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 6, 2021
To Our Shareholders

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

Notice of Convocation of the 14th Annual Shareholders Meeting
You are hereby notified that the 14th Annual Shareholders Meeting of J. FRONT RETAILING Co., Ltd.
(hereinafter the “Company”) will be held on Thursday, May 27, 2021.
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.
Date and Time:
Venue:

Thursday, May 27, 2021, at 10:00 a.m. (JST) (Reception opens at 9:30 a.m.)
New Pier Hall
11-1, Kaigan 1-chome, Minato-ku, Tokyo

Purpose of the meeting:
Matters to be reported: 1. Business Report, Consolidated Financial Statements, and Non-consolidated
Financial Statements for the 14th fiscal year (from March 1, 2020 to February
28, 2021)
2. Audit reports of the Accounting Auditor and the Audit Committee on
Consolidated Financial Statements for the 14th fiscal year
Matters to be resolved: Proposal:
Election of Twelve (12) Directors
Decisions made for convocation:
Please refer to Guide to the Exercise of Voting Rights on pages 3 to 4.

* 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 in theirown 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.

-1-



Of the documents attached to Notice of Convocation of the Annual Shareholders Meeting, Systems toensure properness of operations <Basic Policy to Build Internal Control System>* in the Business
Report, Notes to Consolidated 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 the Company’s Articles of Incorporation, hence are not indicated on this Notice ofConvocation.
* “Operational status of systems to ensure properness of operations <Basic Policy to Build Internal Control Systems>”
is included in this Notice of Convocation.

Business Report, which has been audited by the Audit Committee, and 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 ofConvocation, but also Systems to ensure properness of operations <Basic Policy to Build Internal
Control System>, 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/

In view of the situation of the novel coronavirus disease (COVID-19), and with the safety of our shareholders
as our top priority, we strongly request that shareholders refrain from attending the Annual Shareholders
Meeting in person this year as much as possible and exercise voting rights via either postal mail or the Internet
in advance.
Please refer to page 3 for details on how to exercise voting rights in advance.
Exercise due date of your voting rights: Received by 6:00 p.m. on Wednesday, May 26, 2021 (JST)We will conduct the “live streaming of the meeting via Internet” on the day of the meeting.
▶Please refer to pages 5 to 6 for details.

-2-Guide to the Exercise of Voting Rights
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 26, 2021 (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/
Access the voting website.
Enter the “Login ID” and the “Temporary password” shown on the voting form and click the “Login” button.
Set a new password.
Follow the directions that appear on the screen to input approval or disapproval to each proposal.
Handling of cases where voting rights are exercised in duplicate by the same shareholder both inwriting and by an electromagnetic means
The voting rights exercised by an electromagnetic means shall be treated as valid. If the same shareholder
exercises his/her voting rights by an electromagnetic means more than once, only the last exercise of voting
rights shall be treated as valid.
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)
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 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 26, 2021 (JST)
Attending the Shareholders Meeting in person
Please submit the enclosed voting form at the reception of the meeting.
In view of the situation of the novel coronavirus disease (COVID-19), and with the safety of ourshareholders as our top priority, we strongly request that shareholders refrain from attending the Annual
Shareholders Meeting in person this year as much as possible.

-3-Measures to prevent COVID-19 infection






Please make sure to wear a mask to protect yourself and others from COVID-19.
(You may be refused entry if you do not wear one.)
We ask for your cooperation in disinfecting your hands with alcohol and taking your temperature at
the entrance of the venue.
Please note that we may ask you to refrain from entering the venue if the temperature check showsthat you have a fever of more than 37.5 degrees Celsius or if you look unwell.
The Company’s officers and staff will wear a mask and respond at the venue after checking their
physical condition.
The proceedings of this Annual Shareholders Meeting will be shortened to prevent COVID-19
infection.

-4-

Guide to live streaming of the meeting via Internet
The Annual Shareholders Meeting will be live streamed via the Internet for you to view the proceedings ofthe meeting at home or other locations.
1.

Date and time of the live streaming

From 10:00 a.m. on Thursday, May 27, 2021 to the closing time of the Annual Shareholders
Meeting*A live streaming web page is available from around 9:30 a.m., approximately 30 minutes before thestart time of the Annual Shareholders Meeting.
2. How to view the live streaming
Please prepare in advance your Shareholder ID (Shareholder Number) and password (postal code) requiredon the shareholder authentication page (login screen), and access the following website for live streaming.
Website for live streaming:

https://www.virtual-sr.jp/users/j-front-retailing/login.aspx(i) Shareholder ID: Shareholder Number (eight-digit number) shown on the voting form, etc.
(ii) Password: Postal code of the address registered in the shareholders’ register as of the end of February
2021 (seven-digit number without a hyphen)
The Shareholder ID (Shareholder Number) and Password (postal code) are printed on the voting form.
*Please be sure to take a note of your Shareholder Number before posting your voting form. If you
forget your ID and/or password, please contact us at the contact number listed below “Contact information
for inquiries about live streaming” on page 6.
(Note)(ii) “Password (Postal code)” may differ from the postal code printed on the voting form (because thepassword does not reflect information such as on change of address made after the record date of the Annual
Shareholders Meeting or on mailing address designated for the voting form to be sent). Shareholders
residing outside Japan who have designated a standing proxy are requested to enter the postal code of theproxy.
3. Important notice(1) Due to unavoidable circumstances, we might be unable to provide the live streaming. In that case, a
notice will be posted on the Company’s website (https://www.j-front-retailing.com/).
(2) Shareholders viewing the live streaming are not considered to be attending the Annual
Shareholders Meeting under the Companies Act, and therefore, will not be able to exercise theirvoting rights or make any comments, including questions on the day. Please exercise your voting
rights in advance by following the instructions on page 3 on this Notice of Convocation.
(3) Viewing will be restricted to shareholders only.
(4) It is strictly prohibited to capture, record audio or video of, or save the live streaming, or to publish it on
SNS or other media.
(5) Please note that due to the Internet communication environment and other factors, the video and audio
may be distorted, or the streaming may be interrupted.
(6) The live streaming may not be viewable depending on the device used or the network environment
connected.
(7) Fees for accessing the website for viewing (Internet access fees, communication fees, etc.) shall be borneby the shareholder.

-5-

(Contact information for inquiries about live streaming)
Mitsubishi UFJ Trust and Banking Corporation
Service period

Tel: 0120-191-060

May 27, 2021 (the day of the Annual Shareholders Meeting)From 9:00 a.m. to the closing time of the Annual Shareholders Meeting from 9:00 a.m. to the closing timeof the Annual Shareholders Meeting

Questions will be accepted in advance via the Internet
We will accept questions from shareholders in advance on the Company’s website.
We plan to answer questions frequently asked by shareholders at the Annual Shareholders Meeting.
Please note that we do not respond to individual inquiries.
Please access the dedicated website for receiving questions using the URL or QR code below to fill in the
Question Submission Form.
URL:
https://krs.bz/jfr/m?f=1
Due date for receipt of questions:by 6:00 p.m. on Thursday, May 20, 2021

-6-

Reference Materials for Shareholders Meeting
Proposal and Reference Information
Proposal: Election of Twelve (12) 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 12, reducing the number of Directors by one, and proposes the election of thosecandidates.
If the candidates for Director in this proposal are elected as proposed, the Board of Directors will have 12
Directors with one less Inside Director, half of the members (six out of 12) will be independent Outside
Directors, and three female Directors. The Company believes that this structure will allow the Board topromote management from a shareholder-oriented perspective, continue to facilitate the appropriate
functioning of the Company’s three statutory committees (nomination, audit, and remuneration), and exercise
diverse supervisory functions. Furthermore, the Company has reviewed the composition of its three statutory
committees, and will reduce the number of members in each committee from five to four and will only selectDirectors who do not execute business as members for the Nomination Committee and the Remuneration
Committee. Consequently, in matters such as the determination of the plan for the selection and dismissal ofRepresentative Executive Officers and the decision of individual remuneration, the Company believes that it
can expect the further strengthening of management supervision functions due to the increase of objectivity
and transparency. 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.
Skills expected of candidates for Director
In selecting candidates for the Board of Directors, the Company takes the perspective of strengthening
management supervisory functions, and, within the scope of the number of members specified in the Articles
of Incorporation, considers the balance of the numbers of supervisors and executives. In addition, in order toeffectively fulfill the roles and responsibilities of the Board of Directors, the Board shall consist of personnel
with experience and knowledge in key areas related to the Company’s business management.
In selecting candidates for Outside Director, the Company selects persons from the point of view of Board
diversity who have experience as managers not in the retailing industry that forms the core of the Company’sbusiness but in manufacturing and other non-retail industries, and who have expertise in legal, accounting
audit and other fields. With regard to candidates for non-executive Inside Director, wide-ranging practicalexperience within the Group and specialized knowledge in fields such as auditing are sought by the Company.
As for candidates for executive Director, the Company 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 as well as persons responsible for the Group’s core subsidiaries,
which are Daimaru Matsuzakaya Department Stores and PARCO.

-7-

No.

Name

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

Attribute

Nomination

1

YAMAMOTO Ryoichi (Note 1)

Audit

○

○

Reappointment

Non-executive

FemaleNew

Non-executive

YAGO Natsunosuke

Male

Reappointment

Non-executive

Independent

Outside4

HAKODA Junya

Male

New

Non-executive

Independent

Outside5

UCHIDA Akira

Male

Reappointment

Non-executive

Independent

Outside6

SATO Rieko (Note 3)

FemaleReappointment

Non-executive

Independent

Outside○Reappointment

Non-executive

Independent

Outside○New

Non-executive

Independent

Outside23

Chairperson

Male

HAMADA Kazuko (Note 2)

7

SEKI Tadayuki

Male

8

KOIDE Hiroko

Female9

YOSHIMOTO Tatsuya Male Reappointment

Executive

10

SAWADA Taro

Male

Reappointment

Executive

11

MAKIYAMA Kozo

Male

Reappointment

Executive

Reappointment

Executive

12

WAKABAYASHI Hayato
Male

Remuneration

○
◎

○
◎

○

◎

○

○

Expected skills as Candidate for Director

No.

Name

Management
strategies

Finance

MarketingHuman
resource&
organization
development

Legalaffairs &complianceIT &digitalE:
Environment

S:
SocietyG:
Governance

1

YAMAMOTO Ryoichi(Note 1)Chairperson

2

HAMADA Kazuko(Note 2)

3

YAGO Natsunosuke○

4

HAKODA Junya

○

○

○

5

UCHIDA Akira

○

○

○

6

SATO Rieko

7

SEKI Tadayuki

8

KOIDE Hiroko

○

○

9

YOSHIMOTO Tatsuya

○

○

10

SAWADA Taro

○

○

11

MAKIYAMA Kozo

○

○

12

WAKABAYASHI Hayato

○

○

○

○
○

○
○

○

○

(Note 3)
○

○

○

○

○

○

○

○

○

○
○

○

○

○

○

○

○

○

(Notes) 1. If the election of YAMAMOTO Ryoichi is approved in this proposal, the Company plans to select him once again
as the Chairperson of Board of Directors at a Board of Directors meeting that is to be held after this Annual
Shareholders Meeting.
2. HAMADA Kazuko is recorded under the name of HIMENO Kazuko in the family register.
3. SATO Rieko is recorded under the name of KAMATA Rieko in the family register.
4. The Company plans to elect eight 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.

-8-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

-9-

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):

March 2008
95,667

Special interests between
the Company and the
Candidate:
None

1

Number of attendance at
the Board of Directors
meetings for the 14th
fiscal year:

March 2010
September 2012
April 2013
May 2017
May 2020

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
Director, Chairperson of Board of Directors (present)

15/15
Number of attendance at
the meetings ofNomination Committee
14/14
Number of attendance at
the meetings ofRemuneration
Committee
15/15
Tenure as Director (atthe conclusion of thisMeeting):
approx. 13 years and9 months

Reasons for nomination as candidate for Director and overview of expected roles-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 and Representative Director of the Company in April
2013, he has been precisely and efficiently managing business of the Group overall. In addition to formulating a new Group
Vision that showed the direction of management 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 codeat the center of change and reform of corporate management. In light of his track record and abundant experience, and to achieve
the Group Vision and sustainability management in a business environment where uncertainty is increasing, the Company
expects him, as an Inside Director who is well versed in the Group’s overall strategy and the roles and expectations of individual
businesses, to help ensure the improved corporate value and sustained growth of the Group by serving as the Chairperson ofBoard of Directors and conducting supervisory operations that consider all stakeholders. As such, the Company has nominatedhim as a candidate to continue serving as Director.

- 10 -

No.

Name(Date of birth)
New Candidate

HAMADA Kazuko(Name in the family
register: HIMENO
Kazuko)(September 6, 1962)

2

Gender: Female
Number of the Company’s
shares owned (shares):

Career summary, positions and areas of responsibility in the Company
April 1985
September 2000
March 2002
March 2005
March 2007
March 2010
March 2013
March 2015
May 2020

Joined Parco Co., Ltd.
General Manager of Marketing Department of Sales Management
Division
Deputy General Manager of Kichijoji PARCO
General Manager of Kichijoji PARCO
General Manager of Shintokorozawa PARCO
Executive Officer (Personnel)
Executive Officer (Administration and Personnel)
Executive Officer (Group Audit Office)
Auditor (present)

None
Special interests between
the Company and the
Candidate:
None

Reasons for nomination as candidate for Director and overview of expected roles-HAMADA Kazuko served as store manager of the Kichijoji and Shintokorozawa stores at Parco Co., Ltd. before being appointed
as Executive Officer of the company in March 2010. She then engaged in initiatives such as planning a senior management
development program as Executive Officer in charge of Administration and Personnel. Based on such abundant experience, she
has broad insight in the areas of store operations and business management of Parco Co., Ltd. as well as corporate diversity
promotion. Furthermore, she was in charge of the Group Audit Office from March 2015, and served as Auditor from May 2020,
contributing to strengthening the audit function of Parco. The Company expects her to help ensure the improved corporate value
and sustained growth of the Group, particularly through the maximization of group synergies with Parco, which has become awholly owned subsidiary of the Company, by utilizing her abundant knowledge based on her achievements and experience andfulfilling appropriate management supervisory function, and therefore has newly nominated her as a candidate to serve as
Director.

- 11 -

No.

Name(Date of birth)

Career summary, positions and areas of responsibility in the Company

Independent
Outside Director

YAGO Natsunosuke(May 16, 1951)
Gender: Male
Number of the Company’s
shares owned (shares):
2,208
Special interests between
the Company and the
Candidate:
None

3

Number of attendance at
the Board of Directors
meetings for the 14th
fiscal year:
12/12
Number of attendance at
the meetings ofNomination Committee
11/11
Number of attendance at
the meetings ofRemuneration Committee

April 1977
June 2002
April 2004

Joined EBARA CORPORATION
Executive Officer
Senior Executive Officer, Group Executive of Precision Machinery
Group, Representative Director and Chairman of Ebara Precision
Machinery Europe GmbH, Representative Director and Chairman of
Ebara Technologies Inc. and Chairman of Ebara Precision Machinery
Shanghai Inc.
June 2004
Director
April 2005
Director and Chairman of Ebara Precision Machinery Taiwan Inc.
June 2005
Director, President of Precision Machinery Company and General
Manager of Fujisawa Operation
April 2006
Director and Managing Executive Officer
President of Precision Machinery Company
April 2007
President and Representative Director
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)
May 2020
Outside Director of J. Front Retailing Co., Ltd. (present)
Important concurrent positions
Outside Director of SUBARU CORPORATION

11/11
Tenure as Director (at theconclusion of thisMeeting):
approx. 1 year

Reasons for nomination as candidate for Outside Director and overview of expected roles-YAGO Natsunosuke has been involved in top-level company management for many years, and has abundant experience instrengthening financial bases and in compliance management. He also possesses highly specialized knowledge of internal control
and corporate governance gained through his experience of being involved in the transition to a company with three committees(nomination, audit and remuneration committees). He has contributed to improving the effectiveness of the Board of Directors
by actively and assertively providing advice on the overall management strategy of a holding company, including approaches tosetting appropriate targets for structural reform, how to identify issues for the formulation of medium-term business plans, theideal form of management in matrix management, and how to set and assess materiality and specific promotion measures thereof.
Moreover, he has contributed to strengthening the management personnel function by providing necessary advice as appropriate
on transparent and fair decision making of officer personnel appointment plan and when deliberating on the Nomination
Committee’s operational policies focusing on succession plan as a member of the Nomination Committee, as well as facilitating
deliberation on specific remuneration amounts and revisions to the officer remuneration system, etc. as the Chairperson of theRemuneration Committee, In light of his track record, abundant experience and high level of insight, the Company expects him
to contribute greatly to management of the Group. As such, he has been nominated as a candidate to continue serving as Outside
Director.

- 12 -

No.

Name(Date of birth)
April 1974

New Candidate
Independent
Outside Director

HAKODA Junya(July 10, 1951)
Gender: Male
Number of the Company’s
shares owned (shares):
None

4

Career summary, positions and areas of responsibility in the Company

Special interests between
the Company and the
Candidate:
None

Joined Mitsubishi Rayon Co., Ltd. (present Mitsubishi Chemical
Corporation)
November 1980
Joined Pricewaterhouse CPA Office(Reorganized as Aoyama Audit Corporation in June 1983)
April 1984
Registered as Certified Public Accountant
April 2000
Partner at the merged firm, ChuoAoyama Audit
Corporation/PricewaterhouseCoopers
August 2006
Representative of Arata Audit Corporation/Partner ofPricewaterhouseCoopers
April 2008
Eminent Professor of Graduate School of Keio University (internal
audit theory)
September 2009
Member of the Agreement Monitoring Committee of the Japan External
Trade Organization (JETRO)
September 2010
Director of Japan Internal Control Research Association
December 2014
Outside Corporate Auditor of Schroder Investment Management (Japan)
Limited (present)
March 2015
Director of Institute of Corporate Governance, Japan (present)
June 2015
Outside Corporate Auditor of Yamaha Corporation
June 2015
Outside Director of AEON Financial Service Co., Ltd.
June 2017
Outside Director and Chairperson of the Audit Committee of Yamaha
Corporation
September 2019
Member of the Ethics Committee of the Japanese Institute of Certified
Public Accountants (present)
August 2020
Vice Chairperson of the Committee on Training and Research for
Outside Officers (present)
Important concurrent positions

Member of the Ethics Committee of the Japanese Institute of Certified Public Accountants
Vice Chairperson of the Committee on Training and Research for Outside Officers, JapaneseInstitute of Certified Public Accountants
Reasons for nomination as candidate for Outside Director and overview of expected roles-HAKODA Junya was involved in accounting audits, management consulting, and internal audits of auditing firms, etc. as acertified public accountant for many years at PricewaterhouseCoopers, also served as an eminent professor teaching internal
audit theory at Graduate School of Keio University, and therefore has abundant experience and high-level expertise in corporate
auditing. He also has a high level of expertise in corporate governance and management auditing, having served as the
Chairperson of the Audit Committee of Yamaha Corporation when the company changed its organizational design to a company
with three committees (nomination, audit, and remuneration committees). In light of his track record, abundant experience andhigh level of insight, the Company expects that he will apply them to the appropriate supervision of management in the Group,and has accordingly appointed him as a candidate to serve as a new Outside Director.

- 13 -

No.

Name(Date of birth)

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

Independent
Outside Director

UCHIDA Akira(October 4, 1950)
Gender: Male
Number of the Company’s
shares owned (shares):
3,118
Number of other shares asstock-based remuneration
not yet granted (shares):
1,933
Special interests between
the Company and the
Candidate:
None

5

Number of attendance at
the Board of Directors
meetings for the 14th
fiscal year:
15/15

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)
May 2020
Director of Daimaru Matsuzakaya Department Stores Co. Ltd. (present)
Important concurrent positions
Outside Director of Yokogawa Electric Corporation(Concurrent positions in the Group)
Director of Daimaru Matsuzakaya Department Stores Co. Ltd.

Number of attendance at
the meetings ofNomination Committee
11/11
Number of attendance at
the meetings ofRemuneration Committee
11/11
Number of attendance at
the meetings of Audit
Committee
5/5
Tenure as Director (at theconclusion of thisMeeting):
approx. 2 years

Reasons for nomination as candidate for Outside Director and overview of expected roles-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. He has contributed to improving theeffectiveness of the Board of Directors by actively and assertively providing advice and oversight with respect to how tostrengthen collaboration among organizations that will lead to group synergies, clarify the chain of command in promoting
structural reforms and digital initiatives, and formulate and communicate visions and strategies expected by stakeholders, aswell as approaches to ESG and CSV management that will lead to increased corporate value. Moreover, he has contributed tostrengthening the management personnel function, by facilitating deliberation on specific remuneration amounts and revisions
to the officer remuneration system, etc., as the Chairperson of the Remuneration Committee, as well as by providing necessary
advice as appropriate on transparent and fair decision making of officer personnel appointment plan and when deliberating on
the Nomination Committee’s operational policies focusing on succession plan as a member of the Nomination Committee. In
light of his track record and abundant insight, the Company expects him to contribute greatly to management of the Group. As
such, he has been nominated as a candidate to continue serving as Outside Director.

- 14 -

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):
1,777
Number of other shares asstock-based remuneration
not yet granted (shares):
3,866

6

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
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)
June 2020
Outside Director (Member of the Audit and Supervisory Committee) of
NTT DATA CORPORATION (present)
Outside Audit & Supervisory Board Member of Mitsubishi Corporation(present)
Important concurrent positions
Partner and attorney at law of Ishii Law OfficeOutside Director (Audit and Supervisory Committee Member) of Dai-ichi Life Holdings,
Inc.
Outside Director (Member of the Audit and Supervisory Committee) of NTT DATACORPORATION
Outside Audit & Supervisory Board Member of Mitsubishi Corporation(Concurrent positions in the Group)
Director of Daimaru Matsuzakaya Department Stores Co. Ltd.

Number of attendance at
the Board of Directors
meetings for the 14th
fiscal year:
14/15
Number of attendance at
the meetings of Audit
Committee
18/18
Tenure as Director (at theconclusion of thisMeeting):
approx. 3 years

Reasons for nomination as candidate for Outside Director and overview of expected roles-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 attorneyat law specializing in corporate legal affairs. She has contributed to improving the effectiveness of the Board of Directors byproviding active advice and oversight from legal perspectives on how to promote structural reforms, points to keep in mind in
conducting them, the importance of analyzing the future environment in medium- to long-term strategies, and what digital-based
services customers expect, etc. Moreover, as a member of the Audit Committee, she has endeavored to strengthen the audit
function by auditing the execution of duties by Directors and Executive Officers of the company with three committees(nomination, audit, and remuneration committees), while engaging in discussions from the perspective of legality andappropriateness related to items submitted to the Board of Directors and items judged to require monitoring by the Audit
Committee. In light of her track record and abundant insight, the Company expects her to contribute greatly to management of
the Group. As such, she has been nominated as a candidate to continue serving as Outside Director.

- 15 -

No.

Name(Date of birth)

Career summary, positions and areas of responsibility in the Company
April 1973
June 1998

Independent
Outside Director

SEKI Tadayuki(December 7, 1949)
Gender: Male
Number of the Company’s
shares owned (shares):984
Special interests between
the Company and the
Candidate:

7

None
Number of attendance at
the Board of Directors
meetings for the 14th
fiscal year:
12/12
Number of attendance at
the meetings of Audit
Committee
13/13
Tenure as Director (at theconclusion of thisMeeting):

Joined ITOCHU Corporation
General Manager, Finance Division, ITOCHU International Inc.
(Stationed in New York)
June 2004
Executive Officer of ITOCHU Corporation, CFO of Food Company
April 2007
Managing Executive Officer, General Manager of Finance Division
June 2009
Representative Director, Managing Director, Chief Officer for Finance,
Accounting, Risk Management and CFO
April 2010
Representative Director, Senior Managing Executive Officer
May 2011
Representative Director, Senior Managing Executive Officer and CFO
April 2013
Representative Director, Executive Vice President and CFO
April 2014
Representative Director, Executive Vice President, Executive Advisory
Officer, CFO & CAO
April 2015
Adviser
May 2016
External Director of Parco Co., Ltd.
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)
May 2020
Outside Director of J. Front Retailing Co., Ltd. (present)
Director of Parco Co., Ltd. (present)
Important concurrent positions
Outside Director of VALQUA, LTD.
Outside Director of JSR Corporation
Outside Statutory Auditor of Asahi Mutual Life Insurance Company(Concurrent positions in the Group)
Director of Parco Co., Ltd.

approx. 1 year

Reasons for nomination as candidate for Outside Director and overview of expected roles-SEKI Tadayuki was involved in international business management and risk management at a general trading company for many
years, and has extensive experience in finance and accounting as CFO, as well as abundant experience as an outside director andoutside corporate auditor of multiple companies. He has contributed to improving the effectiveness of the Board of Directors byactively and affirmatively providing advice to the Board of Directors on how to promote structural reforms, how the Payment
and Finance Businesses and new businesses should be structured in the Medium-term Business Plan, and how to formulate
capital cost-conscious financial strategies, etc. As a member of the Audit Committee, he has contributed to strengthening theaudit function by auditing the execution of duties by Directors and Executive Officers of the company with three committees(nomination, audit, and remuneration committees), while engaging in discussions from the perspective of legality,
appropriateness, etc. related to items submitted to the Board of Directors and items judged to require monitoring by the Audit
Committee. In light of his track record and high level of insight, the Company expects him to contribute greatly to managementof the Group. As such, he has been nominated as a candidate to continue serving as Outside Director.

- 16 -

No.

Name(Date of birth)

September 1986

New Candidate
Independent
Outside Director

KOIDE Hiroko(August 10, 1957)
Gender: Female

8

Career summary, positions and areas of responsibility in the Company

Number of the Company’s
shares owned (shares):
None
Special interests between
the Company and the
Candidate:
None

Joined J. Walter Thompson Japan K.K. (present J. Walter Thompson
Japan G.K.)
May 1993
Joined Nippon Lever K.K. (present Unilever Japan K.K.)
April 2001
Director
April 2006
General Manager of Marketing Management Division of Masterfoods
Ltd. (present Mars Japan Limited)
April 2008
Chief Operating Officer
November 2010
President and Representative Director of Parfums Christian Dior Japon
K.K.
January 2013
Outside Director of Kirin Co., Ltd.
April 2013
Senior Vice President of Global Marketing of Newell Rubbermaid Inc.
(U.S.) (present Newell Brands Inc.)
June 2016
Outside Director of Mitsubishi Electric Corporation (present)
April 2018
Director of Vicela Japan Co., Ltd.
June 2019
Outside Director of Honda Motor Co., Ltd (present)
Outside Director of J-OIL MILLS, Inc. (present)
Important concurrent positions
Outside Director of Mitsubishi Electric Corporation
Outside Director of Honda Motor Co., Ltd
Outside Director of J-OIL MILLS, Inc.

Reasons for nomination as candidate for Outside Director and overview of expected roles- KOIDE Hiroko served as an officer at foreign companies for many years, also engaged in corporate management as the headof marketing at the head office of a U.S. company, and therefore has abundant experience in global management and knowledge
based on her extensive experience in the marketing field. She also has wide-ranging insight as an outside director of multiple
listed companies. In light of her track record, abundant experience, and deep knowledge, the Company expects that she will
apply them to the appropriate supervision of management in the Group, and has accordingly appointed her as a candidate toserve as a new Outside Director.

- 17 -

No.

Name(Date of birth)

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

YOSHIMOTO
Tatsuya(April 13, 1956)

January 2008
May 2008
January 2010

Gender: Male
Number of the Company’s
shares owned (shares):75,004
Special interests between
the Company and the
Candidate:None

9

Number of attendance at
the Board of Directors
meetings for the 14th
fiscal year:

March 2010

May 2012
April 2013
May 2013
May 2017
May 2020

Joined The Daimaru, Inc.
Senior Manager of Preparatory Office for Opening Sapporo Store ofPlanning Office for Sapporo Store, Head Office
General Manager of Tokyo Store
Corporate Officer, General Manager of Tokyo Store
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.
Corporate Officer of Daimaru Matsuzakaya Department Stores Co. Ltd.
Senior General Manager of Management Planning Division
Director and Corporate Officer
President of Daimaru Matsuzakaya Department Stores Co. Ltd. andPresident of Daimaru Matsuzakaya Sales Associates Co. Ltd.
Director of J. Front Retailing Co., Ltd. (present)
Representative Managing Executive Officer
President and Representative Executive Officer (present)

15/15
Number of attendance at
the meetings ofNomination Committee
11/11
Number of attendance at
the meetings ofRemuneration Committee
11/11
Tenure as Director (at theconclusion of thisMeeting):
approx. 8 years

Reasons for nomination as candidate for Director and overview of expected roles-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 as 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 considering the roles and expectations of the Department StoreBusiness under the Group’s strategy, and formulating a new Department Store Business strategy in reaction to the massivechanges in the external environment. He has been demonstrating swift and resoundingly effective leadership based on a strong
results-oriented approach aimed at realizing these initiatives. Since 2017, as Representative Managing Executive Officer of theCompany, he has accumulated further knowledge based on his experiences in management reform in relation to business
management and corporate governance for the Group as a whole. Since being appointed as President and Representative
Executive Officer of the Company in May 2020, he has exercised leadership in leading the entire Group amid the severebusiness environment, and in formulating group strategies to achieve sustainability management in the Medium-term Business
Plan starting this fiscal year. In light of his track record and experience, the Company expects that he will help ensure theimproved corporate value and sustained growth of the Group and has accordingly nominated him as a candidate to continue
serving as Director.

- 18 -

No.

Name(Date of birth)
April 1983
June 2004

SAWADA Taro(January 17, 1960)
Gender: Male
Number of the Company’s
shares owned (shares):20,114
Special interests between
the Company and the
Candidate:
None

10

Career summary, positions and areas of responsibility in the Company

Number of attendance at
the Board of Directors
meetings for the 14th
fiscal year:
12/12
Tenure as Director (at theconclusion of thisMeeting):
Approx. 1 year
(Reference) Tenure as
Director before April 2020
Approx. 1 year
(May 24, 2018 to May 23, 2019)

Joined The Daimaru, Inc.
Department Manager of Sales Promotion Department, Sales Planning &CS Promotion Division of Kobe StoreMarch 2010
Division Manager of Management Planning Division of Daimaru
Matsuzakaya Department Stores Co. Ltd.
January 2011
Executive Store Manager of Daimaru Kobe
May 2011
Corporate Officer
May 2012
Executive Store Manager of Daimaru Osaka Shinsaibashi
September 2015
Executive Store Manager of Daimaru Osaka Shinsaibashi and Executive
General Manager of Shinsaibashi New Store Planning Office
July 2016
Executive General Manager of Management Planning Unit
March 2017
Executive General Manager of Management Planning Unit, Senior
General Manager of Management Planning Division and Executive
General Manager of Future Standard Laboratory
May 2017
Director and Managing Executive Officer
May 2018
Director of J. Front Retailing Co., Ltd.
Managing Executive Officer
Senior Executive General Manager of Management Strategy Unit and in
charge of Risk Management
March 2019
Senior General Manager of New Business Division
May 2020
Director of J. Front Retailing Co., Ltd. (present)
Senior Managing Executive Officer of J. Front Retailing Co., Ltd.
(present)
President of Daimaru Matsuzakaya Department Stores Co. Ltd.
(present)
President and Representative Director of Daimaru Matsuzakaya Sales
Associates Co. Ltd. (present)
Important concurrent positions(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 and overview of expected roles-SAWADA Taro has served in management in Daimaru Matsuzakaya Department Stores Co. Ltd., serving as Executive StoreManager 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 theShinsaibashi Store and promoting the action plan, possessing in-depth insight and the ability to lead organizations in planningand proposals. From July 2016, he has coordinated the Medium-term Business Plan as the Executive General Manager ofManagement Planning Unit of Daimaru Matsuzakaya Department Stores, and has been involved in projects to create businessmodels from a broad perspective with new ideas. From 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. Since being appointed as President of Daimaru
Matsuzakaya Department Stores Co. Ltd. in May 2020, he has demonstrated leadership in formulating a new Department
Store Business strategy, including efforts to redefine the department store business in the Medium-term Business Plan starting
this fiscal year, based on the role and expectations of the department store business under the Group Strategy. In light of his
track record, the Company expects that he will help ensure the improved corporate value and sustained growth of the Group in
acting as a manager of Daimaru Matsuzakaya Department Stores, and has accordingly nominated him as a candidate tocontinue serving as Director.

- 19 -

No.

Name(Date of birth)

MAKIYAMA Kozo
(August 28, 1958)
Gender: Male
Number of the Company’s
shares owned (shares):26,844

11

Special interests between
the Company and the
Candidate:
None
Number of attendance at
the Board of Directors
meetings for the 14th
fiscal year:
15/15
Tenure as Director (at theconclusion of thisMeeting):

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
May 2013
Director of J. Front Retailing Co., Ltd. (present)
May 2017
Managing Executive Officer
May 2020
Senior Managing Executive Officer (present)
Representative Director, President and Executive Officer of Parco Co.,
Ltd. (present)
Important concurrent positions(Concurrent positions in the Group)
Representative Director, President and Executive Officer of Parco Co., Ltd.

approx. 8 years

Reasons for nomination as candidate for Director and overview of expected roles-MAKIYAMA Kozo serves as Representative Director, President and 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 sufficientunderstanding of Parco roles and expectations under the Group’s strategy, he promotes the management vision leveraging
attributes of Parco, and is proactively expanding into new store makeups that are symbolized by the opening of the new
Shibuya PARCO and new business fields. When Parco became a wholly owned subsidiary of the Company, he demonstrated
resoundingly effective leadership based on his ability to act as a unifying force within the organization. In opening
Shinsaibashi PARCO, he helped realize a new store image that symbolizes the maximization of group synergy. In addition, he
continuously takes on challenges for sustainable growth. For example, in formulating the Medium-term Business Plan, he sets
his sights on the future, 50 years from now, considering the roles and expectations of Parco under the Group’s strategy. In lightof his track record, the Company expects that he will help ensure the improved corporate value and sustained growth of theGroup in acting as a manager of Parco, and has accordingly nominated him as a candidate to continue serving as Director.

- 20 -

No.

Name(Date of birth)

WAKABAYASHI
Hayato(August 31, 1961)
Gender: Male
Number of the Company’s
shares owned (shares):12,165

12

Special interests between
the Company and the
Candidate:
None
Number of attendance at
the Board of Directors
meetings for the 14th
fiscal year:
15/15
Tenure as Director (atthe conclusion of thisMeeting):

Career summary, positions and areas of responsibility in the Company
April 1985

Joined Matsushita Electric Industrial Co., Ltd. (present Panasonic
Corporation)
April 1998
President of Panasonic Financial Center Malaysia Co., Ltd.
April 2007
Director and Chief Executive Officer of Matsushita Electric (China)
Finance Limited
February 2009
Finance Planning Team Leader (Manager), Headquarters Finance & IR
Group of Panasonic Corporation
July 2013
General Manager, Finance & IR Group, Corporate Strategy Division
and Finance Strategy Team Leader of Panasonic Corporation (Director)
May 2015
Joined J. Front Retailing Co., Ltd.
In charge of Finance Policy, Administration Unit
September 2015
Executive Officer
In charge of Financial Strategy and Policy, Administration Unit
March 2016
Senior Executive General Manager of Financial Strategy Unit (present)
and in charge of Finance Policy
May 2016
Director (present)
March 2017
In charge of Financing and Finance Policy
May 2017
Managing Executive Officer (present)
May 2018
Senior General Manager of Financing and Finance Policy Division
May 2020
Director of Parco Co., Ltd. (present)
Important concurrent positions(Concurrent positions in the Group)
Director of Parco Co., Ltd.

approx. 5 years

Reasons for nomination as candidate for Director and overview of expected roles-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 2016, he has led thetransition to IFRS with an eye to the future, and began its application during the previous Medium-term Business Plan. Amid
the severe business environment caused by COVID-19, he has raised funds to support the continuation of corporate activities
by implementing appropriate financial measures. In addition to such achievements and in-depth insight on finance, he has thecommensurate 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 expects that he will help ensure the improved
corporate value and sustained growth of the Group by executing duties acting as a Director, and has accordingly nominatedhim as a candidate to continue serving as Director.

- 21 -

Special notes regarding the candidates for Director-The Company has entered into an agreement with candidates for reappointment as Directors YAMAMOTO Ryoichi, YAGO
Natsunosuke, UCHIDA Akira, SATO Rieko and SEKI Tadayuki individually to limit the liability of damages stipulated in
Paragraph 1, Article 423 of the Companies Act as prescribed in Paragraph 1, Article 427 of the said Act. If the election of the
new candidates for Director HAMADA Kazuko, HAKODA Junya and KOIDE Hiroko is approved under this proposal, theCompany plans to enter into the same agreement with each of the three candidates.
-The Company has entered into a Directors and Officers liability insurance contract with an insurance company as prescribed in
Paragraph 1, Article 430-3 of the Companies Act. Under such insurance contract, the Company will bear the full amount of
insurance premiums for all the insured. The insurance policy covers all Directors and Executive Officers of the Company andall Directors and Audit & Supervisory Board Members of its subsidiaries. All candidates for reappointment as Directors andnew candidate for Director HAMADA Kazuko (Auditor of Parco Co., Ltd.) are included in the insured persons of the said
insurance contract. If the election of the new candidates for Director HAKODA Junya and KOIDE Hiroko is approved under
this proposal, the Company plans to include both of them as the insured under the insurance contract.
-Candidates for reappointment as Directors YAGO Natsunosuke, UCHIDA Akira, SATO Rieko and SEKI Tadayuki are
independent officers who have been given the obligation by the Tokyo Stock Exchange and the Nagoya Stock Exchange toprotect ordinary shareholders. If the election of the new candidates for Director HAKODA Junya and KOIDE Hiroko isapproved under this proposal, the Company plans to register both of them as independent officers.

(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 otherthan 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
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.

- 22 -

[Reference Document for the 14th Annual Shareholders Meeting]Business Report (From March 1, 2020 to February 28, 2021)
1. Current status of the corporate group(1) Business summary and results
In the fiscal year under review, the Japanese economy was significantly affected by the spread of
the novel coronavirus disease (COVID-19). Although the economy bottomed out after it registered arecord negative real GDP growth rate at the beginning of the fiscal year under review, andsubsequently showed signs of picking up, it ended up with only a moderate recovery due to therebound of the epidemic in the latter half of the fiscal year. While corporate earnings were robust incertain industries, many businesses were forced to control investments and reduce employment andwages. Despite a gradual recovery from a slump in the early fiscal year under review, personal
spending remained weak mainly due to the declaration of another state of emergency in the late fiscal
year.
Amid the unprecedented business environment, the J. Front Retailing Group (hereinafter the“Group”) strove to operate its respective businesses in response to the changing circumstances, withthe highest priority given to ensuring the safety and security of customers and employees, as well as
the viability of its business. At the same time, with an eye to the future, we promoted efforts tocontribute to a sustainable society and to achieve the Group’s medium- and long-term growth.
Responding to the novel coronavirus (COVID-19)
To adequately respond to unprecedented business environment caused by the pandemic, the Groupset up the Emergency Response Headquarters in the early stage of the infection spread andimplemented a range of measures to ensure safety and security with thorough hygiene management aswell as its business continuity and management stability.
In our sales activities, we suspended store operations or shortened operating hours taking into
account demands by the Japanese government and each local government. For sales, we endeavored
to prevent the spread of COVID-19 by taking such measures as creating a safe in-store environment,
where customers can feel secure while shopping, by carrying out in-store disinfection, ensuring safe
traffic flows for customers and adequate air circulation, and reviewing event plans. Also, whileproviding suppliers with sales support through the utilization of the website of Daimaru Matsuzakaya
and PARCO, we worked to improve the work environment through meticulous hygiene management
for sales staff at stores, including rest areas and lockers, and by encouraging remote work andstaggered working hours and utilizing online meetings for back-office departments.
At the same time, from the perspective of ensuring business continuity and management stability, we
took early actions to brace for a situation where the impact of COVID-19 becomes even more severe
than expected, including controlling investments, cutting expenses, accumulating cash on hand andincreasing the amount of credit lines for fund raising so as to ensure financial stability and liquidity.
Meanwhile, we promoted the use of digital technologies in our sales activities to adapt to newlifestyles amid the spread of self-curfew. Specifically, we worked on enhancing the selection of
products in the online stores of our department stores and offering a remote sales service by providing
online customer service and distributing videos from the department stores. In addition, as part of“Think LOCAL,” which was launched in September as support for manufacturers in various regions,
we introduced, on our website, local specialties in areas where our stores are located. In the PARCO
Business, we also moved forward with our efforts toward the integration of brick-and-mortar storeswith the online store by implementing measures such as distributing a virtual tour video of
Shinsaibashi PARCO and strengthening online sales in cooperation with suppliers.
Initiatives toward the achievement of medium- and long-term growth
We implemented organizational reforms and consolidation of the Real Estate Business as part ofnecessary structural adjustments following the conversion of PARCO into a wholly owned subsidiary.
In the organizational reforms, we set up the “Organizational Structure Review Committee” and built a
new structure which allows PARCO to be dedicated to strengthening its own business by restructuring
and integrating head office functions for the holding company and PARCO from the perspective ofpromptly generating the Group synergies and facilitating highly efficient management. As for the- 23 -

consolidation of the Real Estate Business, we transferred the Daimaru Matsuzakaya Department
Store’s real estate business to PARCO in September to concentrate the Group assets and centralize
operation, supervision and development functions.
As part of our efforts to generate the Group synergies, we also opened Shinsaibashi PARCO in
November. Shinsaibashi PARCO is a new commercial facility that embodies sustainability
management and fusion of our department stores and PARCO, which are what the Group promotes,
and aims to expand the area customer base through coexisting with local communities andcontributing to generating the prosperity of the Shinsaibashi area together with Daimaru Shinsaibashi
store, with which its management was integrated, and by attracting new customers. After the opening,
Shinsaibashi PARCO has been visited by a broad range of customers, and its synergy with Daimaru
Shinsaibashi store has been demonstrated.
Along with such efforts to reinforce our foundation toward the achievement of medium- and longterm growth, we worked on the formulation of a new Medium-term Business Plan starting fromFY2021. Regarding the reform of management structure that is included in the plan, we aim to workon improving revenue by accelerating the transformation of business models and streamlining
business operations by restructuring the Group’s business to quickly build a future growth platform,
while taking a serious look at the future survivability and growth potential of each of our businesses.
As part of such efforts, in light of environmental changes in each of our businesses and the future
survivability of the market, we decided to close Tsudanuma PARCO and Shintokorozawa PARCO in
the PARCO Business (on February 28, 2023, and February 29, 2024, respectively), and excluded J.
Front Foods Co., Ltd., which is engaged in the restaurant business, from the scope of consolidated
subsidiaries by transferring all the shares in the company in February.
Consolidated revenue for the fiscal year under review
As for consolidated revenue for the fiscal year under review, the spread of infectious diseasecaused the stagnation in both domestic and inbound spending, which impacted, among others, ourcore Department Store Business. Despite various measures including those mentioned above, revenue
was ¥319,079 million, down 33.6% year on year.
In this environment, despite securing a profit of ¥2,366 million in business profit as a result ofcontrolling investments and reducing expenses throughout the fiscal year, operating loss was ¥24,265
million (operating profit of ¥40,286 million in the previous fiscal year) as a result of reclassificationof fixed costs primarily due to suspending store operations, and the recording of expenses, such as
those for store closures and impairment loss. Loss before tax was ¥28,672 million (profit before tax of¥37,161 million in the previous fiscal year), and loss attributable to owners of parent was ¥26,193
million (profit attributable to owners of parent of ¥21,251 million in the previous fiscal year) due toan increase in expenses as a result of reversing the deferred tax assets of subsidiaries.
Regarding, dividends, given the unprecedented business environment as well as severe earnings
forecasts and financial conditions, the Company paid an interim dividend of ¥9 per share (¥18 in theprevious fiscal year), but from the perspective of ensuring stable dividend payments to shareholders,has decided to pay a year-end dividend of ¥18 per share, which is the same as the previous fiscal year.
As a result, the annual dividend is ¥27 per share.

- 24 -

Results by segment are as follows.
Revenue and operating profit by business segment of the corporate group(Millions of yen)
14th fiscal year (Current fiscal year)(Fiscal 2020)

13th fiscal year
(Fiscal 2019)
Business segment

Revenue
Results

Operating profit

Composition

Revenue

Composition

Results%

Results%

Operating profit

Composition

Results

Composition%%

Department StoreBusiness

263,74854.9

17,62543.7

164,02451.4(22,199)

PARCO Business

112,21223.3

10,82326.9

68,861

21.6(6,895)–

Real Estate Business

17,793

3.7

6,725

16.7

15,372

4.8

1,986

–

Credit and FinanceBusiness

10,719

2.2

1,908

4.7

9,035

2.8

421

–

Total

404,474

84.1

37,08292.0

257,29480.6(26,687)–

Other

123,275

25.7

4,700

11.7

95,722

30.0

2,852

–

–

Adjustments(47,128)(9.8)(1,496)(3.7)(33,937)(10.6)(430)–

Consolidated total

480,621100.0

40,286100.0

319,079

100.0(24,265)

100.0- 25 -

<Department Store Business>
Due to the spread of COVID-19, we downsized operations at each of our department stores fromMarch. After the declaration of state of emergency in April, we suspended operations at almost all thestores, excluding the food sales floors. Despite successively restarting operations in the middle of May,
both the number of customers visiting stores and sales decreased significantly throughout the year,
reflecting self-curfew and the reconsideration of the events and sales from the perspective of avoiding“Three Cs” (closed spaces, crowded places, and close-contact settings) and overseas travel restrictions.
Meanwhile, we promoted the enhancement of product lineups in the “Daimaru Matsuzakaya Online
Shopping” to meet stay-at-home demand; the offering of remote sales services, through whichcustomers can enjoy shopping at home; and sales activities using digital technologies such as the visit
reservation system. In addition, we carried out new activities amid the COVID-19 pandemic, such as
the installment of non-contact collection boxes of used clothing for the “ECOFF Recycle Campaign,”
in which customers can participate.
Besides that, customers were invited to the Daimaru Shinsaibashi store in conjunction with the
opening of Shinsaibashi PARCO, and a mutual customer referral campaign using both Daimaru’s and
PARCO’s house cards was implemented.
As part of the restructuring of regional suburban department stores, we brought Shimonoseki
Daimaru under direct management. Then, we re-opened the Daimaru Shimonoseki store in March. In
addition, we proceeded with creating community-based stores at the Daimaru Ashiya store and the
Daimaru Suma store.
Despite our efforts including capital investments and reduction of expenses throughout the fiscal year,
coupled with various measures such as those mentioned above, revenue decreased significantly to¥164,024 million, down 37.8% year on year, partly due to the stagnation in both domestic and inboundspending, and operating loss was ¥22,199 million (operating profit of ¥17,625 million in the previous
fiscal year) partly due to the recording of impairment loss.

- 26 -

(Reference)

Net sales by company, store and product of the Department Store Business (Japanese GAAP)
are as follows.

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

41,6468.9(51.2)

Osaka Umeda store

37,9378.1(41.0)

Tokyo store

38,7848.3(51.0)

Kyoto store

47,041

10.1(29.6)

Kobe store

57,633

12.3(22.6)

Suma store

6,893

1.5

(13.7)Ashiya store

3,420

0.7

(22.4)

Sapporo store

41,7728.9(36.2)

Shimonoseki store

8,115

1.8

(35.2)

283,24560.6(38.6)

Nagoya store

86,48918.5(25.6)

Ueno store

28,913

6.2(26.1)

Shizuoka store

14,863

3.2(25.1)

Takatsuki store

5,787

1.2

(26.8)Sub total
Matsuzakaya

Toyota store

5,075

1.1

(26.5)Sub total

141,12930.2(25.8)

424,37490.8(34.8)The Hakata Daimaru, Inc.

Sub total

35,0037.5(33.9)

Kochi Daimaru Co., Ltd.

7,948

1.7

(28.2)

Elimination

(118)

(0.0)

12.3

Total
467,208
100.0(34.7)(Note) The Shimonoseki Daimaru, Inc. was merged and absorbed into Daimaru Matsuzakaya Department Stores Co. Ltd. on
March 1, 2020, and renamed the Daimaru Shimonoseki store.
Net sales by product of the Department Store Business(Millions of yen)
Product
AmountComposition
Year-on-year changes%%

Men’s clothing andhaberdashery

28,347

6.1(38.7)

Ladies’ clothing andhaberdashery

143,31330.7(32.6)

Children’s clothing andhaberdashery

6,719

1.4

(46.8)

Kimono, bedding and otherclothing

5,587

1.2

(37.7)

Accessories

33,6347.2(39.6)

Furniture

3,747

0.8

(31.0)

Home appliances

290

0.1

(22.7)

Household goods

13,4702.9(33.4)

Food products

117,08825.1(27.1)

Food halls and cafes

9,367

2.0

(55.2)

General goods

82,98517.8(43.6)

Services

1,531

0.3

(51.1)

Other

21,2434.4

0.4

Elimination
Total

(118)

(0.0)

–

467,208

100.0(34.7)- 27 -

<PARCO Business>
As a result of the impact of the spread of COVID-19, we suspended store operations and shortened
operating hours, and were forced to restrict entrance to entertainment venues, which caused both thenumber of customers visiting stores and tenant transaction volume to decrease significantly. In thisenvironment, in order to further progress customer communication, we worked on new digital measures,such as strengthening the “PARCO ONLINE STORE” in cooperation with suppliers, holding online
exhibitions, promoting live commerce and implementing e-commerce services for overseas.
Additionally, in November, we opened Shinsaibashi PARCO, the first store for PARCO to open in
Shinsaibashi, Osaka in approximately nine years. Despite opening in the midst of the rebound of thepandemic, the store has been visited by a broad range of customers and maintained sales exceeding
expectations.
Despite securing a profit of ¥2,062 million in business profit as a result of initiatives, such as cutting
capital investments, cost of sales and expenses, in addition to various measures such as those mentioned
above, revenue was ¥68,861 million, down 38.6% year on year, partly due to a rebound following thesales of reserve floor space in the Shibuya redevelopment project in the previous fiscal year.
Furthermore, operating loss was ¥6,895 million (operating profit of ¥10,823 million in the previous
fiscal year) partly due to the recording of store closure-related expenses.
(Reference) Tenant transaction volume by store of PARCO (on a gross basis) is as follows.
Tenant transaction volume by store of PARCO (Millions of yen)
Store

AmountCompositionYear-onyearchangesStore

AmountCompositionYear-onyearchanges

Sapporo PARCO

7,055

%
3.9

%
(42.3) Shintokorozawa
PARCO

7,952

%
4.4

%
(21.0)

Sendai PARCO

13,646

7.6(32.6) Tsudanuma PARCO

8,716

4.8

(27.3)Urawa PARCO

21,266

11.8(21.7) Hibarigaoka PARCO

5,858

3.2

(23.5)

Ikebukuro PARCO

14,4598.0(45.8) Matsumoto PARCO

3,712

2.1

(29.5)

PARCO_ya Ueno

3,360

1.8

(42.0)

Total of community
complex group26,24014.5(32.9)

Kichijoji PARCO

5,353

3.0

Total of city and(44.7) community complex
groups180,424100.0(30.3)

Shibuya PARCO

11,877

6.6

25.8

Kinshicho PARCO

6,332

3.5

(29.4)

Chofu PARCO

14,3888.0(22.6)

Shizuoka PARCO

6,968

3.9

(29.0)

Nagoya PARCO

20,705

11.5(38.9)

Shinsaibashi PARCO

4,122

2.2

–

Hiroshima PARCO

10,104

5.6(33.0)

Fukuoka PARCO

14,542

8.1(34.5)

Total of city complex
154,18485.5(29.8)
group(Notes) 1. The tenant transaction volume represents the total amount of tenant transactions at PARCO stores.
2. Shibuya PARCO opened on November 22, 2019.
3. Shinsaibashi PARCO opened on November 20, 2020.

- 28 -

(Real Estate Business)
As was the case with the Department Store Business and the PARCO Business, rental income
decreased due to a drop in tenant sales impacted by self-curfew as well as being forced to suspend theoperations of facilities and shorten operating hours of facilities. On the other hand, we promoted thedevelopment in the Nagoya Sakae area to make the area more appealing to customers by working with
the Matsuzakaya Nagoya store and Nagoya PARCO. Specifically, in July, we entered into a basic
agreement for the “development of Nishiki 3-chome District 25,” which is scheduled to complete andopen in 2026, and opened “BINO SAKAE” in November.
Despite various measures such as those mentioned above, revenue was ¥15,372 million, down 13.6%
year on year, partly due to the impact of rent concessions on fixed rent income during the suspension
period and decreased percentage rents, and operating profit was ¥1,986 million, down 70.5% year on
year, due to a rebound following the recording of gain on sale of property in the previous fiscal year.
<Credit and Finance Business>
In order to strengthen business, we updated Daimaru Matsuzakaya Card in January to enhanceservices and introduced a new point program “QIRA POINT.” We also started the offering of a personalcard loan service “QIRA LOAN - BRIGHT LIFE -” in February.
Despite various measures such as those mentioned above, revenue was ¥9,035 million, down 15.7%
year on year, partly due to decreased transaction volume at department stores and increased costs
associated with the update of the card, and operating profit was ¥421 million, down 77.9% year on year,
due to changes in the method of recording annual membership fees.
<Other>
The electronic devices division of Daimaru Kogyo, which is engaged in the wholesale business, hadstrong performance. Despite this, revenue was ¥95,722 million, down 22.4% year on year, and operating
profit was ¥2,852 million, down 39.3% year on year, as a result of a reactionary drop in the design andconstruction contracting business engaged by J. Front Design & Construction, following the special
demand associated with the renovation of the main building of the Daimaru Shinsaibashi store in theprevious fiscal year; and an adverse impact on Dimple’s personnel recruitment business resulting fromthe suspension of operations at its client facilities.

- 29 -

(2) Explanation of financial position(Assets, liabilities, and equity as of February 28, 2021)
Total assets as of February 28, 2021 was ¥1,263,722 million, up ¥23,414 million compared with
February 29, 2020. Total liabilities was ¥899,378 million, an increase of ¥58,751 million compared with
February 29, 2020. Interest-bearing liabilities (including lease liabilities) was ¥562,815 million, up¥84,042 million compared with February 29, 2020.
Total equity was ¥364,343 million, a decrease of ¥35,338 million compared with February 29, 2020.
(Cash flow position)
The balance of cash and cash equivalents (hereinafter “cash”) as of February 28, 2021 was ¥128,925
million, up ¥94,292 million compared with February 29, 2020. This was due to an increase in cash on
hand to secure financial stability.
Cash flow positions in the current fiscal year and the factors for these were as follows.
Net cash provided by operating activities was ¥56,471 million. In comparison with the previous fiscal
year, cash provided decreased by ¥16,887 million, largely due to the recording of loss before tax.
Net cash used in investing activities was ¥20,870 million. In comparison with the previous fiscal
year, cash used decreased by ¥28,689 million, largely reflecting a decrease in purchase of property,
plant and equipment.
Net cash provided by financing activities was ¥58,727 million. In comparison with the previous fiscal
year, cash provided increased by ¥73,556 million, largely reflecting issuances of commercial papers.
(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 ¥29,996 million, as a result of curtailing investments, excluding those for opening
Shinsaibashi PARCO.
(i) Major facilities completed during the current fiscal year
Mainly, in the Department Store Business this included building of the north wing of the Daimaru
Shinsaibashi store, and in the PARCO Business this included asset purchases associated with new
opening of Shinsaibashi PARCO.
(ii) New establishments and expansions of major facilities with ongoing construction works during thecurrent fiscal year
Not applicable.
(iii) Sales, removals and losses of major non-current assets
Not applicable.
(4) Status of procurement
The Group’s basic policy is to source funds needed for business activities using internally generated
funding. Moreover, when the need arises for business investment or other expenditures, such funds areprocured mainly by issuing bonds and borrowing from financial institutions, with consideration placedon maintaining financial soundness.
The Group subsidiaries do not procure funds from financial institutions, but instead we promotecentralized and streamlined means of procuring funds by means of intra-Group financing using a cash
management system. PARCO also completed centralizing fund procurement timed to coincide with it
becoming a wholly owned subsidiary to generate the Group synergies and facilitate the highly efficientmanagement.
For the current fiscal year, based on the above policy, funds were procured in the following ways toprepare for a shortage of funds resulting from the spread of the infectious disease and secure sufficient
cash on hand. They consisted of procuring ¥82,000 million in long-term borrowings and ¥47,000
million in current borrowings from financial institutions, and ¥66,000 million through commercial
papers. In addition to the redemption of the third unsecured straight bonds of ¥10,000 million, after- 30 -

having repaid current borrowings of ¥60,000 million and long-term borrowings of ¥23,400 million, theinterest-bearing liabilities (excluding lease liabilities) increased by ¥101,700 million compared to theend of the previous fiscal year to ¥359,900 million, and the balance of cash and deposit stood at¥128,900 million. The commitment line of ¥300,000 million was also set in preparation for a cash
shortage possibly caused by the unexpectedly lingering spread of infectious disease.
(5) Issues to be addressed
1. Preparation of the Medium-term Business Plan
The Group positioned the period of the previous Medium-term Business Plan starting in fiscal 2017as a phase of changing its structure towards transforming its business portfolio. Under the new Group
Vision, “Create and Bring to Life ‘New Happiness’,” we have steadily worked to expand our businessdomain and transform the business models of our existing businesses, as well as promoting ESG
management and so forth. Further, the Group established a system enabling the Group-wide initiatives
to be undertaken to evolve fundamental but flexible portfolios by making PARCO a wholly owned
subsidiary and consolidating the Real Estate Business.
Meanwhile, the spread of COVID-19 has had a significant impact on social and economic activities
in Japan and overseas, and the Group was obliged to record heavy losses in its operating results for the
fiscal 2020. With these and other factors, the Group faces a severe situation.
There are ongoing trends such as the declining birthrate and aging population, population decline,
and technology advancement. Moreover, consumer awareness and behavior have changed due to the
COVID-19 pandemic, creating a “new normal.” We recognize that the environment surrounding
management will not return to its pre-COVID-19 state.
However, such times of great uncertainty in the future all the more provide a good opportunity for
the Group to reexamine the values that it considers important and the significance of its existence amidchanges in society and the times.
In preparing the Medium-term Business Plan, we have formulated specific strategies and measuresthat the Group should focus on for the three-year period to achieve early recovery of earnings andimprovement of financial position. The strategies and measures have been formulated by developing
the Group’s vision toward 2030 and a strategic direction for achieving it.
2.

Basic policy promoting sustainability management

The spread of COVID-19 has provided people with opportunities to rethink their lives and work andremind themselves of the importance of health, safety and security, and the connection between people.
Corporations are strongly called for to play a role and fulfill their responsibilities to tackle andaddress issues over the environment, society, and human rights through business activities, alongsideeconomic values.
We have set seven materiality issues in order to position sustainability at the core of management
and embody it in Group-wide corporate activities, with a view to realizing the Group Vision.
By promoting business activities based on these materiality issues, we will work to realize “WellBeing Life” for all of our stakeholders.
[Please refer to pages 38 to 39 for descriptions of the materiality issues and Well-Being Life]

3.

Management direction looking ahead to 2030

(1) Corporate vision“A corporate group producing fulfilling lifestyles and unique urban development in coexistencewith local communities”- 31 -

When we consider management direction looking ahead to 2030, the Group’s values to date will
become even more important. These are “respect for human thought and individuality,” “coexistencewith local communities,” and “passing on traditional culture and communicating a cutting-edge culture.”
The Group has developed business with the commercial field at its core, such as the Department
Store Business and Shopping Center Business (PARCO Business). Looking forward, we will expand
our business portfolio beyond the commercial field into areas such as the Real Estate Business, andprovide consumers with cultural and fulfilling lifestyles through the Group’s distinctive unique urban
development in coexistence with local communities.
(2) Strategic direction
For business environment looking ahead to 2030, we consider the following external environmental
changes will have a significant impact on the Group: 1) the “resilience of the urban commercial area”
amid a shrinking national population, 2) the “fusion of real and digital,” in which information received
through “people” and its reliability are reevaluated, and 3) “continued polarization of income andconsumption.”
Moreover, we recognize that the Group’s four strengths are 1) store real estate assets in major
Japanese cities such as Tokyo, Nagoya, and Osaka, 2) commercial production capabilities developed
through store and urban development, 3) partners such as suppliers and specialist stores with excellent
content and original creators, and 4) a high quality customer base that enjoys active lifestyles.
1)

Three key strategies - Shift to a developer strategy -We have taken these long-term environmental changes as an opportunity to carry out businessstructure reforms and create new businesses. We have reconfigured the Group’s four strengths anddetermined the Groups’ three key strategies: “developer strategy,” “real x digital strategy,” and “prime
life strategy,” to make full use of them across the Group.
Among these, the “developer strategy” is positioned as a growth driver for regrowth of the Group,
and we will concentrate our allocation of management resources in this area as our top priority strategy.
(i) Developer strategy•••

We will maximize the value of the Group’s real estate assets. In complex redevelopment and so forth,
we will adjust the scale of department stores and PARCO and make use of the relaxed floor-arearatio. We will increase the share of non-commercial applications to increase profitability.
In the development of large-scale complexes in key areas, we will contribute to lively towns
through attractive urban development that respects individuality of the towns, while increasing ourshare of consumer sentiment.
We will diversify multiple revenue streams by acquiring and developing new real estate, organizing
private subscription investment funds, and engaging in asset management. In addition, we will
expand our development area to include suburban areas.

(ii) Real x digital strategy•••

With use of digital technology inspired by stores, we will transform the business model into one thatprovides new experience value beyond time and space.
We will increase the sophistication of customer data analysis and use of digital tools to deepen therelationships with customers putting “people” at the start.
In addition to sales revenue, we will diversify multiple revenue streams, such as rental revenue andcommission revenue through the use of digital technology.

(iii) Prime life strategy•••

We will further strengthen our proposals for consumers who value culture and arts and enjoy
fulfilling, sustainable lifestyles.
We will enhance our content by utilizing the Group’s entertainment and arts, as well as developing
new products and service that provide premium experiences through alliances with companies
outside the Group.
We will promote the acquisition of customers beyond department store gaisho, such as the new richin Japan and wealthy classes overseas in Asia, including through alliances with other companies.
- 32 -

•We will expand our pool of loyal customers by offering new payment methods and developing highadded value financial services through customer life planning.

2)

Area strategy bringing together the three key strategies

In Shinsaibashi district, Osaka and Sakae district, Nagoya, in which our department stores and
PARCO are adjacent, we will bring together the three key strategies to promote unique urban
development in coexistence with local communities.
Our area customer strategy will be advanced by utilizing the integrated customer database acrossmultiple businesses such as department stores, PARCO, and new commercial and non-commercial
facilities, and by promoting links with JFR Card customer services.
3)

Alliances, M&As, and wing expansion

We will realize long-term, highly important Group strategies, such as alliances with other companies
and business acquisitions with a view to expanding the scale and increasing the speed of our key
strategies.
(3) Pursue Group synergies with strategy committees
The three key strategies shall each have a newly established committee comprising members fromacross the Group to guide the proposal and execution of plans from an optimal Group perspective.
(4) Approach to long-term profit growth and business portfolio
From fiscal 2024 onward, through annualized profit growth of over 10%, we will aim to achieve
consolidated operating profit of ¥80,000 million and ROE (profit/equity attributable to owners ofparent) of 10% for fiscal 2030.
We will increase the shares of the Developer Business and the Payment and Finance Business inconsolidated operating profit in the business portfolio in 2030 to 40% from 20% in fiscal 2019.
From fiscal 2021, the Group will have four business segments: the Department Store Business, theSC (Shopping Center) Business, the Developer Business, and the Payment and Finance Business.
4.

FY2021-FY2023 Medium-term Business Plan

(1) Positioning of the Medium-term Business Plan - Complete recovery and start on regrowth This Medium-term Business Plan aims to achieve “complete recovery” from the COVID-19
pandemic by returning our financial figures to fiscal 2019 levels in the final fiscal year of the plan, fiscal
2023, while at the same time positioning this period as one for getting back on track for “regrowth”
from fiscal 2024 onward.
Aiming for early recovery in profitability, we will concentrate our efforts at the renovation of flagshipstores and digital investment under a key strategy, the “real x digital,” as well as solid customer baseunderpinned by the department store gaisho under the “prime life strategy.” At the same time, we will
steadily promote efforts to achieve “management structure reforms” as the most important measure forcomplete recovery.
In the “developer strategy,” we will increase our investment allocation in advance, starting during
the period of this plan as a medium- to long-term growth driver.

- 33 -

Overall Composition of the FY2021-FY2023 Medium-term Business Plan(i) Real x digital strategy (Department Store Business and SC Business(PARCO))
Three key strategies for “quick recovery of(ii) Prime life strategy (Department Store Business and Payment andearnings and regrowth”
Finance Business)(iii) Developer strategy (Developer Business (PARCO))
Most important measure towards“complete recovery”

Management structure reforms (reduce fixed expenses, increase
management efficiency and asset efficiency)

Strengthening of management foundation

Financial strategy, human resource strategy, (defensive) IT strategy, andgovernance(2) Key performance indicator targets
ROIC (Return on Invested Capital) will be applied as the indicator to manage the capital’s profitability
from this medium-term business plan.
For fiscal 2023, we will aim to achieve consolidated operating profit of ¥40,300 million, Return on Equity(ROE) of 7%, Return on Invested Capital (ROIC) of 5%. In addition, as sustainability targets, we will aim
to achieve a reduction in greenhouse gas emissions of 40% and a ratio of women in management positionsof 26%.
FY2019 results

FY2020 results

FY2023 targets¥40,286 million¥(24,265) million¥40,300 million

Consolidated ROE

5.4%(7.1)%

7.0%

Consolidated ROIC

–

–

5.0%

Consolidated operating
profit (IFRS)Greenhouse gas emissions*(16.3)%(under calculation)

Ratio of women in
16.6%
19.9%
management positions*Scope 1 and 2 emissions compared with FY2017. The result of FY2020 is under calculation.

(40)%
26%

(3) Financial policy
We will generate operating cash flow of ¥190,000 million or more (including depreciation of right-of-use
assets) over three years, ¥90,000 million of which will be injected into the growth and capital investments.
Until fiscal 2023, investment allocation will be made giving priority to projects that contribute to profit andthe “developer strategy.”
We will reduce interest-bearing liabilities (excluding lease liabilities) to ¥260,000 million by the end of
fiscal 2023.
We will provide shareholder returns on the basis of maintaining a consolidated dividend payout ratio ofat least 30% and also consider the option of purchasing treasury shares as appropriate.

(4) Framework for the medium-term business plan
[Key strategies]
1)

Real x digital strategy(Department Store Business)
(i)
•

•

Increase the attractiveness of stores and content
We will focus on expanding the categories in which department stores have strengths, such as by further
enhancing luxury, centered on flagship stores, and delving deep into cosmetics, watches, art and otheritem groupings that have a high share within the industry, aiming to establish a competitive advantage
in each location.
We will work to increase the value of the customer experience by increasing the attractiveness of stores,
through efforts such as developing new content and sales floors that utilize a variety of customer contact- 34 -

points, such as physical stores, gaisho and e-commerce, improving the comfortable sales floors andstore environment that are exclusive to physical stores, and developing high-quality service menus.
(ii) Expand businesses that utilize online spaces•

We will increase the attractiveness of our stores and develop original OMO sales spaces (merging
physical stores with online) for cosmetics, art, and so forth, inspired by physical stores. In tandem with
this, we will enrich and expand product lineups such as foods and gifts and rebuild department stores’
websites to develop brands and the like.

(iii) Conduct business activities from a CSV (Creating Shared Value) perspective•

We will develop business activities connected with increasing social value, such as development andsale of limited products created with local communities, entry into the subscription business that utilizes
online spaces, and collaboration with suppliers to contribute to decarbonized society.

<SC (Shopping Center) Business>(i)•

Rebuild the PARCO store brand value
We will combine elements form our development of the Shibuya PARCO and Shinsaibashi PARCO
stores with the local culture of each store’s area to rebuild the original brand value provided by eachstore.

(ii) Pursue a digital SC platform•

Through a digital SC platform developed in collaboration with our business partners, we will promote
the construction of PARCO’s proprietary OMO sales spaces, including the mutual transfer of customers
between the physical world and online based on the stores’ power of communication.

(iii) Develop alliance-based sales floors and new content•

We will work to develop sales floors, zones, and content that provide experience value such as “health,”“beauty,” “food,” and “learning” through real x digital.

(iv) Develop content from a CSV perspective•

We will work to enhance online events for art, theatrical performance, and music, hold cultural eventsin cooperation with towns, and develop businesses that cater to new values and lifestyles such aswellness and shared offices.

2)

Prime life strategy(i)Develop solution services•

Based on department store gaisho, we will deepen our mainstay categories while also taking steps toprovide content and experience value beyond the conventional framework by developing new categories
and services, and so forth.

(ii) Evolve communication with customers••

We will work to strengthen online communication, such as promoting digitalization in department store
gaisho activities and enhancing remote sales services.
We will work to increase the sophistication of CRM (Customer Relationship Management) activities,
including strengthening relationships with customers through full use of our customer database andretaining overseas customers who visit Japan.

(iii) Enhance products in the Payment and Finance Business•We will develop new products aligned with customers’ life stages, such as insurance and financial
services while collaborating with Department Store Business to strengthen the customer base.

3)

Developer strategy(i)Work on diverse applications that are not limited to the commercial field•

In addition to the commercial field, we will work on development of residences, offices, hotels, andcomplexes that include combinations of them by working together with other companies.

(ii) Promote CRE (Corporate Real Estate) strategies•

We will work to improve profitability through measures such as asset sales and asset replacement.
- 35 -

(iii) Start operation of a circular investment scheme•

We will organize a private subscription fund and start a circular investment scheme. Furthermore, wewill diversify multiple revenue streams by entering the asset management business.

(iv) Expand into suburban areas•

We will work to develop complex facilities in suburban areas where needs for closely situated “work,
living, and commercial” facilities are expected to increase.

(v) Promote key area development•

We will work to develop large-scale complexes in the Group’s key areas such as Shinsaibashi, Osakaand Sakae, Nagoya, looking ahead to 2030.

[Management structure reforms]
1)

Reduction of fixed costs through structure reforms

We will reduce fixed expenses by ¥10,000 million compared with fiscal 2019 and lower our break-evenpoint.
(i)•

Organizational and personnel structure reforms

We will promote organizational and personnel structure reforms, including business model reforms
in each business as well as revision of store operation methods and areas for business process
outsourcing.

(ii) Cost structure reforms•

We will promote cost reductions, such as streamlining offices through work style reforms, use of digital
media for advertising and promotion, and Group purchasing of material and supplies.

2)

Increase management efficiency and asset efficiency

We will narrow down our businesses based on the future and growth potential of each business to increase
the efficiency of management. We will also increase asset efficiency by identifying non-business assets.

[Strengthening of management foundation]
1)

Group financial strategy

We will respond flexibly to ensure liquidity of funds while monitoring the impact of the COVID-19
pandemic on business. In addition, we will perform new fund procurement to promote ESG investment. In
addition, we will strengthen the governance in accordance with the Group’s tax policies, and promote
optimization of tax costs.
2)

Group human resource strategy

We will strengthen human resource management through measures such as skill development for
employees who will carry out the key strategies and boosted recruitment of specialists. To become a People
Development Company where employees can demonstrate their full individuality and capabilities, we willconduct various measures such as encouragement of active participation of women, work style reforms,
employment of people with disabilities, and initiatives related to LGBT issues.
3)Group IT strategy

To increase the sophistication of management and administration, we will work to rebuild backbone
systems. We also aim to improve productivity through efforts such as revising our business processes.
Furthermore, we will promote IT governance including optimization of IT investment and strengthening of
information security.
4)

Sophistication of corporate governanceTo expedite management decision-making and execution, we will work to increase the sophistication of
corporate governance, such as further delegating business execution authority to executive officers andclarifying responsibilities, while strengthening the supervision function in the Board of Directors.

- 36 -

(Reference) Changes in the Reportable Segments• From the fiscal year ending February 28, 2022, the Group will have four business segments; theDepartment Store Business, the SC (Shopping Center) Business, the Developer Business, and the
Payment and Finance Business.
• The changes in the reportable segments under the Group, the major subsidiaries, and theclassification of the real estate properties for the fiscal year ended February 28, 2021 and the fiscal
year ending February 28, 2022 are as follows.
(Note) In the chart below, the scope of the existing PARCO Business is presented within the dotted lines.
Up to August 2020

Up to February 2021

March 2021 and beyond

Department Store Business

Department Store Business

Department Store Business
Daimaru Matsuzakaya
Department Stores

Real Estate Business(Held by Daimaru Matsuzakaya)

Real Estate Business(Held by Daimaru Matsuzakaya)

Hakata Daimaru

GINZA SIX
Tenants around department stores

GINZA SIX
Tenants around department stores

GINZA SIX
Tenants around department stores(Held by PARCO)
Ueno Frontier Tower (lease)*

Ueno Frontier Tower (lease)*

Other (BINO, etc.)

Other (BINO, etc.)

Kochi Daimaru

SC Business
PARCO stores(Included Shinsaibashi PARCO)NEUVE A
Parco (Singapore)

North wing of Shinsaibashi store

PARCO Business

PARCO Business

PARCO stores

PARCO stores

Ueno Frontier Tower

Shinsaibashi PARCO(opened on November 20)

Developer BusinessZERO GATEZERO GATEZERO GATEPARCO SPACE SYSTEMS
Parco Digital Marketing

Other subsidiaries of PARCO

Other subsidiaries of PARCO

JAPAN RETAIL ADVISORS

Credit and Finance Business

Credit and Finance Business

Other (BINO, etc.)
J. Front Design & Construction

Payment and Finance Business(renamed)
Other

Other

J. Front Design & Construction

J. Front Design & Construction

JFR Card

Other
Daimaru Kogyo
Dimples’, etc.

*

Daimaru Kogyo
Dimples’, etc.

Daimaru Kogyo
Dimples’, etc.

“Ueno Frontier Tower (lease)” up to February 2021 includes real estate lease revenue from PARCO Co., Ltd. on PARCO_ya
Ueno.

- 37 -

(Feature) The Group’s Sustainability Vision(i) JFR’s Sustainability Policy

With an aim to achieve sustainable management, the Group established its “Sustainability Policy,”
the cornerstone of all ESG activities, to create and bring to life “New Happiness.” According to thepolicy, we also formulated our “Eco Vision” and “Social Vision,” which, together with the “Corporate
Governance Policy,” form the basis for our ESG activities. In order to 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.
For details of the sustainability policy, pleaseretailing.com/english/sustainability/top-commitment01.php)

refer

to:

(https://www.j-front-(ii) Sustainability Management and a renewed affluence “Well-Being Life”

We value the sustainability management which incorporates sustainability into the corporate andbusiness strategies to achieve a sustainable business growth. Based on this recognition, the Group
promotes the sustainability management through the business activities to achieve our Group Vision,“Create and Bring to Life ‘New Happiness’.”
On the other hand, the pandemic transformed the world with the social structure and consumption
pattern being about to change, which alters the value that the retail industries are expected to offer.
Amid an increasing uncertainty, in order to promote sustainability management and realize the Group’s
vision, we have deliberated and discussed a model that will lead to new affluence, security andhappiness after the pandemic. As a result, we concluded that the objective of the vision we should seek
is to realize “Well-Being Life” for all of our stakeholders. What we regard as “Well-Being Life” refers
to the life that realizes not only conventional material and economic affluence, but also spiritual(intellectual and cultural) and social wealth, as well as the enriched environment surrounding them. We
will promote efforts to realize “Well-Being Life” while valuing the opportunities to interact with ourcustomers and other stakeholders.
(iii) Seven materiality issues (key issues)

To promote the sustainability management and realize “Well-Being Life,” we reviewed themateriality issues. Taking the environmental issues, changes in the external circumstances due to suchas the COVID-19 pandemic, balancing the existing materiality issues and contributing to SDGs into
account, we add “promotion of circular economy” and “realization of customers’ healthy/safe/securelife” to the materiality issues.
In addition, in response to an increasing awareness toward decarbonization at home and abroad,
among the existing materiality issues, the former “contribution to a low-carbon society” has changed to“realization of decarbonized society.” Furthermore, given the social background, “promotion ofdiversity” and “realization of work-life balance” are revised to “promotion of diversity & inclusion”
and “realization of work-life integration,” respectively.
Toward the future, with the clarification of both aspects of risks and opportunities that lie in the sevenmateriality issues, we will respond to the risks, create the business opportunities related to eachmateriality issue, and aim to realize both social and economic values simultaneously based on the CSV
vision.

- 38 -

Highest priority
issueWith people

With local
communities

With
environment

Materiality

JFR’s commitment to realization of a sustainable society

Contribution to decarbonizedsociety

Leading decarbonized society and creating a global climate for new generations

Realization of customers’
healthy/safe/secure life (new)Realizing a future-oriented Well-Being Life that satisfies the mind and body of
our customers
Building safe, secure and resilient stores for the future

Promotion of diversity &inclusion

Realizing a highly diversified society where everyone recognizes each other’s
diversity and flexibly demonstrates his/her individuality

Realization of work-life
integration

Realizing Well-Being for the employees and their families through new ways ofworking for the future of diversity and flexibility

Coexistence with local
communities

Building affluent future-oriented communities together with local residents,
where people gather centered on our storesManagement of the entire
supply chain

Realizing a sustainable supply chain created together with suppliers
Realizing decarbonization throughout the entire supply chain created together
with suppliers
Realizing Well-Being in which we, together with suppliers, protect the humanrights and health of the people working along the supply chain

Promotion of circular
economy (new)Realizing a sustainable global environment for the future and a growth as acompany through the promotion of circular economy- 39 -

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

13th fiscal year
(Fiscal 2019)14th fiscal year
(Fiscal 2020)

Gross sales

1,138,981

1,125,153

1,133,654

766,297

Revenue

469,915459,840

480,621319,079

Business profit

46,24745,51445,363

2,366

Operating profit

49,54640,89140,286(24,265)

Operating profit/revenue

10.5%

8.9%

8.4%

(7.6)%

Profit before tax

48,271

42,126

37,161(28,672)

Category

Profit attributable to owners of parent

28,48627,35821,251(26,193)

Total assets

1,022,348

1,029,573

1,240,308

1,263,722

Total equity

450,887

468,485399,681364,343

Equity attributable to owners of parent

395,519

412,700

387,188352,171

38.7

40.1

31.2

27.9

Ratio of equity attributable to owners of parent to total assets
Cash flows from operating activities

57,07934,87073,35856,471

Cash flows from investing activities(19,030)(26,836)(49,559)(20,870)

Free cash flows

38,048

8,034

23,79935,601

Cash flows from financing activities(31,048)(21,274)(14,829)58,727

Cash and cash equivalents at end of period

38,88325,65934,633

128,925

Profit/equity attributable to owners of parent (ROE)

7.5%

6.8%

5.4%

(7.1) %

Operating profit/total assets (ROA)

4.9%

4.0%

3.2%

(1.9) %

Basic earnings per share (EPS) (Yen)

108.92104.5581.19(100.03)

Equity attributable to owners of parent per share (Yen)

1,511.91

1,576.68

1,479.07

1,344.91

Price earnings ratio (PER)

17.91%

11.79%

14.13%(10.17) %Interim dividend (Yen)

16.00

17.00

18.00

9.00

Year-end dividend (Yen)

19.00

18.00

18.00

18.00

Dividend payout ratio

32.1%

33.5%

44.3%

–%

Dividends/equity attributable to owners of parent

2.3%

2.2%

2.4%

2.0%

(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.

- 40 -

(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)
Company nameShare capital

Ratio of ownershipby the Company(%)

Major businesses

Daimaru Matsuzakaya Department Stores
Co. Ltd.

10,000

The Hakata Daimaru, Inc.

3,037

69.9

Department Store Business

Kochi Daimaru Co., Ltd.

300

100.0

Department Store Business

34,367100.0

PARCO Business, Real EstateBusiness

S$4 million

100.0

PARCO Business

NEUVE A Co., Ltd.

100

100.0

PARCO Business

PARCO SPACE SYSTEMS Co., Ltd.

490

100.0

PARCO Business

PARCO Co., Ltd.
Parco (Singapore) Pte Ltd

100.0

Department Store Business,
Real Estate Business

PARCO Digital Marketing Co., Ltd.

10

100.0

PARCO BusinessJAPAN RETAIL ADVISORS Co., Ltd.

10

100.0

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

J. Front Design & Construction Co., Ltd.

100

100.0

Design and construction
contracting

Dimples’ Co., Ltd.

90

100.0

Staffing service

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

100.0

Commissioned sales and store
management operations

Daimaru Matsuzakaya Sales Associates Co.
Ltd.

90

Specified prepaid transaction
service(Notes) 1. The Shimonoseki Daimaru, Inc. was absorbed and merged into the Daimaru Matsuzakaya Department Stores Co.
Ltd. as of March 1, 2020, and renamed to the Daimaru Shimonoseki Store.
2. The Company transferred all of the shares of J. Front Foods Co., Ltd. as of February 26, 2021.
Daimaru Matsuzakaya Tomonokai Co., Ltd.

100

100.0

(iii) Matters relating to specified wholly owned subsidiaries(Millions of yen)
Name

Address

Total book value

Total assets of theCompany

Daimaru Matsuzakaya
Department Stores Co. Ltd.

18-11, Kiba 2-chome, Koto-ku,
Tokyo202,109

675,917

PARCO Co., Ltd.

1-28-2 Minami-Ikebukuro, Toshimaku, Tokyo

160,581675,917(Note) 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.

- 41 -

(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, parking,and leasing.
(9) Major business locations(Department Store Business)
Name

Location

Name

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

Kochi Daimaru Co., Ltd.

Kochi, Kochi

Ashiya store

Ashiya, Hyogo

Sapporo store

Chuo-ku, Sapporo

Shimonoseki store

Shimonoseki,
Yamaguchi

Nagoya store
Ueno store
Shizuoka store
Takatsuki store
Toyota store

LocationNaka-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
Ikebukuro PARCO

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

PARCO_ya Ueno

Taito-ku, Tokyo

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

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
PARCO SPACE SYSTEMS Co.,
Ltd.

Name

Location

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

Aoi-ku, Shizuoka
Naka-ku, Nagoya
Chuo-ku, Osaka
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
Pedi SHIODOME
Minato-ku, Tokyo
Parco (Singapore) Pte Ltd

Singapore

JAPAN RETAIL ADVISORS Co.,Ltd.

Shibuya-ku, Tokyo

Shibuya-ku, Tokyo- 42 -

(Real Estate Business)
Name

Location

Daimaru Matsuzakaya Department Stores Co. Ltd.
GINZA SIX
PARCO Co., Ltd.
Ueno Frontier Tower
BINO OKACHIMACHI
BINO GINZA
BINO SAKAE
BINO HIGASHINOTOIN

Koto-ku, Tokyo
Chuo-ku, Tokyo
Shibuya-ku, Tokyo
Taito-ku, Tokyo
Taito-ku, Tokyo
Chuo-ku, Tokyo
Naka-ku, Nagoya
Nakagyo-ku, Kyoto
and others(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 8, 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.

133

Department Store Business

2,232

PARCO Business

1,575Real Estate Business

47

Credit and Finance Business

182

Other

2,359

Total
6,528
(Note) Other than the employees above, the number of dedicated employees is 1,688 and the number of fixed-term
employees is 1,419.

(ii) Employees of the Company
Number of employees

Average age

133
45.7
(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

1,886

47.9

684

43.9

- 43 -

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

Creditor
Borrowings
MUFG Bank, Ltd.

54,277Development Bank of Japan Inc.

35,253

Sumitomo Mitsui Banking Corporation

32,828Mizuho Bank, Ltd.

14,128

Other

83,624

Sub total

220,110Straight bonds, etc.

139,820

Total

359,930(12) Other important matters relating to current status of the corporate group
Aiming to strengthen the business foundation and competitiveness and enhance management
efficiency as a retail and real estate business group, we transferred the real estate business of Daimaru
Matsuzakaya Department Stores Co. Ltd. to PARCO Co., Ltd. effectively on September 1, 2020 toconcentrate the Group assets and centralize operation, supervision, and development functions.

- 44 -

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:

142,788(4) Major shareholders
Number of shares held(Thousands of shares)

Name of shareholders

The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
Nippon Life Insurance Company
SMBC Nikko Securities Inc.
J. Front Retailing Kyoei Supplier Shareholding Association
The Dai-ichi Life Insurance Company, Limited
MUFG Bank, Ltd.
Custody Bank of Japan, Ltd. (Trust Account 9)
GOLDMAN SACHS & CO.REG
Custody Bank of Japan, Ltd. (Trust Account 5)(Note)

Shareholding ratio(%)

24,946
14,201
9,828
8,491
6,353
5,470
4,373
4,326
4,325
3,740

9.45
5.37
3.72
3.21
2.40
2.07
1.65
1.63
1.63
1.41

Although the Company holds 6,596 thousand shares of treasury shares, the Company is excluded from the above
major shareholders. Shareholding ratio is calculated by deducting the said treasury shares. Treasury shares do notinclude shares of the Company owned by the officer remuneration BIP trust.

(5) Summary of shares that are granted to the officers of the Company as compensation for the
performance of duties during the current fiscal year
Stock-based remuneration that is granted during the current fiscal year is as follows.
Number of granted persons

Number of shares

3
(2)
14
17

20,600(5,600)11,001
31,601

Director[of which, Outside Director]
Executive Officer
Total(Notes)1. The number of shares that are granted as compensation for the performance of duties during the term of theexecutive officers is shown in the Executive Officer row.
2. The aforementioned number of granted persons and the number of shares include the officers who retired during
the current fiscal year and the shares granted to those officers.
3. The shares granted to those who were directors during the current fiscal year as compensation for the performanceof duties were “Restricted Stock (non-performance linked stock-based remuneration)” that is not linked toperformance under the stock-based compensation plan, which were granted at the time of retirement from thedirector.
4. The shares granted to the executive officers during the current fiscal year as compensation for the performanceof duties were “Performance shares (performance linked stock-based remuneration)” (Trust-type stock-based
remuneration) that is linked to a single year performance under a stock-based compensation plan, which were
granted in the current fiscal year based on the performance of the previous fiscal year.
5. The number of shares above amounts to shares issued to each Director. 34,039 shares among the shares whoserights granted to each Director will be provided in cash in the amount equivalent to the amount converted within
the Trust based on the share issuance policy of the stock-based remuneration system.

- 45 -

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

YAMAMOTO
Ryoichi

Chairperson of Board of Directors
Member of Nomination andRemuneration Committees

100.0%
15/15

Yes

Director

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

100.0%
15/15

Yes

Director

MURATA Soichi

Member of Audit Committee

100.0%
15/15

Yes

Director (Outside)

ISHII Yasuo

Chairperson of Nomination Committee
and member of Remuneration
Committee
Director of PARCO Co., Ltd.

100.0%
15/15

Yes

Director (Outside)

NISHIKAWA
Koichiro

Chairperson of Audit Committee

100.0%
15/15

Yes

UCHIDA Akira

Chairperson of Remuneration Committee
and member of Nomination Committee
Outside Director of Yokogawa Electric
Corporation
Director of Daimaru Matsuzakaya
Department Stores Co. Ltd.

100.0%
15/15

Yes

SATO Rieko(Note 1)

Member of Audit Committee
Partner of Ishii Law OfficeOutside Director (Audit and Supervisory
Committee Member) of Dai-ichi Life
Holdings, Inc.
Outside Director (Member of the Audit
and Supervisory Committee) of NTT
DATA CORPORATION
Outside Audit & Supervisory Board
Member of Mitsubishi Corporation
Director of Daimaru Matsuzakaya
Department Stores Co. Ltd.

93.3%
14/15

Yes

Director (Outside)

SEKI Tadayuki

Member of Audit Committee
Outside Director of VALQUA, LTD.
Outside Director of JSR Corporation
Outside Statutory Auditor of Asahi
Mutual Life Insurance Company
Director of PARCO Co., Ltd.

100.0%
12/12

Yes

Director (Outside)

YAGO
Natsunosuke

Member of Nomination andRemuneration Committees
Outside Director of SUBARUCORPORATION

100.0%
12/12

Yes

Director (President andRepresentative Executive
Officer)

YOSHIMOTO
TatsuyaMember of Nomination andRemuneration Committees

100.0%
15/15

Director (Senior Managing
Executive Officer)

SAWADA Taro

100.0%
12/12

Director (Senior Managing
Executive Officer)

MAKIYAMA Kozo

100.0%
15/15

Director (Managing
Executive Officer)

WAKABAYASHI
Hayato100.0%
15/15

Director (Outside)

Director (Outside)- 46 -

(Notes)

1. SATO Rieko is recorded under the name of KAMATA Rieko in the family register.
2. Stated are the number of the meetings of the Board of Directors attended and number of the meetings of theBoard of Directors held during the individual’s tenure this fiscal year (Details of attendance at each committee
meeting are given in “7. Operations of each Committee.”)
3. The Company enters into agreements limiting liability for damages such that are stipulated in Paragraph 1, Article
423 of the Companies Act, provided for in Paragraph 1, Article 427 of the said Act, with the relevant individuals(marked as “Yes” in the “Limited liability agreements” column). These agreements limit the amount 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. The Company enters into a Directors and Officers liability insurance contract with an insurance company as
stipulated in Paragraph 1, Article 430-3 of the said Act. Under such an insurance contract, indemnification will
be provided for legal damages and litigation costs to be borne by the insured. The Company covers the payment
for the entire amount of the premium for all of those insured. The insurance policy covers all Directors andExecutive Officers of the Company and all Directors and Audit & Supervisory Board Members of its subsidiaries.
However, the contract does not cover any damages, etc. arising from criminal acts and violations of laws andregulations committed by the insured knowingly what they are doing, as a measure to prevent the impairment of
the appropriateness of the execution of duties by the insured.
5. Audit Committee member TSUTSUMI Hiroyuki gained across-the-board experience into finance and accounting
and deep 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.
6. Audit Committee member NISHIKAWA Koichiro has deep 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.
7. Audit Committee member SEKI Tadayuki was involved in international business management and risk
management. As CFO, he has both abundant experience and highly specialized knowledge in relation to financeand accounting. He also has deep insight into finance and accounting matters.
8. Audit Committee members 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.

- 47 -

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

Name

President andRepresentative Executive
Officer

YOSHIMOTO
Tatsuya

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

Senior Managing Executive
SAWADA Taro
OfficerPresident and Representative Director of Daimaru Matsuzakaya
Department Stores Co. Ltd.
President and Representative Director of Daimaru Matsuzakaya Sales
Associates Co., Ltd.

Senior Managing Executive
MAKIYAMA Kozo
Officer

Representative Director, President and Executive Officer of PARCO
Co., Ltd.

Managing Executive Officer

WAKABAYASHI
HayatoManaging Executive Officer HIRANO Hidekazu

Senior Executive General Manager of Financial Strategy Unit
Director of PARCO Co., Ltd.
Senior Executive General Manager of Management Strategy Unit andin charge of Risk Management
Director of Daimaru Matsuzakaya Department Stores Co. Ltd.

Managing Executive Officer YUNOKI Kazuyo

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

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

NAKAYAMA
TakashiSenior Executive General Manager of Group Digital Strategy Unit andSenior General Manager of Digital Promotion Division

Executive Officer

IMAZU Takahiro

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

Executive Officer

IWATA Yoshimi

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

Executive Officer

ONO Keiichi

Senior General Manager of Structural Reform Promotion Division of
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(Reference) A new Executive Officer was elected and appointed. Accordingly, Executive Officers’ areas of responsibility in
the Company and important concurrent positions outside the Company have been partially changed on March 1,
2021 as indicated below. On March 1, 2021, Executive Officer, YUNOKI Kazuyo, retired from office andassumed the position of Executive Officer of Daimaru Matsuzakaya Department Stores Co. Ltd. and the positionof President and Representative Director of GINZA SIX Retail Management Co., Ltd.
Position in the Company

NameManaging Executive Officer MATSUDA(New)
Hirokazu

New areas of responsibility in the Company
Senior Executive General Manager of Human Resources Strategy Unit
and Administration Unit and in charge of ComplianceManaging Executive Officer ARISAWA Hisashi

In charge of Special Assignments from President

Executive Officer

IMAZU Takahiro

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

Executive Officer

IWATA Yoshimi

Senior General Manager of Accounting and Tax Affairs Division of
Financial Strategy Unit

- 48 -

(3) Total amount of remuneration, etc. to Directors and Executive Officers
Total amount of
remuneration,
Number ofetc.
payees(Millions ofyen)

Totals by category of remuneration, etc.
(Millions of yen)Basicremuneration

Performancelinked
bonuses

Performancelinked stockbased
remuneration

Nonperformancelinked stockbased
remuneration

Director

12

221

167

–

–

53

[of which, Outside
Director]

[8]

[99]

[80]

–

–

[18]

Executive Officer

14

252

229

23

–

–

(Notes)

Total
26
474
397
23
–
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 ¥12 million.
2. In the above table, the remuneration, etc. for Directors of ¥221 million includes ¥21 million (including nonperformance-linked stock-based remuneration) paid to three Directors who held the post between March 1 andMay 28, 2020.
3. Given the deterioration in earnings performance and downward revisions made in earnings and dividends
forecasts impacted by the spread of COVID-19 infectious disease, the Company reduced (returned) the basic
remuneration amount of Directors (including Outside Directors) and Executive Officers, from July to September
2020, by 10% with the approval of the Remuneration Committee that received the proposal from Executive
Directors and Inside Directors. The amount affected by the reduced (or returned) basic remuneration amount isrecorded in other operating income. The total amount of remuneration, etc., and basic remuneration do not reflect
the effect of the reduced (or returned) basic remuneration amount.
4. The remunerations, etc. that are paid as compensation for the performance of duties during the term of the
Executive Officers is shown in the Executive Officer row.
5. 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 a trust
for officers (a system of granting the Company’s shares to officers (in certain cases, the Company’s shares areconverted 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 stockbased remuneration in the above chart corresponds to monetary remuneration in the Companies Act and is thetotal 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 Medium-Term Business Plan targets, as well as non-performance-linked
stock-based remuneration for Directors who do not execute business. Actual trend of earnings performanceindicators for calculating bonuses and performance share in the current business year (consolidated operating
income, consolidated operating profit, and ROE and basic earnings per share) are stated under 1. (6) Changes in
assets and profit or loss.
6. The figure in the “Performance-linked bonuses” column represents an amount recognized as a provision(expense), factoring in the results of performance evaluation for the fiscal year ended February 28, 2021. The
actual amounts to be paid after factoring in the earnings performance assessment of each Executive Director will
be determined by a meeting of the Remuneration Committee scheduled for or after April 2021.
7. The “performance-linked stock-based remuneration” column reflects the reversal of a provision of ¥65 million
for short-term incentives recorded in the first quarter of the fiscal year ended February 28, 2021 as theperformance-linked factor was set to zero. As the performance-linked factor was set to zero, a provision of ¥356
million was also reversed for performance shares that are the medium- and long-term incentives of performancelinked stock-based remuneration.

(4) 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
The Company established and published an Officer Remuneration Policy in April 2017.
Beginning in the fiscal year ended February 28, 2021, the Remuneration Committee with amajority of independent Outside Directors reviewed the Officer Remuneration System according
to changes in the Medium-term Business Plan, business environment and Management Policy, andrevised the Officer Remuneration Policy to reflect the promotion of sustainability management
and so forth, and further enhance the details of the policy.

- 49 -

<Basic policy for officer remuneration>
The Company’s Officer Remuneration System follows the basic approach below, aiming toachieve the objectives of realizing and promoting sustainability management (pay for purpose).
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 increase corporate value over the
medium to long term, and be consistent with the corporate culture.
 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.
<How to determine remuneration levels>
To make quick responses to changes in the external environment and the market environment,
the Company uses objective remuneration survey data, and so forth, from external specialist
organizations, 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.
<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”(performance-linked stock-based remuneration, which is trust-type stock-based remuneration)linked to the consolidated performance achievement rate, etc. provided in the Medium-term
Business Plan as a stock-based remuneration system. The performance indicators of bonuses andperformance shares were selected as shown in the table below so as to achieve ROE of 8% in the
final fiscal year of the Medium-term Business Plan and to make a healthy incentive for sustainablegrowth function.

- 50 -

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
*2>
<60%

Qualitativeevaluation<40% *2>

Consolidated
revenue

18%

Consolidated
operating profit

24%

ROE

18%

Customer perspective
Process perspective
Organizational and human resource
perspective

40%[Short-term: 40%] Base amount by rank (position) ×
Performance achievement factor *3*3 Calculated based on the following measures of achievement *4
Evaluation
weights

Details

Performancelinked stockbased
remuneration(variable)

Consolidated operating profit

20%

Basic earnings per share

20%

Annualpayment instocks[Medium- to long-term: 60%] Base amount by rank (position) ×
Performance achievement factor *5*5 Calculated based on the following measures of achievement *4
At theIf free cash flow and ROE targets are not met, the amount paid
expiration ofwill be cut by 50% (if only one of the targets is not met, by
the term of
25%).
each MediumEvaluation term Business
Details
weights
Plan in stocks
Consolidated operating profit
30%

Basic earnings per share30%*2 At the Affiliated Business Unit, which includes evaluations of departments in charge, the quantitative evaluation is 70%
and the qualitative evaluation 30%.
*4 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
50% or more, but less than 150%
Less than 50%

2(Actual results ÷ Target – 0.5) × 2
0[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 accordancewith rank (position) and (ii) “restricted stock” (non-performance-linked stock-based remuneration,
which is trust-type stock-based remuneration), which is not linked to performance, as part of thestock-based remuneration system. Restricted stock is a system for issuing the Company’s sharesin a way that it is not linked to performance, with the objective of involving Directors who do not
execute business in management with a medium- to long-term view in order that they should
strengthen proactive and defensive governance of the Company from a different standpoint to the
Executive Officers as representatives of stakeholders. The shares are issued upon their retirement- 51 -

from office. The Company will disclose the number of shares held as the number of dilutive
potential shares until the shares are issued.
<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 date of
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 remuneration in the form of performance-linked stock-based
remuneration is to provide additional incentive to them to work for the improvement of thefinancial performance and corporate value of the Company from the medium- to long-term
perspective. Directors and Executive Officers of Daimaru Matsuzakaya Department Stores shalladopt the same policy for their acquisition and holding of the Company’s shares.
(ii) Process for determining remuneration for Directors and Executive Officers
To ensure the appropriateness of the level and amount of remuneration, and the transparency ofdecision-making processes, decisions are made by resolution of the Remuneration Committee
comprising independent Outside Directors (majority), a non-executive Chairperson of the Boardof Directors and the President and Representative Executive Officer, and headed by anindependent Outside Director. Remuneration Committee meetings are to be held at least four times
per year. The committee decides on the policy for determining remuneration details for theindividual officers (Directors and Executive Officers) of the Company, Daimaru Matsuzakaya
Department Stores and PARCO, and on the remuneration details for individual Directors andExecutive Officers of the Company. Basic remuneration positioned as fixed remuneration isdecided for each rank (position) based on the size (weight) of the responsibility borne by each
officer. Bonuses are decided by evaluating results that correspond to every fiscal year performancebased on the numerical target of “financial perspective” and using a balanced scorecard with three
key issues: “customer perspective,” “process perspective” and “organizational and humanresource perspective.” The committee also confirms the performance-linked factor in accordancewith the achievement rates of consolidated operating profit and basic earnings per share to
determine short-term performance shares that account for 40% of performance shares(performance-linked stock-based remuneration). Based on these results, the committee determinesthat the remuneration details for individual Directors and Executive Officers during the current
fiscal year align with the Company’s basic policy for officer remuneration and the approach todetermine remuneration levels.
Regarding Executive Officers’ bonuses and stock-based remuneration, the right of payment ofbonuses and granting of stock-based remuneration may be forfeited or the Company may request
the return of remuneration that has already been paid or granted in cases such as where the Boardof Directors has resolved that the financial results are to be amended afterwards due to a serious
accounting misstatement or fraud, or where there has been a serious infringement of theappointment contract, etc., between the Company and an officer, or when an officer has retired fortheir own reasons during their term of office against the will of the Company.
To properly promote the initiatives above, the Company appoints external remuneration
consultants with a view to introducing objective viewpoints from outside the Company andexpertise on officer remuneration systems. With their support, the Company reviews its
remuneration levels and remuneration system in light of external data, economic environment,
industry trends, business conditions, and corporate culture, among others.
In addition, the Remuneration Committee revised the Officer Remuneration Policy in April
2021 in accordance with the FY2021-FY2023 Medium-term Business Plan. The Officer
Remuneration System is supposed to be reviewed in accordance with each Medium-term Business
Plan period. During the Medium-term Business Plan period, the level of basic remuneration will
be reviewed if a drastic review becomes necessary due to dramatic changes in the external
environment and so forth.
- 52 -

For the details of this revision made in the Officer Remuneration Policy, please refer to the“Notice Regarding Revision of Officer Remuneration Policy” announced on April 13, 2021.
For details, please refer to:(https://www.j-front-retailing.com/_data/news/210413_remunerationpolicy_E.pdf)- 53 -

(5) Matters relating to Outside Directors

ISHII Yasuo
Independent(Note)

Important concurrent positions
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 PARCO Co., Ltd.
PARCO Co., Ltd. is a wholly owned subsidiary of theCompany.
No items to report

100% (Attended all 15 meetings held during tenure thisfiscal year)
Nomination
100% (Attended all 14 meetings held
during tenure this fiscal year)
Remuneration 100% (Attended all 15 meetings held
during tenure this fiscal year)[Major activities during current fiscal year and overview of duties executed in roles that are expected to be fulfilled]
ISHII Yasuo has contributed to ensuring more effective meetings of the Board of Directors by fulfilling expectations of him
drawing on points of view and perspectives that vary from those of Inside Directors in providing advice and oversight withregard to, among others, the importance of analyzing the future environment when developing medium- and long-term
strategies, the approach to working on structural reforms in critical circumstances above everything else, the necessity ofsuggesting overseas business expansion with the effective use of the Group’s resources, and the approach to new businesses
in line with sustainability management. He does so using his experience with global business outside the field of retail andadvanced knowledge based on his broad experience in the field of business planning, including being knowledgeable ofexpanding business overseas. In regard to being a committee member, he serves as the Chairperson of the Nomination
Committee and a member of the Remuneration Committee and has worked to strengthen the functions of managers by
fulfilling expectations of him not only deciding on the transparent and fair choice of directors and promoting deliberations
on the policy of operating the Nomination Committee focused on succession plans as the Chairperson of the Nomination
Committee but also deciding on concrete compensation amounts and helping deliberate on the revision of the Officer
Remuneration System as a 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 18 meetings held
Committees to which he belongs
during tenure this fiscal year)[Major activities during current fiscal year and overview of duties executed in roles that are expected to be fulfilled]NISHIKAWA Koichiro, utilizing his various experiences related to business tie-ups, M&As, business reforms, and importantinternational negotiations, has contributed to ensuring more effective meetings of the Board of Directors by fulfilling
expectations of him drawing on points of view and perspectives that vary from those of Inside Directors in providing advice
and oversight with regard to, among others, the identification of multiple risks in financial strategies such as the importanceof ensuring financial bases under the declaration of a state of emergency, the recruitment and development of diverse
management personnel, the necessity of speedily working on digitalization and structural reforms, and the importance ofclarifying KPIs including a non-financial perspective. In regard to being a committee member, he serves as the Chairpersonof the Audit Committee and has worked to strengthen audit functions by fulfilling expectations of him promoting exchangesof opinions and discussions on items submitted to the Board of Directors and items judged to require monitoring by the
Audit Committee from the perspective of legality, appropriateness, etc. while auditing the execution of duties by Directors
and Executive Officers of a company with three committees (nomination, audit, and remuneration committees).

- 54 -

Important concurrent positions

UCHIDA Akira
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

Outside Director of Yokogawa Electric Corporation
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 11 meetings held
during tenure this fiscal year)
Remuneration 100% (Attended all 11 meetings held
during tenure this fiscal year)
Audit
100% (Attended all 5 meetings held
during tenure this fiscal year)[Major activities during current fiscal year and overview of duties executed in roles that are expected to be fulfilled]
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 has contributed to ensuring more effective
meetings of the Board of Directors by fulfilling expectations of him drawing on points of view and perspectives that varyfrom those of Inside Directors in providing advice and oversight with regard to, among others, the strengthening of interorganizational cooperation to help generate the Group synergies, the clarification of the chain of command and order topromote structural reforms and work on digitalization, the approach to management from the perspectives of ESG and CSV
to help increase corporate value, and the ways of developing and delivering visions and strategies that stakeholders expect
to see. In regard to being a committee member, he serves as the Chairperson of the Remuneration Committee and a memberof the Nomination Committee and has worked to strengthen the functions of managers by fulfilling expectations of him not
only deciding on concrete compensation amounts and promoting deliberations on the revision of the Officer Remuneration
System as the Chairperson of the Remuneration Committee but also deciding on the transparent and fair choice of directors
and helping deliberate on the policy of operating the Nomination Committee focused on succession plans and other matters
as a member of the Nomination Committee.
Important concurrent positions
Partner of Ishii Law OfficeOutside Director (Audit and Supervisory Committee
Member) of Dai-ichi Life Holdings, Inc.
Outside Director (Member of the Audit andSupervisory Committee) of NTT DATACORPORATION
Outside Audit & Supervisory Board Member of
Mitsubishi Corporation
SATO Rieko
Director of Daimaru Matsuzakaya Department Stores
Co. Ltd.
Independent
Relationships
betweentheCompany
Daimaru Matsuzakaya Department Stores Co. Ltd. is a
(Note)and organizations where important
wholly owned subsidiary of the Company.
concurrent positions are held
Relationship with specified affiliated No items to reportbusiness operator
Attendance at the meetings of the
93.3% (Attended 14 of 15 meetings held during tenure
Board of Directors
this fiscal year)
Attendance at the meetings of
Audit
100% (Attended all 18 meetings held
Committees to which she belongs
during tenure this fiscal year)[Major activities during current fiscal year and overview of duties executed in roles that are expected to be fulfilled]
SATO Rieko has contributed to ensuring more effective meetings of the Board of Directors by fulfilling expectations of her
drawing on points of view and perspectives that vary from those of Inside Directors in providing advice and oversight withregard to, among others, specific ways and points that should be kept in mind to promote structural reforms, the importanceof analyzing the future environment when developing medium- and long-term strategies, new forms of services using digitaltechnologies that customers expect us to offer, and views on agenda from the perspective of laws and regulations. She does
so based on her abundant experience and advanced and expert knowledge as a lawyer specializing mainly in corporate legal
affairs. She also has served as a lead director of the Company’s executive session established as an opportunity for Outside
Directors to openly and freely exchange opinions and share information. In regard to being a committee member, she serves
as a member of the Audit Committee and has worked to strengthen audit functions by fulfilling expectations of her
exchanging opinions on and discussing items submitted to the Board of Directors and items judged to require monitoring by
the Audit Committee from the perspective of legality, appropriateness, etc. while auditing the execution of duties byDirectors and Executive Officers of a company with three committees (nomination, audit, and remuneration committees).

- 55 -

Important concurrent positions

Outside Director of VALQUA, LTD.
Outside Director of JSR Corporation
Outside Statutory Auditor of Asahi Mutual Life
Insurance Company
Director of PARCO Co., Ltd.
PARCO Co., Ltd. is a wholly owned subsidiary of theCompany.

Relationships between the Company
and organizations where importantconcurrent positions are held
Relationship with specified affiliated No items to reportbusiness operator
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 13 meetings held
Committees to which he belongs
during tenure this fiscal year)[Major activities during current fiscal year and overview of duties executed in roles that are expected to be fulfilled]
SEKI Tadayuki was involved in international business management and risk management at a general trading company formany years, and as CFO has both abundant knowledge and experience in relation to finance and accounting. He also has
wide-ranging insights derived from roles as Outside Director and Audit & Supervisory Board Member at multiple
companies. Using such experience and knowledge, he has contributed to ensuring more effective meetings of the Board of
Directors by fulfilling expectations of him drawing on points of view and perspectives that vary from those of Inside
Directors in providing advice and oversight with regard to, among others, specific ways of promoting structural reforms
with employee motivation in mind, the approach to positioning the Payment and Finance Business in the Medium-term
Business Plan, the ideal way of operating new businesses, and the best financial strategy considering the cost of capital. In
regard to being a committee member, he serves as a member of the Audit Committee and has worked to strengthen audit
functions by fulfilling expectations of him exchanging opinions on and discussing items submitted to the Board of Directors
and items judged to require monitoring by the Audit Committee from the perspective of legality, appropriateness, etc. while
auditing the execution of duties by Directors and Executive Officers of a company with three committees (nomination, audit,
and remuneration committees).
Important concurrent positions
Outside Director of SUBARU CORPORATION
Relationships between the Company
No special relationships exist
and organizations where importantconcurrent positions are held
YAGO Natsunosuke Relationship with specified affiliated No items to reportbusiness operator
Independent
Attendance at the meetings of the
100% (Attended all 12 meetings held during tenure this(Note)
Board of Directors
fiscal year)
Attendance at the meetings ofNomination
100% (Attended all 11 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 and overview of duties executed in roles that are expected to be fulfilled]
YAGO Natsunosuke has been involved in top-level company management for many years, and has abundant experience instrengthening financial bases and in compliance management. He also has advanced knowledge of internal control andcorporate governance based on his experience in transitioning to a company with three committees (nomination, audit andremuneration committees). Using such experience and knowledge, he has contributed to ensuring more effective meetingsof the Board of Directors by fulfilling expectations of him drawing on points of view and perspectives that vary from thoseof Inside Directors in providing advice and oversight with regard to, among others, the approach to setting appropriate goals
to promote structural reforms, the method of identifying issues toward the development of the Medium-term Business Plan,
how the management should promote matrix management, the appropriate ways of identifying and examining materiality
issues, and specific initiatives to help resolve the materiality issues. In regard to being a committee member, he serves as the
Chairperson of the Remuneration Committee and a member of the Nomination Committee and has worked to strengthen thefunctions of managers by fulfilling expectations of him not only deciding on concrete compensation amounts and promoting
deliberations on the revision of the Officer Remuneration System as the Chairperson of the Remuneration Committee but
also deciding on the transparent and fair choice of directors and helping deliberate on the policy of operating the Nomination
Committee focused on succession plans and other matters as a member of the Nomination Committee.
(Note) The above-mentioned 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.

SEKI Tadayuki
Independent(Note)- 56 -

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¥112 million(ii) Total cash and other financial profits to be paid by the Company and its¥255 million
subsidiaries(Note) The audit agreement entered into by the Accounting Auditor and the Company does not clearly distinguish theamount 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 be practically distinguished from eachother. Therefore, the amount in (i) above indicates the total of these two kinds of amounts.

(3) Content of non-audit service
Tax accounting and taxation support, etc. for the transfer of real estate(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 the detailsof proposals to dismiss or not reappoint the Accounting Auditor submitted to the Shareholders Meeting,in the event 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 Paragraph 1, Article 340of 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 establishedby the Audit Committee.

- 57 -

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 theideals 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.
(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), and substantively ensures
their rights.
The Company treats its shareholders equitably and impartially, in accordance with types and numbersof 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 the Group
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 which constructive
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 mannerusing appropriate means, and with the added aim of facilitating more extensive understanding regarding
the Group.
(4) Roles and responsibilities of the Board of Directors, etc.
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 the aimof 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;- 58 -

(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 progress ofsenior 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.
(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 of external
persons in order to hold rigorous discourse on important strategic issues relating to the Groupmanagement.
(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 establishing acompany with three committees. The majority of the members of each of these committees are
independent Outside Directors.
(iv) The Company will build a governance structure that is easy to understand from global perspectives,
such as those of overseas investors.

- 59 -

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 to management
strategies, such as the Group Medium-Term Business Plan and Management Policy,
and matters relating to important business execution, such as asset acquisition, newbusiness 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

The COVID-19 pandemic had a profound impact over the Company’s performance
during FY2020. Amid such backdrop, the Board of Directors made a decision basedon factors such as the earning power and financial stability of the Group, to placeutmost priority on proceeding with the management structure reforms. The decision
was reflected in the Group’s agenda setting accordingly.
Considering the drastic change in environment internally and externally, the
COVID-19 pandemic and the transformation of PARCO into a wholly owned
subsidiary, we put halt to the Medium-term Business Plan covering period from
FY2017 to FY2021 and terminated it one year ahead of schedule. The new Mediumterm Business Plan that will initiate in March 2021 are plans that will lead toachievements by demonstrating the Group’s strengths cross-sectionally between
businesses. The target is to return to the pre-COVID-19 pandemic level ofoperational results reached in FY2019 in the final year of the business plan,
FY2023.
FY2021 will be the first year of the new Medium-term Business Plan. We will focus
on working on management structure reforms while recovering the profit of theoperating companies, achieving FY2023 goal, and creating a footing that will leadto regrowth in and after FY2024. We will hold discussions designed to improve thequality of strategies from the perspective of stakeholders and enhance management
oversight in order to contribute to the realization of the Group Vision and greater
corporate value.

Director
YAMAMOTO Ryoichi(Evaluation of effectiveness of the Board of Directors)
The Company conducted its sixth evaluation of the effectiveness of the Board of Directors between
September and October 2020. Third-party organization conducted individual interviews based on
advance questionnaire. A Report was prepared from the collected and analyzed results and used in
discussion at October’s Board of Directors meeting. Taking into account the fact that we now have a
new structure due to the changes of the Chairperson of the Board of Directors as well as the President
and Representative Executive Officer, we examined the status of our responses to the previous year’s
findings while putting emphasis notably on identification of issues taking into consideration the status
of deliberation and operation of the Board of Directors.
As a result, the following five issues were picked up: “redefining the roles of the Board of Directors,”“strengthening discussion on medium- and long-term growth strategy,” “reviewing the composition of
the Board of Directors,” “strengthening the PDCA cycle of the Board of Directors,” and “strengthening
the function of the Nomination Committee.”
Based on these issues, during FY2021, we will: 1) redefine the roles of the Board of Directors, review
guideline for submitting agenda items, and promote delegation of authority to executives to acceleratemanagement; 2) for medium- and long-term growth strategy, take into account the COVID-19 crisisand emphasize discussion from the perspective of recovering profit; 3) look into more effective
composition of the Board, taking into consideration the board diversity as well as the balance between
the number of persons with the function to oversee and those with execution function; 4) prepare theBoard of Directors issue management table to strengthen monitoring; and 5) review management
evaluation process and strengthen cooperation with the Nomination Committee and the Remuneration
Committee.
We will continue to strive to share issues based on the evaluation of the effectiveness of the Board of
Directors and improve the effectiveness of the Board of Directors.
- 60 -

7. Operations of each Committee(1) 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 to be submitted to shareholders’ meetings,
and reports 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 and membersof individual committees, and other matters.

Number of meetings held

14

Number of meetings attended

2 incumbent members attended all 14 meetings. Directors Uchida, Yago, andYoshimoto, who were newly appointed in May 2020, also attended all 11 meetings
held during their tenure.

Comment from Chairperson of
the Committee

The Nomination Committee utilizes in-house personnel evaluation information as
well as assessment data by a third-party organization to deliberate effective
composition of the Board of Directors and the election and dismissal of Directors
including Outside Directors as well as Executive Officers of the Company. The
committee also obtains opportunities to get to know candidate’s personalities andideas through conducting interviews, etc., as necessary, and ensures higher
objectivity, transparency and rationality.
The Nomination Committee has positioned the management team succession plan
as a central issue necessary to generate sustainable growth of the Company andcontinues to conduct related deliberations. As for training of candidates for the next
generation of managers, the committee evaluates their performance, debates theirroles 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.

Director (Outside)
ISHII Yasuo(2) 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 to be submitted to the Board of Directors,
and other individual matters the Audit Committee considers necessary.

Number of meetings held

18

Number of meetings attended

4 incumbent members attended all 18 meetings. Director Seki, who was newly
appointed in May 2020, also attended all 13 meetings held during his tenure.

Comment from Chairperson of
the Committee

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.
The committee also conducted hearing at Audit Committee Meeting (held 16
times), a meeting body held apart from the Audit Committee, regarding topics suchas the group’s business strategy, progress of organizational reform, and governanceand risk management system under the influence COVID-19 pandemic to gain
understanding of the current situation.
From the perspective of increasing the effectiveness and accuracy of audits, theAudit Committee will mutually cooperate with the Internal Audit Division,
Accounting Auditor, and Audit & Supervisory Board Members of the Group
companies and work to further enrich the audit system. The Committee will also
continue to work to establish high quality corporate governance structure that is
worthy of social trust and to conduct audits in a fair and impartial manner tocontribute to the growth of the Group and the enhancement of its corporate value.

Director (Outside)
NISHIKAWA Koichiro- 61 -

(3) 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

15

Number of meetings attended

2 incumbent members attended all 15 meetings. Directors Uchida, Yago, andYoshimoto, who were newly appointed in May 2020, also attended all 11 meetings
held during their tenure.

Comment from Chairperson of
the Committee

Pursuant to the Officer Remuneration Policy formulated in April 2017 and revisedin 2020, the Remuneration Committee examines the overall level of officer
remuneration and the ratio of performance-linked remuneration, as well as the ratioof stock-based remuneration therein against preset peer group. By doing so, theCompany maintains objective and appropriate remuneration level and system at all
times.
Furthermore, upon formulating the new Medium-term Business Plan, theCommittee held series of discussions regarding reviewing the officer remuneration
system and the policy. To support the achievement of the new Medium-term
Business Plan, overall level of officer remuneration, the ratio of performance-linked
remuneration, and current trends on stock-based remuneration for officers were
examined using third-party organization, while also designing appropriate
remuneration system and remuneration level to compensate officers the amountadequate for their work. Going forward, we will continue to operate the systemappropriately.

Director (Outside)
UCHIDA Akira- 62 -

8. System and policies of the Company(1) Systems to ensure properness of operations <Basic Policy to Build Internal Control System>
The Basic Policy to Build Internal Control System is disclosed on our website (https://www.j-frontretailing.com/) in accordance with the laws and regulations and the Article 16 of the Company’s Articles
of Incorporation.
You can access here to read the entire contents of the Basic Policy to Build Internal Control System.
(https://www.j-front-retailing.com/english/company/internalcontrol.php)(2) Operational status of systems to ensure properness of operations <Basic Policy to Build Internal
Control Systems> (FY2020)
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 statusof 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 no riskof 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 discussed items stipulated
in the Companies Act and Articles of Incorporation, matters related to initiatives for structuralreform in view of business continuity under COVID-19 crisis, formulated FY2021-FY2023
Medium-term Business Plan, and worked to steadily implement the current Medium-term
Business Plan by strengthening audits to check progress of the execution of the 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 areno 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 the Boardof 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, Group Digital Strategy Unit, Affiliated Business Unit, Financial Strategy Unit,
Human Resources Strategy Unit, and Administration Unit. These units support the prompt
execution of operations and management of operating companies under the “Mission
Statement,” which stipulates their 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 progress and performance
management control of the said plans, and proper allocation of the Group’s management
resources. With regard to matters related to business execution at operating companies, in order- 63 -

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 accordancewith these standards.
3)

The Company has established various meetings to execute items, the roles of which are clearly
indicated. The Group Management Meeting focuses on discussions of important issues to besubmitted to the Board of Directors, such as overall policy and plans for the Group management,
and the matters discussed are confirmed at the Group Policy Meeting, the Group Liaison
Meeting, and the Group Results and Strategy Examination Meeting to facilitate prompt
management decisions.

4)

As a rule, the common Group accounting system is introduced; and efforts are made to promote
more efficient operations and integrated and more efficient fund procurement by the Groupthrough a cash management system.

5)

In view of the critical condition of business performance resulting from the worsening
management environment affected by the outbreak of novel coronavirus, we established
Structural Reform Promotion Division to press ahead with the planning and execution of
structural reform of the entire group, which has become a pressing issue.

6)With regard to internal controls over financial reporting, the Company and operating companies
maintain and operate internal systems to ensure the legality and appropriateness of financial
reporting in line with the Financial Instruments and Exchange Act and various associated laws
and regulations.

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)

During the current fiscal year, the committee met three times and reexamined corporate risks
that will become the starting point of the Company’s management strategy, taking into
consideration the forward-looking forecast for 2030, impact of COVID-19 pandemic, andmanagement’s medium-and long-term risk recognition, among others. The committee sharesinformation and provides advice to operating companies in order to establish process to improverisk management of the whole Group.

(2) Execution control
1) Under the direction of the President and Representative Executive Officer, the Company has
placed designated staff in the ESG Promotion Division in the Management Strategy Unit anddevelops and manages internal controls under the Companies Act and the internal control
system under 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, andthis 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 unit’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 the current fiscal year, we thoroughly implemented measures to prevent infection at theGroup’s stores and offices, by continuing the operation of Emergency Response Headquarters- 64 -

which was established in February 2020 to address COVID-19 crisis, by prioritizing“continuation of the Company’s existence,” “protecting jobs of employees,” and “not letting goof the hands of our customers and suppliers,” and by expanding telework by formulating
guideline in view of the infection situation and memorandums issued by the administration.
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 andRepresentative 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 and directionof business operations that are in accordance with laws and regulations and internal company
rules.

3)

The Compliance Committee met five times during the current fiscal year and discussed factors
behind and countermeasures against compliance-related violations and provided instructions to
implement specific measures to prevent recurrence. In addition, the Committee once again
carried out a group-wide discussion on how the Group’s compliance should be, and reconfirmedthat it is a broader concept that is not just a matter of compliance but is something rooted incorporate philosophy.

4)

In order to spread efforts to ensure compliance, those responsible for compliance at each groupcompany meet three times a year to increase compliance awareness and implement activities
within the entire group. We also invited lecturer from outside the Group and gave trainings toGroup company managements and those in charge of compliance at each group company.

(2) Whistle-blowing system
1) The Company has established the “JFR Group Compliance Hotline” for reporting issues to theCompany or an independent party (corporate lawyer), which may be used by all persons
working at the Company and operating companies.
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 andsubjected to directions from the Audit Committee.

3)

During the current fiscal year, efforts were made to increase recognition and promote
understanding of the system among the Group company employees through measures such as
renewing posters. As a result, 24 cases related to labor-management relations and other issues
were reported, and are being dealt mainly by the secretariat.

(3) Other
Daimaru Matsuzakaya Department Stores Co. Ltd. and Daimaru Matsuzakaya Sales Associates
Co. Ltd., subsidiaries of the Company, have been reinforcing their monitoring to ensure legal
compliance. As a result, they detected a violation of the Act on Prohibition of Private
Monopolization and Maintenance of Fair Trade in sales of school uniform to a prefectural highschool in Aichi Prefecture.
The companies voluntarily reported the violation by making an application under the leniency
program of the Japan Fair Trade Commission (JFTC), and stopped the conduct that was inviolation with the Act and fully cooperated in the JFTC’s investigation.
Since such actions were recognized, the companies did not receive any cease and desist orderor surcharge payment order. However, the Group is taking this matter seriously and sincerely
and will work with Daimaru Matsuzakaya Department Stores Co. Ltd. and Daimaru
Matsuzakaya Sales Associates Co. Ltd. to continue to further strengthen the compliance systemof the Group.
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 the legality- 65 -

and effectiveness of systems of corporate governance, risk management and compliancemanagement, in addition to performing audits on business operations of the Company andoperating companies.
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. As for orders related to improvement measures frommanagement, issues are promptly handled in collaboration with the audited departments.

3)

We have established an audit structure that utilizes digital equipment to enable execution ofaudit under COVID-19, and are performing audits. Our audits and reports given during thecurrent fiscal year focused on compliance situation of the “Subcontracting Law and the Antimonopoly Law,” “organizational culture and human resources development,” “IT system
operation,” and “maintenance and operation of appropriate internal control rules.”V. Structure of the Audit Committee
1) The Audit Committee, which is chaired by an Outside Director, is composed of five members,
two of whom are Directors who do not execute business and are Inside Directors.
2)

In accordance with the overall policy and plan determined by the Board of Directors, the Audit
Committee audits the execution of business by Executive Officers and Directors, importantmatters 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 fromthe Accounting Auditor, and receives explanations and reports on the audit results and expresses
its opinions including requests on audit items, and in addition, exchanges of opinions with the
Accounting Auditor are 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 other meetings,
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 18 times. Apart from the Audit
Committee, efforts are being made at the Audit Committee Meeting, to gain understanding of
the current situation regarding execution by carrying out audits on execution of duties of all of
the Executive Officers of the Company. Meeting with Audit & Supervisory Board Members of
the Group companies are held every month for each company in principle, to enhancecooperation.

VI. Other(1) System for storage and management of information
Documents relating to the execution of duties by Executive Officers and Directors and theminutes of the important meetings and committees such as the meetings of the Board of
Directors and the Group Management Meeting are being accurately recorded and prepared, andinformation 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 theBoard of Directors, the Audit Committee, and Group Management Meeting regularly and whennecessary. During the current fiscal year, we newly formulated “IT governance policy,
regulations, and rules” intending to minimize potential IT related risks and to increase corporate
value, and are controlling the set of activities from establishing IT strategy to implementing
them, while promoting information security policy compliance initiatives as a priority measure.

- 66 -

(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 business detailsof the Group and the sources of the Group’s corporate value, continuously and sustainably ensuresthat the corporate value of the Group and, by extension, the common interests of shareholders areserved, 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 interestsof 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 the Company’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, or for
the Company’s Board of Directors to make an alternative proposal.
Therefore, the Company believes that these measures are in line with the contents of the basic
policy and contribute to securing and enhancing the corporate value of the Group and, by extension,
the common interests of 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 of thesephilosophies 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 andservices that meet the changing times and satisfying customers beyond their expectations” and “toaim 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 of measures,
aiming to realize the Group Vision of “Create and Bring to Life ‘New Happiness,’” in order to makea contribution to securing and enhancing the corporate value of the Group and, by extension, thecommon 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- 67 -

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, the Company
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 thatthese 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 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 to maintainthe 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 such ends,
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 addressrisks.
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 we achieve
maximization of the operating profit and sustainable improvement of the operating profit margin bystrengthening 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
We aim at developing the Group by contributing to society at large as a fair and reliable corporation.
Under such Basic Mission Statement, the Company promotes IR activities for the purpose ofmaintaining and developing relations of trust with stakeholders including shareholders and investors.
By accurately and plainly disclosing important information about the Company in a fair, timely and- 68 -

appropriate manner, we aim to improve management transparency and help stakeholders better
understand the Company.

- 69 -

Consolidated Financial Statements
Consolidated Statement of Financial Position (As of February 28, 2021)
Item
AssetsAmountCurrent assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other current assets

273,605
128,925
113,414
5,841
20,684
4,739

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

990,116
493,644
157,819523
188,879
5,752
37,815

Item
Liabilities
Current liabilities
Bonds and borrowings
Trade and other payables
Lease liabilities
Other financial liabilities
Income tax payables
Provisions
Other current liabilities(Millions of yen)Amount389,926
145,151
121,937
29,79930,211
1,957
914
59,953

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

509,451
214,779
173,085
39,237
19,781
10,53451,301
731

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

899,378
352,171
31,974
188,542(14,830)
9,578
136,906

Non-controlling interests

12,17186,8706,751
12,061

Total equity
Total liabilities and equity
Total assets
1,263,722(Note) Amounts have been rounded down to the nearest one million yen.

- 70 -

364,343
1,263,722

Consolidated Statement of Profit or Loss (From March 1, 2020 to February 28, 2021)(Millions of yen)
Item

Amount319,079(184,711)

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

134,368(132,001)
5,711(32,343)

Operating profit (loss)
Finance income
Finance costs
Share of profit (loss) of investments accounted for using equity
method(24,265)962(6,086)(Loss) before tax
Income tax expense(28,672)
2,251(Loss)(26,421)

Loss attributable to:
Owners of parent
Non-controlling interests(26,193)(227)(Note)(Loss)
Amounts have been rounded down to the nearest one million yen.

- 71 -

717(26,421)

Consolidated Statement of Changes in Equity (From March 1, 2020 to February 28, 2021)(Millions of yen)
Equity attributable to owners of parent
Other components of equity

Balance as of March 1, 2020

Share capital

CapitalsurplusTreasurysharesExchangedifferenceson translationof foreign
operations

Cash flow
hedgesFinancial assets
measured at fair
Remeasurements ofvalue throughdefined benefit
other
plans
comprehensive
incomeTotal

31,974

189,340(14,974)

(65)

(3)

11,710–11,641(Loss)

–

–

–

–

–

–

–

–

Other comprehensive
income

–

–

–

(24)

15

(2,107)

1,013(1,103)

Total comprehensive income

–

–

–

(24)

15

(2,107)

1,013(1,103)Purchase of treasury shares

–

–

(3)

–

–

–

–

–

Disposal of treasury shares

–

(0)

0

–

–

–

–

–

Dividends

–

–

–

–

–

–

–

–

Share-based paymenttransactions

–

(796)

148

–

–

–

–

–

Transfer from othercomponents of equity toretained earnings

–

–

–

–

–

53

(1,013)

(959)

–

(797)

144

–

–

53

(1,013)(959)

31,974

188,542(14,830)

(89)

11

9,656

–

9,578

Total transactions withownersBalance as of February 28,
2021

Equity attributable to ownersof parent

Total

Total

Noncontrollinginterests

169,206

387,188

12,493399,681(26,193)(26,193)(227)(26,421)–(1,103)0(1,102)

Total comprehensive income(26,193)(27,296)(226)(27,523)

Purchase of treasury shares

–

(3)

–

(3)

Disposal of treasury shares

–

(0)

–

(0)

(7,066)(7,066)(94)(7,161)

Share-based paymenttransactions

–

(648)

–

(648)

Transfer from othercomponents of equity toretained earnings

959

–

–

–

Total transactions withowners(6,107)(7,719)(94)(7,813)

Balance as of February 28,
2021

136,906

352,171

12,171

364,343

Balance as of March 1, 2020
(Loss)
Other comprehensive
incomeDividends(Note)

Retainedearnings

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

- 72 -

[Reference]
Consolidated Statement of Cash Flows (Summary) (From March 1, 2020 to February 28, 2021)(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.

- 73 -

56,471(20,870)
58,727
94,32834,633(37)
128,925

Non-consolidated Financial Statements
Non-consolidated Balance Sheet (As of February 28, 2021)
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

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 costs(Note)

AmountItem
Liabilities
145,764 Current liabilities
117,810
Short-term borrowings
Commercial papers
26,244
Deposits received
2,050
Accrued expenses(340)
Accounts payable - other
Income taxes payable
Provision for bonuses
Provision for bonuses for directors
and other officers
Other529,972
111
90
21

205
205

529,654
1,159
377,358
151,000
636
(500)
180
180

(Millions of yen)Amount129,701
56,92570,001
1,230
626
533
135
106
23
120

Non-current liabilities
Bonds payable
Long-term borrowings
Long-term deposits received for
officer shares trust
Provision for officer remuneration
BIP trust
Asset retirement obligations
Deferred tax liabilities

216,864
70,000144,960

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

346,565

Valuation and translation adjustments
Valuation difference on available-forsale securities

Total net assets
Total assets
675,917
Total liabilities and net assets
Amounts have been rounded down to the nearest one million yen.

- 74 -

1,765
106
29
3

329,382
31,974
249,075
9,474
239,601
62,39862,39862,398(14,066)(30)(30)
329,351
675,917Non-consolidated Statement of Income (From March 1, 2020 to February 28, 2021)
J. Front Retailing Co., Ltd.
(Millions of yen)
Item

AmountOperating revenue
Dividend income
Consulting fee income

9,210
4,602

13,812

General and administrative expense

4,264

Operating profit
Non-operating income
Interest income
Dividend income
Other

9,547
677
158
90

926

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

868
415
200
141

1,624

Ordinary profit
Extraordinary losses
Loss on valuation of shares of subsidiaries
and associates
Loss on sale of shares of subsidiaries andassociates
Impairment losses

8,849
763
241
343

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

1,348
7,500

15
(1)

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

- 75 -

137,487

Non-consolidated Statement of Changes in Equity (From March 1, 2020 to February 28, 2021)
J. Front Retailing Co., Ltd.
(Millions of yen)
Valuation andtranslation
adjustments

Shareholders’ equity
Retainedearnings

Capital surplus

Share capital

Balance as of March 1,
2020

31,974

Other retained
earnings
Capitalsurplus

Other capitalsurplusRetainedearnings
brought
forward9,474

239,601

62,038TreasurysharesTotal shareholders’equity(14,210)

328,878

Valuationdifference on
available-forsale securities(7)

Total net
assets328,871

Changes during period
Dividends of surplus(7,127)(7,127)(7,127)

Profit

7,487

7,487

7,487

(4)

(4)

(4)

148

148

148

Purchase of treasury
shares
Disposal of treasury
shares(0)

Net changes in items
other than shareholders’equityTotal changes during
periodBalance as of February 28,
2021(Note)

(23)

(23)

–

–

(0)

360

144

504

(23)

480

31,974

9,474

239,601

62,398(14,066)

329,382(30)

329,351

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

- 76 -

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

Report of Independent Auditors
April 9, 2021
The Board of Directors
J. FRONT RETAILING Co., Ltd.
Ernst & Young ShinNihon LLC
Tokyo office
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
OpinionPursuant 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, the consolidated
statement of profit or loss, the consolidated statement of changes in equity and the notes to the consolidated
financial statements of J. FRONT RETAILING Co., Ltd. (the “Company”) applicable to the fiscal year fromMarch 1, 2020 through February 28, 2021.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the financial position and results of operations of the J. Front Retailing Group, which consisted of theCompany and consolidated subsidiaries, applicable to the 14th fiscal year from March 1, 2020 throughFebruary 28, 2021 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.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Consolidated Financial Statements section of our report. We are independent of the Company and its
consolidated subsidiaries in accordance with the ethical requirements that are relevant to our audit of theconsolidated financial statements in Japan, and we have fulfilled our other ethical responsibilities inaccordance with these requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.
Responsibilities of Management and the Audit Committee 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.
In preparing the consolidated financial statements, management is responsible for assessing whether it isappropriate to prepare the consolidated financial statements on the going concern basis, and disclosing, asapplicable, matters related to going concern in accordance with the provisions of the second sentence ofParagraph 1, Article 120 of the Regulation on Corporate Accounting, which permit preparation omitting
certain disclosures required under International Financial Reporting Standards and using the going concern
basis of accounting.
The Audit Committee is responsible for overseeing the Executive Officers’ and Directors’ performance of
duties within the maintenance and operation of the financial reporting process.
- 77 -

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our responsibilities are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion on the consolidated financial statements based on our audit from an
independent point of view. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the decisions of users takenon the basis of the consolidated financial statements.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:











Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, and design and perform audit procedures responsive to those risks. Selecting
audit procedures to be applied is at the discretion of the auditor. Obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion.
Consider, in making those risk assessments, internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, while the purpose of the audit of theconsolidated financial statements is not expressing an opinion on the effectiveness of the Group’s
internal control.
Evaluate the appropriateness of accounting policies used by management and their method of
application, as well as the reasonableness of accounting estimates by management and related notes
thereto.
Conclude on the appropriateness of management’s use of the going concern basis for preparing theconsolidated financial statements and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related notes to the consolidated financial statements or, if
the notes to the consolidated financial statements on material uncertainty are inadequate, to express aqualified opinion with exceptions on the consolidated financial statements. Our conclusions are basedon the audit evidence obtained up to the date of our auditor’s report. However, future events orconditions may cause the Group to cease to continue as a going concern.
Evaluate whether the presentation and disclosures of the consolidated financial statements are inaccordance with the provision of the second sentence of Article 120 (1) of the Regulation on Corporate
Accounting of Japan, which permits the omission of some disclosure items required under IFRS, theoverall presentation, structure and content of the consolidated financial statements, including thedisclosures, and whether the consolidated financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the Company
and its consolidated subsidiaries to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the audit of the consolidated financial
statements. We remain solely responsible for our audit opinion.
We communicate with the Audit Committee regarding the planned scope and timing of the audit andsignificant audit findings, including any significant deficiencies in internal control that we identify
during our audit, and other matters required by auditing standards.
We also provide the Audit Committee with a statement that we have complied with the ethicalrequirements in Japan regarding independence that are relevant to our audit of the financial statements,
and communicate with it all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards in order to eliminate or reduce obstruction
factors.

Conflicts of Interest
We have no interest in the Company and its consolidated subsidiaries which should be disclosed incompliance with the Certified Public Accountants Act.

- 78 -

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

Report of Independent Auditors
April 9, 2021
The Board of Directors
J. FRONT RETAILING Co., Ltd.
Ernst & Young ShinNihon LLC
Tokyo office
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
OpinionPursuant to Item 1, Paragraph 2, Article 436 of the Companies Act, we have audited the accompanying nonconsolidated financial statements, which comprise the non-consolidated balance sheet, the non-consolidated
statement of income, the non-consolidated statement of changes in equity, the notes to the non-consolidated
financial statements and the related supplementary schedules of J. FRONT RETAILING Co., Ltd. (the“Company”) (the “non-consolidated financial statements, etc.”) applicable to the 14th fiscal year fromMarch 1, 2020 through February 28, 2021.
In our opinion, the non-consolidated financial statements etc. referred to above present fairly, in all material
respects, the financial position and results of operations of the Company applicable to the 14th fiscal year
from March 1, 2020 through February 28, 2021 in conformity with accounting principles generally acceptedin Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Non-consolidated Financial Statements, Etc. section of our report. We are independent of theCompany in accordance with the ethical requirements that are relevant to our audit of the consolidated
financial statements etc. in Japan, and we have fulfilled our other ethical responsibilities in accordance withthese requirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
Responsibilities of Management and the Audit Committee for the Non-consolidated Financial Statements,
Etc.
Management is responsible for the preparation and fair presentation of the non-consolidated financial
statements etc. in accordance with accounting principles generally accepted in Japan; this includes themaintenance and operation of such internal control as management determines is necessary to enable thepreparation and fair presentation of non-consolidated financial statements etc. that are free from material
misstatement, whether due to fraud or error.
In preparing the non-consolidated financial statements etc., management is responsible for assessing
whether it is appropriate to prepare the non-consolidated financial statements etc. on the going concern basisof accounting and disclosing, as applicable, matters related to going concern in accordance with accounting
principles generally accepted in Japan.
The Audit Committee is responsible for overseeing the Executive Officers’ and Directors’ performance of
duties within the maintenance and operation of the financial reporting process.
Auditor’s Responsibilities for the Audit of the Non-consolidated Financial Statements, Etc.
Our responsibilities are to obtain reasonable assurance about whether the non-consolidated financial
statements etc. as a whole are free from material misstatement, whether due to fraud or error, and to issue- 79 -

an auditor’s report that includes our opinion on the non-consolidated financial statements etc. based on our
audit from an independent point of view. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the decisions ofusers taken on the basis of the non-consolidated financial statements etc.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of non-consolidated financial statements etc.,
whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Selecting audit procedures to be applied is at the discretion of the auditor. Obtain audit evidence thatis sufficient and appropriate to provide a basis for our opinion.
Consider, in making those risk assessments, internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, while the purpose of the audit of the nonconsolidated financial statements etc. is not expressing an opinion on the effectiveness of the Group’s
internal control.
Evaluate the appropriateness of accounting policies used by management and their method of
application, as well as the reasonableness of accounting estimates by management and related notes
thereto.

Conclude on the appropriateness of management’s use of the going concern basis for preparing thenon-consolidated financial statements etc. and, based on the audit evidence obtained, whether amaterial uncertainty exists related to events or conditions that may cast significant doubt on theGroup’s ability to continue as a going concern. If we conclude that a material uncertainty exists, weare required to draw attention in our auditor’s report to the related notes to the non-consolidated
financial statements etc. or, if the notes to the non-consolidated financial statements etc. on material
uncertainty are inadequate, to express a qualified opinion with exceptions on the non-consolidated
financial statements etc. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to continue
as a going concern.
Evaluate whether the presentation of the non-consolidated financial statements etc. and the notes
thereto are in accordance with accounting standards generally accepted in Japan, as well as evaluate
the overall presentation, structure and content of the non-consolidated financial statements etc.,
including the related notes thereto, and whether the non-consolidated financial statements etc. fairly
represent the underlying transactions and accounting events.



We communicate with the Audit Committee regarding the planned scope and timing of the audit andsignificant audit findings, including any significant deficiencies in internal control that we identify
during our audit, and other matters required by auditing standards.
We also provide the Audit Committee with a statement that we have complied with the ethicalrequirements in Japan regarding independence that are relevant to our audit of the financial statements,
and communicate with it all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards in order to eliminate or reduce obstruction
factors.
Conflicts of Interest
We have no interest in the Company which should be disclosed in compliance with the Certified Public
Accountants Act.

- 80 -

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 14th fiscal year from March 1, 2020 throughFebruary 28, 2021. 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 throughthe following 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 thematters related to the performance of their duties, and when necessary, requested explanations of thosereports. Audit Committee Members also reviewed key decision documents, and conducted surveys of theoperations 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 in accordancewith “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
found no improper acts or important violation of applicable laws and regulations or the Articles of- 81 -

Incorporation.
(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 by Directors
and Executive Officers. Regarding the response to the novel coronavirus (COVID-19), the “Emergency
Response Headquarters,” which was established in the Company and operating companies in the previous
fiscal year, continued, and comprehensive measures to prevent infections have been thoroughly
implemented. The Audit Committee confirms that the Company and all the Group companies are working
together to strengthen the crisis control system. Furthermore, as stated in the Business Report, Daimaru
Matsuzakaya Department Stores Co. Ltd. and Daimaru Matsuzakaya Sales Associates Co. Ltd., subsidiariesof the Company, have been reinforcing their monitoring to ensure legal compliance. As a result, theydetected a violation of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade insales of school uniform to a prefectural high school in Aichi Prefecture. The companies voluntarily reported
the violation by making an application under the JFTC’s leniency program, and stopped the conduct thatwas in violation with the Act and fully cooperated in the JFTC’s investigation. Since such actions wererecognized, Daimaru Matsuzakaya Department Stores has not received any cease and desist order orsurcharge payment order. However, the Audit Committee confirms that the Company and J. Front RetailingGroup (the “Group”) are taking this matter seriously and sincerely and will continue to further strengthen
the compliance system of the Group.
(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 12, 2021
Audit Committee
J. FRONT RETAILING Co., Ltd.
NISHIKAWA Koichiro(seal)
Chairperson of Audit Committee
TSUTSUMI Hiroyuki(seal)
Audit Committee Member (full-time)
MURATA Soichi(seal)
Audit Committee Member (full-time)
SATO Rieko(seal)
Audit Committee Member
SEKI Tadayuki(seal)
Audit Committee Member(Note) Audit Committee Members, namely, NISHIKAWA Koichiro, SATO Rieko and SEKI Tadayuki are
Outside Directors as prescribed in Item 15, Article 2 and Paragraph 3, Article 400 of the Companies Act.

- 82 -