Executive Officer who
does not concurrently serve as Director.
4. The Company plans to elect nine Executive Officers who do not concurrently serve as Directors at a Board of
Directors meeting that is to be held after this Annual Shareholders Meeting.
Reappointment
New
Non-executive
Executive
Independent
OutsideCandidate for reappointment as Director
Candidate for new Director
Candidate for Director who does not concurrently serve as Executive Officer
Candidate for Director who concurrently serves as Executive Officer
Independent officer whose status as such is registered with the stock exchange
Candidate for Outside Director(Reference) The Company’s criteria for determining independence of Outside Directors are as follows.
In appointing the Company’s Outside Directors, we select individuals who maintain a high degree of
independence and consequently are not susceptible to conflicts of interest involving the Company’s
shareholders. An individual does not meet the criteria for independence if one or more of the items listed
below apply to that individual.
(i) Person who executes business in the J. Front Retailing Group (the “Group”)(ii) Major shareholder of the Company (including person who executes business thereof; the same
applies with items (iii) to (vi) below)(iii) Major business partner of the Group(iv) Person affiliated with a law office, audit firm, consultancy or other entity that receives payment
other than executive compensation of more than a certain amount from the Group(v) Recipient of donations of more than a certain amount contributed by the Group(vi) Related party in cases where the party is engaged in an arrangement involving a reciprocal officer-6-

appointment with the Group(vii) Person with respect to whom any of items (i) to (vi) has applied at any point over the last five years(viii)Spouse or relative within the second degree of consanguinity of a person with respect to whom anyof the items (i) to (vii) applies
With respect to the above, “person who executes business” refers to an Executive Director, an Executive
Officer, and any other employee; “major shareholder” refers to a shareholder who holds voting rights
accounting for no less than 10% of the Company’s voting rights; “major business partner” refers to abusiness partner whose transactions with the Group account for 2% or more of the Company’s annual
consolidated net sales or the business partner’s annual net sales for any of the fiscal years over the last
five years; “a certain amount” refers to an annual amount of ¥10 million in any of the fiscal years overthe last five years.

-7-

No.

Name
(Date of birth)

Career summary, positions and areas of responsibility in the Company
April 1973
May 2003

YAMAMOTO
Ryoichi(March 27, 1951)

September 2007

Gender: Male
Number of theCompany’s shares
owned (shares):89,412
Special interests between
the Company and the
Candidate:
None

1

Number of attendance at
the Board of Directors
meetings for the 13th
fiscal year:

March 2008
March 2010
September 2012

April 2013
May 2017

Joined The Daimaru, Inc.
President and COO and General Manager of Department StoreOperations, Group Headquarters
Director of J. Front Retailing Co., Ltd.
In charge of Sales Reform and Out-of-Store Sales (gaisho) Reform
Promotion
Executive General Manager of Department Store Operations
Headquarters and Planning Office for New Umeda Store, Head Officeof The Daimaru, Inc.
Director of Matsuzakaya Co., Ltd.
Executive General Manager of Sales Headquarters, Head Office of The
Daimaru, Inc.
President of Daimaru Matsuzakaya Department Stores Co. Ltd.
President of Daimaru Matsuzakaya Department Stores Co. Ltd. andPresident of Daimaru Matsuzakaya Sales Associates Co. Ltd.
President and Representative Director of J. Front Retailing Co., Ltd.
Director, President and Representative Executive Officer (present)

15/15
Number of attendance at
the meetings ofNomination Committee
13/13
Number of attendance at
the meetings ofRemuneration
Committee
11/11
Tenure as Director (atthe conclusion of thisMeeting):
approx. 12 years and9 months

Reasons for nomination as candidate for Director-YAMAMOTO Ryoichi possesses broad-based insight and a high-level overview gained through his abundant experience
spanning overall retail operations. Since being appointed as President of the Company in 2013, he has been precisely andefficiently managing business of the Group overall. In addition to formulating a new Group Vision that showed the direction ofmanagement strategies that is necessary considering the external environment surrounding the Group and leading its
permeation, he has been demonstrating strong leadership in positioning the corporate governance code at the center of change
and reform of corporate management toward realizing where the overall Group strives to be in ten years. Taking into
consideration such achievements and the current business environment, the Company has judged that an Inside Director withthorough knowledge of the roles of the Group’s overall strategy and individual businesses, as well as knowledge of
expectations of individual businesses serving as the Chairperson of Board of Directors and conducting supervisory operations
that consider all stakeholders will lead to the improved corporate value and sustained growth of the Group and has accordingly
nominated him as a candidate to continue serving as Director.
-If the election of YAMAMOTO Ryoichi is approved in this proposal, the Company plans to enter into an agreement with him
to limit the liability of damages stipulated in Paragraph 1, Article 423 of the Companies Act pursuant to Paragraph 1, Article
427 of the said Act.

-8-

No.

Name
(Date of birth)

TSUTSUMI Hiroyuki(February 3, 1958)
Gender: Male
Number of the Company’s
shares owned (shares):17,298
Number of other shares asstock-based remuneration
not yet granted (shares):11,7102

Special interests between
the Company and the
Candidate:
None
Number of attendance at
the Board of Directors
meetings for the 13th
fiscal year:
15/15

Career summary, positions and areas of responsibility in the Company
April 1980
March 1993

Joined The Daimaru, Inc.
General Manager of Accounting Division of HONG KONG DAIMARU
LIMITED
March 2001
General Manager of Finance Headquarters of The Daimaru, Inc.
September 2007
General Manager of Finance Division, Administration Headquarters
March 2010
General Manager of Finance Division, Administration Unit of Daimaru
Matsuzakaya Department Stores Co. Ltd.
May 2013
Corporate Officer, Senior General Manager of Finance Division,
Administration Unit of J. Front Retailing Co., Ltd.
March 2016
Executive Officer, Senior General Manager of Finance and Accounting,
Financial Strategy Unit
May 2017
Director of J. Front Retailing Co., Ltd. (present)
Audit & Supervisory Board Member of Daimaru Matsuzakaya
Department Stores Co. Ltd. (present)
Important concurrent positions outside the Company(Concurrent positions in the Group)
Audit & Supervisory Board Member of Daimaru Matsuzakaya Department Stores Co. Ltd.

Number of attendance at
the meetings of Audit
Committee
15/15
Tenure as Director (at theconclusion of thisMeeting):
approx. 3 years

Reasons for nomination as candidate for Director-TSUTSUMI Hiroyuki has abundant insight in relation to finance and accounting, having consistently accumulated experiencein the fields of finance since March 1989. He is highly knowledgeable of the business characteristics and financial positions
through the guidance he provided in regard to the consolidated settlement of accounts to each business operating subsidiary incooperation with the accounting auditors after his appointment as Senior General Manager of Finance Division in May 2013.
He has also been instrumental in guiding the preparation for the Company’s voluntary adoption of IFRS as Senior General
Manager of Finance and Accounting, Financial Strategy Unit since March 2016. As such, the Company has judged that he is acompetent professional who is capable of helping ensure the improved corporate value and sustained growth of the Group by
utilizing his abundant experience related to finance and accounting in his supervision as a Director, which is essential for theCompany’s sound operations, and has accordingly nominated him as a candidate to continue serving as Director.
-The Company has entered into an agreement with TSUTSUMI Hiroyuki to limit the liability of damages stipulated in
Paragraph 1, Article 423 of the Companies Act pursuant to Paragraph 1, Article 427 of the said Act.

-9-

No.

Name
(Date of birth)

MURATA Soichi(September 9, 1956)

Gender: Male

3

Career summary, positions and areas of responsibility in the Company
April 1980
March 2000
September 2002

Number of the Company’s
shares owned (shares):15,810January 2005
January 2006

Special interests between
the Company and the
Candidate:
None

January 2010
May 2010

Number of attendance at
the Board of Directors
meetings for the 13th
fiscal year:
12/12
Number of attendance at
the meetings of Audit
Committee
10/10April 2013

May 2013
May 2017

May 2019

Joined The Daimaru, Inc.
Senior Manager of Men’s Wear & Accessory Division of Osaka Umeda
Store
Senior Manager of Business Planning Department of Business Planning& CS Promotion Division of Osaka Umeda Store
Deputy General Manager of Osaka Umeda Store
Deputy General Manager of Osaka Umeda Store and General Manager
of Planning Office for New Umeda Store of Head Office
Executive Store Manager of Osaka Umeda
Corporate Officer and Executive Store Manager of Daimaru Osaka
Umeda
Corporate Executive Officer, Executive General Manager of Sales &Marketing Headquarters and Senior General Manager of Merchandising
Strategy Promotion Unit
Director and Corporate Executive Officer
Managing Executive Officer, Senior Executive General Manager of
Administration Unit and in charge of Compliance of J. Front RetailingCo., Ltd.
Director (present)

Tenure as Director (at theconclusion of thisMeeting):
approx. 1 year

Reasons for nomination as candidate for Director-MURATA Soichi has broad insight based on abundant experience in the field of department store sales. He has led new store
planning for, and served as Executive Store Manager of Daimaru Osaka Umeda store, as serving on the management team of adepartment store operator, and Executive General Manager of Sales & Marketing Headquarters, the core of the Department
Store Business. Moreover, after being appointed as Managing Executive Officer of the Company in May 2017, he served as
Senior Executive General Manager of the Administration Unit and mainly in charge of compliance and the entire Group’s
shared services. As such, the Company has judged that he is a competent professional who is capable of helping ensure theimproved corporate value and sustained growth of the Group by fulfilling appropriate management supervisory function,utilizing his abundant knowledge based on his experience, and has accordingly nominated him as a candidate to continue
serving as Director.
-The Company has entered into an agreement with MURATA Soichi to limit the liability of damages stipulated in Paragraph 1,
Article 423 of the Companies Act pursuant to Paragraph 1, Article 427 of the said Act.

- 10 -

No.

Name(Date of birth)
Independent
Outside Director

ISHII Yasuo(September 4, 1947)
Gender: Male
Number of the Company’s
shares owned (shares):
3,600
Number of other shares asstock-based remuneration
not yet granted (shares):
3,866
Special interests between
the Company and the
Candidate:
None

4

Number of attendance at
the Board of Directors
meetings for the 13th
fiscal year:
15/15
Number of attendance at
the meetings ofNomination Committee
10/10Career summary, positions and areas of responsibility in the Company
April 1970
June 2000

Joined Yamanouchi Pharmaceutical Co., Ltd.
Director of the Board, Director of Ethical Products Marketing
Department of Sales & Marketing Division
January 2001
Director of the Board of Yamanouchi Pharmaceutical Co., Ltd. andChairman of Yamanouchi Europe B.V.
March 2003
Director of the Board of Yamanouchi Pharmaceutical Co., Ltd.,
Chairman of Yamanouchi U.K. Limited and Chairman of Yamanouchi
Europe B.V.
June 2003
Managing Director of the Board of Yamanouchi Pharmaceutical Co.,Ltd.
June 2004
Senior Corporate Executive
April 2005
Senior Corporate Executive of Astellas Pharma Inc. and Chairman &CEO of Astellas Pharma Europe Ltd.
June 2008
Executive Vice President and Representative Director of Astellas
Pharma Inc.
June 2011
Vice Deputy Chairman and Representative Director
June 2013
Retired from the office of Vice Deputy Chairman and Representative
Director
May 2015
Outside Audit & Supervisory Board Member of J. Front Retailing Co.,Ltd.
Audit & Supervisory Board Member of Daimaru Matsuzakaya
Department Stores Co. Ltd.
May 2017
Outside Director of J. Front Retailing Co., Ltd. (present)
May 2018
Director of Daimaru Matsuzakaya Department Stores Co. Ltd. (present)
Important concurrent positions outside the Company(Concurrent positions in the Group)
Director of Daimaru Matsuzakaya Department Stores Co. Ltd.

Number of attendance at
the meetings of Audit
Committee
5/5
Number of attendance at
the meetings ofRemuneration Committee
8/8
Tenure as Director (at theconclusion of thisMeeting):
approx. 3 years

Reasons for nomination as candidate for Outside Director and special notes regarding the candidate-ISHII Yasuo possesses insight based on his experience in global corporate management and abundant experience in the field of
management planning outside the retail industry, such as special familiarity with business development in overseas countries.
He has contributed to ensuring more effective meetings of the Board of Directors by actively and assertively furnishing advice
with respect to overall management strategy such as strengthening the holding company functions aimed at swift decision
making for business execution. Moreover, as a member of the Nomination Committee and Remuneration Committee, hecontributes to strengthening the management personnel function through determination of transparent and fair officer
personnel change proposals, deliberation on the succession plan, and provision of suitable advice related to deliberation, etc.
on proper level of officer remuneration and proper operation of the remuneration system. In light of his track record andabundant insight, the Company has judged that in acting as an Outside Director he is likely to contribute greatly to
management of the Group. As such, he has been nominated as a candidate to continue serving as Outside Director.
-ISHII Yasuo is an independent officer who has been given the obligation by the Tokyo Stock Exchange and the Nagoya Stock
Exchange to protect ordinary shareholders.
-The Company has entered into an agreement with ISHII Yasuo to limit the liability of damages stipulated in Paragraph 1,
Article 423 of the Companies Act pursuant to Paragraph 1, Article 427 of the said Act.

- 11 -

No.

Name(Date of birth)

Career summary, positions and areas of responsibility in the Company
April 1970
August 1995
June 2001

Independent
Outside Director

NISHIKAWA
Koichiro

April 2003
June 2003
January 2006

(July 12, 1947)
Gender: Male
Number of the Company’s
shares owned (shares):
1,800
Number of other shares asstock-based remuneration
not yet granted (shares):5

April 2007
April 2010
April 2012
March 2014
May 2015

3,866
Special interests between
the Company and the
Candidate:
None

May 2017
May 2018

Joined Hitachi, Ltd.
Vice President of Hitachi America, Ltd.
Managing Officer, General Manager of Global Business Development
Division of Hitachi, Ltd.
Managing Officer, Manager of Business Development Division
Executive Officer, Manager of Business Development Division
Vice President and Executive Officer, in charge of Business
Development
Senior Vice President and Executive Officer, in charge of Business
Development
Senior Vice President and Executive Officer of Hitachi Cable, Ltd.
Senior Advisor of Hitachi Research InstituteOutside Director of Kyowa Hakko Kirin Co., Ltd.
Outside Audit & Supervisory Board Member of J. Front Retailing Co.,Ltd.
Audit & Supervisory Board Member of Daimaru Matsuzakaya
Department Stores Co. Ltd.
Outside Director of J. Front Retailing Co., Ltd. (present)
Director of Daimaru Matsuzakaya Department Stores Co. Ltd.

Number of attendance at
the Board of Directors
meetings for the 13th
fiscal year:
15/15
Number of attendance at
the meetings of Audit
Committee
15/15
Tenure as Director (at theconclusion of thisMeeting):
approx. 3 years

Reasons for nomination as candidate for Outside Director and special notes regarding the candidate-NISHIKAWA Koichiro possesses practical experience in business alliances, M&A, business reforms, and his involvement innumerous important international negotiations. This enabled him to contribute to ensuring more effective meetings of theBoard of Directors by actively and assertively furnishing advice to the Board of Directors with respect to matters such as
identifying risks regarding new business and M&As as well as suitability thereof, advancing progress management and results
verification for corporate management strategies, and the suitability of numerical-target based planning. Also, as chairpersonof the Audit Committee he contributes to strengthening the audit function by promoting discussions from the perspectives oflegal compliance and appropriateness on the business execution of Directors and Executive Officers as well as matterssubmitted to the Board of Directors for deliberation or matters deemed necessary by the Audit Committee. In light of his trackrecord and abundant insight, the Company has judged that in acting as an Outside Director he is likely to contribute greatly to
management of the Group. As such, he has been nominated as a candidate to continue serving as Outside Director.
-NISHIKAWA Koichiro is an independent officer who has been given the obligation by the Tokyo Stock Exchange and the
Nagoya Stock Exchange to protect ordinary shareholders.
-The Company has entered into an agreement with NISHIKAWA Koichiro to limit the liability of damages stipulated in
Paragraph 1, Article 423 of the Companies Act pursuant to Paragraph 1, Article 427 of the said Act.

- 12 -

No.

Name(Date of birth)
Independent
Outside Director

UCHIDA Akira(October 4, 1950)
Gender: Male
Number of the Company’s
shares owned (shares):
1,500

6

Special interests between
the Company and the
Candidate:
None
Number of attendance at
the Board of Directors
meetings for the 13th
fiscal year:
12/12
Number of attendance at
the meetings of Audit
Committee
10/10
Tenure as Director (at theconclusion of thisMeeting):
approx. 1 year

Career summary, positions and areas of responsibility in the Company
April 1975
June 1996
June 2000

Joined Toray Industries, Inc.
Executive Vice President of Toray Industries (America), Inc.
General Manager on Special Assignment of Corporate Strategic
Planning Division 1, General Manager on Special Assignment ofCorporate Communications Dept. of Toray Industries, Inc.
June 2004
Counsellor of Corporate Strategic Planning Division, and Counsellor of
Investor Relations Dept.
June 2005
Member of the Board, General Manager of Finance and Controller’s
Division
President, Toray Holding (USA), Inc.
June 2009
Senior Vice President (Member of the Board), General Manager ofFinance and Controller’s Division
President, Toray Holding (USA), Inc.
June 2012
Senior Vice President (Member of the Board), in charge of CSR;
General Manager of General Administration and Legal Division,
Investor Relations Dept., Corporate Communications Dept., andAdvertising Dept., Tokyo Head Office
June 2016
AdviserMarch 2019
Retired from Adviser
May 2019
Outside Director of J. Front Retailing Co., Ltd. (present)
June 2019
Outside Director of Yokogawa Electric Corporation (present)
Important concurrent positions outside the Company
Outside Director of Yokogawa Electric Corporation

Reasons for nomination as candidate for Outside Director and special notes regarding the candidate-UCHIDA Akira possesses broad experience and knowledge in the corporate division, as a manager in charge of management
planning and IR, and as the person responsible for the finance and accounting division, and has contributed to ensuring more
effective meetings of the Board of Directors by actively and assertively furnishing advice with respect to the best financial
strategy considering the cost of capital and ideas on ESG management that appropriately reflect the opinions of stakeholders.
As a member of the Audit Committee, he contributes to strengthening the audit function by carrying out audits of theappropriate execution of duties by Directors and Executive Officers of a company with three committees (nomination, audit,
and remuneration committees), and from the perspective of legality, appropriateness, etc., engages in discussions related toitems submitted to the Board of Directors, and items judged to require monitoring by the Audit Committee. In light of his trackrecord and abundant insight, the Company has judged that in acting as an Outside Director he is likely to contribute greatly to
management of the Group. As such, he has been nominated as a candidate to continue serving as Outside Director.
-UCHIDA Akira is an independent officer who has been given the obligation by the Tokyo Stock Exchange and the Nagoya
Stock Exchange to protect ordinary shareholders.
-The Company has entered into an agreement with UCHIDA Akira to limit the liability of damages stipulated in Paragraph 1,
Article 423 of the Companies Act pursuant to Paragraph 1, Article 427 of the said Act.

- 13 -

No.

Name(Date of birth)
Independent
Outside Director

SATO Rieko(Name in the family
register: KAMATA
Rieko)(November 28, 1956)
Gender: Female
Number of the Company’s
shares owned (shares):800
Number of other shares asstock-based remuneration
not yet granted (shares):
1,933

7

Special interests between
the Company and the
Candidate:
None

Career summary, positions and areas of responsibility in the Company
April 1984
August 1989
July 1998
June 2004
June 2012
June 2015
October 2016

Registered as attorney at law
Shearman & Sterling LLP
Partner of Ishii Law Office (present)
External Audit & Supervisory Board Member of Ajinomoto Co., Inc.
Outside Corporate Auditor of NTT DATA CORPORATION (present)
Outside Director of The Dai-ichi Life Insurance Company, Limited
Outside Director (Audit and Supervisory Committee Member) of Daiichi Life Holdings, Inc. (present)
May 2018
Outside Director of J. Front Retailing Co., Ltd. (present)
May 2019
Director of Daimaru Matsuzakaya Department Stores Co. Ltd. (present)
Important concurrent positions outside the Company
Partner and attorney at law of Ishii Law OfficeOutside Corporate Auditor of NTT DATA CORPORATION
Outside Director (Audit and Supervisory Committee Member) of Dai-ichi Life Holdings,
Inc.
(Concurrent positions in the Group)
Director of Daimaru Matsuzakaya Department Stores Co. Ltd.

Number of attendance at
the Board of Directors
meetings for the 13th
fiscal year:
15/15
Number of attendance at
the meetings ofNomination Committee
3/3
Number of attendance at
the meetings of Audit
Committee
15/15
Number of attendance at
the meetings ofRemuneration Committee
3/3
Tenure as Director (at theconclusion of thisMeeting):
approx. 2 years

Reasons for nomination as candidate for Outside Director and special notes regarding the candidate-SATO Rieko possesses abundant experience as an outside director and outside audit & supervisory board member at othercompanies, in addition to having made a career in handling many projects with in-depth and specialized knowledge as an
attorney at law specializing in corporate legal affairs. She has contributed to maintaining and strengthening the Company’s
governance through providing active advice and oversight from an objective viewpoint, not only in areas related to defensive
governance such as effective implementation method of internal audit and internal controls, but also regarding risks in creationof new businesses linked to the growth strategy. As a member of the Audit Committee, she contributes to strengthening theaudit function by carrying out discussions from the perspective of legality, appropriateness, related to audits of the appropriate
performance of duties by Directors and Executive Officers of a company with three committees (nomination, audit, andremuneration committees), and from the perspective of legality, appropriateness, engages in discussions related to items
submitted to the Board of Directors, and items judged to require monitoring by the Audit Committee. In light of her trackrecord and abundant insight, the Company has judged that in acting as an Outside Director she is likely to contribute greatly to
management of the Group. As such, she has been nominated as a candidate to continue serving as Outside Director.
-SATO Rieko is an independent officer who has been given the obligation by the Tokyo Stock Exchange and the Nagoya Stock
Exchange to protect ordinary shareholders.
-The Company has entered into an agreement with SATO Rieko to limit the liability of damages stipulated in Paragraph 1,
Article 423 of the Companies Act pursuant to Paragraph 1, Article 427 of the said Act.

- 14 -

No.

Name(Date of birth)

Career summary, positions and areas of responsibility in the Company

Joined ITOCHU Corporation
General Manager, Finance Division, ITOCHU International Inc.
(Stationed in New York)
June 2004
Executive Officer, CFO of Food Company
SEKI Tadayuki
April 2007
Managing Executive Officer, General Manager of Finance Division(December 7, 1949)
June 2009
Representative Director, Managing Director, Chief Officer for Finance,
Accounting, Risk Management and CFO
Gender: Male
April 2010
Representative Director, Senior Managing Executive Officer
Number of the Company’s May 2011
Representative Director, Senior Managing Executive Officer and CFO
shares owned (shares):
April 2013
Representative Director, Executive Vice President and CFO
0April 2014
Representative Director, Executive Vice President, Executive Advisory
Special interests between
Officer, CFO & CAO
the Company and theApril 2015
Adviser
8
Candidate:
External Director of Parco Co., Ltd. (present)
None May 2016
June 2016
Outside Director of NIPPON VALQUA INDUSTRIES, LTD. (present
VALQUA, LTD.) (present)
April 2017
Advisory Member of ITOCHU Corporation (present)
June 2017
Outside Director of JSR Corporation (present)
July 2017
Outside Statutory Auditor of Asahi Mutual Life Insurance Company(present)
Important concurrent positions outside the Company
Outside Director of VALQUA, LTD.
Outside Director of JSR Corporation
Outside Statutory Auditor of Asahi Mutual Life Insurance Company(Concurrent positions in the Group)
External Director of Parco Co., Ltd.
Reasons for nomination as candidate for Outside Director and special notes regarding the candidate-SEKI Tadayuki was involved in international business management and risk management at a general trading company formany years, and as CFO has both abundant experience and highly specialized knowledge in relation to finance andaccounting. He also has wide-ranging insights derived from roles as Outside Director and Audit & Supervisory Board Member
at multiple companies, including PARCO Co., Ltd. The Company judges that he will apply his achievements and deep
knowledge to the appropriate supervision of management in the Group, and has accordingly nominated him as a candidate
serving as Outside Director.
-If the election of SEKI Tadayuki is approved in this proposal, the Company plans to register him as an independent officer
who has been given the obligation by the Tokyo Stock Exchange and the Nagoya Stock Exchange to protect ordinary
shareholders.
-If the election of SEKI Tadayuki is approved in this proposal, the Company plans to enter into an agreement him to limit theliability of damages stipulated in Paragraph 1, Article 423 of the Companies Act pursuant to Paragraph 1, Article 427 of thesaid Act.
New Candidate
Independent
Outside Director

April 1973
June 1998- 15 -

No.

Name(Date of birth)

Career summary, positions and areas of responsibility in the Company

Joined EBARA CORPORATION
Executive Officer
Senior Executive Officer, Group Executive of Precision Machinery
Group, Representative Director and Chairman of Ebara Precision
YAGO Natsunosuke
Machinery Europe GmbH, Representative Director and Chairman of
Ebara Technologies Inc. and Chairman of Ebara Precision Machinery(May 16, 1951)
Shanghai Inc.
June
2004
Director
Gender: Male
April 2005
Director and Chairman of Ebara Precision Machinery Taiwan Inc.
Number of the Company’s
June
2005
President of Precision Machinery Company and General Manager ofshares owned (shares):Fujisawa Operation
0
April 2006
Director and Managing Executive Officer
Special interests between
President of Precision Machinery Company
the Company and the9Candidate:
April 2007
President and Representative Director
None May 2007
President and Representative Director and General Manager of Internal
Control Promotion Department
July 2009
President and Representative Director and General Manager of Internal
Control Department
April 2013
Chairman & Director
October 2017
Representative Director of The Ebara Hatakeyama Memorial
Foundation (present)
March 2019
Retired from the office of Chairman & Director of EBARACORPORATION
June 2019
Outside Director of SUBARU CORPORATION (present)
Important concurrent positions outside the Company
Outside Director of SUBARU CORPORATION
Reasons for nomination as candidate for Outside Director and special notes regarding the candidate-YAGO Natsunosuke has been involved in top-level company management for many years, and has abundant experience instrengthening financial bases and in compliance management. In addition to demonstrating his leadership skills during thetransition of Ebara Corporation to a company with three committees (nomination, audit and remuneration committees), he has
experience as a nomination committee member, and possesses highly specialized knowledge of internal control and corporate
governance. The Company judges that he will apply his achievements and deep knowledge to the appropriate supervision ofmanagement in the Group, and has accordingly nominated him as a candidate serving as Outside Director.
-If the election of YAGO Natsunosuke is approved in this proposal, the Company plans to register him as an independent
officer who has been given the obligation by the Tokyo Stock Exchange and the Nagoya Stock Exchange to protect ordinary
shareholders.
-If the election of YAGO Natsunosuke is approved in this proposal, the Company plans to enter into an agreement with him to
limit the liability of damages stipulated in Paragraph 1, Article 423 of the Companies Act pursuant to Paragraph 1, Article 427of the said Act.
New Candidate
Independent
Outside Director

April 1977
June 2002
April 2004

- 16 -

No.

Name(Date of birth)

YOSHIMOTO
Tatsuya(April 13, 1956)
Gender: Male
Number of the Company’s
shares owned (shares):61,065

10

Special interests between
the Company and the
Candidate:
None
Number of attendance at
the Board of Directors
meetings for the 13th
fiscal year:
15/15
Tenure as Director (at theconclusion of thisMeeting):
approx. 7 years

Career summary, positions and areas of responsibility in the Company
April 1979
March 2000

Joined The Daimaru, Inc.
Senior Manager of Preparatory Office for Opening Sapporo Store ofPlanning Office for Sapporo Store, Head Office
January 2008
General Manager of Tokyo StoreMay 2008
Corporate Officer, General Manager of Tokyo Store
January 2010
Corporate Officer, General Manager of Sales Planning Promotion
Division and Marketing Planning Promotion Division of Department
Stores Coordination Division of J. Front Retailing Co., Ltd.
March 2010
Corporate Officer of Daimaru Matsuzakaya Department Stores Co. Ltd.
Senior General Manager of Management Planning Division
May 2012
Director and Corporate Officer
April 2013
President and Representative Director of Daimaru Matsuzakaya
Department Stores Co. Ltd. (present) and President and Representative
Director of Daimaru Matsuzakaya Sales Associates Co. Ltd. (present)
May 2013
Director of J. Front Retailing Co., Ltd. (present)
May 2017
Representative Managing Executive Officer (present)
Important concurrent positions outside the Company(Concurrent positions in the Group)
President and Representative Director of Daimaru Matsuzakaya Department Stores Co. Ltd.
President and Representative Director of Daimaru Matsuzakaya Sales Associates Co. Ltd.

Reasons for nomination as candidate for Director-YOSHIMOTO Tatsuya has abundant experience and insight into the whole of the Department Store Business, particularly
those areas related to business management, planning and store operations. Since being appointed President andRepresentative Director of Daimaru Matsuzakaya Department Stores Co. Ltd. in April 2013, he has been involved in executing
existing high-quality department store business strategy taking the roles and expectations of the Department Store Businesswith respect to the Group’s strategy into account, and formulating new Department Store Business Strategy in reaction to themassive changes in the external environment. He has been demonstrating swift and resoundingly effective leadership based ona strong results-oriented approach aimed at realizing these initiatives. Since May 2017, as Representative Managing Executive
Officer of the Company he has accumulated further knowledge based on his experiences in management reform in relation tobusiness management and corporate governance for the Group as a whole. In light of his track record and experience, theCompany has judged that he is a competent professional who is capable of helping ensure the improved corporate value andsustained growth of the Group and has accordingly nominated him as a candidate to continue serving as Director.

- 17 -

No.

Name(Date of birth)

Career summary, positions and areas of responsibility in the Company

Joined The Daimaru, Inc.
Department Manager of Sales Promotion Department, Sales Planning &SAWADA TaroCS Promotion Division of Kobe Store(January 17, 1960)
March 2010
Division Manager of Management Planning Division of Daimaru
Matsuzakaya Department Stores Co. Ltd.
January 2011
Executive Store Manager of Daimaru Kobe
Gender: Male
Corporate Officer
Number of the Company’s May 2011
shares owned (shares):
May 2012
Executive Store Manager of Daimaru Osaka Shinsaibashi
17,747 September 2015
Executive Store Manager of Daimaru Osaka Shinsaibashi and Executive
General Manager of Shinsaibashi New Store Planning OfficeSpecial interests between
the Company and theJuly 2016
Executive General Manager of Management Planning Unit
Candidate:
March 2017
Executive General Manager of Management Planning Unit, Senior
None
11
General Manager of Management Planning Division and Executive(Reference) Tenure as
General Manager of Future Standard Laboratory
Director in the past
May 2017
Director (present) and Managing Executive Officer
approx. 1 year fromMay 2018
Director of J. Front Retailing Co., Ltd.
May 24, 2018 to May
23, 2019
Managing Executive Officer (present)
Senior Executive General Manager of Management Strategy Unit and in
charge of Risk Management (present)
Director of Parco Co., Ltd. (present)
March 2019
Senior General Manager of New Business Division (present)
Important concurrent positions outside the Company(Concurrent positions in the Group)
Director of Daimaru Matsuzakaya Department Stores Co. Ltd.
Director of Parco Co., Ltd.
Reasons for nomination as candidate for Director-SAWADA Taro has served in management in a Department Store Business company, serving as Executive Store Manager of
Daimaru Kobe and Executive Store Manager of Daimaru Osaka Shinsaibashi, and since being appointed as Executive General
Manager of Shinsaibashi New Store Planning Office in September 2015, he has accumulated valuable practical experience as
the person responsible for formulating the master plan for rebuilding the main building of the Shinsaibashi Store andpromoting the action plan, possessing in-depth insight and the ability to lead organizations in planning and proposals. From
July 2016, he has coordinated the Medium-term Business Plan as the Executive General Manager of Management Planning
Unit of the Department Store Business, and has been involved in projects to create business models from a broad perspectivewith new ideas. From May 2018, as the Senior Executive General Manager of Management Strategy Unit of the Company, he
has been promoting the Group Medium-term Business Plan, leading the conception, planning and promotion toward making
the Group Vision a reality. In light of his track record, the Company has judged that he is a competent professional who iscapable of helping ensure the improved corporate value and sustained growth of the Group in acting as a manager of a major
business subsidiary, and has accordingly nominated him as a candidate serving as Director.
New Candidate

April 1983
June 2004- 18 -

No.

Name(Date of birth)

MAKIYAMA Kozo
(August 28, 1958)
Gender: Male
Number of the Company’s
shares owned (shares):20,70012Special interests between
the Company and the
Candidate:
None
Number of attendance at
the Board of Directors
meetings for the 13th
fiscal year:
15/15
Tenure as Director (at theconclusion of thisMeeting):
approx. 7 years

Career summary, positions and areas of responsibility in the Company
April 1981
March 2004

Joined Parco Co., Ltd.
Executive Officer, Executive General Manager of Store Operation
Division
March 2007
Managing Executive Officer, Executive General Manager of StoreManagement Division
March 2008
Senior Executive Officer, Senior Executive General Manager of StoreOperation Headquarters and Executive General Manager of StoreManagement Division
May 2008
Director and Senior Executive Officer
March 2009
Supervisor of Store Operation Division
March 2010
In charge of Store Management
March 2011
In charge of Business Management
May 2011
Director, President and Representative Executive Officer (present)
May 2013
Director of J. Front Retailing Co., Ltd. (present)
May 2017
Managing Executive Officer (present)
Important concurrent positions outside the Company(Concurrent positions in the Group)
Director, President and Representative Executive Officer of Parco Co., Ltd.

Reasons for nomination as candidate for Director-MAKIYAMA Kozo serves as Representative Executive Officer of PARCO Co., Ltd., and has abundant experience and insight
related to the business management and store operations of PARCO. Drawing on a sufficient understanding of PARCO
business roles and expectations with respect to the Group’s strategy, he promotes the management vision leveraging attributesof the PARCO Business, and while demonstrating resoundingly effective leadership based on his ability to act as a unifying
force within the organization, he proactively continues taking on the challenges of expanding into new store makeups andbusiness fields that are symbolized the opening of the new Shibuya PARCO. In light of his track record, the Company has
judged that he is a competent professional who is capable of helping ensure the improved corporate value and sustained
growth of the Group in acting as a manager of a major business subsidiary, and has accordingly nominated him as a candidate
to continue serving as Director.

- 19 -

No.

Name(Date of birth)

WAKABAYASHI
Hayato(August 31, 1961)
Gender: Male
Number of the Company’s
shares owned (shares):
9,647

13

Special interests between
the Company and the
Candidate:
None
Number of attendance at
the Board of Directors
meetings for the 13th
fiscal year:
15/15
Tenure as Director (atthe conclusion of thisMeeting):
approx. 4 years

Career summary, positions and areas of responsibility in the Company
April 1985
April 1998
April 2007
February 2009
July 2013
May 2015
September 2015
March 2016
May 2016
March 2017
May 2017
May 2018

Joined Matsushita Electric Industrial Co., Ltd. (present Panasonic
Corporation)
President of Panasonic Financial Center Malaysia Co., Ltd.
Director and Chief Executive Officer of Matsushita Electric (China)
Finance Limited
Finance Planning Team Leader (Manager), Headquarters Finance & IR
Group of Panasonic Corporation
General Manager, Finance & IR Group, Corporate Strategy Division
and Finance Strategy Team Leader of Panasonic Corporation (Director)
Joined J. Front Retailing Co., Ltd.
In charge of Finance Policy, Administration Unit
Executive Officer
In charge of Financial Strategy and Policy, Administration Unit
Senior Executive General Manager of Financial Strategy Unit (present)
and in charge of Finance Policy
Director (present)
In charge of Financing and Finance Policy
Managing Executive Officer (present)
Senior General Manager of Financing and Finance Policy Division(present)

Reasons for nomination as candidate for Director-WAKABAYASHI Hayato has pursued a career mainly in the financial realm of Panasonic Corporation and its groupcompanies, and as such has adequate insight and sufficient experience related to financial policy with respect to enhancing
financial standing, improving levels of cash management and other such initiatives. As such, he was invited into the Group in
May 2015 and has established and promoted a financial strategy encompassing the entire Group. From March 2016, he has led
the transition to IFRS with an eye to the future as Senior Executive General Manager of Financial Strategy Unit, and began its
application during the Group’s current Medium-term Business Plan. In addition to such achievements and in-depth insight onfinance, he has the commensurate abilities as a management professional in terms of his strategic and transformation-minded
leadership, strong results-oriented approach and other such attributes. As such, the Company has judged that he is a competentprofessional who is capable of helping ensure the improved corporate value and sustained growth of the Group by executing
business acting as a Director, and has accordingly nominated him as a candidate to continue serving as Director.

- 20 -

[Reference Document for the 13th Annual Shareholders Meeting]Business Report (From March 1, 2019 to February 29, 2020)
1. Current status of the corporate group(1) Business summary and results
In the fiscal year under review, the Japanese economy rose and fell. For various reasons, including
stagnant exports and production and a decline in capital investments and domestic demand due to theimpact of the slowdown in overseas economies, natural disasters, and other developments, theJapanese economy’s recovery trend leveled off, and uncertainty regarding various aspects of theJapanese economy, such as corporate production, capital investments, and spending, rapidly increased
near the end of the fiscal year. Although the employment and income environments were firm,
personal spending was not only lackluster due to continued weak spending as a result of theconsumption tax hike but also further deteriorated toward the end of the fiscal year as both in-boundand domestic spending fell because of the novel coronavirus (COVID-19).
During the current Medium-term Business Plan, two major development projects werecompleted
Amid this environment, the J. Front Retailing Group (hereinafter the “Group”) worked to
implement the following five strategies to generate growth and reinforce its foundation as part of its
efforts in the third year of the “FY2017–FY2021 Medium-term Business Plan” to realize the Groupvision and transform its business portfolio. In particular, we completed two large-scale redevelopment
projects this fiscal year—the main building of the Daimaru Shinsaibashi store, which embodies a new
department store business model, and Shibuya PARCO, a next-generation commercial space.
Executed the transformation of PARCO to a wholly-owned subsidiary, with the aim ofgenerating new value
The business environment in which the Group operates is undergoing major changes. In order tofurther increase the corporate and brand value of the Company and PARCO, it is necessary toaccurately read ever-changing consumer needs. In order to quickly promote a fundamental but
flexible reform of our business portfolio based on quick decision-making, it is necessary to deepen
collaboration between the two companies and focus business resources. Therefore, we conducted atakeover bid of PARCO and forced shareholders to sell their shares, which resulted in PARCO
becoming a wholly owned subsidiary as of March 23, 2020. Through these efforts, we will maximize
the Group synergies and accelerate efforts to transform the Group structure in order to realize theGroup Vision “Create and Bring to Life ‘New Happiness.’”
The Group Growth Strategy(i) Multi Service Retailer Strategy
We not only worked to expand our existing business fields by concluding a licensing agreementwith VISA and Mastercard in July for our Credit and Finance Business and moving forward withcreating an environment to conduct the Group’s acquiring (affiliated store) business but also
updated our existing cards by overhauling various card features, such as the point program (a new
point program is expected to be introduced in the fall of 2020) and ancillary services. As for efforts
to expand new business fields, we moved forward with efforts to gain an understanding of theclothing rental business and an examination of entering that market as the value of “sharing, notowning, items and services” spreads and we respond to those risks.
(ii) Urban Dominant Strategy
Following GINZA SIX and Ueno Frontier Tower, we completed two massive area redevelopments
projects—the main building of the Daimaru Shinsaibashi store in September and Shibuya PARCO
in November. In addition, we worked to develop the surrounding areas of core stores, such as
opening two BINO stores, commercial facilities based on the concept of beauty and health, in
Kyoto and the Ueno area. We also worked to improve the appeal of cities through various efforts,
including hosting joint-promotions and area revitalization events with department stores and
PARCO in Ueno, Nagoya, and Kobe areas and collaborating with local universities to support thenext generation and develop local areas.
- 21 -

(iii) ICT Strategy in the IoT Era
We made integrated use of customer data as a shared Group asset and worked to build an
integrated database, a foundation for promoting the Lifetime Service Hub concept, the goal ofwhich is to maximize the lifetime value of customers (*). At the same time, we strove to build acloud environment that makes it possible to manage security at the various Group companies andquickly and flexibly respond to the introduction of digital technology called for in the businessstrategy.
* By providing new products and services according to the life stage of each and every
customer, we strengthen lifetime relationships with customers and maximize the customer
value we provide.
(iv) Innovating existing businesses
In the Department Store Business, we not only introduced into the main building of the Daimaru
Shinsaibashi store a new department store business model that balances growth and profitability
through novel floor compositions for department stores but also moved forward with developing
new sales areas that match changes in the market at the various stores. We also steadily promoted
structural reforms at rural and suburban stores, such as Shimonoseki Daimaru and the Daimaru
Ashiya store.
PARCO celebrated its fiftieth anniversary, and we opened the new Shibuya PARCO, a nextgeneration commercial facility that embodies the new appeal of the PARCO brand, and thisincluded expanding experience-based content, re-proposing fashion, and creating futuristic sales
areas that make use of ICT. In addition, we made steady progress in developing various types ofstores, including opening Kinshicho PARCO, SAN-A Urasoe West Coast PARCO CITY, andKawasaki ZERO GATE.

(v) ESG initiatives
We moved forward with company-wide efforts to resolve five major issues, such as “contribution
to a low-carbon society.” At the main building of the Daimaru Shinsaibashi store, our flagshipstore for promoting ESG, we switched to renewable energy sources for the whole interior, and at
Daimaru Matsuzakaya Department Stores, we held our first explanatory meeting for suppliers
regarding the “JFR Principles of Action for Suppliers,” which were establish in 2019, in order topromote cooperation in our ESG activities. Because of these efforts, there has been an increase in
ESG related certifications and evaluations by independent parties, including a climate change
survey.
*ESG stands for environmental, social and governance.
Strengthening Business Foundation that Lends Support to the Growth Strategy
As for reforming personnel affairs of the Group, with the goal of becoming a human resources
development company that aims to generate sustainable growth, we moved forward with reforms to
the personnel system that draws out creation and challenges and promoted efforts to recruit
specialized human resources and to push back the retirement age at the various group companies to 65
from the perspective of making use of seniors in order to establish human resources management
centered on “human resource power” that creates new value.
As for the Group’s fiscal strategy, we not only worked to improve asset efficiency by promoting
B/S-oriented management and administration to build a management system that boasts high capitalefficiency but also steadily adopted new lease accounting standards that are based on the International
Financial Reporting Standards (IFRS). Furthermore, we held the first business strategy briefing to
expand opportunities for dialogue with all investors.
As for the Group’s administrative systems innovation, we strove to strengthen information security
and increase business efficiency by not only promoting the automation of operations, primarily in theGroup back-office operations, through the greater use of robotic process automation (RPA) but also
introducing business tools to raise productivity.
Consolidated revenue for the fiscal year under review
As for consolidated revenue for the fiscal year under review, spending continued to be weak as a
- 22 -

result of the consumption tax hike, and Japan faced natural disasters, a warm winter, and the spread of
the novel coronavirus (COVID-19). However, as a result of various measures such as those mentioned
above were implemented, sales revenue was ¥480,621 million, up 4.5% year on year, for various
reasons, including sales of reserve floor space in the Shibuya redevelopment project. Even so,
operating profit was ¥40,286 million, down 1.5% year on year; profit before tax was ¥37,161 million,
down 11.8% year on year; and profit attributable to owners of parent was ¥21,251 million, down
22.3% year on year. In addition, profit/shareholders’ equity (ROE) was 5.4%, down 1.4 percentage
points year on year, and the ratio of equity attributable to owners of parent to total assets was 31.2%,
down 8.9 percentage points year on year.
J. Front Retailing Co., Ltd. (hereinafter the “Company”) has decided to pay year-end dividend of¥18 per share. As a result, the annual dividend with the addition of an interim dividend of ¥18 pershare is ¥36 per share, marking nine consecutive years of dividend increases.
Results by segment are as follows.
Revenue and operating profit by business segment of the corporate group(Millions of yen)
13th fiscal year (Current fiscal year)(Fiscal 2019)12th fiscal year
(Fiscal 2018)
Business segment

Revenue
Results

Operating profit

Composition

Results

Composition%
Department StoreBusiness

275,44159.9

PARCO Business

89,969Real Estate Business

16,995Credit and FinanceBusiness

10,573

Total
Other

Revenue
Results%

Operating profit

Composition

Results%

Composition%

24,19459.2

263,74854.9

17,625

43.7

19.6

5,445

13.3

112,21223.3

10,823

26.9

3.7

4,664

11.4

17,793

3.7

6,725

16.7

2.3

2,360

5.8

10,719

2.2

1,908

4.7

392,979

85.5

36,665

89.7

404,474

84.1

37,082

92.0

104,250

22.7

3,507

8.6

123,275

25.7

4,700

11.7

Adjustments(37,389)

(8.2)

717

1.7

(47,128)(9.8)(1,496)(3.7)

Consolidated total

459,840

100.0

40,891

100.0

480,621100.0

40,286100.0- 23 -

<Department Store Business>
The main building of the Daimaru Shinsaibashi store, which reopened in September after being
rebuilt, has been transformed into a more evolved department store for the world and future thattargets “all customers who actively enjoy life” and can better handle affluent customers and foreign
tourists to Japan, our strength.
As for implementing the new customer strategy, we introduced the Daimaru and Matsuzakaya app
at the end of May in order to expand our customer base. We also continued efforts to acquire newcustomer accounts in response to the expanding affluent customer market, and carried out
maintenance of the operation support system that utilizes ICT and construction of a new organization
with an eye toward development of a new out-of-store sales (gaisho) business model.
As a result of various measures such as those mentioned above, revenue was ¥263,748 million,
down 4.2% year on year, and operating profit was ¥17,625 million, down 27.2% year on year, becauseof a reduction in store hours and closed stores due to natural disasters; weak spending as a result of
the consumption tax hike; the impact of the novel coronavirus (COVID-19); and other developments.
Net sales by product and by company and store of the Department Store Business (JapaneseGAAP) are as follows.
Net sales by product of the Department Store Business
Product
Amount(Millions of yen)
Year-on-year changes

Composition%%

Men’s clothing andhaberdashery

46,265

6.5(8.4)

Ladies’ clothing andhaberdashery

212,553

29.7

(2.0)

Children’s clothing andhaberdashery

12,6301.8(14.3)

Kimono, bedding and otherclothing

8,964

1.3

(10.6)

Personal belongings

55,7147.8(16.1)

Furniture

5,431

0.8

(7.7)

375

0.1

(29.4)

Home appliancesHousehold goods

20,233

2.8(9.2)

Food products

160,664

22.5

(5.9)

Food halls and cafes

20,902

2.9(3.2)

General goods

147,115

20.6

4.9

Services

3,130

0.4

11.6

Other

21,162

2.8

2.6

(105)

(0.0)

–

715,039

100.0

(3.8)

Elimination
Total- 24 -

Net sales by company and store of the Department Store BusinessCompany / Store
Amount(Millions of yen)
Year-on-year changes

Composition%%

Daimaru Matsuzakaya Department Stores Co. Ltd.
Daimaru
Osaka Shinsaibashi store

85,340

Osaka Umeda store

64,337

9.0(2.6)

Tokyo store

79,185

11.1

(2.6)

Kyoto store

66,859

9.4

(2.7)

413

0.1

(88.6)

74,453

10.4

(5.0)

Suma store

7,991

1.1

(4.9)

Ashiya store

4,409

0.6

(33.2)

Yamashina store
Kobe store

11.9

(2.7)

Sapporo store

65,4869.1(2.1)

Sub total

448,477

62.7

(4.1)

Matsuzakaya
Nagoya store

116,317

16.3

(2.4)

Ueno store

39,1225.5(2.1)

Shizuoka store

19,840

2.8(6.2)

Takatsuki store

7,904

1.1

(5.8)

Toyota store

6,908

0.9

(3.2)

Sub total

190,092

26.6

(2.9)

638,569

89.3

(3.8)

Sub total
The Hakata Daimaru, Inc.

52,9777.4(3.4)

The Shimonoseki Daimaru, Inc.

12,5241.8(6.2)

Kochi Daimaru Co., Ltd.

11,072

1.5

(5.3)

(105)

(0.0)

93.5

Elimination

Total
715,039100.0(3.8)(Notes) 1. The Daimaru Yamashina store closed on March 31, 2019.
2. The Daimaru Ashiya store reduced its sales floor space as of March 18, 2019.
3. As for the Daimaru Kobe store and Daimaru Kyoto store, surrounding stores have gradually been moved to theReal Estate Business since March 2018 and June 2019, respectively.
4. As of March 20, 2019, the second floor of south wing of the Matsuzakaya Nagoya store has been changed tolease contracts.
5. With the opening of the main building of the Daimaru Shinsaibashi store on September 20, 2019, the north wingof the Daimaru Shinsaibashi store temporarily closed as of September 28, 2019.

<PARCO Business>
In November, the new Shibuya PARCO opened as a unique next-generation commercial facility
that provides both new consumption experiences and values. We also promoted real estatedevelopment using several methods, which included opening Kinshicho PARCO (March), arenovation type development property; SAN-A Urasoe West Coast PARCO CITY (June), a joint
venture with SAN-A CO., LTD., and Kawasaki ZERO GATE (August). For PARCO stores, we havedeveloped a system to promote customer-driven business model reforms in response to the evolutionof the digital environment and changing consumer mindset, and these reforms include changing thecustomer benefit system from one based on discounts to one based on points. We also worked todevelop new tenants and strengthen communication in order to expand customer contact points andimprove customer satisfaction.
As a result of various measures including those mentioned above, even though some existing
PARCO stores and businesses struggled, sales revenue was ¥112,212 million, up 24.7% year on year,
due mainly to contributions from the newly opened Kinshicho PARCO, new Shibuya PARCO, etc,
and sales of reserve floor space at the Shibuya redevelopment project and other factors. Operating
profit was ¥10,823 million, up 98.7% year on year, as a result of a rebound following the recording oflosses due to store closing and impairment loss on other stores for the previous fiscal year.
- 25 -

<Real Estate Business>
We worked to strengthen the real estate lease business by increasing leased floor space, particularin priority areas (Ueno, Nagoya, Kyoto, Shinsaibashi, and Kobe) for the Urban Dominant Strategy. In
particular, we opened BINO HIGASHINOTOIN (April) in the Karasuma area of Kyoto and BINO
OKACHIMACHI (December) on the former site of the Matsuzakaya Ueno Annex No. 2 andrenovated DAIMARU WHITE AVENUE (November) in Shinsaibashi area. In this and other ways, we
steadily developed surrounding stores.
Because of various measures including those mentioned above and strong contributions from
GINZA SIX, which opened in Fiscal 2017, sales revenue was ¥17,793 million, up 4.7% year on year.
Despite up-front investments for the north wing of the Daimaru Shinsaibashi store, which is expected
to open in the fall of 2020, operating profit was ¥6,725 million, up 44.2% year on year, due mainly tosales of non-current assets.
<Credit and Finance Business>
There was an increase in revenues from affiliated store fees, interest income from installment sales,
and other items as a result of greater business by external affiliated stores and efforts to promote theuse of revolving shopping credit and installment sales. Therefore, sales revenue was ¥10,719 million,
up 1.4% year on year. Furthermore, operating profit was ¥1,908 million, down 19.1% year on year,
because of an increase in expenses related to recruiting human resources and strengthening theorganization in order to achieve medium- and long-term growth centered on payment and financial
services.
<Other>As for the personnel recruitment business Dimples’, it faced difficult times, and the wholesale
business Daimaru Kogyo recorded a decline in both revenue and profit due to weakness in theelectronic devices division, but J. Front Design & Construction saw a dramatic increase in bothrevenue and profit as a result of a growth in orders for not only interior work on hotels and luxury
brand stores but also remodeling of the main building of the Daimaru Shinsaibashi store. As a result,sales revenue in the Other was ¥123,275 million, up 18.2% year on year, and operating profit was¥4,700 million, up 34.0% year on year.

- 26 -

(2) Explanation of financial position(Assets, liabilities, and equity as of February 29, 2020)
Total assets as of February 29, 2020 was ¥1,240,308 million, up ¥210,735 million compared with
February 28, 2019. This was mainly attributable to an increase in right-of-use assets due to theapplication of IFRS 16 “Leases.” Total liabilities was ¥840,627 million, an increase of ¥279,540
million. Interest-bearing debt was ¥478,773 million, up ¥304,395 million. This was mainly
attributable to an increase in lease liabilities due to the application of IFRS 16 “Leases.”
Total equity was ¥399,681 million, a decrease of ¥68,804 million compared with February 28, 2019.
This was mainly attributable to a decrease in share premium and non-controlling interests due to an
additional acquisition of shares of PARCO CO., LTD.
(Cash flow position)
The balance of cash and cash equivalents (hereinafter “cash”) as of February 29, 2020 was ¥34,633
million, up ¥8,974 million compared with February 28, 2019.
Cash flow positions in the current fiscal year and the factors for these were as follows.
Net cash provided by operating activities was ¥73,358 million. In comparison with the previous
fiscal year, cash provided increased by ¥38,488 million, largely reflecting an adjustment ofdepreciation and amortization expense due to an increase in the right-of-use asset and a decrease ininventories.
Net cash used in investing activities was ¥49,559 million. In comparison with the previous fiscal
year, cash used increased by ¥22,723 million, largely reflecting an increase in purchase of investment
securities.
Net cash used in financing activities was ¥14,829 million. In comparison with the previous fiscal
year, cash used decreased by ¥6,445 million, largely reflecting issuance of bonds and other financing
activities, despite payment for an additional acquisition of shares of PARCO CO., LTD. and recordingof repayments of lease liabilities.
(3) Status of capital investment
The basic approach taken regarding the Group’s recurring capital investment is to keep suchinvestment within the scope of the amount of depreciation. In the current fiscal year, total capital
investments were ¥48,636 million, which was a result of recurring investments combined withproactive implementation of strategic investment.
(i) Major facilities completed during the current fiscal year
Mainly, in the Department Store Business this included ¥14,608 million for rebuilding of themain building of the Daimaru Shinsaibashi store, and in the PARCO Business this included theredevelopment project of the Shibuya PARCO and asset purchases associated with new store
opening of Kawasaki ZERO GATE.
(ii) New establishments and expansions of major facilities with ongoing construction works during thecurrent fiscal year
The main component of this in the PARCO Business was interior decorating work, etc.
performed in preparation for the opening of Shinsaibashi PARCO (provisional name).
(iii) Sales, removals and losses of major non-current assets
This mainly included retirement due to plans for the north wing of the Daimaru Shinsaibashi
store of Daimaru Matsuzakaya Department Store and the land sale of the Jiyugaoka Building.
(4) Status of procurement
The Group’s basic policy is to source funds needed for business activities using internallygenerated funding. Moreover, when the need arises for business investment or other expenditures,such funds are procured mainly by issuing bonds and borrowing from financial institutions, withconsideration placed on maintaining financial soundness.
As a general rule, the Group subsidiaries do not procure funds from financial institutions, butinstead we promote centralized and streamlined means of procuring funds by means of intra-Group- 27 -

financing using a cash management system.
For the current fiscal year, based on the above policy funds were procured in the following ways
taking balanced procurement into consideration. It primarily consisted of procuring 1) ¥30,000
million through the issuance of unsecured straight bonds and ¥10,300 million in long-term borrowings
from financial institutions, which is earmarked for rebuilding the main building of the Daimaru
Shinsaibashi store, and 2) ¥60,000 million in current borrowings from financial institutions, which isearmarked for acquiring shares of PARCO. On the other hand, progress in repaying borrowings
resulted in interest-bearing liabilities (excluding lease liabilities) increasing ¥83,800 million year on
year to ¥258,200 million.
(5) Issues to be addressed
It has been three years since the “FY2017–FY2021 Medium-term Business Plan” to achieve theGroup vision of “Create and Bring to Life ‘New Happiness’” was launched. Over those three years,
we have steadily moved forward with implementing the growth strategy touted in the medium-termbusiness plan, which has included completing two large-scale redevelopment projects, the mainbuilding of the Daimaru Shinsaibashi store and new Shibuya PARCO in FY 2019, which followed
work on GINZA SIX and Ueno Frontier Tower. On the other hand, we did not achieve sufficientresults related to promoting efforts to “reform the business portfolio,” the most important issue for theGroup as existing businesses are growing even more mature.
The business environment surrounding the Group is undergoing major changes, including evolving
digital technology, more diverse spending, and the spread of cashless payments, and these changes are
occurring at an unprecedented speed. In addition, the outlook is even more uncertain as a result of thegreater risk of an economic slowdown due to the spread of the novel coronavirus (COVID-19), andwe recognize the strong need to promptly respond to enterprise risk both in the short term andmedium to long term.
Because of these changes in the environment, we transformed PARCO into a wholly-owned
subsidiary in FY2019 to further increase the corporate value of the Group. Doing so, we not only
accelerated discontinuous growth that is more than an extension of the current trend by maximizing
the Group business resources but also moved forward with creating a system for the whole Group tounite and tackle the issue in order to fundamentally and flexibly reform the business portfolio.
In FY2020, we will work to accelerate efforts to implement the growth strategy by maximizing theGroup synergies, which will involve opening large-scale commercial complexes through cooperation
between department stores and PARCO under this new management system, the “new JFR Group.”
In addition, it will be difficult to achieve the targets in the current medium-term business plan
(FY2017–FY2021) during this period of greater than expected changes in the business environment,
and it is our judgment that to realize growth in the medium- and long-term for the Group, it would be
best to rework the growth strategy and launch a “new medium-term business plan” in FY2021 toachieve the unrealized reforms to our business structure.
Therefore, we will complete the current Medium-term Business Plan in FY2020. We havepositioned this fiscal year as “the year to launch a new growth strategy to realize the Group Vision”
and will unite to kick off the new Medium-term Business Plan next year.
As for the impact of the novel coronavirus (COVID-19), which began to spread in the second halfof FY2019, we will give the greatest priority to ensuring the safety and health of customers andemployees and giving consideration to their health and quickly and appropriately respond to changing
conditions.
We look forward to the continued support and guidance of all our shareholders.
<Key issues being tackled>
I. Accelerating the implementation of the growth strategy by maximizing the Group synergies
II. Formulating a “New Medium-term Business Plan” for the “new JFR Group”
III. Responding to the impact of the novel coronavirus (COVID-19)- 28 -

I. Accelerating the implementation of the growth strategy by maximizing the Group synergies
We will strive to strengthen our growth strategy and business foundation by maximizing the Groupsynergies. Specifically, we will transfer Daimaru Matsuzakaya Department Store’s real estate business
to PARCO and strengthen our real estate development capabilities by concentrating the Group assets
and centralizing development functions. In addition, we will work to reinforce the foundation for both
the retail and real estate business. This will involve jointly developing stores, such as large-scalecommercial complexes, including Shinsaibashi PARCO (tentative name), which is expected to open in
the fall of 2020, and strengthening our relationship with customers by mutual sharing of customer
data between department stores and PARCO.
In order to generate growth as a Multi Service Retailer, we are aiming to evolve the businessthrough cooperation in design and construction contracting, etc. and will not only make the greatest
use possible of PARCO’s outstanding know-how related to businesses (entertainment business, etc.)
but also move forward with the development of new businesses, such as providing new services that
fit the life stage of customers.
We are also aiming to implement highly efficient management, such as integrating and improving
efficiency of indirect departments and conducting new business development as a unified Group, andare working to provide new value to customers by sharing business know-how through personnel
exchanges.
The Group Growth Strategy
a. Multi Service Retailer Strategy
In addition to strengthening the Credit and Finance Business, which is positioned as a highly
efficient business with strong growth potential, we will strive to develop new businesses and expand
business fields while further strengthening collaboration with PARCO.
1) Reinforce the Credit and Finance Business For the Credit and Finance Business, we will launch an acquiring (affiliated store) business for
Daimaru Matsuzakaya Department Stores, introduce a new point program, and update existingcards in the fall of 2020.
2) Expansion of business field toward making the Group Vision a reality
 We will move forward with efforts to expand our business fields for services and establish
alliances with other companies, and this includes creating new services appropriate for “increasing
diversity of lifestyles” and “increasing diversity in means of seeking enjoyment” and developing
businesses for more diverse values related to spending.
(ii) Urban Dominant Strategy
Leveraging the Group resources to a maximum extent, we will move toward forging a “businessmodel for growth along with regions, with the stores at its core.” This initiative will be primarily led
by flagship stores of the Department Store Business and the PARCO Business.
1) Open Shinsaibashi PARCO (tentative name) As for Shinsaibashi PARCO (tentative name), which is expected to open in the fall of 2020, we
will work to create a new large-scale commercial complex using a structure integrated with themain building of the Daimaru Shinsaibashi store, which will involve conducting promotions andproviding services that utilize department store and PARCO customer data.
2) Promoting urban development centered on flagship stores We will aim to open stores in the Nihon Seimei Sakaemachi Building (provisional name) locatedin Nagoya Sakae area, (planned for the fall of 2020), and undertake development in Nishiki 3chome District 25. By doing so, we will work with the Matsuzakaya Nagoya store and Nagoya
PARCO to increase the appeal of the Nagoya Sakae area.
 In addition to developing surrounding stores, mainly in priority areas, in order to increase thecharm of the communities and its competitiveness against other areas, we will strive to create alively neighborhood, which will involve holding events through cooperation with the local
community, government, etc.
ICT Strategy in the IoT Era
We will take concrete steps to realize the “Lifetime Service Hub concept,” which is designed tosolidify the lifetime relationship with customers and to maximize their lifetime value. In addition, we
will work to strengthen the functions and systems included in the ICT strategy, and this will involve- 29 -

implementing the growth strategy and strengthening information security.
1) Make more sophisticated use of data
 We will work to broaden use through mutual sharing of customer data between department stores
and PARCO, such as ascertaining and analyzing customers who use both department stores and
PARCO and strengthening the approach toward similar ID customers.
2) Strengthening the functions and systems of the Group companies
 We will work to strengthen functions and systems for steadily implementing the ICT strategy interms of both offense and defense, including planning, implementing, and supporting a businessstrategy that employs digital technology and appropriately developing and operating information
systems for strengthening information security at each Group company.
(iv) Innovating existing businesses(Department Store Business)
We will strive to improve both competitiveness and profitability by expanding the introduction of
the new department store business model, expanding our customer base and strengthening CRM
through the promotion of the new customer strategy, and reinforcing the customer-centered businessmodel.
1) Realization of a new department store business model Taking into consideration the success factors behind the main building of the Daimaru
Shinsaibashi store, we will work to not only build a new store model in order to raise the value ofbrick-and-mortar stores but also introduce that model into other stores.
2) Strengthening the customer base by promoting a new customer strategy
 In addition to trying to expand our customer base, such as capturing more mobile app members,
we will strive to propose personal products and services that make use of customer data.
 We will work to reinforce our customer base by proposing new products and services that makeuse of digital technology in the gaisho business and promoting sales activities optimized tocustomer needs and purchasing traits.
(PARCO Business)
In order to maximize the Group synergies, we will not only build a business-dedicated corporate
structure and strive to quickly formulate and implement a new real estate business strategy but also
work to further raise corporate value by reforming the PARCO store business.
1) Construction of a new system as an operating company
 In addition to increasing asset and organization efficiency, such as merging head office functions
and restructuring the organization, in order to maximize the Group synergies when transforming
the company into a wholly-owned subsidiary, we will work to quickly build a system dedicated toreinforcing and expanding business.
2) Formulation of a strategy to expand the real estate business strategy
 We will work to secure a scheme to transfer businesses from Daimaru Matsuzakaya Department
Stores, conduct personnel exchanges, and formulate and implement a new real estate businessstrategy.
 We will concentrate and use resources related to the Group’s real estate, expand development
projects in major cities in Japan, and use various development methods.
3) Reform of the PARCO store business We will establish strong cooperation with department stores on various fronts including customer
services and promotions and steadily work to make Shinsaibashi PARCO (tentative name), whichis expected to open in the fall of 2020, a success.
 We will promote reforms that make use of the knowledge and network gained from opening
Shibuya PARCO and aim to rebuild the store brand for existing PARCO stores.
(v) ESG initiatives
We will steadily promote efforts to achieve the five materiality targets. We will also aim to realize
sustainable growth for the Group and medium- to long-term enhancement of its corporate value
through ongoing efforts to strengthen corporate governance functions.
1) Promoting efforts to unite the Group and strengthening information disclosure We will work to develop solutions to problems based on each Group company’s distinguishing
characteristics and action plan in line with the idea of creating shared value (CSV) to solve societal- 30 -

problems and meet needs through our main business. In addition, we will gradually introduce
efforts by the Daimaru Shinsaibashi store, the model CSV store, to other stores.
 We will regularly hold JFR Sustainability Committee meetings and promote PDCA-based Groupwide efforts related to issues such as managing progress and sharing problems by all Group
companies.
 In order to properly communicate ESG efforts inside/outside the Company, we will work tostrengthen disclosure to independent evaluation organizations by regularly issuing sustainability
reports and important disclosure guidelines.
2) Further strengthening the Group governance We will further strengthen the Group governance, which includes redesigning PARCO’sorganization when it is transformed into a wholly-owned subsidiary and handling the Group efforts
to increase the accuracy of internal controls and manage risks.
Strengthening Business Foundation that Lends Support to the Growth Strategy<The Group human resources policy>
 We will use the transformation of PARCO into a wholly-owned subsidiary to further promotepersonnel exchanges beyond operating companies.
 With the goal of becoming a company with human resource development excellence, we will
promote the hiring of diverse human resources and training of specialized personnel while
continuing to work to achieve work-life balance and reform work styles by fully operating ahuman resources system centered on “human resource power” that creates new value.
<The Group financial policy>
 To construct a management structure with high capital efficiency that is consistently above the costof equity, we will move forward with an examination of the optimal capital structure for futurebusiness portfolio reforms and promote a balanced capital policy that is designed tosimultaneously satisfy the needs for strategic investments, shareholders’ return enhancement, andimprovement in financial standing.
<Strengthening compliance management> We will endeavor to further strengthen group compliance management by raising awareness aboutcompliance through education and training, strengthening the compliance checking system, anddeveloping and enforcing of measures to prevent recurrence of misconducts.
II. Formulating a New Medium-term Business Plan for the new JFR GroupWe will formulate a new medium-term business plan based on our vision of a new JFR Group, a
new management system introduced with the transformation of PARCO into a wholly-owned
subsidiary. As a system to promote the formulation of the plan, in addition to establishing a working
group for each field, such as the department store business, SC real estate business, finance business,
future pathways business, and life solutions business, we will move forward with formulating new
growth strategies and business plan starting in FY2021 by marshaling the collective strength of theGroup.
III. Responding to the impact of the novel coronavirus (COVID-19)
The impact of the novel coronavirus (COVID-19) is still unclear, and as the situation continuallychanges, we will give the greatest priority to ensuring the safety and health of customers andemployees and giving consideration to their health and quickly and appropriately respond by creatinga system based on the business continuity plan and taking similar steps.
At the same time, we will pay close attention to the impact that stagnant social and economic
activity has on the Group’s various businesses and flexibly respond, such as reviewing business plans
for the fiscal year as the risk of a recession (decline in personal spending, etc.) grows greater.
In the future, we expect that there will be greater awareness of the safety and health of customers
and changes in how people live and work and spending behavior. With an eye on these changes, wewill move forward with efforts related to the various businesses, such as examining new products andservices and how to communicate with customers.

- 31 -

(6) Status of assets and profit or loss
Changes in assets and profit or loss of the corporate group(Millions of yen, unless otherwise stated)
International Financial Reporting Standards (IFRS)
10th fiscal year
(Fiscal 2016)

11th fiscal year
(Fiscal 2017)12th fiscal year
(Fiscal 2018)

13th fiscal year
(Fiscal 2019)

Gross sales

1,134,342

1,138,981

1,125,153

1,133,654

Revenue

452,505

469,915459,840

480,621

Business profit

44,89846,24745,51445,363Operating profit

41,72749,54640,89140,286

Operating profit/
revenue

9.2

10.5

8.9

Profit before tax

42,60848,271

42,126

37,161

Profit attributable to owners of parent

27,052

28,48627,35821,251

Total assets

1,005,069

1,022,348

1,029,573

1,240,308

Total equity

421,444

450,887

468,485399,681

Equity attributable to owners of parent

368,571395,519

412,700

387,188

36.7

38.7

40.1

31.2

Cash flows from operating activities

33,76457,07934,87073,358Cash flows from investing activities(49,559)

Category

Ratio of equity attributable to owners of parent to total assets

8.4(27,952)(19,030)(26,836)

Free cash flows

5,812

38,048

8,034

23,799Cash flows from financing activities(2,097)(31,048)(21,274)(14,829)

Cash and cash equivalents at end of period

31,86738,88325,65934,633

Profit/equity attributable to owners of parent (ROE)

7.6%

7.5%

6.8%

5.4%

Operating profit/total assets (ROA)

4.2%

4.9%

4.0%

3.2%

Basic earnings per share (EPS) (Yen)103.43108.92104.5581.19

Equity attributable to owners of parent per share (Yen)

1,409.20

1,511.91

1,576.68

1,479.07

Price earnings ratio (PER)

16.69%

17.91%

11.79%

14.13%

Interim dividend (Yen)

14.00

16.00

17.00

18.00

Year-end dividend (Yen)

14.00

19.00

18.00

18.00

Dividend payout ratio

27.1%

32.1%

33.5%

44.3%

Dividends/equity attributable to owners of parent

2.0%

2.3%

2.2%

2.4%

(Notes) 1. The type of profit used for the calculation of ROE is profit attributable to owners of parent, and the type of profit
used for the calculation of ROA is operating profit.
2. Gross sales are calculated by converting certain transactions recognized as revenue under IFRS on a net basis toamounts on a gross basis. Specifically, we converted sales from purchase recorded at the time of sale (shoka
shiire) of the Department Store Business and Other (Daimaru Kogyo) to a gross amount and the net amounttransactions of the PARCO Business to tenant sales (gross basis). Business profit is calculated by deducting costof sales and selling, general and administrative expenses from revenue.

- 32 -

(7) Status of significant parent company and subsidiaries(i) Relationship with the parent company
No items to report.
(ii) Status of major subsidiaries(Millions of yen, unless otherwise stated)
Capital(Millions of yen
unless otherwise
stated)Name

Ratio of ownershipby the Company(%)

Major business

Daimaru Matsuzakaya Department Stores
Co. Ltd.

10,000

The Hakata Daimaru, Inc.

3,037

69.9

Department Store Business

480

100.0

Department Store Business

The Shimonoseki Daimaru, Inc.
Kochi Daimaru Co., Ltd.
PARCO Co., Ltd.
Parco (Singapore) Pte Ltd

100.0

Department Store Business,
Real Estate Business

300

100.0

Department Store Business

34,367

96.4

PARCO Business
PARCO Business

S$4 million

96.4

NEUVE A Co., Ltd.

490

96.4

PARCO Business

PARCO SPACE SYSTEMS Co., Ltd.

490

96.4

PARCO Business

PARCO Digital Marketing Co., Ltd.

10

96.4

PARCO BusinessJAPAN RETAIL ADVISORS Co., Ltd.

10

96.4

PARCO Business

JFR Card Co., Ltd.

100

100.0

Credit and Finance Business

Daimaru Kogyo, Ltd.

1,800

100.0

Wholesale Business

Daimaru Kogyo International Trading(Shanghai) Co., Ltd.

US$2 million

100.0

Wholesale Business

Daimaru Kogyo (Thailand) Co., Ltd.

THB202 million

99.9

Wholesale BusinessTaiwan Daimaru Kogyo, Ltd.

NT$60 million

100.0

Wholesale Business

100

100.0

Design and construction
contracting and manufactureand sale of furniture

Dimples’ Co., Ltd.

90

100.0

Staffing service

J. Front Foods Co., Ltd.

100

100.0

Restaurant

Consumer Product End-Use ResearchInstitute Co., Ltd.

100

100.0

Merchandise test and quality
controlAngel Park Co., Ltd.

400

50.2

Parking

JFR Service Co. Ltd.

100

100.0

Commissioned back-officeservice, leasing and parking
management

JFR Information Center Co., Ltd.

10

100.0

Information service

J. Front Design & Construction Co., Ltd.

Daimaru Matsuzakaya Sales Associates Co.
Ltd.

90

100.0

Commissioned sales and store
management operations

Daimaru Matsuzakaya Tomonokai Co., Ltd.

100

100.0

Specified prepaid transaction
service(iii) Matters relating to specified wholly-owned subsidiaries(Millions of yen)
Name
Daimaru Matsuzakaya
Department Stores Co. Ltd.
(Note)

Address
18-11, Kiba 2-chome, Koto-ku, Tokyo

Total book value

Total assets of theCompany

222,130

531,341

A specified wholly-owned subsidiary is one where the book value of the shares of said subsidiary on the final dayof the fiscal year exceeds 1/5th of the Company’s total assets, and one whose shares are all held by the Company.

- 33 -

(8) Major businesses
The Department Store Business, the PARCO Business, the Real Estate Business, the Credit and
Finance Business, and Other including wholesale business, design and construction contracting,manufacture and sale of furniture, parking, and leasing.
(9) Major sales offices(Department Store Business)
Name

Location

Name

Location

Daimaru Matsuzakaya
Department Stores Co. Ltd.
Head Office
Daimaru Osaka Shinsaibashi store
Osaka Umeda store
Tokyo store
Kyoto store

Koto-ku, Tokyo
Chuo-ku, Osaka
Kita-ku, Osaka
Chiyoda-ku, Tokyo
Shimogyo-ku, Kyoto

Matsuzakaya

Kobe store

Chuo-ku, Kobe

The Hakata Daimaru, Inc.

Chuo-ku, Fukuoka

Suma store

Suma-ku, Kobe

The Shimonoseki Daimaru, Inc.

Ashiya store
Sapporo store

Ashiya, Hyogo
Chuo-ku, Sapporo

Shimonoseki,
Yamaguchi

Kochi Daimaru Co., Ltd.

Kochi, Kochi

Nagoya store
Ueno store
Shizuoka store
Takatsuki store
Toyota store

Naka-ku, Nagoya
Taito-ku, Tokyo
Aoi-ku, Shizuoka
Takatsuki, Osaka
Toyota, Aichi(PARCO Business)
Name

Location

PARCO Co., Ltd.
Headquarters
Shibuya Head Office
Sapporo PARCO
Sendai PARCO
Urawa PARCO
Shintokorozawa PARCO

Toshima-ku, Tokyo
Shibuya-ku, Tokyo
Chuo-ku, Sapporo
Aoba-ku, Sendai
Urawa-ku, Saitama
Tokorozawa, Saitama

Ikebukuro PARCO

Toshima-ku, Tokyo

PARCO_ya Ueno
Kinshicho PARCO
Shibuya PARCO
Hibarigaoka PARCO
Kichijoji PARCO
Chofu PARCO
Tsudanuma PARCO
Matsumoto PARCO

Taito-ku, Tokyo
Sumida-ku, Tokyo
Shibuya-ku, Tokyo
Nishi-Tokyo, Tokyo
Musashino, Tokyo
Chofu, Tokyo
Funabashi, Chiba
Matsumoto, Nagano

NEUVE A Co., Ltd.

Shibuya-ku, Tokyo

PARCO Digital Marketing Co., Ltd. Shibuya-ku, Tokyo

Name

Location

Shizuoka PARCO
Nagoya PARCO
Hiroshima PARCO
Fukuoka PARCO
Sapporo ZERO GATE
Harajuku ZERO GATE

Aoi-ku, Shizuoka
Naka-ku, Nagoya
Naka-ku, Hiroshima
Chuo-ku, Fukuoka
Chuo-ku, Sapporo
Shibuya-ku, Tokyo
Kawasaki-ku,
Kawasaki ZERO GATE
Kawasaki-shi
Nagoya ZERO GATE
Naka-ku, Nagoya
Kyoto ZERO GATE
Shimogyo-ku, Kyoto
Shinsaibashi ZERO GATE Chuo-ku, Osaka
Dotonbori ZERO GATE
Chuo-ku, Osaka
Sannomiya ZERO GATE Chuo-ku, Kobe
Hiroshima ZERO GATE
Naka-ku, Hiroshima
PediSHIODOME
Minato-ku, Tokyo
PARCO SPACE SYSTEMS Co., Shibuya-ku, Tokyo
Ltd.
Parco (Singapore) Pte Ltd

Singapore(Real Estate Business)
Name

Location

Daimaru Matsuzakaya Department Stores Co. Ltd.
Real Estate Business Division
Koto-ku, Tokyo
GINZA SIX
Chuo-ku, Tokyo
Ueno Frontier Tower
Taito-ku, Tokyoand others- 34 -(Credit and Finance Business)
Name

Location

JFR Card Co., Ltd.

Head Office: Takatsuki, Osaka
Office:Tokyo 3, Osaka 2, Kyoto 1, Kobe 1, Sapporo 1, Nagoya 1,
Shizuoka 1(Other subsidiaries)
Head Office: Osaka 9, Nagoya 1, Shanghai 1, Thailand 1, Taiwan 1(10)
Status of employees(i) Employees of the corporate group
Category

Number of employees

J. FRONT RETAILING Co., Ltd.

147

Department Store Business

2,226

PARCO Business

1,613

Real Estate Business

49

Credit and Finance Business

172

Other

2,372

Total
6,579
(Note) Other than the employees above, the number of dedicated employees is 1,739 and the number of fixedterm employees is 1,526.

(ii) Employees of the Company
Number of employees

Average age

147
45.1
(Note) Other than the employees above, the number of fixed-term employees is 17.

(iii) Employees of major subsidiaries
Name
Daimaru Matsuzakaya Department
Stores Co. Ltd.
PARCO Co., Ltd.

Number of
employees

Average age

1,847

47.3

522

42.4

- 35 -

(11) Status of major creditors
Major creditors of the corporate group(Millions of yen)Amount payable

Creditor
Borrowings
MUFG Bank, Ltd.

54,325

Sumitomo Mitsui Banking Corporation

31,900Mizuho Bank, Ltd.

19,400Sumitomo Mitsui Trust Bank, Limited

17,500Other

51,385Sub total

174,510Straight bonds, etc.

83,766

Total

258,276(12) Other important matters relating to current status of the corporate group
The Company acquired an additional 31.45% of the issued shares of PARCO Co., Ltd. on February
25, 2020 by means of a tender offer, raising the ownership ratio of the Company in said subsidiaryfrom 64.98% to 96.43%. Subsequently, the Company conducted a Demand for Share Cash-Out toshareholders of PARCO Co., Ltd. on February 27, 2020, rendering it a wholly-owned subsidiary on
March 23, 2020.

- 36 -

2. Matters relating to shares of the Company(1) Number of shares authorized:
1,000,000,000 shares(2) Number of shares issued:

270,565,764 shares(3) Number of shareholders:

122,552(4) Major shareholders
Number of shares held(Thousands of shares)

Name of shareholders

The Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account)
Nippon Life Insurance Company
J. Front Retailing Kyoei Supplier Shareholding Association
The Dai-ichi Life Insurance Company, Limited
Japan Trustee Services Bank, Ltd. (Trust Account 5)
Japan Trustee Services Bank, Ltd. (Trust Account 9)
MUFG Bank, Ltd.
JP MORGAN CHASE BANK 385151
STATE STREET BANK WEST CLIENT - TREATY 505234(Note)

23,62016,598
9,828
6,319
5,732
4,779
4,444
4,373
4,158
3,472

Shareholding ratio
(%)

8.94
6.28
3.72
2.39
2.17
1.81
1.68
1.65
1.57
1.31

Shareholding ratio is calculated by deducting treasury shares (6,592 thousand shares). Treasury shares do notinclude shares of the Company owned by the officer remuneration BIP trust.

- 37 -

3. Matters relating to corporate officers(1) Names, etc. of Directors

Position in the Company

Name

Areas of responsibility in the Company
and important concurrent positions
outside the Company

Attendanceat themeetings ofthe Board of
Directors

Limitedliability
agreements(Note 3)(Note 2)

Director

KOBAYASHI
Yasuyuki

Chairperson of Board of Directors
Member of Nomination andRemuneration Committees

100%
15/15

Yes

Director

TSUTSUMI
HiroyukiMember of Audit Committee
Audit & Supervisory Board Member of
Daimaru Matsuzakaya Department
Stores Co. Ltd.

100%
15/15

Yes

Director

MURATA Soichi

Member of Audit Committee

100%
12/12

Yes

TACHIBANA
FUKUSHIMA
Sakie

Chairperson of Nomination Committee
and member of Remuneration
Committee
President and Representative Director of
G&S Global Advisors Inc.
Outside Director of USHIO INC.
Outside Director of KONICAMINOLTA, INC.

100%
15/15

Yes

OTA Yoshikatsu

Chairperson of Remuneration Committee
and member of Nomination Committee
Honorary Advisor of KONICAMINOLTA, INC.

100%
15/15

Yes

Director (Outside)

ISHII Yasuo

Member of Nomination andRemuneration Committees
Director of Daimaru Matsuzakaya
Department Stores Co. Ltd.

100%
15/15

Yes

Director (Outside)

NISHIKAWA
Koichiro

Chairperson of Audit Committee

100%
15/15

Yes

Director (Outside)

SATO Rieko(Note 1)

Member of Audit Committee
Partner and attorney at law of Ishii Law
OfficeOutside Corporate Auditor of NTT
DATA CORPORATION
Outside Director of Dai-ichi Life
Holdings, Inc.
Director of Daimaru Matsuzakaya
Department Stores Co. Ltd.

100%
15/15

Yes

Director (Outside)

UCHIDA Akira

Member of Audit Committee
Outside Director of Yokogawa Electric
Corporation

100%
12/12

Yes

Director (President andRepresentative Executive
Officer)

YAMAMOTO
RyoichiMember of Nomination andRemuneration Committees

100%
15/15

Director (Representative
Managing Executive
Officer)

YOSHIMOTO
Tatsuya

100%
15/15

Director (Managing
Executive Officer)

MAKIYAMA Kozo

100%
15/15

Director (Outside)

Director (Outside)

Director (Managing
WAKABAYASHI
100%
Executive Officer)
Hayato15/15(Notes) 1. SATO Rieko is recorded under the name of KAMATA Rieko in the family register.
2. Number of the meetings of the Board of Directors attended / Number of the meetings of the Board of Directors
held during the individual’s tenure this fiscal year (Details of attendance at each committee meeting are givenin the following item (2).)- 38 -

3. The Company enters into agreements limiting liability for damages such that are stipulated in Paragraph 1,
Article 423 of the Companies Act, pursuant to Paragraph 1, Article 427 of the said Act, with the relevant
individuals (marked as “Yes” in the “Limited liability agreements” column). These agreements limit theamount of their liability for damages to the higher of either ¥12,000,000 or the minimum amount of liability
such that is stipulated in Paragraph 1, Article 425 of the said Act.
4. Audit Committee member TSUTSUMI Hiroyuki gained across-the-board experience into finance andaccounting and due insight into finance and accounting matters between 1981, his second year since joining
The Daimaru, Inc., and his appointment as Director of the Board in May 2017.
5. Audit Committee member NISHIKAWA Koichiro has due insight into financial matters, having been involved
in areas such as business alliances, M&A and management reform, and also through his experience in multiple
important international negotiations.
6. Audit Committee member TSUTSUMI Hiroyuki and MURATA Soichi are full-time Audit Committee members.
We aim to improve the effectiveness of supervisory roles by having as full-time Audit Committee members two
Directors from in-house who are Directors who do not execute business and who have specialist knowledge of
specific areas of our business based on a thorough understanding of in-house organizations and business
operations.

(2) Attendance at the meetings of each committee
Name
KOBAYASHI Yasuyuki

Nomination Committee

Audit Committee

100% (13/13)

Remuneration Committee
100% (11/11)

TSUTSUMI Hiroyuki

100% (15/15)

MURATA Soichi

100% (10/10)

TACHIBANA FUKUSHIMA Sakie◎100% (13/13)

100% (11/11)

OTA Yoshikatsu

100% (13/13)◎100% (11/11)

ISHII Yasuo

100% (10/10)

NISHIKAWA Koichiro
SATO Rieko

100% (5/5)

100% (8/8)◎100% (15/15)
100% (3/3)

100% (15/15)

UCHIDA Akira

100% (3/3)

100% (10/10)

YAMAMOTO Ryoichi
100% (13/13)
100% (11/11)(Note) The “◎” mark indicates Chairperson. (**/**) indicates number of the meetings of each committee attended /number of the meetings of each committee held during the individual’s tenure this fiscal year.

- 39 -

(3) Names, etc. of Executive Officers
Position in the Company

Name

President andRepresentative Executive
Officer

YAMAMOTO
Ryoichi

Representative Managing
Executive Officer

YOSHIMOTO
TatsuyaManaging Executive Officer MAKIYAMA Kozo
Managing Executive Officer

WAKABAYASHI
HayatoManaging Executive Officer SAWADA Taro

Areas of responsibility in the Company and important concurrent
positions outside the Company

President and Representative Director of Daimaru Matsuzakaya
Department Stores Co. Ltd.
President and Representative Director of Daimaru Matsuzakaya Sales
Associates Co. Ltd.
Director, President and Representative Executive Officer of PARCO
Co., Ltd.
Senior Executive General Manager of Financial Strategy Unit andSenior General Manager of Financing and Finance Policy Division
Senior Executive General Manager of Management Strategy Unit, incharge of Risk Management, and Senior General Manager of New
Business Division
Director of Daimaru Matsuzakaya Department Stores Co. Ltd.
Director of PARCO Co., Ltd.

Managing Executive Officer YUNOKI Kazuyo

Senior Executive General Manager of Affiliated Business UnitManaging Executive Officer ARISAWA Hisashi

Senior Executive General Manager of Administration Unit and in
charge of Compliance

Executive Officer

TADATSU
Takehiko

Senior Executive General Manager of Human Resources Strategy Unit
and Senior General Manager of Group Human Resources
Development Division
Executive Officer and Executive General Manager of Human
Resources Development Division of Daimaru Matsuzakaya
Department Stores Co. Ltd.

Executive Officer

IMAZU Takahiro

Senior General Manager of Management Planning Division
and Group Communication Promotion Division, Management
Strategy Unit

Executive Officer

NAKAYAMA
TakashiSenior General Manager of Group Digital Strategy Division,
Management Strategy Unit

Executive Officer

IWATA Yoshimi

Senior General Manager of Budget and Management Support
Division, Financial Strategy Unit

Executive Officer

NINOBE Mamoru

President and Representative Director of JFR Card Co., Ltd.

Executive Officer

KONDO Yasuhiko

President and Representative Director of J. Front Design &Construction Co., Ltd.

Executive Officer

ONO Keiichi

President and Representative Director of Dimples’ Co., Ltd.

Executive Officer

MAKITA Takayuki

In charge of Special Assignments from President(Reference) Executive Officers’ areas of responsibility in the Company and important concurrent positions
outside the Company have been changed on March 1, 2020 as follows:
Areas of responsibility in the Company and important concurrent
Name
positions outside the Company
ARISAWA Hisashi

Senior Executive General Manager of Human Resources Strategy
Unit and Administration Unit and in charge of Compliance

Senior Executive General Manager of Group Digital Strategy Unit
NAKAYAMA Takashi and Senior General Manager of System Planning Division and
Digital Promotion Division
TADATSU Takehiko

In charge of Special Assignments from President
Executive Officer and in charge of Special Assignments fromPresident of Daimaru Matsuzakaya Department Stores Co. Ltd.

- 40 -

(4) Total amount of remuneration, etc. to Directors and Executive Officers
Totals by category of remuneration, etc.
(Millions of yen)

Number ofpayeesDirector

10

Total amount ofNonremuneration,
Performance
performanceetc.
Basic-linked(Millions of yen) remuneration Bonuses stock-based linked stockbased
remuneration
remuneration
217

163

–

–

53

[of which, Outside Director]

[6]

[95]

[77]

–

–

[18]

Executive Officer

16

492

219

106

165

–

(Notes)

Total
26
709
382
106
165
53
1. Other than the above, the total amount of remuneration, etc. received by Outside Directors from subsidiaries of
the Company in the current fiscal year is ¥7 million.
2. In the above table, the remuneration, etc. for Directors of ¥217 million includes ¥9 million (including nonperformance-linked stock-based remuneration) paid to one Director who held the post between March 1 andMay 23, 2019.
3. Sums of remuneration, etc., for performance of duties paid to Directors who concurrently hold other posts are
given in the Executive Officer row.
4. Beginning in the fiscal year ended February 28, 2018, to ensure steady execution of the Medium-term Business
Plan for realizing the Group Vision, the Company has adopted the stock-based remuneration system using atrust for officers (a system of granting the Company’s shares to officers (in certain cases, the Company’s sharesare converted into cash within the trust and cash in the amount equivalent to their conversion value is paid) inaccordance with the officers’ rank and level of achievement of the Medium-term Business Plan, etc.) The
stock-based remuneration in the above chart is the total recorded as expenses for the period under review
according to Japanese accounting standards. It is divided into performance-linked stock-based remuneration
corresponding to degree of achievement of single fiscal year results and degree of achievement of the MediumTerm Business Plan targets, as well as non-performance-linked stock-based remuneration for Directors who do
not execute business.
5. Figures in the “bonuses” and “performance-linked stock-based remuneration” columns represent amounts
recognized as provisions (expenses) (standard amounts) before adjustment for the results of performance
evaluation for the fiscal year ended February 2020. The actual amounts to be paid will be determined by ameeting of the Remuneration Committee scheduled for or after April 2020.

(5) Outline of method for determining policy regarding decisions on amounts of remuneration, etc.
of each corporate officer or calculation method thereof, and contents of such policy(i) Policy on determining remuneration for Directors and Executive Officers
Beginning in the fiscal year ended February 28, 2018, to ensure steady execution of theMedium-term Business Plan for realizing the Group Vision, the Company has formulated the“Officer Remuneration Policy” including the introduction of a stock-based remuneration systemfor officers.
<Basic policy for officer remuneration>
The officer remuneration system of the Company is operated under the following basic policy
with a view to realizing the Group Vision. The same basic philosophy is also established by
Daimaru Matsuzakaya Department Stores, which is one of the major subsidiaries of the Group.
・ Contribute to the sustainable growth of the Group and medium- to long-term enhancement ofcorporate value.
・ A highly performance-based remuneration system that provides incentives to Executive
Officers both for accomplishing objectives set under management strategies and businessplans, and for achieving targets with respect to corporate performance.
・ Remuneration levels that can secure and retain human resources who have the desirable
managerial talent qualities required by the Company.
・ Increase shared awareness of profits with shareholders and awareness of shareholder-focusedmanagement.
・ Enhanced transparency and objectivity in the remuneration determining process.
- 41 -

<How to determine remuneration levels>
To make quick responses to changes in the external environment and the market environment,
the Company adopts officer remuneration levels of companies in the same industry (department
store, retailer) and companies of a comparable size (selected based on market capitalization andconsolidated operating profit) in other industries as a benchmark and compares the remunerationlevels of its Executive Officers and Directors with the benchmark annually. The same treatment
shall apply to the Directors and Executive Officers of Daimaru Matsuzakaya Department Stores.
<Composition of remuneration>[Executive Officers]
Remuneration for Executive Officers shall comprise (i) basic remuneration (monetary
remuneration) in accordance with rank (position), (ii) bonuses (monetary remuneration) basedon individual evaluations conducted each business year, and (iii) performance shares linked tothe consolidated performance achievement rate, etc. provided in the Medium-term Business Plan
as a stock-based remuneration system.

Type ofremuneration
Basic
remuneration(fixed)Payment
methodPayment basis

Determined separately for each rank (position)

Composition of
remuneration
Officers
President other thanPresidentMonthly
payment in
cash

38.5%

45.4%

Annualpayment in
cash

23.0%

27.3%

38.5%

27.3%

Base amount by rank (position) × Evaluation factor *1*1 Determined based on the following quantitative andqualitative evaluation using a balanced scorecard.
Evaluation
weights

Details

Bonuses(variable)

Quantitative
Financial
evaluation
perspective
70%

Qualitativeevaluation
30%

Consolidated
revenue

21%

Consolidated
operating profit

28%

ROE

21%

Customer perspective
Process perspective
Organizational and human resource
perspective

30%[Short-term: 40%] Base amount by rank (position) ×
Performance achievement factor *2*2 Calculated based on the following measures of achievement*3
Evaluation
weights

Details

Performancelinked stockbased
remuneration(variable)

Consolidated operating profit

20%

Basic earnings per share

20%[Medium-term: 60%] Base amount by rank (position) ×
Performance achievement factor *4*4 Calculated based on the following measures of achievement *3
If free cash flow and ROE targets are not met, the amount paid
will be cut by 50% (if only one of the targets is not met, by25%).
Evaluation
weights

Details
Consolidated operating profit

30%

Basic earnings per share30%- 42 -

Annualpayment instocksAt theexpiration of
the term ofeach Mediumterm Business
Plan in stocks

*3 The performance-linked factor for performance-linked stock-based remuneration is calculated by the following calculation
method:Performance target achievement
Performance-linked factor
150% or more

2.0

50% or more, but less than 150%

(Actual results ÷ Target – 0.5) × 2

Less than 50%0(Reference) Financial performance for the previous fiscal year (March 2018 to February 2019) and thepayment status of performance-linked remuneration for Executive Officers
Type of remuneration
Bonuses
Performancelinked stockbased
remuneration

Financial
perspective
Short-term
Medium-term

TargetResults

Consolidated revenue¥485,000 million¥459,840 million

Consolidated operating profit¥48,500 million¥40,891 million

ROE
Consolidated operating profit
Basic earnings per share
Consolidated operating profit
Basic earnings per share

7.5%

6.8%

¥48,500 million¥40,891 million¥116.59¥104.55¥56,000 million¥141.47–

Regarding bonuses and performance-linked stock-based remuneration paid to Executive Officers as partof their remuneration, etc., the amount of bonuses provisioned for in the previous fiscal year was ¥138
million and the total target amount of performance-linked stock-based remuneration (short-term) was ¥66
million, whereas the total actual bonuses paid based on performance results was ¥122 million and the total
amount of performance-linked stock-based remuneration (short-term) paid was ¥51 million.
[Directors who do not execute business]
Remuneration for Directors who do not execute business shall consist only of fixed
remuneration, which shall be (i) basic remuneration (monetary remuneration) in accordance withrank (position) and (ii) non-performance-linked stock-based remuneration, which is not linked toperformance.
<Stock acquisition and holding>
Any shares of the Company acquired by Executive Officers as stock-based remuneration shallcontinue to be held by respective Executive Officers at least for three years from the grant dateof the shares (or at least for one year after they retire from the office of Executive Officer). The
purpose of this requirement is to deepen the common interest of shareholders and officers. In
particular, the purpose of granting shares of the Company to Executive Officers who areresponsible for business execution as performance- linked stock-based remuneration is toprovide additional incentive to them to work for the improvement of the financial performanceand corporate value of the Company from the medium- to long-term perspective.
(ii) Procedures for determining remuneration for Directors and Executive Officers
To ensure the appropriateness of the level and amount of remuneration, and the transparencyof decision-making processes, independent Outside Directors account for the majority, anddecisions are made by deliberation and resolution of a Remuneration Committee headed by anindependent Outside Director. The Remuneration Committee determines the policy on deciding
the contents of individual remuneration to management personnel of the Company and Daimaru
Matsuzakaya Department Stores, and these contents themselves.
It is planned that the Remuneration Committee shall meet at least four times a year. Futurerevisions of the officer remuneration system will be undertaken based on Medium-TermBusiness Plan periods.
In addition, the Company appoints external remuneration consultants with a view tointroducing objective viewpoints from outside the Company and expertise on officer
remuneration systems. With their support, the Company reviews its remuneration levels andremuneration system in light of external data, economic environment, industry trend and- 43 -

business conditions, among others.
(6) Matters relating to Outside Directors
Important concurrent positions

President and Representative Director of G&S Global
Advisors Inc.
Outside Director of USHIO INC.

Relationships between the Company
and organizations where importantconcurrent positions are held
Relationship with specified affiliatedbusiness operator
Attendance at the meetings of theBoard of Directors
Attendance at the meetings ofCommittees to which she belongs

No special relationships exist

Outside Director of KONICA MINOLTA, INC.
TACHIBANA
FUKUSHIMA Sakie
Independent(Note)

No items to report
100% (Attended all 15 meetings held during tenure thisfiscal year)
Nomination
100% (Attended all 13 meetings held
during tenure this fiscal year)
Remuneration 100% (Attended all 11 meetings held
during tenure this fiscal year)[Major activities during current fiscal year]
TACHIBANA FUKUSHIMA Sakie contributes to ensuring more effective meetings of the Board of Directors by drawing
on points of view and perspectives that vary from those of Inside Directors in providing advice and oversight. She does sobased on her abundant experience in and knowledge of governance both in Japan and abroad gained as a director at a U.S.
company’s global headquarters and as an Outside Director at numerous Japanese companies, and using her corporate
management experience and in-depth knowledge regarding global human resources gained as the president of a foreignowned human resource consulting company’s local Japanese branch. In addition, she serves as a leader of the executive
session, which is composed only of Outside Directors, and contributes to the exchange of opinions and sharing of
information among Outside Directors. She also serves as the Chairperson of the Nomination Committee and a member ofRemuneration Committee. As the Chairperson of the Nomination Committee, she endeavors to strengthen the management
personnel function by promoting the deliberation on the succession plan and the Board of Director structure that should be
adopted by the Company and its major subsidiaries, the transparent and fair determination of officer personnel changes,
and the confirmation of the pooling status of senior management candidates for the future.
Important concurrent positions
Honorary Advisor of KONICA MINOLTA, INC.
Relationships between the Company
No special relationships exist
and organizations where importantconcurrent positions are held
Relationship with specified affiliated No items to reportOTA Yoshikatsu
business operator
Independent
Attendance at the meetings of the
100% (Attended all 15 meetings held during tenure this(Note)
Board of Directors
fiscal year)
Attendance at the meetings ofNomination
100% (Attended all 13 meetings held
Committees to which he belongs
during tenure this fiscal year)
Remuneration 100% (Attended all 11 meetings held
during tenure this fiscal year)[Major activities during current fiscal year]
OTA Yoshikatsu contributes to ensuring more effective meetings of the Board of Directors by drawing on points of view
and perspectives that vary from those of Inside Directors in providing advice and oversight regarding issues such as
promoting Group management and the ideal form of functions of a holding company with three committees (nomination,
audit, and remuneration committees). He does so using his abundant experience and in-depth knowledge gained byundertaking management mergers between listed companies, acting as a manager of a holding company, and serving as thechair of the Board of Directors of a company with three committees (nomination, audit, and remuneration committees).
He also serves as the Chairperson of the Remuneration Committee and a member of Nomination Committee. As the
Chairperson of the Remuneration Committee, he endeavors to strengthen the management personnel function bypromoting the improvement of the policy for the determination of officer remuneration amounts and the calculation
method thereof, the determination of specific remuneration amounts to be paid, and the review and revision of theevaluation system to determine officers’ bonuses.

- 44 -

Important concurrent positions

ISHII Yasuo
Independent(Note)

Relationships between the Company
and organizations where importantconcurrent positions are held
Relationship with specified affiliatedbusiness operator
Attendance at the meetings of theBoard of Directors
Attendance at the meetings ofCommittees to which he belongs

Director of Daimaru Matsuzakaya Department Stores
Co. Ltd.
Daimaru Matsuzakaya Department Stores Co. Ltd. is awholly-owned subsidiary of the Company.
No items to report
100% (Attended all 15 meetings held during tenure thisfiscal year)
Nomination
100% (Attended all 10 meetings held
during tenure this fiscal year)
Audit
100% (Attended all 5 meetings held
during tenure this fiscal year)
Remuneration 100% (Attended all 8 meetings held
during tenure this fiscal year)[Major activities during current fiscal year]
ISHII Yasuo contributes to ensuring more effective meetings of the Board of Directors by drawing on points of view andperspectives that vary from those of Inside Directors in providing advice and oversight regarding issues such as the ideal
form of organizations to implement business strategies and general business activities, including suggestions on points thatshould be keep in mind to generate the Group synergies. He does so using his experience with global business outside thefield of retail and advanced knowledge based on his broad experience in the field of business planning, including being
knowledgeable of expanding business overseas.
In regard to being a committee member, he serves as a member of both the Nomination Committee and Remuneration
Committee and works to strengthen the functions of managers by contributing to not only decisions regarding thetransparent and fair “choice of directors” and deliberations on issues such as “succession plans” as a member of theNomination Committee but also decisions regarding “concrete compensation amounts” and deliberations on theformulation of “policies related to decisions on the amount of employee compensation and method for calculating that” asa member of the Remuneration Committee.
Important concurrent positions
None
Relationships between the Company
No special relationships exist
and organizations where important
NISHIKAWA
concurrent positions are held
Koichiro
Relationship with specified affiliated No items to reportbusiness operator
Independent
Attendance at the meetings of the
100% (Attended all 15 meetings held during tenure this(Note)
Board of Directors
fiscal year)
Attendance at the meetings of
Audit
100% (Attended all 15 meetings held
Committees to which he belongs
during tenure this fiscal year)[Major activities during current fiscal year]
NISHIKAWA Koichiro, utilizing his various experiences related to business tie-ups, M&As, business reforms, andimportant international negotiations, contributes to ensuring more effective meetings of the Board of Directors by drawing
on points of view and perspectives that vary from those of Inside Directors in providing advice and oversight regarding
issues such as determining factors underlying uncertainties related to new businesses and M&As and the appropriatenessof those and increasing the sophistication of proposals through clarification of important items.
In regard to being a committee member, he serves as the Chairperson of the Audit Committee and from the perspective oflegality, appropriateness, etc., promotes exchanges of opinions and discussions and works to strengthen audit functions
related to audits of appropriate execution of duties by Directors and Executive Officers of a company with threecommittees (nomination, audit, and remuneration committees), items submitted to the Board of Directors, and items
judged to require monitoring by the Audit Committee.

- 45 -

Important concurrent positions

SATO Rieko
Independent(Note)

Relationships between the Company
and organizations where importantconcurrent positions are held
Relationship with specified affiliatedbusiness operator
Attendance at the meetings of theBoard of Directors
Attendance at the meetings ofCommittees to which she belongs

Partner and attorney at law of Ishii Law Office(present)
Outside Corporate Auditor of NTT DATACORPORATION
Outside Director of Dai-ichi Life Holdings, Inc.
Director of Daimaru Matsuzakaya Department Stores
Co. Ltd.
Daimaru Matsuzakaya Department Stores Co. Ltd. is awholly-owned subsidiary of the Company.
No items to report
100% (Attended all 15 meetings held during tenure thisfiscal year)
Nomination
100% (Attended all 3 meetings held
during tenure this fiscal year)
Audit
100% (Attended all 15 meetings held
during tenure this fiscal year)
Remuneration 100% (Attended all 3 meetings held
during tenure this fiscal year)[Major activities during current fiscal year]
SATO Rieko contributes to ensuring more effective meetings of the Board of Directors by drawing on points of view andperspectives that vary from those of Inside Directors in providing advice and oversight with regard to, among others, areasthat are related to defensive corporate governance in general, such as effective implementation method of internal audit
and internal controls and new ways to ensure effective functioning of each department of the holding company, and risks
in creation of new businesses linked to the growth strategy. She does so based on her abundant experience and advanced
and expert knowledge as a lawyer specializing mainly in corporate legal affairs.
As a committee member, she serves as a member of the Audit Committee and from the perspective of legality,
appropriateness, etc., promotes exchanges of opinions and discussions and works to strengthen audit functions related toaudits of the appropriate execution of duties by Directors and Executive Officers of a company with three committees(nomination, audit, and remuneration committees), items submitted to the Board of Directors, and items judged to requiremonitoring by the Audit Committee.
Important concurrent positions
Outside Director of Yokogawa Electric Corporation
Relationships between the Company
No special relationships exist
and organizations where importantconcurrent positions are held
UCHIDA Akira
Relationship with specified affiliated No items to report
Independent
business operator(Note)
Attendance at the meetings of the
100% (Attended all 12 meetings held during tenure thisBoard of Directors
fiscal year)
Attendance at the meetings of
Audit
100% (Attended all 10 meetings held
Committees to which he belongs
during tenure this fiscal year)[Major activities during current fiscal year]
UCHIDA Akira possesses extensive experience and knowledge of not only business planning and IR but also corporate
departments as the person responsible for the finance and accounting division, and contributes to ensuring more effective
meetings of the Board of Directors by drawing on points of view and perspectives that vary from those of Inside Directors
in providing advice and oversight with regard to the best financial strategy considering the cost of capital and ideas on
ESG management that appropriately reflect the opinions of stakeholders.
In regard to being a committee member, he serves as a member of the Audit Committee and from the perspective oflegality, appropriateness, etc., promotes exchanges of opinions and discussions and works to strengthen audit functions
related to audits of the appropriate execution of duties by Directors and Executive Officers of a company with threecommittees (nomination, audit, and remuneration committees), items submitted to the Board of Directors, and items
judged to require monitoring by the Audit Committee.
(Note) The above-mentioned six Outside Directors are independent officers, which are required to be put in place by the
Tokyo Stock Exchange, Inc. and Nagoya Stock Exchange, Inc. for the protection of general shareholders.

- 46 -

4. Matters relating to Accounting Auditor(1) Name of Accounting Auditor
Ernst & Young ShinNihon LLC(2) Amount of remuneration, etc. of Accounting Auditor(i) Amount of remuneration, etc. to be paid by the Company¥149 million(ii) Total cash and other financial profits to be paid by the Company and its¥261 million
subsidiaries(Notes) 1. Among the significant subsidiaries of the Company, PARCO Co., Ltd. and its five subsidiaries areaudited by auditing firms other than the Accounting Auditor of the Company. PARCO Co., Ltd. isaudited by KPMG AZSA LLC.
2. The audit agreement entered into by the Accounting Auditor and the Company does not clearly
distinguish the amount being derived from the audit under the Companies Act and that being derived
from the audit under the Financial Instruments and Exchange Act, and the two amounts cannot bepractically distinguished from each other. Therefore, the amount in (i) above indicates the total of thesetwo kinds of amounts.

(3) Content of non-audit service
Consulting service for the International Financial Reporting Standards (IFRS), etc.
(4) Rationale for Audit Committee’s agreement on remuneration of the Accounting Auditor
The Audit Committee furnished its agreement with respect to the amount of remuneration, etc.
provided to the Accounting Auditor, which has been deemed appropriate upon conducting a review
regarding audit appropriateness with respect to the Accounting Auditor’s audit plan, its execution ofduties, the basis used for calculating remuneration estimates and other factors.
(5) Policy for determining dismissal or non-reappointment of Accounting Auditor
The Audit Committee is to take necessary measures that include dismissing the Accounting Auditor
upon gaining consent of all Audit Committee members, or otherwise making a decision on proposals
to dismiss or not reappoint the Accounting Auditor submitted to the Shareholders Meeting, in theevent that the Audit Committee deems it appropriate to dismiss or otherwise not reappoint the
Accounting Auditor, either if there are grounds for dismissal as provided for in Article 340, Paragraph
1 of the Companies Act of Japan, or if a situation arises whereby the audit of the Company has beensignificantly impeded such as would be the case if the supervisory authorities were to issue an order
requiring suspension of auditing activities.
(6) Rationale for Audit Committee’s decision on reappointment of Accounting Auditor
The Audit Committee decided to reappoint Ernst & Young ShinNihon LLC, as a result ofcomprehensive considerations, following the evaluation of the appropriateness and validness of audit
activities by the Accounting Auditor based on the Accounting Auditor Evaluation Standards
established by the Audit Committee.
5. Basic ideas on corporate governance(1) Role of corporate governance
The Company believes that ensuring sustainable growth of the Group and increasing corporate
value over the medium to long term is conducive to realizing ideals of the Group Mission Statement.
Accordingly, the role of corporate governance in the JFR Group must be to help enable us to realize
the ideals of the Group Mission Statement.
The Company, which is a pure holding company at the core of corporate governance of the Group,
assumes responsibility for ensuring managerial transparency, soundness and compliance of the entire
Group, with the aim of realizing the ideals of the Group Mission Statement.

- 47 -

(2) Relationship with shareholders and other stakeholders
Through its business activities, the Company strives to build relationships of trust with all of its
stakeholders.
Our shareholders are the providers of the Company’s capital and act as the main source of theGroup’s corporate governance. Accordingly, the Company respects shareholder rights to the
maximum extent (including those of minority shareholders and foreign shareholders), andsubstantively ensures their rights.
The Company treats its shareholders equitably and impartially, in accordance with types andnumbers of shares held by shareholders. Moreover, neither the Company nor the Group provides
property benefits to any person, such that relate to the exercise of the rights of specific shareholders.
The Company actively works to fulfill its responsibilities towards customers, business partners,
employees and local communities in relation to the environment and society, as part of its efforts torealize a sustainable society.
(3) Information disclosure
We believe that promoting constructive dialogue with our shareholders and investors helps theGroup achieve sustainable growth while increasing corporate value over the medium to long term.
The Company is committed to timely and appropriate disclosure of information, on whichconstructive dialogue is premised, and through such initiatives maintains and develops trusting
relations with its stakeholders.
The Company discloses important information of the Group in a timely and appropriate manner, in
accordance with Japan’s Financial Instruments and Exchange Act and other such laws and regulations,as well as in accordance with rules for timely disclosure stipulated by financial instruments exchanges
on which the Company’s shares are listed. Even in cases where such laws, regulations and the timely
disclosure rules do not apply, the Company recognizes information deemed useful to shareholders,investors and other stakeholders as important with respect to its corporate activities as called for bysociety. As such, the Company proactively discloses such information in an impartial and swift
manner using appropriate means, and with the added aim of facilitating more extensive understanding
regarding the Group.
(4) Roles and responsibilities of the Board of Directors
Directors, who were appointed by the shareholders and were entrusted with management of theCompany, carries out the roles and responsibilities in the Board of Directors as listed below. They doso in accordance with their fiduciary responsibility and accountability to shareholders, and with theaim of realizing the ideals of the Group Vision. Accordingly, these roles and responsibilities include:(i)

Indicating the overall direction that Group management is to take, by engaging in constructive
discussions with respect to the Group Vision, the Group Medium-term Business Plan, the GroupManagement Policy and other management fundamental policies, and carrying out multifacetedand objective deliberations that include evaluation of risks with respect to the aforementioned;(ii) Appropriately making decisions in terms of overall policy and plans pertaining to the Groupmanagement on the basis of the direction noted above and overseeing progress and results of theplans;(iii) Developing an environment conducive to encouraging offense-oriented management geared toachieving discontinuous growth;(iv) Taking steps to build and develop internal control systems of the Group overall, and otherwise
overseeing the operational status of such systems;(v) Overseeing conflicts of interest between related parties; and(vi) On the basis of summary reports furnished by the Nomination Committee, overseeing progressof senior management team succession planning, personnel assignment plans pertaining tomanagerial talent and management team training, as delegated to the Nomination Committee.

(5) Systems of corporate governance
The Company is currently adopting a company with three committees (nomination, audit andremuneration committees) as organizational structure. The reasons are as follows.
- 48 -

(i)The Company will strengthen the oversight function for business execution of the Board of
Directors by separating oversight from execution. In addition, the Company aims to promotesophistication of strategy by having the Board of Directors actively include the insights ofexternal persons in order to hold rigorous discourse on important strategic issues relating to theGroup management.
(ii) The Company will enable decisions of business execution to be delegated to Executive Officers,
clarify the authority and responsibility, and carry out speedy management decision making.
(iii) The Company will improve the transparency and objectivity of management by transitioning to acompany with three committees (nomination, audit and remuneration committees). The majorityof the members of each of these committees are Outside Directors.
(iv) The Company will build a governance structure that is easy to understand from global
perspectives, such as those of overseas investors.

6.

Operation of the Board of Directors
Composition of the Board

9 Directors who do not execute business (including 6 Outside Directors) and 4
Directors who concurrently serve as Executive Officer

Major roles

The Board of Directors shall discuss and resolve matters defined in the
Companies Act and/or the Articles of Incorporation, as well as matters relating tomanagement strategies, such as the Group Medium-Term Business Plan andManagement Policy, and matters relating to important business execution, such as
asset acquisition, new business development, and M&As.

Operational status

Held at least once every month, in principle. With one-third or more of Directors
being independent Outside Directors, the Board of Directors functions as a venue
for constructive discussions and deliberations, beyond being solely a decisionmaking body for important matters, and is a key to the enhancement of corporate
governance.

Comment from Chairperson of
the Board

In FY2019, the effectiveness of the Board of Directors’ management supervisory
function was improved by reviewing the criteria for submitting items to the Boardof Directors accompanying the adoption of IFRS No. 16 and invigorating debatesas the Audit Committee, of which an Outside Director serves as the Chairperson,
more thoroughly implements its audit function. In addition, regarding thetransformation of PARCO into a wholly-owned subsidiary, the purchase of sharesand synergies were discussed by the members of the Board of Directors.
Just like the previous fiscal year, the Board of Directors continued to take time to
discuss the check of progress in implementing the current medium-term businessplan and related issues and responses. As the external environment rapidlychanges and dramatically deviates from initial projections, it was concluded thatfrom the perspective of raising medium- and long-term corporate value, it would
be desirable to launch a new medium-term business in FY2021 considering thedifficulties of maintaining targets over five years and changes to the new businessportfolio, including PARCO.
This year, the Board of Directors will endeavor to focus on formulating a
medium-term business plan for the next period, hold discussions designed to
improve the quality of strategies from the perspective of stakeholders while
sharing a sense of crisis and speed with parties involved in execution, fully
provide management oversight, and contribute to the realization of the Group
Vision and increase in corporate value.

Director
KOBAYASHI Yasuyuki(Evaluation of effectiveness of the Board of Directors)
The Company conducted its fifth evaluation of the effectiveness of the Board of Directors between
October and November 2019. A third-party organization conducted individual interviews taking into
consideration the preliminary survey, and this was discussed at the November Board of Directors
meeting in line with the report that included a compilation and analysis of results. There is arecognition that improvements based on the past four evaluations have resulted in a well-formed
Board of Directors and governance system; therefore, a different third-party organization was used
this time in order to incorporate a new perspective, and the focus of this evaluation was placed on
revealing actual problems.
- 49 -

As a result, “reconfirming the direction of reforms among Directors and aligning their views of the
future business and awareness of speed in achieving that” and “examining the detailed design related
to the roles and functions of the Internal Audit Division so that the Audit Committee can better
function” were given as medium- and long-tern issues while “setting management indicators thatclearly indicate progress in implementing the medium-term business plan and clarifying the systemand schedule for execution tied to strategy” and “continually improving the quality of deliberations by
the Board of Directors” were listed as short-term issues.
In response to these issues, efforts will be made to conduct more efficient and effective
deliberations by 1) promptly providing feedback to parties executing measures based on the results ofdeliberations by the Board of Directors via the Management Meeting and other venues, instructing
related departments to implement required results, and reflecting that in execution and 2) developing
creative methods for further uncovering issues related to the various strategies and strengthening
monitoring of those.
We will continue to strive to share issues based on the evaluation of the effectiveness of the Boardof Directors and improve the effectiveness of the Board of Directors.
7. Operations of each Committee
Nomination Committee
Composition of Committee

4 Directors who do not execute business (including 3 Outside Directors) and 1
Director who concurrently serves as Representative Executive Officer

Major roles

The Nomination Committee determines the contents of proposals on thenomination and dismissal of Directors submitted to shareholders’ meetings, andreports to the Board of Directors upon consultations from the Board of Directors
regarding the nomination and dismissal of management personnel of theCompany and major business subsidiaries, as well as the chairpersons andmembers of individual committees, and other matters.

Number of meetings held

13

Number of meetings attended

4 incumbent members attended all 13 meetings. Director Ishii, who was newly
appointed in May 2019, also attended all 10 meetings held during his tenure.

Main items deliberated on during • Succession plan
the current fiscal year
• System of directors at the Company and its main business subsidiaries and otherofficer issues• Scope of deliberations accompanying PARCO becoming a wholly-owned
subsidiary
Comment from Chairperson of
the Committee
Director (Outside)
TACHIBANA FUKUSHIMA
Sakie

The Nomination Committee ensures the objectivity, transparency and rationality
not only for the determination of effective composition of the Board of Directors
and the election of Directors including Outside Directors but also for the electionof Executive Officers of the Company and Executive Officers of major businesssubsidiaries. This involves utilizing in-house personnel evaluation information as
well as assessment data by a third party organization, and obtaining opportunities
to get to know candidate’s personalities and ideas through conducting interviews,
etc., as necessary.
The Nomination Committee has positioned the management team succession plan
as a central issue necessary to generate sustainable growth of the Company andcontinuously conducts related deliberations. As for training of candidates for the
next generation of managers, the committee creates a pool of candidates andregularly checks evaluations of their performance, debates their roles and transfers
to strengthen future human resources, and ties it to implementation if necessary.
The Nomination Committee will secure management personnel necessary forcontinuous growth and development of the Company, and strive for the election of
the right person in the right place.

- 50 -

Audit Committee
Composition of Committee

5 Directors who do not execute business (including 3 Outside Directors)

Major roles

In accordance with the overall policy and plan determined by the Board of
Directors, the Audit Committee audits the execution of business by Directors andExecutive Officers, important matters submitted to the Board of Directors, andother individual matters the Audit Committee considers necessary.

Number of meetings held

15

Number of meetings attended

3 incumbent members attended all 15 meetings. Directors Uchida and Murata,
who were elected as Director in May 2019, also attended all 10 meetings held
during their tenure.

Main items deliberated on during • Formulating an audit policy and plan for Fiscal 2019the current fiscal year
• Audit report and opinion of the Audit Committee• Reappointing the Accounting Auditor
Comment from Chairperson of
the Committee
Director (Outside)
NISHIKAWA Koichiro

The Audit Committee, in accordance with the Rules of Audit Committee, Audit
Standards, and Practice Standards for Audit concerning Internal Control System,
etc., formulated an audit plan for the current fiscal year, conducted the audit, andreported its contents to the Board of Directors. During the current fiscal year, theChairperson of the Audit Committee was changed from an Inside Director to
Outside Director, and the audit system for the organization was further
strengthened and expanded. Specifically, clarifying the role of the Audit
Committee Secretariat in aiding audits and entrusting investigations to the Internal
Audit Division and departments in the Company related to internal control wereadded to the “Rules of Audit Committee.”
As for issues such as the state of progress in implementing major strategies andstate of creating and operating a system of internal controls during the third yearof the Group Medium-term Business Plan, in addition to audits by full-time Audit
Committee members; Audit Committee Meetings, which are distinct from the
Audit Committee and include outside Audit Committee members, were held (15times); there were reports from and exchange of opinions with Executive Officers
and the Group company supervisors; and additional efforts were made to ascertain
the current state of executing these measures.
From the perspective of increasing the effectiveness and accuracy of audits, wewill create a mechanism for mutual collaboration with the Internal Audit Division,
Accounting Auditor, Audit & Supervisory Board Members of the Group
companies and work to further expand the audit system.
The Audit Committee will continue to work to establish a high quality corporate
governance structure that is worthy of social trust and to conduct audits in a fairand impartial manner to contribute to the growth of the Group and theenhancement of its corporate value.

- 51 -

Remuneration Committee
Composition of Committee

4 Directors who do not execute business (including 3 Outside Directors) and 1
Director who concurrently serves as Representative Executive Officer

Major roles

The Remuneration Committee determines the policy on deciding the contents ofindividual remuneration to management personnel of the Company and major
business subsidiaries, and these contents themselves.

Number of meetings held

11

Number of meetings attended

4 members attended all 11 meetings. Director Ishii, who was newly appointed in
May 2019, also attended all 8 meetings held during his tenure.

Main items deliberated on during • Verification of the system and level of compensation for directors and review of
the current fiscal year
the compensation policy• Allowance for director bonuses and state of performance evaluations related todecisions of individual amounts• Scope of deliberations accompanying PARCO becoming a wholly-owned
subsidiary
Comment from Chairperson of
the Committee
Director (Outside)
OTA Yoshikatsu

Pursuant to the Officer Remuneration Policy resolved on May 25, 2017, theRemuneration Committee has raised the allocation percentage to performancebased remuneration (bonuses and stock-based remuneration). At the same time, it
ensured transparency and objectivity by disclosing the composition of
remuneration including stock-based remuneration as well as performance indexes
and formulas that will determine the level of stock-based remuneration.
For bonuses, which reflect the status of individual officer’s achievements, theRemuneration Committee reviewed evaluation items, the status of performanceindexes established, evaluation rank determination process, and evaluation results
at the end of the interim period and at the end of the fiscal year, to ensure greater
fairness and objectivity in evaluation results.
In addition to ensuring proper operation of the remuneration system, theRemuneration Committee also examined the overall level of officer remuneration,
the ratio of performance-linked remuneration, and current trends on stock-based
remuneration for officers, through a third-party organization, to ensure thatappropriate remuneration systems and levels are always maintained.
The Remuneration Committee will continue to strive for the operation of a fairand highly rational remuneration system.

8. System and policies of the Company(1) Systems to ensure properness of operations <Basic Policy to Build Internal Control System>(Revised on May 23, 2019)
This is a basic policy relating to building an internal control system for lawful and appropriate
execution of overall business within the corporate group comprising J. FRONT RETAILING Co., Ltd.
and its operating companies. By specifically promoting this policy, the Group aims to contribute toincreasing corporate value.
 J. Front Retailing aims to realize corporate governance that is a structure for transparent, fair,swift and resolute decision-making with due attention to the perspectives of shareholders andalso customers, employees and communities in order to ensure the sustainable growth of theGroup and increase corporate value over the medium to long term. The Company has therefore
adopted the company with three committees (nomination, audit, and remuneration committees)in order to strengthen the oversight function and decision-making function for businessexecution of the Board of Directors by clearly separating management oversight and executionfunctions.
 In order to achieve our best possible corporate governance structure, it is important that the
President and Representative Executive Officer takes and hedges various risks (uncertainties)
within the corporate group to build an internal control system capable of appropriate andefficient business execution.
 The internal control system is a structure that companies should establish to control internal risks(uncertainties) with a view to realizing sustainable, stable growth. Specifically, the system- 52 -

comprises the following Group management system, risk management system, legal compliancesystem, internal audit system, and audit committee system.
I.

Group Management System(1) Board of Directors
 The Board of Directors shall perform an oversight function by monitoring the Executive Officers’
and Directors’ execution of business.
 The Board of Directors shall discuss and resolve matters defined in the Companies Act and/or
the Articles of Incorporation, as well as the Group Vision, the Medium-term Business Plan,
overall policy and plan for the Group management, M&As, the Group financing plans, and otherindividual important matters relating to the Group management. In order to speed up businessdecisions and execution, the task of determining matters involving business execution other than
the above shall be delegated to execution, with the exception of matters which have a material
impact on the Group management.
 For monitoring action, decision making and the like by the Board of Directors, a certain number
or more of highly independent Outside Directors shall be appointed, having no risk of a conflictof interest with the Company’s shareholders, and being able to provide judgments independently
from top management and make decisions appropriately.
 To ensure effectiveness of objective management oversight, in addition to the Outside Directors,
internally promoted Directors who do not execute business and who are well informed about
internal information shall also be appointed.
 To further strengthen oversight function while conducting smooth operation of the Board of
Directors, an Inside Director who does not execute business shall be selected as the Chairpersonof Board of Directors.
(2) Management execution framework
 The Company shall clearly separate management oversight and execution and strengthen the
Board of Directors’ oversight function while delegating authority for execution to enable swift
management decision-making. Meanwhile, execution shall be controlled by having thefollowing framework.
 Each corporate division shall have a mission statement that clearly states its mission, and the
responsibilities of execution are clarified, such as the targets, roles, risks, and interdivisional
cooperation.
 Execution shall formulate the major Group management policies and individual importantmatters, and oversee business execution of operating companies. The Board of Directors shalldiscuss and determine (approve) the suitability of major policies and plans that execution has
prepared as well as individual important matters.


The execution bodies shall be the Management Strategy Unit, Affiliated Business Unit, Financial
Strategy Unit, Human Resources Strategy Unit and Administration Unit, and Executive Officers
shall be appointed as the head of the units, through which the Company shall achieve swift andefficient business execution.
 The Group Management Meeting, the Group Results and Strategy Examination Meeting, theGroup Liaison Meeting, the JFR Liaison Meeting, the JFR Division Managers’ Meeting shalldiscuss the overall policy and plan and other matters for the Group management, as well as
checking on the progress of management strategies and sharing information between
management, and so forth.
 The Company shall construct systems to raise overall efficiency of the Group such as theintroduction of the Group’s common accounting system in principle and promotion ofcentralized management of the Group funds.
 The Company has adopted the International Financial Reporting Standards (IFRS) voluntarily in
the interest of implementing effective management based on appropriate asset evaluation,
applying business management that gives emphasis to the profit of the current period and- 53 -

increasing convenience for overseas investors by improving the international comparability offinancial information.
(3) System to secure appropriateness of financial reporting With regard to internal controls over financial reporting, the Company shall be in compliancewith Japan’s Financial Instruments and Exchange Act and various associated laws andregulations, and construct an internal company system to secure the legality and appropriatenessof its financial reporting. In addition, all operating companies shall also construct the same
system.
II. Risk Management System(1) Risk Management Committee
 The Company shall establish the Risk Management Committee as an advisory body to the
President and Representative Executive Officer with regard to risk management. The committee
is chaired by the President and Representative Executive Officer and comprises Executive
Officers and others.
 An officer shall be put in charge of risk management in order to promote the operation of risk
management.
 Each operating company shall put departments and responsible persons in charge of promoting
compliance and risk management, and carry out daily supervision and direction of risk.
 The Risk Management Committee shall systematically manage and address strategic and otherrisks as a whole from a company-wide perspective, enabling management decisions from theperspective of risk management.
 For risks involved in business operations, the Risk Management Committee shall carry out
evaluations and management, and for important risks, the committee shall periodically report on
the risk management status to the Board of Directors.
 Risks to be addressed shall be managed by the ESG Promotion Division by reviewing a Risk
List and Risk Map, which centrally lists all the risks in the Group at any time.
 Of the risks involved in business operations that are identified, for particularly serious items, theRisk Management Committee shall deliberate over and determine a policy in response, and shall
respond to them by having the Company and operating companies execute the policy.
 The Risk Management Committee shall coordinate with the Revitalization Plan Review
Committee, which shall discuss business revitalization for unprofitable or low-profit businesses,
ascertain the management status of operating companies, and share risk recognition within
execution.
(2) Execution control
 Under the direction of President and Representative Executive Officer, the Company shall put aperson in charge of execution control within the ESG Promotion Division in the Management
Strategy Unit to strengthen internal control over execution. The person responsible shall develop
and manage the control environment at the Company and the operating companies.
 The person in charge of execution control shall develop and manage the internal controls
regarding the Companies Act and the internal control system regarding the Financial Instruments
and Exchange Act at the Company and the operating companies.
 The person in charge of execution control shall clarify the mission and risk responsibility in eachdivision and strengthen links between departments by developing and managing the mission
statements for each corporate division.
 The person in charge of execution control shall coordinate with the Audit Committee, theInternal Audit Division, the corporate divisions and operating companies to share information
and remedy any deficiencies that occur in the internal controls.
(3) Hazard risk response For hazard risks such as large-scale earthquakes, fires and accidents, crisis management shall be- 54 -

controlled by the “Emergency Response Headquarters” headed by the President andRepresentative Executive Officer.
III. Legal Compliance System(1) Compliance Committee
 The Company shall establish the Compliance Committee as an advisory body to the President
and Representative Executive Officer regarding the operation of compliance management. The
President and Representative Executive Officer shall be the Chairperson and the members of thecommittee shall be a corporate lawyer, Executive Officers and others.
 An officer shall be put in charge of compliance in order to promote the operation of compliancemanagement.
 At operating companies, departments and responsible persons shall be put in charge ofpromotion of compliance and risk management, and shall carry out daily supervision anddirection of business operations that are in accordance with laws and regulations and internal
company rules.
 The Compliance Committee shall work to develop the foundations of compliance management
such as internal company rules, operation management manuals and formulation of management
systems. In addition, the committee shall periodically formulate and track progress oncompliance penetration activities such as e-learning, through departments in charge ofpromotion of compliance at each company.
 The Compliance Committee shall periodically request reports from persons in charge ofpromotion of compliance at operating companies regarding the status of compliancemanagement in their respective areas of responsibility, and take proper rectification measures. In
addition, the committee shall formulate guidelines and measures to prevent recurrence to befollowed and taken by the Group as a whole, and implement the said guidelines and measures.
(2) Whistle-blowing system The Company shall establish the “JFR Group Compliance Hotline” as the whistle-blowing
system of the Group that also extends beyond companies (to a corporate lawyer), which may be
used by all persons working at the Company and operating companies.
 The hotline’s policy shall be to maintain strict confidentiality regarding notifications and reports
and shall not disclose the personal information of whistleblowers to a third party without theirconsent; to be careful to avoid identification of the whistleblower when investigating the facts;
and to ensure that whistleblowers are not subjected to disadvantageous treatment in terms of
personnel affairs or any other aspect.
 For hotline reports concerning management personnel, the Company shall build a structure
whereby the reports are submitted directly to the Audit Committee and subjected to directions
from the Audit Committee so as to secure an independent reporting route.
IV. Internal Audit Structure The Company shall establish an independent Internal Audit Division under the direction of the
President and Representative Executive Officer. In accordance with internal audit rules andunder the direction of the President and Representative Executive Officer, the Internal Audit
Division shall audit the operations of the Company and operating companies or properly report
the results of audits of operations, examine the properness and effectiveness of the processes fortheir operations, and provide guidance, advice and proposals to all departments at the Company
and to operating companies.
 To further enhance corporate governance by strengthening auditing functions, the Company
shall clarify links between the President and Representative Executive Officer, the Audit
Committee and the Internal Audit Division. Specifically, the Company shall adopt a doublereporting system where both the President and Representative Executive Officer and the Audit
Committee shall receive reports. When the reports are made, the audit report and theimprovement report shall be made together to realize swift measures.
 Appointments and transfers of persons responsible for the internal audit departments shall be- 55 -

subject to advance approval by the Audit Committee.
V. Structure of the Audit Committee
 The Audit Committee shall audit the legality and suitability of the execution of duties by the
Executive Officers and Directors.
 To aim to maintain and improve the accuracy of audits, two full-time Audit Committee members
shall be appointed from among the Inside Directors who do not execute business as Audit
Committee members.
 As an organization in charge of assistance for the Audit Committee’s duties, the Audit
Committee Secretariat has been established within the Board of Directors Secretariat.
 Regarding personnel affairs related to the Audit Committee Secretariat organization and staff
members, the Audit Committee’s advance approval is required to ensure independence.
 The Audit Committee shall have periodic meetings with the President and Representative
Executive Officer to share information. Moreover, the Company’s Executive Officers andDirectors may be asked to attend Audit Committee meetings to provide reports and opinions asnecessary.
 The Audit Committee shall regularly coordinate with the Internal Audit Division to share
information. Moreover, the Accounting Auditor, outside experts and others may be asked toattend Audit Committee meetings to provide reports and opinions as necessary.
 The Audit Committee members shall report to the Audit Committee on the status of audits of thefollowing matters:
 Matters resolved by or reported to the Board of Directors
 Matters identified by the Audit Committee as issues
 Internal audit implementation status and results (audit report, improvement report, etc.)
 The Audit Committee members shall attend the Group Management Meeting and other meetings,
inspect important documents associated with the execution of duties, such as circular approvalmemos, and request explanations from officers and employees of operating companies asnecessary.
 Operating companies shall submit the necessary audit reports and perform other duties if
requested to do so by the Audit Committee.
 The Audit Committee shall have periodic meetings and the like with Audit & Supervisory Board
Members of the operating companies to enhance and strengthen the auditing of the entire Group.
 The Audit Committee may request expenses deemed necessary for performing the duties fromthe Company, and the Company shall bear them.
VI. Other(1) System for storage and management of information
 For documents relating to the execution of duties by Executive Officers and Directors, inaccordance with the rules on confidential information management, each responsible department
shall carry out document storage and management during the stipulated period and shall develop
a system to enable inspections of such documents at any time.
 For minutes and related documents regarding meetings chaired by Executive Officers andDirectors, and other important documents relating to the execution of duties by Executive
Officers and Directors, each responsible department shall carry out document storage andmanagement and shall develop a system to enable inspections of such documents at any time.
(2) Digital information security
 Senior Executive General Manager of the Management Strategy Unit shall control digital
information management of the Company, and shall report periodically and whenever necessaryon the status of digital information management and related matters to the Board of Directors,
the Audit Committee, the Management Meeting and the President and Representative Executive
Officer.
- 56 -

(2) Operational status of systems to ensure properness of operations <Basic Policy to Build Internal
Control Systems> (FY2019)
The Company endeavors to maintain its internal control systems and properly operate such systems
on the basis of its “Basic Policy to Build Internal Control Systems.” Details regarding the overall
status of such operations during the current fiscal year are as follows.
I.

Group Management System(1) Board of Directors
1) The Board of Directors is comprised of highly independent Outside Directors who have norisk of a conflict of interest with the Company’s shareholders, Inside Directors who own deep
understandings about the business environment and issues surrounding the Group, andDirectors who do not execute business. It functions to oversee the execution of duties by
Executive Officers and Directors.
2) The composition of the Board of Directors is such that one-third or more of Directors are
independent Outside Directors and that the majority of Directors are independent Outside
Directors and/or internally promoted Directors who do not execute business and are wellinformed about internal information.
3) The Board of Directors deliberates on material issues related to the Group management, suchas strategies. As for the findings of and issues raised by the Board of Directors, there aredemands for additional reports on execution, and efforts are made to run through the PDCA
cycle, including additional debate by the Board of Directors. Briefings are also provided to
Outside Directors prior to the Board of Directors meetings for fuller discussions at suchmeetings. The effectiveness of the Board of Directors is being improved through these
initiatives.
4) During the current fiscal year, the Board of Directors met 15 times. It fully debates issues andresponses related to items stipulated in the Companies Act and Articles of Association, efforts
to strengthen audits of progress in implementing the medium-term business plan, and items
and countermeasures when actual results diverge from targets, and is working to steadily
implement the medium-term business plan.
In addition, the Board of Directors evaluates the state of creating and operating the various
items stipulated in the “Basic Policy to Build Internal Control Systems” and confirms there
are no major problems.
5) Evaluations of the effectiveness of the Board of Directors are performed by a third-party
organization each fiscal year to continuously and further improve the effectiveness of theBoard of Directors by resolving any identified issues.
(2) Management execution framework
1) In the Company, the organization responsible for execution consists of the Management
Strategy Unit, Affiliated Business Unit, Financial Strategy Unit, Human Resources Strategy
Unit, and Administration Unit. These various units support the prompt execution of operations
and management of operating companies under the direction of the general manager of theunit, who is an Executive Officer, and in line with the “Mission Statement,” which stipulates
each department’s roles and responsibilities.
2) The roles and responsibilities of the Company as a pure holding company are to formulate
overall policy and plan for the Group management, such as the Group Vision, Medium-term
Business Plan, M&As, the Group financing plans, along with the management and progresscontrol of that said plans, and proper allocation of the Group’s management resources. With
regard to matters related to business execution at operating companies, in order to promote
speedy management decisions and clarify management responsibilities; standards have been
established for delegating authority to operating companies, which exclude items that have an
important impact on the Group management; and things are operated in accordance with thesestandards.
3) The Company has established various meetings to execute items, the roles of which areclearly indicated. At the Group Management Meeting, discussions are held on important- 57 -

issues submitted to the Board of Directors, such as overall policy and plans for the Groupmanagement; at the Group Liaison Meeting and JFR Liaison Meeting, important informationis shared; and at the Group Results and Strategy Examination Meeting, progress in generating
earnings and related issues are checked, which leads to prompt management decisions.
4) As a rule, the common Group accounting system is introduced; and efforts are made topromote more efficient operations and integrated and more efficient fund procurement by theGroup through a cash management system.
5) Two committees were established to implement the financial strategy, the purpose of which is
to improve the profitability of investments. The “Investment Plan Review Committee”
verifies issues such as profit and loss projections for, appropriateness of investment plans
related to, and risks related to new investment projects of a certain monetary amount or abovefrom a financial perspective. The committee met eight times during the current fiscal year.
The “Revitalization Plan Review Committee” conducts a financial verification of all existing
businesses from an investment recovery perspective and formulates revitalization/withdrawalplans for poorly-performing businesses. The committee met twice during the current fiscal
year.
6) With regard to internal controls over financial reporting, the Company and operatingcompanies maintain and operate internal systems to ensure the legality and appropriateness offinancial reporting in line with the Financial Instruments and Exchange Act and various
associated laws and regulations. It has been confirmed that there are no problems related tothe introduction and operation of the response to IFRS No. 16 Lease, which was adopted in
the current fiscal year.
II. Risk Management System(1) Risk Management Committee
1) The Company has established the Risk Management Committee as an advisory body to the
President and Representative Executive Officer with regard to risk management. The
committee is chaired by the President and Representative Executive Officer and comprises
Executive Officers and others.
The committee regularly discusses, identifies, and evaluates risks (uncertainties), prioritizes
them and reflects them in strategies, monitors related countermeasures, and submits related
reports to the Audit Committee and the Board of Directors.
2) The committee met four times during the current fiscal year. As a new measure, thecommittee conducted interviews of managers related to awareness of medium- and long-termrisks, and identified risks that the Company faces. In particular, it debates “corporate risks,”
which the Company considers to have a major impact, and reflects that in annual strategies.
The committee shares information and provides advice to operating companies in order toimprove risk management for the whole Group.
(2) Execution control
1) Under the direction of President and Representative Executive Officer, the Company has put aperson in charge of execution control in the Management Strategy Unit. The person develops
and manages the internal controls regarding the Companies Act and the internal control
system regarding the Financial Instruments and Exchange Act at the Company and operatingcompanies.
During the current fiscal year, no material deficiencies that should be disclosed were found,and this was reported to the Audit Committee and the Board of Directors.
2) Moreover, the Company has developed and managed the “Mission Statement,” which
stipulates each department’s roles and responsibilities, and strengthening links between
departments.
(3) Hazard risk response
For hazard risks such as large-scale earthquakes, fires, and accidents, the Company has
established a system in which crisis management is controlled by the “Emergency Response
Headquarters” headed by the President and Representative Executive Officer. During thecurrent fiscal year, training based on the “JFR Business Continuity Manual,” which was revised
last year, was conducted several times. In addition, “Emergency Response Headquarters”- 58 -

related to the spread of the novel coronavirus (COVID-19) have been created in the Company
and operating companies, and comprehensive measures to prevent infections are thoroughly
implemented.
III. Legal Compliance System(1) Compliance Committee
1) The Company has established the Compliance Committee as an advisory body to the
President and Representative Executive Officer regarding the compliance operation. The
President and Representative Executive Officer shall be the chairperson and the members of
the committee shall be a corporate lawyer, Executive Officers and others.
2) Departments and responsible persons in charge of promotion of compliance and risk
management are also put at operating companies, and carry out daily supervision anddirection of business operations that are in accordance with laws and regulations and internal
company rules.
3) The Compliance Committee of the Company draws up a policy for addressing matters
involving serious compliance-related violations, and oversees development of the foundationsof the compliance system and the status of implementation through close collaboration withdepartments in charge of promoting compliance and risk management in operating companies.
The Committee met five times during the current fiscal year and discussed factors behind andcountermeasures against compliance-related violations and provided instructions to
implement specific measures to prevent recurrence.
4) In order to educate people about compliance, compliance training for managers and all
employees based on the “Compliance Action Plan” created last year was held several times
during the current fiscal year.
(2) Whistle-blowing system
1) The Company has established the “JFR Group Compliance Hotline” for reporting issues to
the Company or an independent party (corporate lawyer), which may be used by all persons
working at the Company and operating companies. During the current fiscal year,“Compliance Hotline Rules” were revised in order to quickly detect and respond to important
cases, and we submitted an application for “Whistle-blowing System Certification(registration based on self-assessment of compliance with certain whistle-blowing systemstandards),” and the application was approved in March 2020.
2) For hotline reports concerning management personnel, the Company has built a structure
whereby the reports are directly submitted through the hotline desk to the Audit Committee
and subjected to directions from the Audit Committee.
3) During the current fiscal year, 36 cases related to labor-management relations and other issues
were reported.
IV. Internal Audit Structure1) The Company has established an independent Internal Audit Division under the President andRepresentative Executive Officer. The Internal Audit Division verifies and evaluates thelegality and effectiveness of systems of corporate governance, risk management andcompliance management, in addition to performing audits on business operations of theCompany and each operating company.
2) There is a system in which reports are submitted to both the President and Representative
Executive Officer and Audit Committee, and audit results and improvement measures related
to audit findings are regularly reported on. As for orders related to improvement measuresfrom management, issues are promptly handled in collaboration with the audited departments.
3) During the current fiscal year, there were audits and reports, which were primarily on not only
the state of compliance with the Act against Delay in Payment of Subcontract Proceeds, Etc.
to Subcontractors; Act on Prohibition of Private Monopolization and Maintenance of Fair
Trade; and Act on the Arrangement of Related Acts to Promote Work Style Reform but also
the state of system security management.
V. Structure of the Audit Committee
1) The Audit Committee, which is chaired by an Outside Director, is composed of five members,- 59 -

two of whom are Directors who do not execute business and are Inside Directors.
In accordance with the overall policy and plan determined by the Board of Directors, theAudit Committee audits the execution of business by Executive Officers and Directors,
important matters submitted to the Board of Directors, and other individual matters the Audit
Committee considers necessary, as well as the status of establishing and implementing
internal controls, and then prepares audit reports.
3) The Audit Committee receives explanations on the audit policy and plan prior to the audit
from the Accounting Auditor, and receives explanations and reports on the audit results andexpresses its opinions including requests on audit items, and in addition, exchanges of
opinions with the Accounting Auditor is carried out on a regular basis.
4) To grasp important decision-making processes and the status of the execution of duties, fulltime members of the Audit Committee not only attend important committees and othermeetings, such as the Group Management Meeting, but also peruse important documents
relating to the execution of business such as approval circulars.
5) During the current fiscal year, the Audit Committee met fifteen times. Efforts are being madeto further increase the accuracy of audits by newly establishing an “Audit Committee
Meeting,” which is separate from the Audit Committee, and using that to deepen debate.
VI. Other(1) System for storage and management of information
2)

Documents relating to the execution of duties by Executive Officers and Directors and the minutesof the important meetings and committees such as the meetings of the Board of Directors and theGroup Management Meeting are being accurately recorded and prepared, and information is being
properly stored and managed by the responsible department.

(2) Digital information security
In order to strengthen security, the Company has formulated a “JFR Group Information Security
Policy,” shares that policy within the Group, and manages digital information based on that.
Reports on the status of digital information management and related matters are made at the Boardof Directors, the Audit Committee, and Group Management Meeting regularly and when necessary.
During the current fiscal year, the “Information System Promotion and Sharing Meeting” wasnewly established, and efforts are being made to improve the level of security of operatingcompanies.

(3) Basic policy regarding control of the Company
I. Contents of basic policy
The Company believes it is necessary for the party controlling the Company’s financial andbusiness policy decisions to be a party who sufficiently understands the financial and businessdetails of the Group and the sources of the Group’s corporate value, continuously and sustainably
ensures that the corporate value of the Group and, by extension, the common interests ofshareholders are served, and enables further improvement in this area.
As the Company is a listed enterprise, the Company’s policy regarding its shareholders is that, ingeneral, they are determined through free market transactions on the financial instruments market.
Furthermore, even in the case of a purchase of shares of the Company above a certain scale byspecific shareholders or specific groups (hereinafter “Large-Scale Purchase”), if this Large-Scale
Purchase will contribute to the corporate value of the Group and, by extension, the common
interests of its shareholders, the Company believes that this should not be rejected outright and that,
ultimately, the decision on whether to accept or reject it should be left to the discretion of theCompany’s shareholders.
Nevertheless, a Large-Scale Purchase that involves a serious risk of causing damage to thecorporate value of the Group may be envisaged. This may include a Large-Scale Purchase that, inview of its purpose and other factors, would demonstrably harm the Group’s corporate value; one
with the potential to involve substantial coercion of shareholders to sell shares of the Company; or
one that would not provide sufficient time and information for the Company’s Board of Directors
and shareholders to consider factors such as the details of the large-scale purchaser’s proposal, orfor the Company’s Board of Directors to make an alternative proposal.
- 60 -

A party attempting this kind of Large-Scale Purchase, which would not contribute to thecorporate value of the Group and, by extension, the common interests of its shareholders(hereinafter, the “Large-Scale Purchaser”), would not be appropriate as a party controlling theCompany’s financial and business policy decisions. Accordingly, the Company believes that it isthe duty of the Company’s Board of Directors, which is entrusted by the shareholders to manage
the Company, to respond to this kind of Large-Scale Purchase by ensuring that processes such asprovision of information by the Large-Scale Purchaser and considerations and evaluations by theCompany’s Board of Directors are carried out, and securing sufficient time for the Company’s
Board of Directors and shareholders to consider the details of the Large-Scale Purchaser’s proposal
in order to prevent damage to the corporate value of the Group and, by extension, the common
interests of its shareholders.
II. Frameworks contributing to realization of basic policy
Since the foundation of Daimaru and Matsuzakaya, the Group has been engaged in businesses ofkimono fabric stores and department stores for many years based on the corporate philosophies andtraditional spirits of these businesses, which are: “Service before profit (those who place service
before profit will prosper),” “Abjure all evil and practice all good” and “In doing good to others,
we do good to ourselves.”
The Company believes that the sources of the Group’s corporate value are the relationships oftrust it has established with customers and with society, which have been refined on the basis ofthese philosophies and spirits.
Accordingly, in order to exemplify the principles of “customer-first principle” and “contribution
to society,” which are in common with these philosophies and spirits, the Company has establishedthe following Basic Mission Statement of the Group: “to aim at providing high quality products
and services that meet the changing times and satisfying customers beyond their expectations” and“to aim at developing the Group by making a broad contribution to society as a fair and trusted
business entity.” Based on this Basic Mission Statement, the Company implements a wide range ofmeasures, aiming to realize the Group Vision of “Create and Bring to Life ‘New Happiness,’” inorder to make a contribution to securing and enhancing the corporate value of the Group and, byextension, the common interests of shareholders.
III. Framework to prevent parties deemed inappropriate in light of basic policy from controlling thefinancial and business policy decisions of the Company
At present, the Company has not specifically stipulated a concrete framework for a case in whicha Large-Scale Purchaser appears, commonly known as takeover defense measures.
Nevertheless, the Company believes that, in order to prevent damage to the Group’s corporate
value if a Large-Scale Purchaser appears, it is necessary to carefully examine the impact a LargeScale Purchase would have on the Group’s corporate value after ascertaining certain information
about the Large-Scale Purchaser. Such information would include the nature of the Large-Scale
Purchaser, the purpose of the Large-Scale Purchase, the Large-Scale Purchaser’s proposed financial
and business policies and their policy for handling shareholders, the Group’s customers, business
partners, employees, the communities that surround the Group, and other stakeholders.
Accordingly, if this occurs, the Company will establish an independent committee composed of
Outside Directors and experts with viewpoints that are independent from the Company’s Inside
Directors. If the Company judges that the said Large-Scale Purchaser is inappropriate in light of theaforementioned basic policy after considering advice and opinions from the committee, theCompany will act to secure the Group’s corporate value and, by extension, the common interests ofshareholders by taking necessary and appropriate countermeasures.
IV. Judgment of the Company’s Board of Directors regarding concrete framework and reasons for such
judgment
Various measures formulated by the Group are formulated based on the Group’s Basic Mission
Statement, and are intended to further build up the relationships of trust with customers and withsociety, which are the sources of the Group’s corporate value. Therefore, the Company believes
that these measures are in line with the contents of the basic policy and contribute to securing andenhancing the corporate value of the Group and, by extension, the common interests of- 61 -

shareholders.
Furthermore, if the Company takes necessary and appropriate countermeasures against a LargeScale Purchaser judged to be inappropriate in light of the basic policy, the fairness, neutrality andrationality of this judgment will be ensured by making it in consideration of advice and opinionsfrom an independent committee whose independence from the Inside Directors of the Company isassured. Accordingly, the Company believes that these measures would not damage the corporate
value of the Group or the common interests of shareholders, and that they are not intended tomaintain the positions of the officers of the Company.
(4) Basic Capital Policy
The Company believes that any increase in free cash flow and improvement in ROE should help toensure its sustainable growth and increase corporate value over the medium to long term. To suchends, the Company promotes a capital policy that takes a balanced approach to undertaking strategic
investment, enhancing shareholder returns, and expanding net worth being equipped to address risks.
Moreover, in procuring funds through interest-bearing liabilities, we aim to achieve an optimal
structure of debt to equity in a manner cognizant of our funding efficiency and cost of capital, carriedout on the basis of having taken into consideration our capacity for generating free cash flows and ourbalance of interest-bearing liabilities.
A business strategy where higher sales are accompanied by profits and a financial strategy(encompassing the capital policy) that heightens profitability of invested capital are essential elementswith respect to improving free cash flows and ROE. In addition, we believe it is crucial that weachieve maximization of the operating profit and sustainable improvement of the operating profit
margin by strengthening our core businesses and concentrating management resources on initiatives
such as business field expansion and active development of new businesses.
(5) Policy regarding decisions on dividends of surplus, etc.
The Company’s basic policy is to appropriately return profits. Hence, while maintaining andenhancing its sound financial standing, the Company strives to provide stable dividends and target a
consolidated dividend payout ratio of no less than 30%, taking profit levels, future capital investment,
free cash flow trends and other such factors into consideration. The Company also gives consideration
to the option of purchasing its own shares as appropriate, in accordance with aims that include
improving capital efficiency and implementing a flexible capital policy.
(6) IR Policy
Under the Basic Mission Statement that “we aim at developing the Group by contributing tosociety at large as a fair and reliable corporation,” the Company promotes IR activities for the purposeof maintaining and developing relations of trust with stakeholders including shareholders andinvestors. By accurately and plainly disclosing important information about the Company in a fair,timely and appropriate manner, we aim to improve management transparency and help stakeholders
better understand the Company.
(7) Sustainability Policy(i) Aiming for sustainable society
The society we live in is facing various social issues inside and outside Japan, including abnormal
weather, water resource crises, resource depletion, widening disparity, underemployment, and humanrights issues. Among these issues are environmental risks that have been particularly evident in recent
years, and the environment surrounding us is drastically changing due to global warming and theworsening global environment. Corporations are required to make even more contributions to asustainable society in line with the international initiatives by, for example, addressing climate changein accordance with the Paris Agreement and the social issues listed in the “Sustainable Development
Goals (SDGs)” adopted by the United Nations. Corporate initiatives toward environment, society, andgovernance are thus indispensable.
- 62 -

Whereas Daimaru and Matsuzakaya, which are the cornerstones of the Group, have carried out
business activities in their long history spanning 300 to 400 years under the corporate credos “Service
before profit” and “Abjure all evil and practice all good,” representing their commitment to pursuing
the right path. Our Group Vision “Create and Bring to Life ‘New Happiness’” has been newly
established based on these concepts. Now we are engaged in business activities aiming at realizationof happy future of our customers, always bearing life of each and every one of them in mind.
We have many places where we communicate with customers, including retail stores. These places
allow various people to get together and meet each other, including customers, employees, business
partners, and residents in the local community. Local communities where people rooted in play a vitalrole in maintaining these communication places rich. Such communities should be sustained as
touchpoints brimming with energy at all times. To this end, we believe it important to pass down the
global environment that supports these whole activities smoothly to the future generations. This means
that, in order for us to create and bring to life new happiness as we aspired, it is important to maintainthe communication places; and this can only be achieved with sustainable society.
(ii) Five materiality issues (key issues)
We have set the places of communication with customers as one of the key areas that the Company
designates for the sustainability management and are seriously making concerted efforts to realize asustainable society on our own initiative. In this endeavor, we have received various opinions fromstakeholders through questionnaires and have had repeated discussions at the Management Meetings
and the Board of Directors meetings. As a result, we identified five materiality issues that we need toaddress: “contribution to a low-carbon society,” “management of the entire supply chain,”“coexistence with local communities,” “promotion of diversity” and “realization of work-life balance.”
We believe our efforts to address these materiality issues will contribute to achieving the global“Sustainable Development Goals (SDGs).” Among these five materiality issues, the management teamputs the greatest focus on “contribution to a low-carbon society (actions against climate change),”which is an urgent issue. We are addressing this issue as the mission of a member of society anddeveloped the “JFR Eco Vision” with an eye to 2050 to help realize a sustainable society. Based on
this Vision, we will aim to achieve both the resolution of environmental issues and corporate growth.
In view of the above matters, we are committed to fulfilling our environmental and social
responsibilities to customers toward the achievement of a sustainable society, and at the same time, asa Multi Service Retailer, will pursue the creation of new happiness of life of each and every
stakeholder. At the same time, we will continue achieving sustainable growth by strengthening
corporate governance to tirelessly continue these initiatives.
(iii) Sustainability policy
The “Sustainability Policy” forms the foundation of our thinking on all ESG activities in order tocreate a sustainable society and bring to life new happiness. In response to this policy, we formulated
our “Eco Vision” and “Social Vision,” which indicate our thinking about the environment and society
and form the foundation of our ESG activities along with the “Corporate Governance Policy.” In orderto actually conduct ESG activities that the Company aimed to undertake, the “JFR Principles of
Action” and “Principles of Action for Suppliers” were formulated in 2019 because it is necessary for
the Company to fulfill its social responsibilities along with suppliers.

- 63 -

(iv) JFR Principles of Action and Principles of Action for Suppliers
JFR Principles of Action stipulate the basic daily behavior of all the Group officers and employees
from the perspective of recognizing their roles and responsibilities and acting in a highly ethicalmanner in order to fulfill social responsibilities, adhere to the corporate credo, and realize thecorporate vision.
The Principles of Action for Suppliers stipulate items that should be adhered to in order for theGroup and its suppliers to fulfill their social responsibilities.
At the Group, we fulfill our social responsibility and aim to raise corporate value along with our
suppliers by adhering to the principles.
(v) Policies that comprise principles of action
1) “JFR Conduct Policy” and “Guidelines for Action for Suppliers”: These are basic policies
regarding five issues that the Company adheres to and demands that suppliers understand andcooperate with. They are “fair business activities,” “consideration for human rights and thework environment,” “consideration for the environment,” “consideration for the safety andsecurity of products and services,” and “contribution to local communities.”
2) “Procurement Policy”:
This is a policy on procuring products and services, increasing business competitiveness, andraising corporate value in order to achieve optimal procurement while fulfilling our societal
responsibilities.
3) “Human Rights Policy”:
This is a policy on gaining a deeper understanding of issues related to human rights, thefoundation of all our business activities, and acting in a proper manner.
4) “Anti-corruption Policy”:
This is a policy on recognizing corruption and bribery as important risks that could
dramatically undermine trust in the Company, preventing actions that could fall under these,and executing fair and highly transparent business activities.
5) “Occupational Health and Safety Policy”:
This is a policy on increasing employee safety and health with priority on ensuring safety andhealth based on the idea that worker safety is the most important foundation for businessactivities.

- 64 -

Consolidated Financial Statements
Consolidated Statement of Financial Position (As of February 29, 2020)
Item
AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other current assets

Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
Investment property
Intangible assets
Investments accounted for using
equity method
Other financial assets
Deferred tax assets
Other non-current assets

Amount208,424
34,633
144,244
5,095
19,1695,281

1,031,883
473,167
179,632523
219,354
5,662
37,439Item
Liabilities
Current liabilities
Bonds and borrowings
Trade and other payables
Lease liabilities
Other financial liabilities
Income taxes payables
Provisions
Other current liabilities(Millions of yen)Amount373,889
108,400
144,020
29,49330,1994,349
999
56,427

Non-current liabilities
Bonds and borrowings
Lease liabilities
Other financial liabilities
Retirement benefit liabilities
Provisions
Deferred tax liabilities
Other non-current liabilities

466,737
149,876
191,003
41,087
20,175
4,909
58,829855

Total liabilities
EquityEquity attributable to owners of parent
Share capital
Capital surplus
Treasury shares
Other components of equity
Retained earnings

840,627
387,188
31,974
189,340(14,974)
11,641
169,206

Non-controlling interests

12,49391,3799,988
14,734

Total equity
Total liabilities and equity
Total assets
1,240,308(Note) Amounts have been rounded down to the nearest one million yen.

- 65 -

399,6811,240,308

Consolidated Statement of Profit or Loss (From March 1, 2019 to February 29, 2020)(Millions of yen)
Item

Amount
480,621(273,667)

Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other operating income
Other operating expenses

206,953(161,590)
8,663(13,740)

Operating profit
Finance income
Finance costs
Share of profit (loss) of investments accounted for using equity
method40,286
1,091(5,862)

Profit before tax
Income tax expense

37,161(13,767)

Profit23,393

Profit attributable to:
Owners of parent
Non-controlling interests

21,251
2,141(Note)

ProfitAmounts have been rounded down to the nearest one million yen.

- 66 -

1,644

23,393

Consolidated Statement of Changes in Equity (From March 1, 2019 to February 29, 2020)(Millions of yen)
Equity attributable to owners of parent
Other components of equity

Balance as of March 1, 2019
Effect of accountingchangeRestated balance
ProfitExchangedifferenceson translationof foreign
operations

Financial assets
measured at fair
Remeasurements ofvalue throughdefined benefit
other
plans
comprehensive
incomeShare capital

CapitalsurplusTreasuryshares31,974

212,210(15,090)

(83)

(5)

14,834–

14,745

–

–

–

–

–

–

–

–

31,974

212,210(15,090)

(83)

(5)

14,834–

14,745

–

–

–

–

–

–

–

–

Cash flow
hedges

Total

Other comprehensive
income

–

–

–

24

1

(2,237)219(1,992)

Total comprehensive income

–

–

–

24

1

(2,237)219(1,992)

Purchase of treasury shares

–

–

(7)

–

–

–

–

–

Disposal of treasury shares

–

(0)

0

–

–

–

–

–

Dividends

–

–

–

–

–

–

–

–

Changes in ownershipinterest in subsidiaries–(23,106)

–

(6)

(0)

84

–

77

Share-based remunerationtransactions

–

236

122

–

–

–

–

–

Transfer from othercomponents of equity toretained earnings

–

–

–

–

–

(970)

(219)

(1,189)–(22,870)

115

(6)

(0)

(885)

(219)

(1,111)

31,974

189,340(14,974)

(65)

(3)

11,710–11,641

Total transactions withownersBalance as of February 29,
2020

Equity attributable to ownersof parent

Balance as of March 1, 2019

Retainedearnings

Total

Total

Noncontrollinginterests

168,861

412,700

55,784

468,485

Effect of accountingchange(12,675)(12,675)(1,914)(14,590)

Restated balance

156,185

400,025

53,869453,895

Profit21,251

21,251

2,141

23,393–(1,992)(80)(2,073)

Total comprehensive income

21,251

19,2592,060

21,320Purchase of treasury shares

–

(7)

–

(7)

Disposal of treasury shares

–

0

–

0

(9,419)(9,419)(972)(10,392)

Changes in ownershipinterest in subsidiaries–(23,028)(42,465)(65,494)

Share-based remunerationtransactions

–

359

–

359

1,189

–

–

–

Total transactions withowners(8,230)(32,096)(43,437)(75,534)

Balance as of February 29,
2020

169,206

387,188

12,493399,681

Other comprehensive
incomeDividends

Transfer from othercomponents of equity toretained earnings(Note)

Amounts have been rounded down to the nearest one million yen.

- 67 -

[Reference]
Consolidated Statement of Cash Flows (Summary) (From March 1, 2019 to February 29, 2020)(Millions of yen)
Item

AmountCash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of period(Note)
Amounts have been rounded down to the nearest one million yen.

- 68 -

73,358(49,559)(14,829)8,970
25,6594
34,633

Non-consolidated Financial Statements
Non-consolidated Balance Sheet (As of February 29, 2020)
J. Front Retailing Co., Ltd.
Item
AssetsCurrent assets
Cash and deposits
Short-term loans receivable fromsubsidiaries and associates
Other
Allowance for doubtful accounts

Non-current assets
Property, plant and equipment
Buildings and structures
Other

Item
Liabilities
76,772 Current liabilities
14,327
Short-term loans payable
Commercial papers
56,245Current portion of bonds
6,378
Accrued expenses(180)
Accounts payable - other
Income taxes payable
Provision for bonuses
Provision for bonuses for directors
and other officers
Provision for officer remuneration
BIP trustOther

454,335129
104
24

Intangible assets
SoftwareInvestments and other assets
Investment securities
Shares of subsidiaries and associates
Long-term loans receivable fromsubsidiaries and associates
Other
Allowance for doubtful accounts
Deferred assets
Bond issuance cost

(Note)

Amount505
505

453,701
1,229
371,288
81,175
508
(500)
233
233

(Millions of yen)Amount98,56982,9904,000
10,000
546
304
135
164
106
136
185

Non-current liabilities
Bonds payable
Long-term borrowings
Provision for officer remuneration
BIP trust
Provision for loss on business of
subsidiaries and associates
Deferred tax liabilities
Other

103,901
70,00031,735

Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Other retained earnings
Retained earnings brought
forwardTreasury shares

202,470

Valuation and translation adjustments
Valuation difference on available-forsale securities

Total net assets
Total assets
531,341
Total liabilities and net assets
Amounts have been rounded down to the nearest one million yen.

- 69 -

674
10
1
1,480

328,878
31,974
249,075
9,474
239,601
62,03862,03862,038(14,210)(7)(7)
328,871
531,341

Non-consolidated Statement of Income (From March 1, 2019 to February 29, 2020)
J. Front Retailing Co., Ltd.
(Millions of yen)
Item

AmountOperating revenue
Dividend income
Consulting fee income

29,0405,076

34,116

General and administrative expenses

5,228

Operating profit
Non-operating income
Interest income
Dividend income
Other

28,888
468
179
28

676

Non-operating expenses
Interest expenses
Provision of allowance for doubtful accounts
Other

455
680
266

1,402

Ordinary profit
Extraordinary losses
Loss on valuation of shares of subsidiaries
and associates
Provision for loss on business of subsidiaries
and associates

28,163
199
10

Profit before income taxes
Income taxes - current
Income taxes - deferred

210
27,952

6(1)

Profit(Note) Amounts have been rounded down to the nearest one million yen.

- 70 -

4
27,948

Non-consolidated Statement of Changes in Equity (From March 1, 2019 to February 29, 2020)
J. Front Retailing Co., Ltd.
(Millions of yen)
Valuation andtranslation
adjustments

Shareholders’ equity
Retainedearnings

Capital surplus

Share capital

Balance as of March 1,
201931,974

Other retained
earnings
Legal capital Other capitalsurplussurplus

9,474

239,601

Retainedearnings
brought
forward43,593

TreasurysharesTotal shareholders’equity(14,326)

310,317

Valuationdifference on
available-forsale securities

12

Total net
assets

310,329

Changes during period
Dividends of surplus(9,503)(9,503)(9,503)

Profit27,94827,94827,948

(7)

(7)

(7)

123

123

123

Purchase of treasury
shares
Disposal of treasury
shares(0)

Net changes in items
other than shareholders’equityTotal changes during
periodBalance as of February 29,
2020(Note)

31,974

9,474

(19)

(19)

(0)

18,445

115

18,560(19)

18,541

239,601

62,038(14,210)

328,878(7)

328,871

Amounts have been rounded down to the nearest one million yen.

- 71 -

THE AUDIT REPORT OF INDEPENDENT AUDITORS CONCERNING THE CONSOLIDATEDFINANCIAL STATEMENTS (COPY)

Report of Independent Auditors
April 8, 2020
The Board of Directors
J. Front Retailing Co., Ltd.
Ernst & Young ShinNihon LLC
Kazunori Takenouchi(seal)
Certified Public Accountant
Designated and Engagement Partner
Yoshihisa Shibayama(seal)
Certified Public Accountant
Designated and Engagement Partner
Hiroshi Matsuura(seal)
Certified Public Accountant
Designated and Engagement Partner
Pursuant to Paragraph 4, Article 444 of the Companies Act, we have audited the accompanying
consolidated financial statements, which comprise the consolidated statement of financial position, theconsolidated statement of profit or loss, the consolidated statement of changes in equity and the notes to theconsolidated financial statements of J. Front Retailing Co., Ltd. (the “Company”) applicable to the fiscal
year from March 1, 2019 through February 29, 2020.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements
in conformity with the latter part of Paragraph 1, Article 120 of the Regulation on Corporate Accountingthat allows companies to prepare consolidated financial statements with the omission of a part of thedisclosure items required under the designated International Financial Reporting Standards (“IFRS”), andfor designing and operating such internal control as management determines is necessary to enable thepreparation and fair presentation of the consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audit froman independent position. We conducted our audit in accordance with auditing standards generally acceptedin Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditors’ judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due tofraud or error. In making those risk assessments, the auditors consider internal control relevant to theentity’s preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position and results of operations of the J. Front Retailing Group, which consisted of
the Company and consolidated subsidiaries, applicable to the 13th fiscal year from March 1, 2019 throughFebruary 29, 2020 in conformity with the latter part of Paragraph 1, Article 120 of the Regulation on
Corporate Accounting that allows companies to prepare consolidated financial statements with the omissionof a part of the disclosure items required under IFRS.
Conflicts of Interest- 72 -

We have no interest in the Company which should be disclosed in compliance with the Certified Public
Accountants Act.

- 73 -

THE AUDIT REPORT OF INDEPENDENT AUDITORS CONCERNING THE NONCONSOLIDATED FINANCIAL STATEMENTS (COPY)

Report of Independent Auditors
April 8, 2020
The Board of Directors
J. Front Retailing Co., Ltd.
Ernst & Young ShinNihon LLC
Kazunori Takenouchi(seal)
Certified Public Accountant
Designated and Engagement Partner
Yoshihisa Shibayama(seal)
Certified Public Accountant
Designated and Engagement Partner
Hiroshi Matsuura(seal)
Certified Public Accountant
Designated and Engagement Partner
Pursuant to Item 1, Paragraph 2, Article 436 of the Companies Act, we have audited the accompanying
financial statements, which comprise the balance sheet, the statement of income, the statement of changes
in equity, the notes to the financial statements and the related supplementary schedules of J. Front RetailingCo., Ltd. (the “Company”) applicable to the 13th fiscal year from March 1, 2019 through February 29,
2020.
Management’s Responsibility for the Financial Statements and the Related Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements and therelated supplementary schedules in accordance with accounting principles generally accepted in Japan, andfor designing and operating such internal control as management determines is necessary to enable thepreparation and fair presentation of the financial statements and the related supplementary schedules thatare free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the financial statements and the related supplementaryschedules based on our audit from an independent position. We conducted our audit in accordance withauditing standards generally accepted in Japan. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and the related supplementaryschedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements and the related supplementary schedules. The procedures selected depend on theauditors’ judgment, including the assessment of the risks of material misstatement of the financial
statements and the related supplementary schedules, whether due to fraud or error. In making those risk
assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentationof the financial statements and the related supplementary schedules in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectivenessof the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well as evaluating theoverall presentation of the financial statements and the related supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
OpinionIn our opinion, the financial statements and the related supplementary schedules referred to above present
fairly, in all material respects, the financial position and results of operations of the Company applicable tothe 13th fiscal year from March 1, 2019 through February 29, 2020 in conformity with accounting
principles generally accepted in Japan.
Conflicts of Interest
We have no interest in the Company which should be disclosed in compliance with the Certified Public
Accountants Act.
- 74 -

THE AUDIT REPORT OF AUDIT COMMITTEE MEMBERS (COPY)

Audit Report
The Audit Committee has audited the performance of duties by Directors and Executive Officers of J. Front
Retailing Co., Ltd. (the “Company”) during the 13th fiscal year from March 1, 2019 through February 29,
2020. We hereby report as follows regarding the method and results of the audit.
1. Method and content of audits
With respect to the resolution of the Board of Directors concerning the matters stipulated in Item 1 (b) and(e), Paragraph 1, Article 416 of the Companies Act, as well as the system (the internal control system)
developed based on such resolution of the Board of Directors, we received regular reports regarding thestatus of establishment and operation of such system from Directors, Executive Officers and employees,
and others, requested explanations as necessary, expressed opinion thereon, and executed audits through thefollowing methods.
(i) In accordance with audit policies stipulated by the Audit Committee and the division of duties, etc.,
Audit Committee Members, in coordination with the departments in the Company related to internal
control, participated in key meetings, received reports from Directors, Executive Officers, and others
regarding the matters related to the performance of their duties, and when necessary, requested explanationsof those reports. Audit Committee Members also reviewed key decision documents, and conducted surveysof the operations and assets of the head office and of other principal places of business. Further, regarding
subsidiaries, Audit Committee Members worked to communicate with Directors, Executive Officers, Audit& Supervisory Board Members, and other parties at those subsidiaries, and when necessary conducthearings with them regarding their business.
(ii) Additional consideration was given to the basic policy set forth in Item 3 (a), Article 118 of theRegulation for Enforcement of the Companies Act and activities set forth in Item 3 (b), Article 118 of thesame Ordinance, as noted in the Business Report, based on the status of deliberations at the meeting of theBoard of Directors and other key meetings.
(iii) While monitoring and reviewing the audit of the Accounting Auditor to ensure they maintained an
independent position and conducted their audits fairly, Audit Committee Members received reports fromthem regarding the performance of their duties, and when necessary, asked for further explanation
regarding those reports. Audit Committee Members also received notice from the Accounting Auditor inaccordance with “the system for ensuring appropriate execution of their duties” (as enumerated in each
Item of Article 131 of the Regulation on Corporate Accounting) in compliance with the “Quality Control
Standards Relating to Auditing” (adopted by the Business Accounting Deliberations Council in October 28,2005), and, where necessary, Audit Committee Members requested further explanation regarding that
notice.
Based on the above methods, Audit Committee Members proceeded to review the Business Report with the
supplementary schedules, the non-consolidated financial statements (which consist of the non-consolidatedbalance sheet, the non-consolidated statement of income, the non-consolidated statement of changes inequity, and the notes to the non-consolidated financial statements) with the supplementary schedules, andthe consolidated financial statements (which consist of the consolidated statement of financial position, theconsolidated statement of profit or loss, the consolidated statement of changes in equity, and the notes tothe consolidated financial statements) for the current fiscal year.

2. Audit Results(1) Results of Audit of Business Report, etc.
(i) The Audit Committee confirms that the Business Report and the supplementary schedules conformed tothe applicable laws and regulations, and the Articles of Incorporation, and that they accurately present thesituation of the Company.
(ii) With respect to the performance of duties by Directors and Executive Officers, the Audit Committee- 75 -

found no improper acts or important violation of applicable laws and regulations or the Articles ofIncorporation.
(iii) The Audit Committee confirms that decisions by the Board of Directors regarding the Company’s
internal control systems are fair and adequate, and found no areas that require mention regarding thedescription of the internal control systems in the Business Report and the performance of duties byDirectors and Executive Officers. As stated in the Business Report, “Emergency Response Headquarters”
related to the spread of the novel coronavirus (COVID-19) have been created in the Company andoperating companies, and comprehensive measures to prevent infections are thoroughly implemented. The
Audit Committee confirms that the Company and all the Group companies are working together tostrengthen the crisis control system.
(iv) The Audit Committee confirms that the basic policy regarding those who control the determination of
the Company’s financial and operational policies, as noted in the Business Report, is fair and adequate. The
Audit Committee confirms that activities set forth in Item 3 (b), Article 118 of the Regulation for
Enforcement of the Companies Act, as noted in the Business Report, are in line with this basic policy, are
not harmful to the common interest of the Company’s shareholders, and are not intended to maintain thepositions of corporate officers of the Company.
(2) Results of Audit of Non-consolidated Financial Statements and Supplementary Schedules
The Audit Committee confirms that the methods used and results achieved by the Accounting Auditor,
Ernst & Young ShinNihon LLC, are fair and adequate.
(3) Results of Audit of Consolidated Financial Statements
The Audit Committee confirms that the methods used and results achieved by the Accounting Auditor,
Ernst & Young ShinNihon LLC, are fair and adequate.
April 9, 2020
Audit Committee
J. Front Retailing Co., Ltd.
NISHIKAWA Koichiro(seal)
Chairperson of Audit Committee
MURATA Soichi(seal)
Audit Committee Member (full-time)
TSUTSUMI Hiroyuki(seal)
Audit Committee Member (full-time)
SATO Rieko(seal)
Audit Committee Member
UCHIDA Akira(seal)
Audit Committee Member(Note) Audit Committee Members, namely, NISHIKAWA Koichiro, SATO Rieko and UCHIDA Akira are
Outside Directors as prescribed in Item 15, Article 2 and Paragraph 3, Article 400 of the Companies
Act.

- 76 -