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 1, 2023
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 16th Annual Shareholders Meeting
You are hereby notified that the 16th Annual Shareholders Meeting of J. FRONT RETAILING Co., Ltd.
(hereinafter the “Company”) will be held on Thursday, May 25, 2023.
In convening this general meeting of shareholders, the Company has taken measures to electronicallyprovide information that constitutes the content of reference documents for the general meeting ofshareholders, etc. (matters to be provided electronically), and posts this information as “Notice ofConvocation of the 16th Annual Shareholders Meeting” and “16th Annual Shareholders Meeting: Other
Matters for Which Information is Provided in Electronic Format (Matters for Which Document Provision is
Omitted)” on the following websites. To review the information, please access the websites by using theinternet addresses shown below.
We look forward to the continued understanding and support of all our shareholders.

Date and Time:
Venue:

Thursday, May 25, 2023, 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 16th fiscal year (from March 1, 2022 to February
28, 2023)
2. Audit reports of the Accounting Auditor and the Audit Committee on
Consolidated Financial Statements for the 16th fiscal year
Matters to be resolved: Proposal:
Election of Eleven (11) Directors
Decisions made for convocation:
Please refer to Guide to the Exercise of Voting Rights on page 4.

Important notes for when attending the Annual Shareholders Meeting in person


Please note that persons who are not shareholders entitled to exercise voting rights, such as proxies who are
not shareholders and persons accompanying shareholders who are not shareholders, are not permitted to enterthe venue (persons accompanying shareholders with disabilities are exempt and will be admitted).
However, institutional investors who hold shares in the names of trust banks, etc. and do not hold shares intheir own names will be admitted on condition that they have fulfilled the requirements and procedures
provided for in the Company’s Articles of Incorporation and Share Handling Regulations.

- 1 -Important notes concerning the Annual Shareholders Meeting informational materials

Of the matters provided electronically, the <Basic Policy for Establishment of Internal Control
System> in the Business Report, Notes to Consolidated Financial Statements and Notes to Nonconsolidated Financial Statements are not included in the documents to be delivered to shareholders
who have requested the delivery of paper-based documents in accordance with relevant laws andregulations and the provisions of Article 16 of the Company’s Articles of Incorporation. Accordingly,
the documents to be delivered to shareholders who have made a request for delivery of paper-based
documents are part of the documents included in the scope of audits by the Audit Committee and the
Financial Auditor when they create their respective audit reports.
If revisions are made to the matters provided electronically, a notice of the revisions and the details of
the matters before and after the revisions will be posted on the Company’s aforementioned website andthe Annual Shareholders Meeting informational materials website.
Company website: https://www.j-front-retailing.com/ (in Japanese)▶ Please access the Company’s website using the above URL, go to the page for the Shareholders Meetingby clicking the banner “The 16th Annual Shareholders Meeting,” and check the Annual Shareholders
Meeting informational materials listed under “The 16th Annual Shareholders Meeting.”
Website for Annual Shareholders Meeting informational materials: https://d.sokai.jp/3086/teiji (inJapanese)- 2 -Process of the Annual Shareholders Meeting
Before the Annual Shareholders Meeting
1. Read the Annual Shareholders Meeting informational materials.
On the Internet, check “Notice of Convocation of the 16th Annual Shareholders Meeting” and “16th Annual
General Shareholders Meeting: Other Matters for Which Information is Provided in Electronic Format(Matters for Which Document Provision is Omitted).” Scan the QR code printed on the voting form (at right).
Company website: https://www.j-front-retailing.com/
Website for Annual Shareholders Meeting informational materials: https://d.sokai.jp/3086/teiji
2. Exercise voting rights in advance.
Exercise deadline: Received by 6:00 p.m. on Wednesday, May 24, 2023 (JST)Convenient exercise of voting rights by smartphone is recommended.
▶ For details, refer to “Guide to the Exercise of Voting Rights” on page 4

3. Ask questions in advance.
Question deadline: Received by 6:00 p.m. on Thursday, May 18, 2023 (JST)We will accept questions in advance from shareholders on the Annual Shareholders Meeting online website.
▶ For details, please refer to “Information regarding the Engagement Portal,” the online site for the Annual
Shareholders Meeting, on page 5
Date of the Annual Shareholders Meeting
1.

Persons attending the venue in person

Please submit the voting form at the reception desk for the meeting.
▶ Documents containing a Notice of Convocation (matters to be provided electronically) will be distributedat the venue.
2.

Persons attending via live streaming

Streaming time: From 10:00 a.m. on Thursday, May 25, 2023 to the closing of the Annual Shareholders
Meeting
The Annual Shareholders Meeting will be live streamed via the Internet for you to view the proceedingsof the meeting at home or other locations.
▶ For details, please refer to “Information regarding the Engagement Portal,” the online site for the Annual
Shareholders Meeting, on page 5- 3 -Guide to the Exercise of Voting Rights
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).
2. Follow the directions that appear on the screen to input approval or disapproval to each proposal.
*“QR code” is a registered trademark of DENSO WAVE INCORPORATED.
How to enter login ID and temporary password
Voting website: https://evote.tr.mufg.jp/
1. Access the voting website.
2. Enter the “Login ID” and the “Temporary password” shown on the voting form and click the “Login”
button.
3. Set a new password.
4. Follow the directions that appear on the screen to input approval or disapproval to each proposal.
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 Platform for
institutional investors operated by ICJ, Inc.
Handling of Exercise of Voting Rights• If a shareholder does not indicate approval or disapproval for a proposal on the voting form, it will bedeemed that the shareholder intended to approve the proposal.
• If a shareholder exercises his/her voting rights both by written form and electromagnetic means, only theexercise of voting rights by 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 shallbe treated as valid.

- 4 -Information regarding the Engagement Portal online site for the Annual Shareholders Meeting“Engagement Portal” online site for the Annual Shareholders Meeting:https://engagement-portal.tr.mufg.jp/
From this site, you can view the live streaming of the Annual Shareholders Meeting and submit questions inadvance.
Prepare the “Login ID” and “Password” indicated on the voting form and access the above Engagement
Portal online site for the Annual Shareholders Meeting.
(i) Login ID: 0007 + Shareholder Number (12-digit number without a hyphen) shown on the voting form,
etc.
(ii) Password: Postal code + 2023 (11-digit number without a hyphen) of the address registered in theshareholders’ register as of February 28, 2023
1. Guide to viewing live streaming of the meeting(i)Enter your “Login ID” and “Password” on the login screen, confirm the Terms of Use and checkthe “I agree to the Terms of Use” checkbox if you agree, then click the “Login” button.
(ii) After logging in, click the “View Live Streaming of the Meeting” button, confirm the Terms of
Use and check the “I agree to the Terms of Use” checkbox if you agree, then click “View.”*Please be sure to make a note of your Login ID and Password before mailing in your voting form bypostal service. If you forget your ID and/or password, please contact us at the contact number listed below“Contact information for inquiries about the Annual Shareholders Meeting online site” on page 6.
(Note)The postal code used for (ii) “Password (Postal code + 2023)” may differ from the postal code printed on
the voting form (because the password does not reflect information such as a change of address made after
the record date of the Annual Shareholders Meeting or a 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 the proxy.
(Important notice)(1)
Due to unavoidable circumstances, there is a possibility that we may not be able to conduct thelive streaming. In such a case, a notice will be posted on the Company’s website (https://www.j-frontretailing.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 their voting
rights or make any comments, including questions on the day. Please exercise your voting rights in advanceby following the instructions on page 4 on this Notice of Convocation.
(3)
Please note that viewing will be limited to shareholders only, and viewing by proxies is not
permitted.
(4)
Filming, recording, storing, or publishing on social networking sites, etc. of the live streaming isstrictly prohibited.

2. Information about acceptance of advance questions
We plan to answer the many questions asked by shareholders at the Annual Shareholders Meeting.
Please note that we will not be able to respond to individual inquiries.
(i) Please click the “Question in advance” button displayed on the screen after logging in to the Annual
Shareholders Meeting online site.
(ii) Select a category for your question, enter the question, confirm the Terms of Use and check the “Iagree to the Terms of Use” checkbox if you agree, then click the “Confirm” button.
(iii) Confirm the contents of your question, etc., and then click the “Send” button.
Deadline for receipt of questions:by 6:00 p.m. on Thursday, May 18, 2023

- 5 -

(Contact information for inquiries about the Annual Shareholders Meeting online site)
Mitsubishi UFJ Trust and Banking Corporation
Dedicated support line for the “Engagement Portal”
Service period

Tel: 0120-676-808 (Toll free)

From 9:00 a.m. to 5:00 p.m. on weekdays, excluding Saturdays, Sundays, national holidays, etc.
(However, on the day of the Annual Shareholders Meeting, from 9:00 a.m. to the end of the Meeting)- 6 -Reference Materials for Shareholders Meeting
Proposal and Reference Information
Proposal: Election of Eleven (11) Directors
The terms of office of all 10 current Directors will expire at the conclusion of this Annual Shareholders
Meeting. Therefore, based on a resolution of the Nomination Committee intended to deepen the governancestructure to one appropriate for a company with three committees (nomination, audit, and remunerationcommittees), from the perspective of diversity for applying a broad range of insights and experience to ourbusiness strategies, and from the perspective of board succession to continually exercise supervisory
functions, we request the addition of one (1) Director and the election of eleven (11) Directors.
If the candidates for Director in this proposal are elected as proposed, the Board of Directors will have astructure with seven out of eleven members, i.e. the majority of its members being independent Outside
Directors, and three female Directors. We believe this will lead to a further strengthening of the oversightfunction and to ensuring a more diverse Board of Directors. The candidates for the Directors are shown below.
Furthermore, of the candidates for Director, please refer to “3. Matters relating to corporate officers” in theBusiness Report regarding the status of activities of six 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 Board of Directors shall be composed of individuals
with the experience and knowledge necessary to appropriately oversee the promotion of sustainability
management (execution of business strategies aimed at resolving the seven materialities) in order to allow
the Board of Directors to effectively fulfill its roles and responsibilities. In selecting candidates for Outside
Director, the Company is conscious of Board diversity, selecting people who have experience as managers
not only in the retailing industry, which forms the core of the Company’s business, but in manufacturing andother non-retail industries, as well as people who have expertise in law and other fields, marketing
perspectives, and extensive experience related to finance and accounting. With regard to candidates for nonexecutive Inside Director, the Company seeks individuals with wide-ranging practical experience within theGroup and knowledge in fields such as auditing. As for candidates for executive Director, the Company has
selected a person responsible for the Financial Department whose high level of knowledge will facilitate theexecution of the strategic financial policies demanded by our shareholders and investors, as well as by the
President and Representative Executive Officer of the Company.

- 7 -

No.

Name

Committee assignments(The “◎” mark indicates thecandidates for Chairperson.)

Attribute

Nomination
YAMAMOTO Ryoichi*1

Audit

○

Remuneration○

1

Chairperson

Reappointment

Non-executive

2

HAMADA Kazuko*2

Reappointment

Non-executive

3

YAGO Natsunosuke

Reappointment

Non-executive

Independent

Outside4

HAKODA Junya

Reappointment

Non-executive

Independent

Outside5

UCHIDA Akira

Reappointment

Non-executive

Independent

Outside6

SATO Rieko*3

Reappointment

Non-executive

Independent

Outside○7

SEKI Tadayuki

Reappointment

Non-executive

Independent

Outside○8

KOIDE Hiroko

Reappointment

Non-executive

Independent

Outside9

KATAYAMA Eiichi

New

Non-executive

Independent

Outside10

YOSHIMOTO Tatsuya

Reappointment

Executive

○
◎

○
◎

○

◎

○

○
○

Reappointment
Executive
11 WAKABAYASHI Hayato*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 the Board of Directors meeting to be held after the conclusion of thisAnnual Shareholders Meeting.
2. HAMADA Kazuko is recorded under the name of HIMENO Kazuko in the Family Registry system.
3. SATO Rieko is recorded under the name of KAMATA Rieko in the Family Registry system.
4. Eight Executive Officers who will not concurrently serve as Directors are scheduled to be elected at the Board of
Directors meeting to be held after the conclusion of this Annual Shareholders Meeting.

Expected skills of Candidates for Director

No.

Name
Management
strategy

Finance○

MarketingHuman
resource&
organization
development

Legalaffairs &complianceIT &digital○E:
Environment

S:
Society○G:
Governance○

1

YAMAMOTO Ryoichi

2

HAMADA Kazuko

3

YAGO Natsunosuke○

4

HAKODA Junya

○

○

○

5

UCHIDA Akira

○

○

○

6

SATO Rieko

7

SEKI Tadayuki

8

KOIDE Hiroko○

9

KATAYAMA Eiichi○

10

YOSHIMOTO Tatsuya○

11

WAKABAYASHI Hayato

○

○

○

○

○

○

○

○

○

○
○

○

○
○

○
○

○

- 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)
April 1973
May 2003

YAMAMOTO
Ryoichi(March 27, 1951)

Number of theCompany’s shares
owned (shares):102,856
Number of other sharesas stock-based
remuneration not yet
granted (shares):25,465Special interests between
the Company and the
Candidate:
None

1

Career summary, positions and areas of responsibility

Number of Board of
Directors meetings
attended during the 16th
fiscal year:

Joined The Daimaru, Inc.
President and COO and General Manager of Department StoreOperations, Group Headquarters
September 2007
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.
March 2008
Executive General Manager of Sales Headquarters, Head Office of The
Daimaru, Inc.
March 2010
President and Representative Director of Daimaru Matsuzakaya
Department Stores Co. Ltd.
September 2012
President and Representative Director of Daimaru Matsuzakaya
Department Stores Co. Ltd. and President and Representative Directorof Daimaru Matsuzakaya Sales Associates Co. Ltd.
April 2013
President and Representative Director of J. Front Retailing Co., Ltd.
May 2017
Director, President and Representative Executive Officer
May 2020
Director, Chairperson of Board of Directors (present)
June 2021
Outside Director of Daido Steel Co., Ltd (present)
Outside Director of NORITAKE CO., LIMITED (present)
Important concurrent positions
Outside Director of Daido Steel Co., Ltd
Outside Director of NORITAKE CO., LIMITED

15/15
Number of Nomination
Committee meetings
attended
13/13
Number of
Remuneration
Committee meetings
attended
12/12
Tenure as Director (atthe conclusion of thisMeeting):
approx. 15 years and9 months

Reasons for nomination as candidate for Director and overview of expected roles- YAMAMOTO Ryoichi possesses broad insights and a high-level perspective gained through his extensive experience in all
aspects of the retail industry. Since being appointed as President and Representative Director of the Company in 2013, he has
been accurately and efficiently managing the overall business of the Group.
In addition to formulating and leading the penetration of the Group Vision in Fiscal 2017, which shows the direction of ourmanagement strategy considering the external environment surrounding the Group, he has been demonstrating strong leadershipin positioning the Corporate Governance Code at the center of innovation and reforms of corporate management. Since May
2020, he has served as the Chairperson of Board of Directors, and has appropriately carried out these duties, contributing to
improving the effectiveness of the Board of Directors.
In light of his track record and wealth of experience, and to achieve the Group Vision and sustainability management in abusiness environment where uncertainty is increasing, the Company expects him, as an Inside Director who is thoroughly
understands the Group’s overall strategy and the roles and expectations of individual businesses, to help ensure the enhancementof corporate value and sustainable growth of the Group by serving as the Chairperson of Board of Directors and conducting
supervisory operations that consider all stakeholders. As such, the Company has nominated him as a candidate to continue
serving as Director.

- 10 -

No.

Name(Date of birth)

Career summary, positions and areas of responsibility

HAMADA Kazuko(Name in Family
Registry: HIMENO
Kazuko)(September 6, 1962)
Number of the Company’s
shares owned (shares):
999
Number of other shares asstock-based remuneration
not yet granted (shares):

April 1985
September 2000
March 2002
March 2005
March 2007
March 2010
March 2013
March 2015
May 2020
May 2021

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)
AuditorDirector of J. Front Retailing Co., Ltd. (present)

7,714

2

Special interests between
the Company and the
Candidate:
None
Number of Board of
Directors meetings
attended during the 16th
fiscal year:
15/15
Number of Audit
Committee meetings
attended
22/22
Tenure as Director (at theconclusion of thisMeeting):
approx. 2 years

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 an 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 her wealth ofexperience, she has broad insights into the store operations and business management of Parco Co., Ltd. as well as the promotionof corporate diversity.
Furthermore, she has contributed to strengthening the auditing function of the Parco Business by taking charge of the Group
Audit Office from March 2015 and serving as a corporate auditor from May 2020.
Since May 2021, she has served as a member of the Audit Committee as an internally elected Director, attending importantinternal management and other meetings. She has also contributed to strengthening the audit function by auditing the executionof duties by Directors and Executive Officers of a company with three committees (nomination, audit, and remuneration), while
exchanging opinions and 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.
The Company expects her to help enhance corporate value and the sustainable growth of the Group, particularly through the
maximization of group synergies with Parco, by utilizing her wealth of knowledge based on her achievements and experienceand fulfilling appropriate management oversight work, and therefore has nominated her to continue serving as Director.

- 11 -

No.

Name(Date of birth)
Independent
Outside Director

YAGO Natsunosuke(May 16, 1951)
Number of the Company’s
shares owned (shares):
6,696
Number of other shares asstock-based remuneration
not yet granted (shares):
4,904
Special interests between
the Company and the
Candidate:
None

3

Number of Board of
Directors meetings
attended during the 16th
fiscal year:
15/15
Number of Nomination
Committee meetings
attended

Career summary, positions and areas of responsibility
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)
May 2021
Director of Parco Co., Ltd.
Important concurrent positions
Outside Director of SUBARU CORPORATION

13/13
Number of Remuneration
Committee meetings
attended
12/12
Tenure as Director (at theconclusion of thisMeeting):
approx. 3 years

Reasons for nomination as candidate for Outside Director and overview of expected roles- YAGO Natsunosuke has been involved in top-level corporate management for many years, and has a wealth of experience incompliance management and strengthening financial bases. He also possesses a high level of expertise in internal control andcorporate governance gained through his experience in transitioning to a company with three committees (nomination, audit andremuneration committees). He has contributed to improving the effectiveness of the Board of Directors by actively andassertively providing advice in many areas, including on the direction of the medium- to long-term strategies and key points
when formulating them, apirations for the developer business, ideas for assets under ownership in financial strategies, andconcepts for generating profits from customer data.
As the Chairperson of the Nomination Committee, he confirms the conditions of future management team candidates based on
the succession plan, and promotes the establishment of an officer selection process that ensures objectivity, transparency, andcontinuity. As a member of the Remuneration Committee, he also provides necessary advice at suitable times in the deliberation
on reviews of suitable remuneration standards and operating rules for bonuses and share-based payments in the officer
remuneration system, and contributes to strengthening the management personnel functions.
In light of his track record, his wealth of experience and considerable insights, the Company expects him to contribute greatly
to the management of the Group as an Outside Director. As such, he has been nominated as a candidate to continue serving as
Outside Director.

- 12 -

No.

Name(Date of birth)
April 1974

Independent
Outside Director

HAKODA Junya(July 10, 1951)
Number of the Company’s
shares owned (shares):
1,958
Number of other shares asstock-based remuneration
not yet granted (shares):
2,971

4

Career summary, positions and areas of responsibility

Special interests between
the Company and the
Candidate:
None
Number of Board of
Directors meetings
attended during the 16th
fiscal year:
15/15
Number of Audit
Committee meetings
attended
22/22
Tenure as Director (at theconclusion of thisMeeting):

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
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
August 2020
Vice Chairperson of the Committee on Training and Research for
Outside Officers, Japanese Institute of Certified Public Accountants
May 2021
Outside Director of J. Front Retailing Co., Ltd. (present)
August 2021
Chairperson of the Committee on Training and Research for Outside
Officers, Japanese Institute of Certified Public Accountants (present)
Important concurrent positions
Chairperson of the Committee on Training and Research for Outside Officers, JapaneseInstitute of Certified Public Accountants

approx. 2 years

Reasons for nomination as candidate for Outside Director and overview of expected roles- HAKODA Junya has been involved in accounting audits, management consulting, and internal audits of auditing firms, etc. formany years at PricewaterhouseCoopers, and has also served as an eminent professor teaching internal audit theory in the
Graduate School of Keio University, and therefore has a wealth of 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 threecommittees (nomination, audit, and remuneration). He has also contributed to improving the effectiveness of the Board of
Directors by actively and assertively providing advice and oversight regarding a wide range of matters including consistency of
medium- to long-term financial planning and medium- to long-term strategies, new business initiatives, human resource
development concepts, and important points when formulating international business strategies.
Moreover, as a member of the Audit Committee, he has endeavored to strengthen the audit function by fulfilling his roles ofauditing the execution of duties by Directors and Executive Officers of a company with three committees (nomination, audit,
and remuneration), while exchanging opinions and engaging in discussions from the perspective of legality and appropriateness,
etc. related to items submitted to the Board of Directors and items judged to require monitoring by the Audit Committee, which
he is expected to promote. He is also simultaneously working to enhance the governance of the Group as a whole.
In light of his track record, wealth of experience and considerable insights, the Company expects him to contribute greatly to
management of the Group as an Outside Director. As such, he has been nominated as a candidate to continue serving as Outside
Director.
April 1975
Joined Toray Industries, Inc.
Independent
June 1996
Executive Vice President of Toray Industries (America), Inc.
Outside Director
5
June 2000
General Manager on Special Assignment of Corporate Strategic
UCHIDA Akira
Planning Division 1, General Manager on Special Assignment ofCorporate Communications Dept. of Toray Industries, Inc.

- 13 -

No.

Name(Date of birth)(October 4, 1950)

Career summary, positions and areas of responsibility
June 2004

Number of the Company’s
shares owned (shares):
5,364
Number of other shares asstock-based remuneration
not yet granted (shares):
6,837
Special interests between
the Company and the
Candidate:
None
Number of Board of
Directors meetings
attended during the 16th
fiscal year:
15/15
Number of Nomination
Committee meetings
attendedCounsellor 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
Adviser, Toray Industries, Inc.
March 2019
Retired from Adviser, Toray Industries, Inc.
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.
May 2022
Director of Parco Co., Ltd. (present)
Important concurrent positions
Outside Director of Yokogawa Electric Corporation(Concurrent positions in the Group)
Director of Parco Co., Ltd.

13/13
Number of Remuneration
Committee meetings
attended
12/12
Tenure as Director (at theconclusion of thisMeeting):
approx. 4 years

Reasons for nomination as candidate for Outside Director and overview of expected roles- UCHIDA Akira possesses broad experience and knowledge in the corporate sector, as a manager in charge of management
planning and IR, as well as the person responsible for the finance and accounting division, and has contributed to improving theeffectiveness of the Board of Directors by actively and assertively providing advice and oversight with respect to a wide rangeof matters including the necessary KPI perspective when formulating Medium-term Business Plans, concepts for funding plans
when carrying out changes to business portfolios, intra-Group cooperation and governance as a holding company, the acquisitionand development of expert human resources, and important points for supporting new businesses initiatives.
As the Chairperson of the Remuneration Committee, he carries out reviews of suitable remuneration standards and operating
rules for bonuses and share-based payments in the officer remuneration system. As a member of the Nomination Committee, he
confirms the status of future management team candidates based on the succession plan, provides necessary advice at suitabletimes in the deliberation on the officer selection process that ensures objectivity, transparency, and continuity, and contributes
to strengthening the management personnel functions.
In light of his track record and considerable insights, the Company expects him to contribute greatly to management of theGroup as an Outside Director. As such, he has been nominated as a candidate to continue serving as Outside Director.
April 1984
Registered as attorney at law
Independent
August 1989
Shearman & Sterling LLP
Outside Director
July 1998
Partner of Ishii Law Office (present)
SATO Rieko
June 2004
External Audit & Supervisory Board Member of Ajinomoto Co., Inc.
(Name in Family
6June 2012
Outside Corporate Auditor of NTT DATA CORPORATION
Registry: KAMATA
June 2015
Outside Director of The Dai-ichi Life Insurance Company, Limited
Rieko)
October 2016
Outside Director (Audit and Supervisory Committee Member) of Dai(November 28, 1956)
ichi Life Holdings, Inc. (present)
May 2018
Outside Director of J. Front Retailing Co., Ltd. (present)- 14 -

No.

Name(Date of birth)
Number of the Company’s
shares owned (shares):
3,125
Number of other shares asstock-based remuneration
not yet granted (shares):
8,770
Special interests between
the Company and the
Candidate:

Career summary, positions and areas of responsibility
May 2019
June 2020

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

None
Number of Board of
Directors meetings
attended during the 16th
fiscal year:
15/15
Number of Audit
Committee meetings
attended
22/22
Tenure as Director (at theconclusion of thisMeeting):
approx. 5 years

Reasons for nomination as candidate for Outside Director and overview of expected roles- SATO Rieko possesses a wealth of experience as an outside director and outside audit & supervisory board member at othercompanies, in addition to her career in handling many projects with advanced and specialized knowledge as an attorney at law
specializing primarily in corporate legal affairs. She has also contributed to improving the effectiveness of the Board of Directors
by actively and assertively providing advice and oversight regarding a wide range of matters including identifying paths tocreating corporate value and achieving profit targets, specific policies for decarbonization and diversity & inclusion which
contribute to sustainable management, the strategic use of customer data, and legal perspectives related to reducing crossshareholdings.
She also serves as a lead director of the executive session established by the Company as an opportunity for Outside Directors
to openly and freely exchange opinions and share information.
She serves as a member of the Audit Committee and is working to strengthen audit functions by fulfilling expectations of her interms of exchanging and discussing opinions on items submitted to the Board of Directors and items judged to require monitoringby 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). She is also
simultaneously working to enhance the governance of the Group as a whole.
In light of her track record and considerable insights, the Company expects her to contribute greatly to management of the Groupas an Outside Director. As such, she has been nominated as a candidate to continue serving as Outside Director.
April 1973
Joined ITOCHU Corporation
Independent
June
1998
General Manager, Finance Division, ITOCHU International Inc.
Outside Director(Stationed in New York)SEKI Tadayuki
June 2004
Executive Officer of ITOCHU Corporation, CFO of Food Company(December 7, 1949)
April 2007
Managing Executive Officer, General Manager of Finance Division
June 2009
Representative Director, Managing Director, Chief Officer for Finance,
Number of the Company’s
Accounting, Risk Management and CFO
7shares owned (shares):
April 2010
Representative Director, Senior Managing Executive Officer
3,230 May 2011
Representative Director, Senior Managing Executive Officer and CFO
April
2013
Representative Director, Executive Vice President and CFO
Number of other shares as
April
2014
Representative Director, Executive Vice President, Executive Advisory
stock-based remuneration
Officer, CFO & CAO
not yet granted (shares):
April 2015
Adviser- 15 -

No.

Name(Date of birth)
4,904
Special interests between
the Company and the
Candidate:
None
Number of Board of
Directors meetings
attended during the 16th
fiscal year:
15/15
Number of Audit
Committee meetings
attended
22/22

Career summary, positions and areas of responsibility
May 2016
June 2016

External Director of Parco Co., Ltd.
Outside Director of NIPPON VALQUA INDUSTRIES, LTD. (present
VALQUA, LTD.) (present)
April 2017
Advisory Member of ITOCHU Corporation
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.
May 2022
Director of Daimaru Matsuzakaya Department Stores 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 Daimaru Matsuzakaya Department Stores Co. Ltd.

Tenure as Director (at theconclusion of thisMeeting):
approx. 3 years

Reasons for nomination as candidate for Outside Director and overview of expected roles- SEKI Tadayuki has many years of experience in international business management and risk management at a general trading
company, and has extensive knowledge and experience in finance and accounting as CFO, as well as broad knowledge as an
outside director and outside statutory auditor of multiple companies. He has contributed to improving the effectiveness of theBoard of Directors by actively and assertively providing advice and oversight on a wide range of matters including concepts
related to businesses and assets under ownership when carrying out changes to business portfolios, consistency of strategies withcore competences and resources, and identification of risks in new business initiatives.
As a member of the Audit Committee, he is working to strengthen audit functions by fulfilling expectations of him in terms of
exchanging and discussing opinions from the perspective of legality, appropriateness, etc. on items submitted to the Board of
Directors and items judged to require monitoring by the Audit Committee, while auditing the execution of duties by Directors
and Executive Officers of a company with three committees (nomination, audit, and remuneration committees). He is also
simultaneously working to enhance the governance of the Group as a whole.
In light of his track record and considerable insights, the Company expects him to contribute greatly to management of theGroup as an Outside Director. As such, he has been nominated as a candidate to continue serving as Outside Director.
September 1986
Joined J. Walter Thompson Japan K.K. (present Wunderman Thompson
Independent
Tokyo
G.K.)
Outside Director
May 1993
Joined Nippon Lever K.K. (present Unilever Japan K.K.)
KOIDE Hiroko
April 2001
Director(August 10, 1957)
April 2006
General Manager of Marketing Management Division of Masterfoods
Ltd. (present Mars Japan Limited)
Number of the Company’s April 2008
Chief Operating Officer
shares owned (shares):
November 2010
President and Representative Director of Parfums Christian Dior Japon
K.K.
1,957
8
January 2013
Outside Director of Kirin Co., Ltd.
Number of other shares as
April 2013
Senior Vice President of Global Marketing of Newell Rubbermaid Inc.
stock-based remuneration(U.S.) (present Newell Brands Inc.)not yet granted (shares):
June 2016
Outside Director of Mitsubishi Electric Corporation (present)
2,971
April 2018
Director of Vicela Japan Co., Ltd.
Special interests between
June 2019
Outside Director of Honda Motor Co., Ltd
the Company and theOutside Director of J-OIL MILLS, Inc. (present)
Candidate:
May 2021
Outside Director of J. Front Retailing Co., Ltd. (present)
Important concurrent positions- 16 -

No.

Name(Date of birth)
None

Career summary, positions and areas of responsibility
Outside Director of Mitsubishi Electric Corporation
Outside Director of J-OIL MILLS, Inc.

Number of Board of
Directors meetings
attended during the 16th
fiscal year:
15/15
Number of Nomination
Committee meetings
attended
13/13
Number of Remuneration
Committee meetings
attended
12/12
Tenure as Director (at theconclusion of thisMeeting):
approx. 2 years

Reasons for nomination as candidate for Outside Director and overview of expected roles- KOIDE Hiroko has extensive knowledge based on her rich experience in the fields of global management and marketing, having
served as an officer at foreign companies for many years, and having been engaged in corporate management as the head ofmarketing at the head office of a U.S. company, as well as a wealth of knowledge gained as an Outside Director at several listedcompanies. She has contributed to improving the effectiveness of the Board of Directors by actively and assertively providing
advice and oversight with respect to a wide range of matters including how to formulate medium- to long-term strategies basedon robust strategic discussions, the importance of a marketing-oriented way of thinking such as identifying targets and needs,
and aspirations for the new developer business.
As a member of the Nomination Committee, she confirms the status of future management team candidates based on the
succession plan and deliberates on the officer selection process that ensures objectivity, transparency, and continuity. As amember of the Remuneration Committee, she also provides necessary advice at suitable times and contributes to strengthening
the management personnel functions at meetings which review suitable remuneration standards and operating rules for bonuses
and share-based payments in the officer remuneration system.
In light of her track record, extensive experience and considerable insights, 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.

- 17 -

No.

Name(Date of birth)

Career summary, positions and areas of responsibility

Joined Nomura Research Institute, Ltd.
Seconded to Nomura Corporate Advisors Co., Ltd.
Outside Director
Joined Merrill Lynch Japan Securities Co., Ltd. (present BofA
Securities Japan Co., Ltd.).
New Candidate
June
2012
Managing Director and General Manager of Research Division
KATAYAMA Eiichi
January
2016
Joined Panasonic Corporation(May 17, 1966)
Officer (in charge of Business Development)
January 2017
Officer (in charge of Strategy Business)
Number of the Company’sVice President of Eco Solutions Company, in charge of AGE-FREE
shares owned (shares):Business
President and Representative Director of Panasonic Cycle Technology
1,500 April 2017
Co., Ltd.
Special interests between
February 2019
Executive Officer and CSO of Panasonic Corporation
the Company and the
In charge of Business Planning, Business Development, and BusinessCandidate:
Creation Project
9
None April 2020
Managing Executive Officer and CSO
October 2020
In charge of Sports Management Business
October 2021
Managing Executive Officer
Assistant General Manager of Lifestyle Updates Business Division
President of Cold Chain Solutions Company
In charge of Sports Management Business
April 2022
Executive Vice President
President of Cold Chain Solutions Company
In charge of DEI promotion, General Manager of Cold Chain Business
Division
April 2023
Executive Vice President
President of the Cold Chain Solutions Company
CDO and in charge of DEI promotion (present)
Important concurrent positions
Executive Vice President of Panasonic Corporation
Reasons for nomination as candidate for Outside Director and overview of expected roles- KATAYAMA Eiichi has a wide range of financial and accounting knowledge based on his many years of experience as a security
company analyst and working in the investment banking business.
As the manager of several companies at a general appliance manufacturer, he has delivered strong leadership and achieved
business regeneration, structural reforms, and other improvements. As CSO, he possesses extensive experience and advanced
knowledge about a wide range of matters including constructing and carrying out various M&A actions, formulating andimplementing company-wide strategies, taking the lead in the transition to a pure holding company, and contributing tostrengthening group governance.
As the officer in charge of new business, he has knowledge related to the creation of new digital businesses, and through his
initiatives in digitalizing existing businesses, he has developed knowledge that permits a comprehensive view of the latest digitaltrends from an objective perspective.
In light of his track record, extensive experience and considerable insights, the Company expects that he will apply them to theappropriate supervision of management in the Group. As such, he has been nominated as a candidate to serve as a new Outside
Director.
Independent

April 1989
June 2000
October 2010- 18 -

No.

Name(Date of birth)
April 1979
March 2000

YOSHIMOTO
Tatsuya(April 13, 1956)

January 2008
May 2008
January 2010

Number of theCompany’s shares
owned (shares):

10

Career summary, positions and areas of responsibility

96,391March 2010

Special interests between
the Company and the
Candidate:

May 2012
April 2013

None
Number of Board of
Directors meetings
attended during the 16th
fiscal year:
15/15

May 2013
May 2017
May 2020
March 2023

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 and Representative Director of Daimaru Matsuzakaya
Department Stores Co. Ltd. and President and Representative Directorof Daimaru Matsuzakaya Sales Associates Co. Ltd.
Director of J. Front Retailing Co., Ltd. (present)
Representative Managing Executive Officer
President and Representative Executive Officer
President and Representative Executive Officer and Senior Executive
General Manager of CRE Strategy Unit (present)

Tenure as Director (atthe conclusion of thisMeeting):
approx. 10 years

Reasons for nomination as candidate for Director and overview of expected roles- YOSHIMOTO Tatsuya has a wealth of experience and knowledge in Department Store Business in general, particularly thoseareas related to business management, planning, and store operations. Since being appointed as President and Representative
Director of Daimaru Matsuzakaya Department Stores Co. Ltd. in 2013, he has been involved in executing the existing highquality department store business strategy based on the roles and expectations of the Department Store Business under theGroup’s strategy, and formulating a new Department Store Business strategy in reaction to the massive changes 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 the Company, he has accumulated further knowledge based on
his experiences in business management for the Group as a whole and management reform based on the Corporate
Governance Code.
Since becoming President and Representative Executive Officer of the Company in FY2020, he has resolutely carried out
structural reforms in the Group as part of the Medium-term Business Plan aimed at fully returning the Company to theoperating profit level of FY2019 in the midst of a harsh business environment. He has also exercised leadership for
implementing sustainability management and for business innovations aimed at success in future competition, includingorganizational changes and personnel interactions to maximize Group synergy, speaking directly with Group employees, andassigning younger employees and middle management to carry out projects directly under his direction.
In light of his track record and experience, the Company has judged that he is a competent professional who can contribute to
the enhancement of corporate value and the sustainable growth of the Group, and accordingly has nominated him as a
candidate to continue serving as Director.
April 1985
Joined Matsushita Electric Industrial Co., Ltd. (present Panasonic
WAKABAYASHI
Corporation)
HayatoApril 1998
President of Panasonic Financial Center Malaysia Co., Ltd.
(August 31, 1961)
April 2007
Director and Chief Executive Officer of Matsushita Electric (China)
Finance Limited
Number of the Company’s February 2009
Finance Planning Team Leader (Manager), Headquarters Finance & IR
shares owned (shares):Group of Panasonic Corporation
11
July 2013
General Manager, Finance & IR Group, Corporate Strategy Division
17,210and Finance Strategy Team Leader of Panasonic Corporation (Director)
Special interests between
May 2015
Joined J. Front Retailing Co., Ltd.
the Company and the
In charge of Finance Policy, Administration Unit
Candidate:
September 2015
Executive Officer
None
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- 19 -

No.

Name(Date of birth)
Number of Board of
Directors meetings
attended during the 16th
fiscal year:
15/15
Tenure as Director (atthe conclusion of thisMeeting):

Career summary, positions and areas of responsibility
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. 7 years

Reasons for nomination as candidate for Director and overview of expected roles
WAKABAYASHI Hayato has pursued his career mainly in the financial realm of a general appliance manufacturer, and as suchhas sufficient knowledge and experience related to financial policy, including the enhancement of financial standing,
improving levels of cash management and other such initiatives. For that reason, he was invited into the Group in May 2015and has established and promoted a financial strategy encompassing the entire Group.
In addition to carrying out the adoption of International Financial Reporting Standards (IFRS) in 2017 and financial measures
to support the continuity of business activities in a difficult business environment, including the onset of the COVID-19
pandemic, he has promoted a wide range of financial strategies and actions for the entire Group and contributed to improving
its financial strength by introducing a Group consolidated tax payment system, beginning the renovation of the accounting
system, and establishing ROIC for each business with the aim of improving investment profitability.
In addition to such achievements and in-depth insights on finance, he has the commensurate abilities as a management
professional in terms of his strategic and transformation-minded leadership, strong results-oriented approach and other such
attributes. As such, the Company has judged that he is a competent professional who can contribute to the enhancement ofcorporate value and the sustainable growth of the Group by executing business acting as a Director, and accordingly has
nominated him as a candidate to continue serving as Director.

- 20 -

Special notes regarding the candidates for Director- The Company has entered into an agreement with candidates for Directors YAMAMOTO Ryoichi, HAMADA Kazuko,
YAGO Natsunosuke, HAKODA Junya, UCHIDA Akira, SATO Rieko, SEKI Tadayuki and KOIDE Hiroko individually tolimit his/her liability for 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 candidate for Director KATAYAMA Eiichi is approved under this
proposal, the Company plans to enter into the same agreement with this candidate.
- The Company has entered into a Directors and Officers liability insurance contract with an insurance company as prescribedin Paragraph 1, Article 430-3 of the Companies Act. Under such an insurance contract, the Company will bear the full amountof insurance premiums for all the insured. The insurance policy covers all Directors and Executive Officers of the Company
and all Directors and Audit & Supervisory Board Members of its subsidiaries. All candidates for Directors are included in theinsured persons of the said insurance contract. If the election of the new candidate for Director KATAYAMA Eiichi isapproved under this proposal, the Company plans to include him as one of the insured under the insurance contract.
- Candidates for Directors YAGO Natsunosuke, HAKODA Junya, UCHIDA Akira, SATO Rieko, SEKI Tadayuki and KOIDE
Hiroko are independent officers who have been given the obligation by the Tokyo Stock Exchange, Inc. and the Nagoya Stock
Exchange, Inc. to protect ordinary shareholders. The Company has notified each of the stock exchanges that the Company will
designate the new candidate for Director KATAYAMA Eiichi as an independent officer if his election is approved under this
proposal.
- At Mitsubishi Electric Corporation, where candidate for Director KOIDE Hiroko has been in office as an Outside Director
since June 2016, several incidents of quality misconduct regarding several products of the company came to light from April
2021. After the incidents came to light, several manufacturing bases of the company related to the incidents received notice,some that their ISO9001 and IRIS certifications would be suspended, and other that part of the scope of their ISO9001
certification and the whole of their IRIS certification would be canceled from July 2021 and onwards. She was not directly
involved in the incidents and was not aware of the incidents until they came to light. She has regularly provided advice fromthe point of view of compliance with laws and regulations even before the incidents came to light, such as by expressing her
opinion at meetings of the Board of Directors regarding the importance of a change in thinking with regard to quality issues,
etc., and has continued to fulfill her duty as an Outside Director after the incidents came to light by providing advice andoversight with respect to efforts aimed at thorough compliance with laws and regulations and with contracts and at theimplementation of effective measures to prevent fraud.

(Reference) The Company’s criteria for determining the 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.

- 21 -

Business Report (From March 1, 2022 to February 28, 2023)
1. Current status of the corporate group(1) Business summary and results
In the fiscal year under review, the Japanese economy showed a gradual move toward recovery
centered on domestic demand as the impact of the novel coronavirus (COVID-19) gradually eased.
However, unstable conditions continued with the emergence of geopolitical risks including conditions
in Ukraine, sharp forex fluctuations, and inflation.
As for corporate earnings, as social and economic activities moved toward normalization, we saw
improvement in the service and other industries with recovery in demand following the COVID-19
pandemic. However, recovery has seesawed amid a slowdown in the overseas economy, surging
resource prices, and stalled production activities due to shortages in the supply of materials.
In personal spending, the impact from COVID-19 began to diminish, mainly due to a recovery inthe consumption of in-person services and tourism demand from the middle of the fiscal year onward,
as restrictions limiting movement eased. However, there is increasing uncertainty regarding the futureamid greater frugality due to rising inflation.

Faced with unprecedented management conditions caused by the COVID-19 pandemic, theCompany launched its new Medium-term Business Plan (FY2021-FY2023) in fiscal 2021, setting
sustainability at the core of management. Under the Medium-term Business Plan, we aim to achieve a“complete recovery” from the COVID-19 crisis and have positioned the period as one of poisingourselves for “regrowth” beginning in fiscal 2024.
During the fiscal year under review, the second year of the Medium-term Business Plan, the impact
of COVID-19 and restrictions on movement in place through the previous fiscal year began todiminish. As such, to create a strong foothold for complete recovery and achieve regrowth from fiscal
2024 onward, we have positioned the fiscal year as a year to transition to offense-oriented
management and have promoted the key strategies and measures established by the Medium-term
Business Plan.
Our commitment to sustainability primarily involves integrating our seven materialities (priority
issues) with our key strategies, reducing greenhouse gas emissions in line with our medium- to longterm targets, and seeking solutions to environmental and social challenges in cooperation with our
suppliers (refer to “(6) The Group’s sustainability initiatives” for further details on our commitment tosustainability).

<Overall Composition of the FY2021-FY2023 Medium-term Business Plan>
Key strategies andmanagement
structure reforms
looking toward“complete recovery”
and “regrowth”

Strengthening
managementfoundation to
support medium- tolong-term growth

Real ｘ digital strategy

Prime life strategy

Developer strategy

Management structurereforms

Department StoreBusiness and SC
Business (PARCO)

Department StoreBusiness and Payment
and Finance Business

Developer Business(PARCO)

Reduce fixed costs,
increase management
efficiency and asset
efficiency

Financial strategy

Human resource strategy- 22 -IT strategy (defensive)

Governance1) Promoting the implementation of key strategies and management structure reforms looking
toward “complete recovery” and “regrowth”
We made steady progress in implementing measures and strategic investments based on our key
strategies, and in management structure reforms which is the most important measure for achieving
complete recovery.
Regarding our Real x Digital Strategy, to increase the attractiveness of our stores, in the
Department Store Business, we have promoted the creation of sales floors and stores that utilize theunique qualities of both the regions and the stores themselves, in addition to expanding the key
categories. In the SC Business, we conducted large-scale remodeling of our flagship stores andexpanded large-scale promotions in each store. Our digital initiatives mainly involved digitalizing
customer contact points by increasing our app membership count and making more sophisticated useof data by identifying potential customers.
Under our Prime Life Strategy, to enhance our response to the affluent market segment, basedlargely on department store gaisho (out-of-store-sales), we have expanded our key categories,
improved our offers of scarce merchandise and services both in-store and online, and worked to
expand our customer base.
Under our Developer Strategy, we evaluated redevelopment in Fukuoka’s Tenjin area throughcooperation with the region and other companies in addition to developing large-scale complex
facilities in our key areas including Nagoya’s Sakae area and Osaka’s Shinsaibashi area. We also
launched into the residential real estate business to use our real estate holdings effectively.
In our management restructuring, we have succeeded in reducing costs more than initially plannedby digitalizing our advertising methods, conducting Group-wide purchasing of materials, andreviewing rental properties in addition to generating effects from organizational and personnel
structure reforms to reduce fixed costs. Furthermore, to improve management and asset efficiency, we
proceeded with the sale of non-business assets and decided to end operations of Matsumoto PARCO(scheduled for the end of February 2025).
At the same time, to accelerate our initiatives toward regrowth with a view to 2030, we have sought
to strengthen our capabilities for formulating and promoting management strategies such as “Group
Digital,” “Group Corporate Real Estate (CRE),” and “Business Portfolio Transformation” startingfrom the fiscal year under review,
Through these initiatives, the Group digital strategy strove to expand our Group customer base byanalyzing and utilizing the customer database, formulate new business plans using digitaltechnologies, and formulate and implement a Group-wide digital human resource development plan.
Under our Group CRE strategy, we have established basic policies and strategies aimed at
maximizing the value of our real estate holdings. In addition, we have decided to reorganize theDeveloper Business to achieve further business growth by fast decision-making from the standpoint ofGroup-wide optimization.
In terms of initiatives for business portfolio transformation, we have established a CVC fund withthe goals of creating new businesses through co-creation with startup companies, developing
management personnel, and evolving a corporate culture that encourages creativity and the spirit ofchallenge. We also acquired shares of XENOZ Co., Ltd. with the goals of entering the e-sportsbusiness, for which future growth is expected, and creating synergies with our businesses including
the SC Business.
2) Strengthening management foundation to support medium- to long-term growth
Under our Group human resource strategy, we strengthened investment in human resources bybolstering the recruitment and skills development of highly specialized talent based on our key
strategies, and by promoting Group-wide projects aimed at encouraging the active participation of
mid-career and young employees and women. We also promoted open recruitment and personnel
placement to reflect the intentions and desires of our employees, and facilitated personnel interaction
on a Group-wide basis to improve the diversity of our organizations and personnel.
Under our Group financial strategy, we improved our financial standing by identifying changes inthe business environment caused by COVID-19 as well as assessing the progress of performance and- 23 -

forecasts, securing free cash flows, optimizing cash and deposits on hand, and reducing interestbearing liabilities. Furthermore, in addition to our efforts to improve our rate of return on invested
capital (ROIC) in each of our businesses, we have introduced a consolidated taxation system toenhance tax governance and optimize tax costs.
Under our Group systems strategy, in addition to supporting the promotion of key strategies in eachbusiness, we promoted development of a common accounting system for the Group to enhance
management and administration, and strengthened our response to both information security andbusiness continuity.
3) Consolidated revenue and results by segment for the fiscal year under review(i) Consolidated revenue
As a result of various measures including those mentioned above, revenue for the fiscal year
under review was ¥359,679 million, up 8.5% year on year.
Furthermore, business profit was ¥24,854 million, up 112.1% year on year, as a result of
improvement in revenue throughout the fiscal year, along with the effects from reduced fixed costs
and expenses. Operating profit was ¥19,059 million (up 103.2% year on year) despite therecording of impairment losses on department stores and PARCO stores and loss on liquidation ofbusiness following the decision to end operations at Matsumoto PARCO. Profit before tax was¥16,873 million (up 172.6% year on year), and profit attributable to owners of parent was ¥14,237
million (up 229.4% year on year), demonstrating a large increase in profit.
Regarding dividends, the Company has decided to pay an annual dividend of ¥31 per share (¥29
in the previous fiscal year), for an increase of ¥2 relative to the previous fiscal year.

<Key performance indicator results and targets>

Consolidated operating
profit (IFRS)FY2020results¥(24,265)
millionFY2021
results

Consolidated ROE(7.1)%

1.2%

4.0%

7.0%

Consolidated ROIC

0.2%

1.2%

2.7%

4.6%

Greenhouse gas emissions*(32.0)%(36.7)%(undercalculation)(40)%¥9,380 million

FY2022
results¥19,059
millionFY2023targets¥38,500
millionRatio of women in
19.9%
21.3%
22.2%
26%
management positions*Scope 1 and 2 emissions compared with FY2017. The result for FY2022 is under calculation.
(Reference) Scope 1: Direct emissions of greenhouse gases from an organization itself (gasoline
for company vehicles, etc.).
Scope 2: Indirect emissions from the use of electricity, heat, or steam provided byanother company (electrical usage in stores and offices, etc.)- 24 -

(ii)Results by segment
Revenue and operating profit by business segment of the corporate group(Millions of yen)
16th fiscal year (Current fiscal year)(Fiscal 2022)

15th fiscal year
(Fiscal 2021)
Business segment

Revenue
Results

Operating profit

Composition

Results

Revenue

Composition%

Results%

Operating profit

Composition

Results%

Composition%

Department StoreBusiness

190,739

57.5(4,594)–

215,754

60.0

7,529

39.5

SC Business

52,556

15.9

2,055

–

54,361

15.1

3,733

19.6

Developer Business

50,633

15.3

4,711

–

54,670

15.2

3,695

19.4

Payment and FinanceBusiness

11,037

3.3

1,970

–

12,889

3.6

3,485

18.3

Total

304,967

92.0

4,142

–

337,676

93.9

18,443

96.8

Other

61,755

18.6

1,199

–

55,922

15.5

899

4.7

Adjustments(35,239)(10.6)

4,039–(33,919)

(9.4)

(283)

(1.5)

Consolidated total

331,484

100.0

9,380

100.0

359,679

100.0

19,059100.0- 25 -

Department Store Business
Revenue of ¥215,754 million (+13.1% YoY), operating profit of ¥7,529 million (operating loss of¥4,594 million in the previous fiscal year)<Reference data>
Gross sales of ¥657,955 million (+18.4% YoY), business profit of ¥12,834 million (+613.7% YoY)
As the impact of the spread of COVID-19 and restrictions on movement began to diminish, mainly
from the middle of the fiscal year onward, consumer behavior, which had been restrained, began torecover. Additionally, as the number of foreign tourists visiting Japan increased, the number ofcustomers visiting stores and net sales improved steadily, reflecting the effects of strategic investments
promoted during the period.
In terms of our key strategy initiatives, we promoted the creation of attractive sales floors and storesusing the unique qualities of each store by expanding key categories such as luxury goods, watches, andart, mainly at our flagship stores, and by building a large-scale character zone at our Daimaru Umeda
store.
Furthermore, in our digital initiatives, we evolved our customer policies by promoting thedigitalization of customer contact points through our app and by identifying potential customers throughdata analysis and use. We also launched a new cosmetics information site “DEPACO” as a form of
media commerce, leveraging the strengths of department stores, including physical stores and sales
capabilities.
To enhance our approach to the affluent market segment, we expanded our key categories and built
high-quality store environments including customer lounges. We also improved our offers of scarcemerchandise and services both in-store and on dedicated customer sites, and worked to expand ourcustomer base.
In our management structure reforms, we produced results in organizational and personnel structurereforms with a view to new store operating models and worked to revise our cost structure including
reviewing the scope of our outsourcing.
As a result of various measures including those mentioned above, revenue was ¥215,754 million, up
13.1% year on year. Operating profit was ¥7,529 million (operating loss of ¥4,594 million in theprevious fiscal year) despite impairment losses on stores, and the Department Store Business shifted to
profitability.

- 26 -

(Reference)

Gross sales by company, store and product of the Department Store Business are as follows.

Gross 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

70,80510.8

33.9

Osaka Umeda store

48,311

7.3

17.2

Tokyo store

64,2369.8

34.9

Kyoto store

61,520

9.4

17.3

Kobe store

83,95412.8

19.7

Suma store

6,314

1.0

(3.6)

Ashiya store

4,204

0.6

0.7

Sapporo store

62,068

9.4

25.7

Shimonoseki store

8,360

1.3

(0.6)

409,776

62.3

23.1

Nagoya store

117,737

17.9

13.2

Ueno store

23,984

3.6

14.8

Shizuoka store

17,517

2.7

2.5
6.3

Sub total
Matsuzakaya

Takatsuki store

5,504

0.8

164,743

25.0

8.9

Corporations, head office, etc.

27,970

4.3

28.0

Total

Sub total

602,490

91.6

19.1

The Hakata Daimaru, Inc.

47,1087.2

13.5

Kochi Daimaru Co., Ltd.

8,379

1.3

1.2

(22)

0.0

−

657,955

100.0

18.4

Adjustments
Total- 27 -

Gross sales by product of the Department Store Business
Product

Amount(Millions of yen)
Year-on-year changes

Composition%%

Men’s clothing andhaberdashery

36,9595.6

15.9

Ladies’ clothing andhaberdashery

227,036

34.5

28.5

Children’s clothing andhaberdashery

6,494

1.0

2.1

Kimono, bedding and otherclothing

6,318

1.0

12.2

Accessories

46,608

7.1

19.9

Furniture

4,939

0.8

15.2

171

0.0

13.0

Home appliancesHousehold goods

13,5982.1(7.1)

Food products

141,573

21.5

8.3

Food halls and cafes

15,4192.3

41.5

General goods

118,712

18.0

18.3

Services

2,379

0.4

22.7

Other

37,765

5.7

13.3

(22)

0.0

–

Adjustments
Total(Note)

657,955
100.0
18.4
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) to a gross amount.

- 28 -

SC Business
Revenue of ¥54,361 million (+3.4% YoY), operating profit of ¥3,733 million (+81.6% YoY)
<Reference data>
Gross sales of ¥254,641 million (+16.2% YoY), business profit of ¥5,382 million (+40.0% YoY)
The SC Business experienced steady improvement in both the number of customers visiting storesand tenant transaction volume due to strategic remodeling centered on flagship stores and stronger
promotions, amid a rebound from store closures and restricted admission policies at entertainment
venues imposed in the previous fiscal year, and as personal spending began to recover starting in the
middle of the fiscal year onward.
In terms of our key strategy initiatives, with an eye on both the changing times and changing lifestyles
driven by the COVID-19 pandemic, we renovated the ground floor and expanded contents with a strong
affinity with the area at Ikebukuro PARCO, and we carried out large-scale renovations with genderless
and ageless themes at Nagoya PARCO. We also rolled out unique pop-up stores, character collaborationplans, and cooperative plans with local communities at each store. Furthermore, with the cooperationof our tenants, we worked to develop a foundation by increasing our app membership count andenhancing the convenience of shopping at both our physical and online stores. We ceased operations of
Tsudanuma PARCO at the end of February 2023.
As a result of various measures including those mentioned above, revenue was ¥54,361 million, up
3.4% year on year. Operating profit was ¥3,733 million (up 81.6% year on year) despite the recordingof loss on liquidation of business following the decision to end operations at Matsumoto PARCO(planned for the end of February 2025) and impairment losses on stores.

- 29 -

(Reference) Tenant transaction volume (on a gross basis) by PARCO store in the SC Business is as follows.
Tenant transaction volume by PARCO store in the SC BusinessYear-onyearchanges(Millions of yen)
Year-onComposiyeartionchangesAmountComposition

Sapporo PARCO

9,980

%
4.0

% Shintokorozawa
25.3 PARCO

7,570

%
3.0

%
(6.9)

Sendai PARCO

17,304

7.0

16.4 Tsudanuma PARCO

9,702

3.9

4.2

Urawa PARCO

25,851

10.4

9.6 Hibarigaoka PARCO

6,798

2.7

11.0

Ikebukuro PARCO

20,991

8.4

28.7 Matsumoto PARCO

4,020

1.6

0.8

PARCO_ya Ueno

6,481

2.6

23.2

Total of community
complex group

28,09211.3

1.9

Kichijoji PARCO

6,852

2.8

Total of urban and15.2 community complex
groups248,502

100.0

16.9

Shibuya PARCO

22,823

9.2

33.7

Kinshicho PARCO

8,715

3.5

25.4

Chofu PARCO

17,411

7.0

14.4

Shizuoka PARCO

7,669

3.1

0.6

Nagoya PARCO

26,910

10.8

18.5

Shinsaibashi PARCO

17,7577.1

30.3

Hiroshima PARCO

11,921

4.8

11.0

Fukuoka PARCO

19,739

7.9

15.2

Store

Store

AmountTotal of urban
88.7
19.1
220,410complex group(Note) 1. The tenant transaction volume represents the total amount of tenant transactions at PARCO stores.
2. Tsudanuma PARCO closed on February 28, 2023.

- 30 -

Developer Business
Revenue of ¥54,670 million (+8.0% YoY), operating profit of ¥3,695 million (-21.6% YoY)
<Reference data>
Gross sales of ¥54,670 million (+1.6% YoY), business profit of ¥2,947 million (-6.0% YoY)
We promoted our key strategies aimed at maximizing the use of the Group’s real estate holdings andreforming our real estate portfolio. This mainly involved entering the residential real estate business todevelop non-commercial facilities using our real estate holdings and planning and carrying out thedevelopment of large-scale mixed-use facilities in key areas where the Company has a solid foundation.
Specifically, in addition to Nishiki 3-chome District 25 (tentative name) in Nagoya’s Sakae area slated
for completion and opening in 2026 and the Shinsaibashi Project (tentative name) in Osaka’s
Shinsaibashi area, we evaluated redevelopment in the Tenjin area of Fukuoka in collaboration with local
communities and other companies, aiming to contribute to the creation of attractive, high-quality urban
development.
Additionally, to pursue further business growth, we established J. Front City Development Co., Ltd.
directly under our holding company and decided to transfer the developer business operated by PARCO
Co., Ltd. to J. Front City Development Co., Ltd. By restructuring this business, we are building a systemcapable of fast decision making from the standpoint of Group-wide optimization. In addition, we willfurther strengthen our governance by developing and securing specialists, conducting management andadministration suitable for the business, and carrying out risk management.
As a result of various measures including those mentioned above, revenue was ¥54,670 million (up8.0% year on year) due to increases in interior and facilities work inside and outside the Group andfacilities management contracting, despite the impact of the end of operations of existing properties.
Operating profit was ¥3,695 million, down 21.6% year on year, partly due to a rebound with respect togain on sales of non-current assets recorded in the previous fiscal year.

Payment and Finance Business
Revenue of ¥12,889 million (+16.8% YoY), operating profit of ¥3,485 million (+76.9% YoY)
<Reference data>
Gross sales of ¥12,889 million (+16.8% YoY), business profit of ¥3,486 million (+82.9% YoY)
In the payment business, in addition to the recovery in transaction volume in the Department StoreBusiness and external afﬁliated stores, we provided special experiences including unique member
events to increase awareness about our unique points program (QIRA Point). We also worked tostrengthen the external affiliated stores by improving the payment environment in Group commercial
facilities.
In the finance business, we strengthened the insurance agency business as well as expanded ourfinancial services including investment trust installment services through partnerships with othercompanies.
As a result of various measures including those mentioned above, revenue was ¥12,889 million, up
16.8% year on year, and operating profit was ¥3,485 million, up 76.9% year on year.
(Note) Starting from the fiscal year under review, gross sales for JFR Card Co., Ltd. have been changed
to IFRS revenue in our calculations. Percentage changes year on year have been calculated by restating
the results for the fiscal year ended February 28, 2022.

- 31 -

OtherRevenue of ¥55,922 million (-9.4% YoY), operating profit of ¥899 million (-25.0% YoY)
<Reference data>
Gross sales of ¥57,358 million (-12.3% YoY), business profit of ¥924 million (-26.2% YoY)
Daimaru Kogyo, Ltd., which is engaged in the wholesale business, enjoyed increased revenue andprofit due mainly to a recovery in orders in the automotive component division. However, due to theimpact of removing the temporary staffing business from the scope of consolidation at the end of theprevious year, revenue was ¥55,922 million (down 9.4% year on year), and operating profit was ¥899
million (down 25.0% year on year).
(Note) Starting from the fiscal year under review, gross sales for Daimaru Kogyo, Ltd. have beenchanged to IFRS revenue in our calculations. Percentage changes year on year have been calculated byrestating the results for the fiscal year ended February 28, 2022.

- 32 -

(2) Explanation of financial position(Assets, liabilities, and equity as of February 28, 2023)
Total assets as of February 28, 2023 were ¥1,120,953 million, down ¥71,954 million compared with
February 28, 2022. Total liabilities were ¥749,542 million, a decrease of ¥81,245 million comparedwith February 28, 2022. Interest-bearing liabilities (including lease liabilities) were ¥413,949 million,
down ¥88,160 million compared with February 28, 2022, as a result of the Company optimizing cash
and deposits on hand secured to provide for effects of the COVID-19 pandemic, and having proceededwith repayment.
Total equity was ¥371,410 million, an increase of ¥9,290 million compared with February 28, 2022.
(Cash flow position)
The balance of cash and cash equivalents (hereinafter “cash”) as of February 28, 2023 was ¥39,874
million, down ¥53,404 million compared with February 28, 2022.
Cash flow positions in the current fiscal year and the factors for these are as follows.
Net cash provided by operating activities was ¥65,480 million. In comparison with the previous fiscal
year, cash provided increased by ¥15,614 million, largely due to an increase in profit before tax.
Net cash used in investing activities was ¥13,371 million. In comparison with the previous fiscal
year, cash used increased by ¥8,082 million, largely due to a rebound from the proceeds from sales ofinvestment property and subsidiary shares recorded in the previous fiscal year, in addition to an increasein purchase of property, plant and equipment.
Net cash used in financing activities was ¥105,694 million. In comparison with the previous fiscal
year, net cash used in financing activities increased by ¥25,302 million, as we repaid interest-bearing
liabilities including bond redemptions.

(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 ¥23,415 million.
(i) Major facilities completed during the current fiscal year
Major facilities completed during the current fiscal year included investments in renovating sales
floors at the Matsuzaka Nagoya store and Daimaru Kyoto store in the Department Store Business,internal renovations and facility upgrades at Nagoya PARCO and Ikebukuro PARCO in the SC Business,and investment in the launch of HAB @ Kumamoto in the Developer Business.
(ii) New construction and expansions of major facilities during the current fiscal year
New construction in Nagoya’s Sakae area for the development of Nishiki 3-chome District 25(tentative name)(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 funds generated by
the Group. Moreover, when the need arises for business investment or other expenditures, the holding
company spearheads efforts to procure such funds mainly by issuing bonds and borrowing fromfinancial institutions, with consideration placed on maintaining financial soundness.
The Group subsidiaries do not procure funds from financial institutions, but instead we promotestreamlined means of procuring Group funds by seeking needed funding through intra-Group financing
using a cash management system.
For the current fiscal year, based on the above policy, we procured ¥5,500 million through long-termborrowings from financial institutions. Meanwhile, we optimized the cash and deposits on hand that we- 33 -

had secured in preparation for the impact of the spread of COVID-19 and repaid ¥24,000 million in
short-term borrowings and ¥15,100 million in long-term borrowings. Additionally, with the redemptionof ¥20,000 million in unsecured straight bonds and ¥15,000 million in commercial paper, our balanceof interest-bearing liabilities (excluding lease liabilities) decreased by ¥68,600 million compared to
February 28, 2022 to ¥249,100 million. We also scaled back the commitment line from ¥200,000 million
to ¥100,000 million.
(5) Issues to be addressed
Two years have passed since the start of the Medium-term Business Plan (FY2021-FY2023), which
positions sustainability at the core of management.
In fiscal 2022, as the impact of repeated spread of COVID-19 and restrictions on movement
diminished, we transitioned to offense-oriented management and promoted concentrated investment
and management structure reforms based on our key strategies. As a result of these efforts, mainly fromthe middle of the fiscal year onward, revenue steadily began to recover, and we reduced interest-bearing
liabilities, improving our financial standing.
The environment surrounding our business is becoming increasingly uncertainty due to theemergence of geopolitical risk, rising global inflation, and growing concerns over an economic
slowdown due to prolonged supply constraints, even though social and economic activities continue tonormalize. In addition to “changes in consumer behavior due to COVID-19” and “the decline of existing
business models,” we are aware of the need to respond to these risks from both short-term and mediumto long-term perspectives.
In fiscal 2023, the final year of the Medium-term Business Plan, we will accelerate theimplementation of key strategies and measures in each business in order to surely capture domestic
spending and inbound demand, which are beginning to recover, and to achieve a “prompt recovery inearnings power.” Furthermore, given the highly uncertain business environment, we will further reduce
fixed costs in our management structure reforms, compared to the initial plan, and thorough variable
costs and other expenses.
In terms of our performance targets for fiscal 2023, we set our operating profit targets very carefullyat the start of the period as we expect utilities costs to surge greater than initially expected, and because
we must carefully identify trends in domestic spending and inbound demand. Considering the futurechanges in the business environment, we aim to achieve the performance targets in the Medium-term
Business Plan by steadily promoting our individual strategies and policies.
Furthermore, amid accelerating changes in spending behavior caused by the COVID-19 pandemic,
the importance of business portfolio transformation has grown further. Against this backdrop, withsustainability at the core of management, we will establish a future vision for the Group with an eye to2030 and set a clear trajectory toward regrowth including transforming the business models of existing
businesses, business growth in non-commercial fields, and the creation of new businesses. In addition,
based on these medium- to long-term strategies, we will begin formulating our next Medium-term
Business Plan to start in fiscal 2024.

1) Accelerating the promotion of key strategies and management structure reforms aimed at a“prompt recovery in earnings power.”(i) Real x Digital Strategy
We are working to increase the attractiveness of flagship stores through concentrated investment andto strengthen our online business with digital technologies.
Furthermore, we are working to expand the Group’s customer base by promoting the mutual
exchange of customers in our key areas such as Nagoya and Shinsaibashi to integrate and use theGroup’s customer database.
A. Increase the attractiveness of stores•

To establish competitive superiority in each region, we are further strengthening key categories that
customer strongly support in our Department Store Business and enhancing unique promotions and- 34 -

•events. Meanwhile, we are accelerating our response to market changes by developing new content
with a focus on beauty, health, and the environment, while streamlining sales floors that handle
practical merchandise.
In addition to concentrated investment in our flagship stores including Shibuya, Ikebukuro, Nagoya,
and Shinsaibashi PARCO, we are developing sales floors with new, fun experiences and enhancing
our information dissemination in Japan and overseas to increase the value of visiting our stores. We
are also opening new community-based commercial facilities.

B. Strengthen online business••In addition to expanding the products and brands in department store websites and cosmetics media
commerce, we will strengthen our business activities from a CSV perspective by launching a men’sline service in our fashion subscription business and expanding sales channels for regional products
using the online platform.
In the SC Business, we are updating our existing online stores, expanding our shops and sales menus,
increasing customer and shop convenience by responding to cross-border EC, and providing highvalue-added services.

(ii) Prime Life Strategy
To strengthen our response to the affluent market segment, we are evolving our customer polices byworking to expand our customer base, developing new content, and using diverse points of customer
contact including stores, gaisho and websites.
A. Expand the customer base•In the Department Store Business, we are expanding our customer base through partnerships withother companies, online enrollments, and promoting member registration on dedicated customer
websites, while also transforming visitors to Japan into regular customers through the use of our app.

B. Develop new products and services•

In the Department Store Business, we are creating rare content and services that increase royalties
in addition to further strengthening our mainstay categories. Also, in the Payment and FinanceBusiness, we are developing and providing financial services tailored to the life stages of customers
through business partnerships with other companies.

C. Evolve customer policies•

We are strengthening our sales activities using digital technologies including a dedicated customer
website and online customer approach while evolving our CRM by expanding the scope of our data
analysis and use.

(iii) Developer Strategy
In addition to promoting large-scale development projects in key areas, we are effectively using ourreal estate holdings and strengthening our business foundation.
Furthermore, under our new business promotion framework launched in March of this year, we areformulating and promoting long-term development plans centered in the key areas* of seven cities inwhich the Company maintains its business foundation, from the standpoints of Group-wide
optimization and advanced utilization of asset holdings.
*Sapporo, Tokyo, Nagoya, Kyoto, Osaka, Kobe, and Fukuoka
A. Promote large-scale development projects in key areas.
•

In addition to our large-scale development products in Nagoya’s Sakae area and Osaka’s
Shinsaibashi, we are advancing the Tenjin 2-chome South Block Station-front East West Street Area
Project (tentative name) through cooperation with the region and other companies.

B. Effectively use real estate holdings•

Contribute to earnings by developing and completing residential properties that match thecharacteristics of real estate holdings.
- 35 -

C. Strengthen business foundations•

We will work to strengthen our business foundations by undertaking asset replacement andestablishing a consignment framework for the asset management business.

(iv) Management structure reforms
In fixed cost reductions, we are working to generate greater benefits than initially planned.
Additionally, we are working to thoroughly manage variable costs as utility costs continue to surge
greater than expected.
A. Reduction of fixed costs•

In addition to the effect of the ongoing organizational and personnel structure reforms, Group-widepurchasing, and a review of rental properties, we will further review cost structure reforms, including
a review of outsourcing areas and streamlining back-office operations.

B. Increase management efficiency and asset efficiency•

With an eye to “regrowth” from fiscal 2024 onward, we will work to improve management efficiency
by refining our business foundation based on future prospects, growth potential, and earnings
potential based on invested capital and to improve asset efficiency by assessing non-business assets.

2) Clarifying the future vision for the Group toward 2030 and the trajectory toward “regrowth”
As the use of digital technologies in everyday life progresses driven by the COVID-19 pandemic,
consumer behavior is changing at an accelerated pace, with a renewed awareness of the value of reallife experiences, such as connecting with people and local communities, sharing places, spaces andemotions, and a heightened awareness of social and environmental issues.
As ways of living and enjoying life diversify for our customers, we have established a future vision
for the Group toward 2030 to “realize a sustainable society and new happiness in life” and are working
to resolve social issues through our businesses and to create new value not bound by our existing
business sectors, products, or services.
To achieve these goals, we will make full use of our management resources including store assets
owned by the Company, customers and regions, supplier connections, and our business knowhow. We
will also formulate medium- to long-term strategies and our next Medium-term Business Plan aimed at“regrowth” by transforming the business models of existing businesses, growing businesses in noncommercial sectors, and creating new businesses.

<Management issues and direction toward “regrowth”>
i)Business model transformation of existing businesses

To transform the business models of our Department Store Business and SC Business, we will expand
our customer base through customer exchanges in key areas and improving services for overseas
customers and next-generation customers. We will also work on development of new businesses aimed
at creating environmental and social value.
ii)

Business growth in non-commercial fields

In our Developer Business, we will formulate and promote long-term strategies such as long-term
development plans in key areas, expansion of construction and interior design business, asset
replacement, and diversification of earnings through asset management, with the aim of proposing
diverse urban lifestyles and contributing to the development of attractive urban areas.
In our Payment and Finance Business, we will rebuild the growth strategy in our finance business byefforts that include creating a plan to establish a Group payment infrastructure and developing highvalue-added services using customer data.

- 36 -

iii) Creating new businesses
We are developing and entering businesses with expectations for future growth such as e-sports andsubscription businesses. Moreover, by combining physical stores and virtual spaces, we are providing
new experiences to our customers as we use digital technologies to create new businesses.
Furthermore, to increase the efficacy of these strategies, we are utilizing diverse knowledge frominside and outside the Company, including partnering with regions and other companies, businessacquisitions, and business co-creation with the CVC fund.

3) Strengthen management foundations for achievement of medium- to long-term growth
We are working to strengthen management foundations for our Group vision with an eye to 2030
and to increase the effectiveness of our business portfolio transformation. In particular, to realize thesustainability management that the Company aims for, we are promoting “human capital management”
for the sustainable growth of our people and organizations by proactively promoting diversity andfocusing investment on the human resources that create new value.
(i) Group human resource strategy
We are strengthening recruitment and developing skills of highly specialized talent, developing thehuman resources responsible for the next generation, and encouraging the active participation of women.
Additionally, we are strengthening investment in human resources both in the placement of individual
personnel in positions that develop motivation and latent capabilities, and in reskilling.
Furthermore, with an eye to the future vision of the Group and business portfolio transformation, we
are formulating development, hiring, and placement policies based on the visualization of the required
human resources and capabilities. We are also accelerating the promotion of our personnel strategy
linked to our management strategy, including increasing employee engagement.
(ii) Group financial strategy
Aimed at business portfolio transformation and realizing growth deriving from profitability in eachbusiness, we are working to enhance the sophistication of Group management and administration byformulating a plan to improve return on invested capital (ROIC) through coordination with eachbusiness and disseminate it internally. Furthermore, in light of trends in the capital markets, we areworking to strengthen our financial standing by creating operating cash flow, securing strategic
investment capital, and controlling interest-bearing liabilities.
(iii) Group systems strategy
We will proceed with introduction of the common Group accounting system aimed at thesophistication of management and administration and streamlining operations at each company inpreparation for its full-fledged operations scheduled for the next Medium-term Business Plan.
Furthermore, from the standpoint of Group-wide optimization and strengthening the response to
information security and business continuity, we are working to strengthen Group IT governance,
including creating new networks and performing integrated management of investment plans andprocesses.
(iv) Strengthening corporate governanceWith the goals of realizing medium- to long-term growth and enhancing corporate value, we areworking to develop more sophisticated corporate governance practices by strengthening the oversightfunction of the Board of Directors and speeding up management decision-making and execution totransform our business portfolio.

(6) The Group’s sustainability initiatives
1) Sustainability management and the seven materialities (priority issues)
The Company has established its sustainability policy “with people, with local communities, withenvironment to realize a sustainable society and new happiness in life,” and is promoting Group-wide
sustainability management.
- 37 -

In its Medium-term Business Plan launched in fiscal 2021, the Company has identified sevenmaterialities for promoting sustainability management and realizing “Well-Being Life.” In eachmateriality, the aim is to realize the creation of shared value (CSV) that balances social value andeconomic value by creating business opportunities from both risks and opportunities.

2) Fiscal 2022 initiatives•

Reducing greenhouse gas emissions through the use of renewable energy

By changing over to renewable energy in our stores and offices, converting lighting to LED, andusing electric vehicles for company vehicles, we have reduced Scope 1 and 2 greenhouse gas emissions(fiscal 2022 results are being calculated, fiscal 2023 target: 40% reduction compared to fiscal 2017).
Furthermore, the ratio of renewable energy to the total energy used in our business activities is expected
to exceed 30% by the end of fiscal 2022 (fiscal 2023 target: 40%).
•

Promoting resource recycling and circular-type businesses

At Daimaru Matsuzakaya Department Stores Co. Ltd., we entered the fashion subscription businesswith “AnotherADdress” in March 2021 with the aim of balancing “the enjoyment of fashion” with “adeparture from the mass production and disposal model.” Amid lifestyle changes prompted by the
COVID-19 pandemic and increasing interest in environmentally-friendly services, AnotherADdress has
enjoyed strong customer support and continued growth. We are working to expand the business byadding a new men’s line in March 2023.
Furthermore, at Daimaru Matsuzakaya Department Stores Co. Ltd., we are promoting “ECOFF
Recycle Campaign” activities in which we collect unneeded clothing, shoes, and bags from customers
to create new resources and reuse them in new materials and products. Through the continued, strong
support of our customers through fiscal 2022, we collected around 367 tons of used items, expanding
both the number of participants and collection volume of the program.
•

Reducing greenhouse gas emissions together with our suppliers

At Daimaru Matsuzakaya Department Stores Co. Ltd., we held a briefing in April 2022 for our main
suppliers (attended by 300 people from 253 companies). We communicated both the Group’s resolveand concrete initiatives to realize a decarbonized society. We will continue to cooperate with our
suppliers to realize a decarbonized society throughout the entire supply chain.
•

Encouraging the active participation of women

Female employees make up 52.9% of all employees in the Group, and we position and encourage
the active participation of women as a key management strategy as we strive for corporate growth.
In fiscal 2022, we launched the “project to encourage the active participation of women” under the
direct management of the Company President. Members were selected from each operating company
and multiple discussions were held on creating an environment in which women can fully exercise theirindividuality and capabilities. We also held “career forums” for management candidates which included
training on the mindset required to exercise leadership and become a manager.
As a result of these initiatives, the ratio of women in management positions at the end of fiscal 2022
was 22.2% (fiscal 2023 target: 26%).
•

Strengthening the recruitment of highly specialized professionals

The Group is actively hiring highly specialized professionals with the specialized skills, experience,and knowledge needed for new growth fields, such as digital, developer-related, and the Payment and
Finance Business. In fiscal 2022, the Group hired a total of 132 people (103 in the previous fiscal year).
Particularly at our holding company, the ratio of outside hires to total employees is 36.4%. Throughdiversity in our organizations and personnel, we are working to realize sustainable growth and thecreation of new value.
*The Company has set “Scope 1 and 2 GHG emissions” and the “ratio of women in management
positions” as non-financial indicators for performance-linked stock-based remuneration in its officer
remuneration system and has clarified the responsibility of management in achieving these targets.
- 38 -

* Details of the Company’s seven materialities are available via the link below.
(https://www.j-front-retailing.com/english/sustainability/sustainability.html)(7) 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)
13th fiscal year
(Fiscal 2019)14th fiscal year
(Fiscal 2020)

15th fiscal year
(Fiscal 2021)

16th fiscal year
(Fiscal 2022)

Gross sales

1,133,654

769,453865,919998,755

Revenue

480,621319,079

331,484

359,679

Business profit

45,363

2,366

11,71824,854

Operating profit

40,286(24,265)

9,380

19,059Operating profit/revenue

8.4%(7.6)%

2.8%

5.3

Profit before tax

37,161(28,672)

6,190

16,873Category

Profit attributable to owners of parent

21,251(26,193)

4,321

14,237

Total assets

1,240,308

1,263,722

1,192,907

1,120,953

Total equity

399,681364,343

362,120

371,410Equity attributable to owners of parent

387,188352,171

350,368

359,385

31.2

27.9

29.4

32.1

478,773[220,497]

562,815[202,885]

502,109[184,394]

413,949[164,825]

Ratio of equity attributable to owners of parent to total assets
Interest-bearing liabilities[Of which, lease liabilities]
Cash flows from operating activities

73,35856,47149,86665,480Cash flows from investing activities(49,559)(20,870)(5,289)(13,371)

Free cash flows

23,79935,601

44,577

52,109Cash flows from financing activities(14,829)58,727(80,392)(105,694)

Cash and cash equivalents at end of period

34,633

128,925

93,27839,874

Profit/equity attributable to owners of parent (ROE)

5.4%(7.1)%

1.2%

4.0%

Operating profit/total assets (ROA)

3.2%(1.9)%

0.8%

1.6%

Return on invested capital (ROIC)

–

0.2

1.2

2.7

81.19

(100.03)

16.50

54.32

Equity attributable to owners of parent per share (Yen)

1,479.07

1,344.91

1,337.29

1,370.43

Price earnings ratio (PER)

14.13%(10.17)%58.29%

23.55%

Interim dividend (Yen)

18.00

9.00

14.00

15.00

Year-end dividend (Yen)

18.00

18.00

15.00

16.00

Dividend payout ratio

44.3%

–%

175.7%

57.1%

Dividends/equity attributable to owners of parent

2.4%

2.0%

2.2%

2.3%

Basic earnings per share (EPS) (Yen)(Notes) 1. Profit attributable to owners of parent, operating profit and business profit after tax are used to calculate ROE,
ROA and ROIC, respectively.
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 to a gross amount and the net amount transactions of the SC Business totenant transaction volume (gross basis). Accordingly, gross sales for the 15th fiscal year have been retrospectively
adjusted.
3. Business profit is calculated by deducting cost of sales and selling, general and administrative expenses fromrevenue.

- 39 -

(8) Status of significant parent company and subsidiaries(i) Relationship with the parent company
No items to report(ii) Status of major subsidiaries
Company nameShare capital

Daimaru Matsuzakaya Department Stores
Co. Ltd.

10,000

The Hakata Daimaru, Inc.
Kochi Daimaru Co., Ltd.
PARCO Co., Ltd.

(Millions of yen, unless otherwise stated)
Ratio of ownershipby the Company
Major businesses
(%)
100.0

Department Store Business

3,037

69.9

Department Store Business

300

100.0

Department Store Business

34,367100.0

Shopping Center Business

S$4 million

100.0

Shopping Center Business

PARCO SPACE SYSTEMS Co., Ltd.

100

100.0

Space engineering andmanagement business

J. Front Design & Construction Co., Ltd.

100

100.0

Design and construction
contracting

PARCO Digital Marketing Co., Ltd.

10

100.0

Internet-related business

J. Front City Development Co., Ltd.
(Note 1)

10

100.0

Real estate business

JFR Card Co., Ltd.

100

100.0

Payment 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. (Note 2)

NT$60 million

100.0

Wholesale business

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, parking

JFR Information Center Co., Ltd.

10

100.0

Information service

Daimaru Matsuzakaya Tomonokai Co., Ltd.

100

100.0

Specified prepaid transaction
service

Parco (Singapore) Pte Ltd.

XENOZ Co., Ltd. (Note 3)100
50.8
E-sports business(Notes) 1. On October 27, 2022, the Company acquired all shares of JAPAN RETAIL ADVISORS Co., Ltd. from PARCO
Co., Ltd. and changed the trade name to J. Front City Development Co., Ltd.
2. On August 22, 2022, the decision was made to dissolve Taiwan Daimaru Kogyo, Ltd., which is now in liquidation
proceedings.
3. On December 1, 2022, the Company acquired shares of XENOZ Co., Ltd., making it a consolidated subsidiary.

(iii) Matters relating to specified wholly owned subsidiaries
Name
Daimaru Matsuzakaya
Department Stores Co. Ltd.
PARCO Co., Ltd.

Address
18-11, Kiba 2-chome, Koto-ku,
Tokyo28-2, Minami-Ikebukuro 1-chome,
Toshima-ku, Tokyo(Millions of yen)
Total book value

Total assets of theCompany

202,109574,302160,581574,302(Note) A specified wholly owned subsidiary is one where the book value of the shares of said subsidiary on the final day of
the fiscal year exceeds 1/5th of the Company’s total assets, and one whose shares are all held by the Company.

- 40 -

(9) Major businesses
The Department Store Business, the SC Business, the Developer Business, the Payment and FinanceBusiness, and Other including wholesale business, parking, and leasing, etc.
(10) Major business locations(Department Store Business)
Name

Location

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

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

Matsuzakaya

Kobe store

Chuo-ku, Kobe

GINZA SIX

Chuo-ku, Tokyo

Suma store

Suma-ku, Kobe

The Hakata Daimaru, Inc.

Chuo-ku, Fukuoka

Ashiya store
Sapporo store

Ashiya, Hyogo
Chuo-ku, Sapporo
Shimonoseki,
Yamaguchi

Kochi Daimaru Co., Ltd.

Kochi, Kochi

Shimonoseki store

Name

Nagoya store
Ueno store
Shizuoka store
Takatsuki store

LocationNaka-ku, Nagoya
Taito-ku, Tokyo
Aoi-ku, Shizuoka
Takatsuki, Osaka(SC Business)
Name
PARCO Co., Ltd.
Headquarters
Shibuya Head Office
Sapporo PARCO
Sendai PARCO
Urawa PARCO
Shintokorozawa PARCO
Ikebukuro PARCO
PARCO_ya Ueno (Ueno
Frontier Tower)
Kinshicho PARCO
Shibuya PARCO
Parco (Singapore) Pte Ltd

Location

Name

Location

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

Hibarigaoka PARCO
Kichijoji PARCO
Chofu PARCO
Tsudanuma PARCO
Matsumoto PARCO
Shizuoka PARCO
Nagoya PARCO

Nishi-Tokyo, Tokyo
Musashino, Tokyo
Chofu, Tokyo
Funabashi, Chiba
Matsumoto, Nagano
Aoi-ku, Shizuoka
Naka-ku, Nagoya

Taito-ku, Tokyo

Shinsaibashi PARCO

Chuo-ku, Osaka

Sumida-ku, Tokyo
Shibuya-ku, Tokyo

Hiroshima PARCO
Fukuoka PARCO

Naka-ku, Hiroshima
Chuo-ku, Fukuoka

Singapore- 41 -

(Developer Business)
Name

Location

Name

PARCO Co., Ltd.
Pedi SHIODOME
Sapporo ZERO GATE
Harajuku ZERO GATE

Minato-ku, Tokyo
Chuo-ku, Sapporo
Shibuya-ku, Tokyo
Kawasaki-ku,
Kawasaki ZERO GATE
Kawasaki
Nagoya ZERO GATE
Naka-ku, Nagoya
Kyoto ZERO GATE
Shimogyo-ku, Kyoto
Shinsaibashi ZERO GATE Chuo-ku, Osaka
Sannomiya ZERO GATE Chuo-ku, Kobe
Hiroshima ZERO GATE
Naka-ku, Hiroshima

PARCO SPACE SYSTEMS Co.,Ltd.

Shibuya-ku, Tokyo

J. Front Design & Construction Co., Chuo-ku, Osaka
Ltd.

Location

BINO OKACHIMACHI
BINO GINZA
BINO SAKAE

Taito-ku, Tokyo
Chuo-ku, Tokyo
Naka-ku, Nagoya

BINO HIGASHINOTOIN

Nakagyo-ku, Kyoto

and others

PARCO Digital Marketing Co., Ltd. Shibuya-ku, Tokyo
J. Front City Development Co., Ltd. Shibuya-ku, Tokyo(Payment 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-fu 5, Nagoya 1, Kawasaki 1, Shanghai 1, Thailand 1, Taiwan 1(11) Status of employees(i) Employees of the corporate group
Category

Number of employees

J. FRONT RETAILING Co., Ltd.

151

Department Store Business

2,884

SC Business

494

Developer Business

843

Payment and Finance Business

211

Other

532

Total
5,115
(Note) Other than the employees above, the number of dedicated employees is 1,195 and the number of fixed-term
employees is 948.

(ii) Employees of the Company
Number of employees

Average age

151
49.0
(Note) Other than the employees above, the number of dedicated employees is 3 and the number of fixed-term
employees is 13.

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

Number of
employees

Average age

2,627

49.0

688

43.9

- 42 -

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

Creditor
Borrowings
MUFG Bank, Ltd.

37,658Development Bank of Japan Inc.

34,484

Sumitomo Mitsui Banking Corporation

23,184

Mizuho Bank, Ltd.

12,284

Other

61,700Sub total

169,310Straight bonds, etc.

79,813

Total

249,123(13) Other important matters relating to current status of the corporate group
At a Board of Directors meeting held on October 11, 2022, the Company resolved to transfer thedeveloper business of its wholly owned subsidiary PARCO Co., Ltd. to its wholly owned subsidiaryJAPAN RETAIL ADVISORS Co., Ltd. (currently J. Front City Development Co., Ltd.) through a
company split (absorption-type split), with an effective date of March 1, 2023.

- 43 -

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:

166,642(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
J. Front Retailing Kyoei Supplier Shareholding Association
The Dai-ichi Life Insurance Company, Limited
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
JP Morgan Securities Japan Co., Ltd.
SMBC Nikko Securities Inc.
SMBC Trust Bank Ltd. (Sumitomo Mitsui Banking
Corporation Retirement Benefit Trust Account)

Shareholding ratio(%)

46,03920,798
9,828
6,462
4,012
3,825
3,565
3,387

17.42
7.87
3.72
2.45
1.52
1.45
1.35
1.28

3,204

1.21

JAPAN SECURITIES FINANCE CO., LTD.
3,124
1.18
(Note) Shareholding ratio is calculated by deducting treasury shares (6,272 thousand shares). Treasury shares do not include
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

–
–
25
25

–
–
35,93035,930

Director[of which, Outside Director]
Executive Officer
Total(Notes)1. The number of shares granted to Directors who concurrently serve as Executive Officers as compensation for
performance of duties during the term of the Executive Officer is shown in the Executive Officer row.
2. The aforementioned number of granted persons and the number of shares include officers who were present
during the current fiscal year, officers who retired during the current fiscal year, and officers who were present
from May 25, 2017 to February 28, 2021 and the shares granted to those officers.
3. The number of shares above amounts to shares issued to each Director. 39,654 shares among the shares whoserights are granted to each Director will be provided in cash in the amount equivalent to the amount converted
within the Trust pursuant to the share granting rules related to the stock-based remuneration system.

- 44 -

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 Board of
Directors
meetings(Note 3)

Limitedliability
agreements(Note 4)

Director

YAMAMOTO
Ryoichi

Chairperson of Board of Directors
Member of Nomination andRemuneration Committees
Outside Director of Daido Steel Co., Ltd.
Outside Director of NORITAKE CO.,LIMITED

Director

HAMADA Kazuko(Note 1)

Member of Audit Committee

Director (Outside)

Chairperson of Nomination Committee
and member of Remuneration
YAGO Natsunosuke Committee
Outside Director of SUBARUCORPORATION

100.0%
15/15

Yes

Director (Outside)

HAKODA Junya

Chairperson of Audit Committee
Chairperson of the Committee on
Training and Research for Outside
Officers, Japanese Institute of Certified
Public Accountants

100.0%
15/15

Yes

UCHIDA Akira

Chairperson of Remuneration Committee
and member of Nomination Committee
Outside Director of Yokogawa Electric
Corporation
Director of Parco Co., Ltd.

100.0%
15/15

Yes

SATO Rieko(Note 2)

Member of Audit Committee
Partner of Ishii Law OfficeOutside Director (Audit and Supervisory
Committee Member) of Dai-ichi Life
Holdings, Inc.
Outside Audit & Supervisory Board
Member of Mitsubishi Corporation

100.0%
15/15

Yes

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 Daimaru Matsuzakaya
Department Stores Co. Ltd.

100.0%
15/15

Yes

Director (Outside)

KOIDE Hiroko

Member of Nomination andRemuneration Committees
Outside Director of Mitsubishi Electric
Corporation
Outside Director of J-OIL MILLS, Inc.

100.0%
15/15

Yes

Director (President andRepresentative Executive
Officer)

YOSHIMOTO
TatsuyaDirector (Outside)

Director (Outside)

Director (Outside)

100.0%
15/15

Yes

100.0%
15/15

Yes

100.0%
15/15

Director (Managing
WAKABAYASHI
100.0%
Executive Officer)
Hayato15/15(Notes) 1. HAMADA Kazuko is recorded under the name of HIMENO Kazuko in the Family Registry.
2. SATO Rieko is recorded under the name of KAMATA Rieko in the Family Registry.
3. Stated are the number of Board of Directors meetings attended and number of Board of Directors meetings held
during the individual’s tenure this fiscal year (Details of attendance at each committee meeting are given in “7.
Operations of each Committee.”)
4. 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- 45 -

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.
5. 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 Companies 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 thepayment for the entire amount of the premium for all of those insured. The insurance policy covers all Directors
and Executive 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 oflaws and regulations 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.
6. Audit Committee member HAKODA Junya has been involved in accounting audits, management consulting,and internal audits of accounting firms, etc., serving as a certified public accountant for many years. He has botha wealth of experience and highly specialized knowledge in relation to corporate auditing. He also has deep
insight into finance and accounting matters.
7. Audit Committee member SEKI Tadayuki was involved in international business management and risk
management. As CFO, he has both a wealth of experience and highly specialized knowledge in relation to financeand accounting. He also has deep knowledge of finance and accounting matters.
8. Audit Committee member HAMADA Kazuko is a full-time Audit Committee member. We aim to improve theeffectiveness of audits by appointing to serve as full-time Audit Committee member an in-house Director who
does not execute business and has specialist knowledge of specific areas of our business based on a thoroughunderstanding of in-house organizations and business execution.

- 46 -

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

Name

President andRepresentative Executive
Officer

YOSHIMOTO
TatsuyaManaging Executive Officer

WAKABAYASHI
HayatoAreas of responsibility in the Company and important concurrent
positions outside the Company

Senior Executive General Manager of Financial Strategy Unit
Director of PARCO Co., Ltd.

Managing Executive Officer ONO Keiichi

Senior Executive General Manager of Management Strategy Unit andin charge of Risk Management
Director of PARCO Co., Ltd

Managing Executive Officer HAYASHI Naotaka

Senior Executive General Manager of Group Digital Unit

NAKAYAMAManaging Executive Officer
TakashiSenior Executive General Manager of Group System Unit
Director of Daimaru Matsuzakaya Department Stores Co. Ltd.

Managing Executive Officer

MATSUDA
Hirokazu

Senior Executive General Manager of Human Resources Strategy Unit
and Administration Unit and in charge of ComplianceDirector of Daimaru Matsuzakaya Department Stores Co. Ltd.

Executive Officer

KAWASE Kenji

Senior General Manager of Management Planning Division, Business
Portfolio Transformation Promotion Division, and Group
Communications Promotion Division of Management Strategy Unit

Executive Officer

HIRAI Yuji

Senior General Manager of CRE Planning Division of Management
Strategy Unit
Executive Officer of PARCO Co., Ltd.
President and Representative Director of J. Front City Development
Co., Ltd.

Executive Officer

YAMAZAKI Shiro

Senior General Manager of System Planning Division of Group
System Unit

Executive Officer

NOGUCHI Hideki

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

Executive Officer

UMEBAYASHI
Akira

Senior General Manager of Group Human Resources Policy Division,
Group Human Resources Development Division, and Group Welfare
Division of Human Resources Strategy Unit

(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 were partially changed on March 1,2023 as indicated below.
New areas of responsibility in the Company and important concurrent
Position in the Company
Name
positions outside the Company
President andRepresentative Executive
Officer

YOSHIMOTO
Tatsuya

Senior Executive General Manager of CRE Strategy Unit

Executive Officer (New)OCHIAI Isao

Senior General Manager of Management Planning Division andBusiness Portfolio Transformation Promotion Division ofManagement Strategy Unit

Senior General Manager of Group Human Resources Development
Division and Group Welfare Division of Human Resources Strategy
Unit
On March 1, 2023, KAWASE Kenji and HIRAI Yuji retired as Executive Officers. KAWASE Kenji assumed thepositions of Representative Director, President and Executive Officer of PARCO Co., Ltd. and HIRAI Yuji assumed
the positions of Representative Director and President (full-time) of J. Front City Development Co., Ltd.

Executive Officer

UMEBAYASHI
Akira- 47 -

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

Number ofpayeesDirector

Total amount ofNonremuneration,
PerformancePerformanceperformanceetc.
Basiclinkedlinkedlinked stock(Millions of yen) remuneration
stock-based
bonusesbased
remuneration
remuneration

8

192[of which, Outside Director]

[6]

[104]

[86]

Executive Officer

15

483

213

(Notes)

151

–

–

40

–

–

[18]

122

147

–

Total
23
675
365
122
147
40
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 ¥9 million.
2. The remunerations, etc. paid to Directors who concurrently serve as Executive Officers as compensation for the
performance of duties during the term of the Executive Officers is shown in the Executive Officer row.
3. In the above table, the remuneration, etc. for Executive Officers of ¥483 million includes ¥25 million (including
performance-linked stock-based remuneration) paid to four Executive Officers who held the post between March
1 and May 26, 2022.
4. Beginning in the fiscal year ended February 28, 2018, to ensure steady execution of the Medium-term Business
Plan for realizing the Group Vision, the Company has adopted the stock-based remuneration system using 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 is the total recorded as expenses for the period under review. 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 trends with respect to financial
indicators for calculating bonuses and performance share in the current business year (consolidated operating
profit and ROE) are stated under “1. Current status of the corporate group, (7) Status of assets and profit or loss.”
Meanwhile, actual trends with respect to non-financial indicators (greenhouse gas emissions and ratio of womenin management positions) are stated in <Key performance indicator results and targets> under “1. Current statusof the corporate group, (1) Business summary and results”
5. Figures in the “performance-linked bonuses” and “performance-linked stock-based remuneration” columns
represent amounts recognized as provisions (standard amounts) before adjustment for the results of performance
evaluation for the fiscal year ended February 28, 2023. The actual amounts to be paid in total and on an individual
basis will be determined by a meeting of the Remuneration Committee scheduled for or after April 2023.

- 48 -

(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. On
May 27, 2021, the Remuneration Committee with a majority of independent Outside Directors
embarked on review of the Officer Remuneration System in alignment with the Medium-term
Business Plan to ensure that officer remuneration functions as an incentive for achieving andpromoting sustainability management. The Officer Remuneration Policy has been revised
accordingly and is now in effect.
<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 policy has been established for the Directors and Executive Officers of the Group’s
major subsidiaries Daimaru Matsuzakaya Department Stores Co. Ltd. and PARCO Co., Ltd., aswell as for the Representative Directors of JFR Card Co., Ltd., J. Front City Development Co.,
Ltd., and J. Front Design & Construction Co., Ltd. (hereinafter, “eligible officers of major
subsidiaries of the Group”).
(i)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.
(ii) Establish a remuneration system that facilitates the achievement of duties (mission) basedon management strategies of professional corporate managers.
(iii) Remuneration levels that can secure and retain human resources who have the “desirable
managerial talent qualities” required by the Company.
(iv) Increase shared awareness of profits with shareholders and awareness of shareholderfocused management.
(v) 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. The same treatment
shall apply to eligible officers of major subsidiaries of the Group.
<Composition of remuneration>[Executive Officers]
Remuneration for Executive Officers shall comprise “basic remuneration” (monetary
remuneration) in accordance with mission grade, “bonuses” (monetary remuneration) based on
individual evaluations conducted each business year, and “performance shares” (performancelinked stock-based remuneration, which is trust-type stock-based remuneration) linked to theconsolidated performance achievement rate, etc. provided in the Medium-term Business Plan as astock-based remuneration system. The performance indicators of bonuses and performance shareswere selected as shown in the table below so as to achieve KPIs for the final fiscal year of theMedium-term Business Plan and to make a healthy incentive for sustainable growth function.

- 49 -

Type ofremuneration

Basic
remuneration(fixed)Payment
methodPayment basis

Determined separately for each mission grade

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 mission grade × Rate of change*1*1 The rate of change is based on a calculation of scores using
the quantitative and qualitative evaluations below.
Evaluation
weights

Details
Quantitative Fiscal year’s
evaluation*2 financial<50%>
evaluation
Bonuses(variable)

Qualitativeevaluation*2<50%>

Fiscal year’s
non-financial
evaluation

Consolidated
operating profit*3

50%

Level ofachievement ofaction plan forachieving
individual missions

30%

Level ofachievement ofaction plan forachieving nonfinancial targets inline withmaterialities

20%[Short-term: 40%] Base amount by mission grade × Performanceachievement factor*4*4 Calculated based on the following measures of achievement
Annual
Evaluation payment in
Details
stocks*6
weights
Consolidated operating profit
Performancelinked stockbased
remuneration(variable)

100%[Medium to long term: 60%] Base amount by mission grade ×
Performance achievement factor*5*5 Calculated based on the following measures of achievement
Evaluation
weights

Details
Financial Consolidated operating profit
indicators
ROE
<80%>
Nonfinancial
indicators<20%>

Greenhouse gas reductions (Scope 1 &2 emissions)

40%
40%

At theexpiration of
the term ofeach Mediumterm Business
Plan in stocks*6

10%

Goal achievement for ratio of women10%
in management positions*2 For eligible officers of major subsidiaries of the Group, the quantitative evaluation rate is 70%, and the qualitativeevaluation rate is 30%. The evaluation weight for the qualitative evaluation includes 20% for the level of achievement of
the action plan for achieving individual missions and 10% for the level of achievement of the action plan for achieving
non-financial targets in line with materialities.
*3 In principle, the target figures are based on consolidated financial indicators but if an officer is in charge of a certain
business, target figures for that business are used.
*4, 5 The performance-linked factor for performance-linked stock-based remuneration is calculated by the following
calculation method:
The rate of change for ratio of women in management positions is evaluated using fiscal 2020 results as the reference.
Actual results = Results - fiscal 2020 results, Target = 26% - fiscal 2020 results- 50 -

Performance target achievement

Performance-linked factor

200% or more
0% or more, but less than 200%
*6

2
Actual results ÷ Target

Less than 0%0
In principle, the equivalent of 50% of the Company’s shares to be issued is converted and paid as cash to provide funds
for payment of tax.

[Directors who do not execute business]
Remuneration for Directors who do not execute business shall consist only of fixed
remuneration, which shall be “basic remuneration” (monetary remuneration) in accordance withresponsibilities and “restricted stock” (non-performance-linked stock-based remuneration, which
is trust-type stock-based remuneration), which is not linked to performance, as part of the stockbased remuneration system. Restricted stock is a system for issuing the Company’s shares in 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 retirementfrom 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. Eligible officers of major subsidiaries of the Group shall adopt the same policy for
their acquisition and holding of the Company’s shares.
(ii) Process for determining remuneration for Directors and Executive Officers and forfeitureof remuneration of Executive Officers (clawback/malus)
To ensure the appropriateness of remuneration levels and the transparency of decision-making
processes, decisions are made by resolution of a Remuneration Committee comprising
independent Outside Directors (majority) and the Chairperson of Board of Directors who does not
execute business, and headed by an independent 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 the individual officers (Directors
and Executive Officers) of the Company and major subsidiaries of the Group, and on the
remuneration details for individual Directors and Executive Officers of the Company. Basic
remuneration positioned as fixed remuneration is decided for each mission grade based on the size
(weight) of the responsibility borne by each officer. As for bonuses, evaluation is carried out using
the “fiscal year’s financial indicators,” serving as quantitative evaluation, and the “fiscal year’s
non-financial indicators,” which include qualitative evaluation. The committee also confirms theperformance-linked factor in accordance with the level of achievement with respect to figuresannounced in the initial forecast (IFRS based) following a resolution of the Board of Directors todetermine short-term performance shares that account for 40% of performance shares(performance-linked stock-based remuneration).
Based on these results, the committee determines that 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 to determine 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- 51 -

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.

The Officer Remuneration System is subject to review as scheduled in the Medium-term
Business Plan, and in April 2021 the Officer Remuneration Policy was revised in accordance with
the FY2021-FY2023 Medium-term Business Plan. Thereafter, it was continuously deliberated andrevised as needed.
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 soforth.

- 52 -

(5) Matters relating to Outside Directors

YAGO Natsunosuke
Independent(Note)

Important concurrent positions

Outside Director of SUBARU CORPORATION

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

No special relationships exist

No items to report

100% (Attended all 15 meetings held during tenure thisfiscal year)
Nomination
100% (Attended all 13 meetings held
during tenure this fiscal year)
Remuneration 100% (Attended all 12 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 a wealth of experience instrengthening financial bases and compliance management. He also has a high level of knowledge of internal controls andcorporate governance gained through his experience in transitioning to a company with three committees (nomination, audit
and remuneration committees). As such, we accordingly expect him to provide advice and oversight enlisting points of view
and perspectives that vary from those of the Inside Directors. Moreover, YAGO Natsunosuke has contributed to improving
the effectiveness of the Board of Directors by actively and assertively providing advice and oversight particularly on
direction to be specified in the medium- to long-term strategies and key points at the time of their formulation, the desired
form of a new developer business company, the approach to asset holdings in our financial strategy, and the approach tomonetizing customer data. In regard to committee membership, he serves as the Chairperson of the Nomination Committee
and a member of the Remuneration Committee, and has been working to strengthen the functions of managers by fulfilling
expectations and roles associated with those committees. As the Chairperson of the Nomination Committee, he has
proceeded with the establishment of the officer selection process that checks the status of future candidates for positions insenior management and ensures objectivity, transparency, and continuity based on the succession plan. As a member of theRemuneration Committee, he has contributed to reviews of appropriate remuneration levels for bonuses and stock-based
remuneration and operating rules in the officer remuneration system.
Important concurrent positions
Chairperson of the Committee on Training andResearch for Outside Officers, Japanese Institute ofCertified Public Accountants
Relationships between the Company
No special relationships exist
andorganizations
whereimportant
HAKODA Junya
concurrent positions are held
Independent
Relationship with specified affiliated No items to report(Note)
business operator
Attendance at Board of Directors
100% (Attended all 15 meetings held during tenure thismeetings
fiscal year)
Attendance at the meetings of
Audit
100% (Attended all 22 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]
HAKODA Junya has been involved in accounting audits, management consulting, and internal audits for auditing firms, etc.
as a certified public accountant for many years at PricewaterhouseCoopers, and also served as an eminent professor teachinginternal audit theory in the Graduate School of Keio University, and therefore has a wealth of experience and high-level
expertise in corporate auditing. As such, we accordingly expect him to provide advice and oversight from perspectives andviewpoints different from those of the Inside Directors. Moreover, HAKODA Junya has contributed to improving theeffectiveness of the Board of Directors by actively and assertively providing advice and oversight particularly in terms ofthe consistency of the medium- to long-term financial plans and medium- to long-term strategies, pursuing new businessinitiatives, the approach to human resources development, and points of focus in formulating an international businessstrategy. Regarding Board committees, he serves as the Chairperson of the Audit Committee and has worked to strengthen
audit functions by fulfilling expectations of him to promote the exchange of opinions and discussions from the perspectiveof legality, appropriateness, etc. on matters submitted to the Board of Directors or matters that the Audit Committee
determines require monitoring, while auditing the execution of duties by Directors and Executive Officers of a company
with three committees (nomination, audit, and remuneration committees). He is also simultaneously working to enhance thegovernance of the Group as a whole.

- 53 -

Important concurrent positions

UCHIDA Akira
Independent(Note)

Relationships between the Company
and each organization whereimportant concurrent positions are
held
Relationship with specified affiliatedbusiness operator
Attendance at Board of Directors
meetings
Attendance at the meetings ofCommittees to which he belongs

Outside Director of Yokogawa Electric Corporation
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 13 meetings held
during tenure this fiscal year)
Remuneration 100% (Attended all 12 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. As such, we accordingly expect him to draw
on such experience and knowledge in providing advice and oversight from perspectives and viewpoints different from thoseof the Inside Directors. Moreover, UCHIDA Akira has contributed to improving the effectiveness of the Board of Directors
by actively and assertively providing advice and oversight particularly in terms of the necessary KPI perspectives theCompany should have when formulating medium-term business plans, the concepts for funding plans when promoting
business portfolio transformation, Group coordination and the approach to governance as a holding company, the acquisitionand development of specialists, and points of focus in supporting initiatives aimed at new business initiatives. Regarding
Board committees, he serves as the Chairperson of the Remuneration Committee and a member of the Nomination
Committee, and has been working to strengthen the functions of managers by fulfilling expectations and roles associatedwith those committees. As the Chairperson of the Remuneration Committee, he has promoted reviews of appropriate
remuneration levels for bonuses and stock-based remuneration and operating rules in the officer remuneration system. As amember of the Nomination Committee, he has confirmed the status of future candidates for positions in senior management
based on the Succession Plan and contributed to the executive decision-making process that ensures objectivity, transparency,
and continuity.
Important concurrent positions
Partner of Ishii Law OfficeOutside Director (Audit and Supervisory Committee
Member) of Dai-ichi Life Holdings, Inc.
Outside Audit & Supervisory Board Member of
Mitsubishi Corporation
Relationships between the Company
No special relationships exist
SATO Rieko
and each organization whereimportant concurrent positions are
Independent
held(Note)
Relationship with specified affiliated No items to reportbusiness operator
Attendance at Board of Directors
100% (Attended all 15 meetings held during tenure thismeetings
fiscal year)
Attendance at the meetings of
Audit
100% (Attended all 22 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 viewpoints and insights from a legal perspective on agenda topics based on a wealth of experience as wellas advanced and expert knowledge as a lawyer specializing mainly in corporate legal affairs. As such, we accordingly expect
her to provide advice and oversight from perspectives and viewpoints different from those of the Inside Directors. Moreover,
SATO Rieko has contributed to improving the effectiveness of the Board of Directors by actively and assertively providing
advice and oversight particularly in terms of the clarification of the path to creating corporate value and achieving profit
targets, specific policies on decarbonization, diversity and inclusion that connect to sustainability management, the strategic
use of customer data, and the legal position on reducing cross-shareholdings. She also has served as a lead director of theexecutive session which the Company established as an opportunity for Outside Directors to openly and freely exchange
opinions and share information. Regarding Board committees, she serves as a member of the Audit Committee and has
worked to strengthen audit functions by fulfilling expectations of her in terms of exchanging opinions and discussions fromthe perspective of legality, appropriateness, etc. on matters submitted to the Board of Directors or matters that the Audit
Committee determines require monitoring, while auditing the execution of duties by Directors and Executive Officers of acompany with three committees (nomination, audit, and remuneration committees). She is also simultaneously working toenhance the governance of the Group as a whole.

- 54 -

Important concurrent positions

Outside Director of VALQUA, LTD.
Outside Director of JSR Corporation
Outside Statutory Auditor of Asahi Mutual Life
Insurance Company
Director of Daimaru Matsuzakaya Department Stores
Co. Ltd.
Daimaru Matsuzakaya Department Stores Co. Ltd. is awholly owned subsidiary of the Company.

Relationships between the Company
and each organization whereimportant concurrent positions are
held
Relationship with specified affiliated No items to reportbusiness operator
Attendance at Board of Directors
100% (Attended all 15 meetings held during tenure thismeetings
fiscal year)
Attendance at the meetings of
Audit
100% (Attended all 22 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 a wealth of knowledge and experience in finance and accounting. He also has wide-ranging
insights derived from roles as Outside Director and Audit & Supervisory Board Member at multiple companies. As such, we
accordingly expect him to provide advice and oversight from perspectives and viewpoints different from those of the Inside
Directors. Moreover, SEKI Tadayuki has contributed to improving the effectiveness of the Board of Directors by actively
and assertively providing advice and oversight particularly on such issues as the approach to business and asset holdings topromote business portfolio transformation, alignment of strategy with core competencies and resources, and risk awarenessin new business initiatives. Regarding Board committees, he serves as a member of the Audit Committee and has worked tostrengthen audit functions by fulfilling expectations of him in terms of exchanging opinions and discussions from theperspective of legality, appropriateness, etc. on matters submitted to the Board of Directors or matters that the Audit
Committee determines require monitoring, while auditing the execution of duties by Directors and Executive Officers of acompany with three committees (nomination, audit, and remuneration committees). He is also simultaneously working toenhance the governance of the Group as a whole.
Important concurrent positions
Outside Director of Mitsubishi Electric Corporation
Outside Director of J-OIL MILLS, Inc.
Relationships between the Company
No special relationships exist
and each organization whereimportant concurrent positions are
held
KOIDE Hiroko
Relationship with specified affiliated No items to report
Independent
business operator(Note)
Attendance at Board of Directors
100% (Attended all 15 meetings held during tenure thismeetings
fiscal year)
Attendance at the meetings ofNomination
100% (Attended all 13 meetings held
Committees to which she belongs
during tenure this fiscal year)
Remuneration 100% (Attended all 12 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]
KOIDE Hiroko served as an officer at foreign companies for many years and engaged in corporate management as the headof marketing at the head office of a U.S. company, and therefore has extensive knowledge based on her rich experience inthe fields of global management and marketing. She also has a wealth of insights gained as an Outside Director at multiple
listed companies. As such, we accordingly expect her to provide advice and oversight from perspectives and viewpoints
different from those of the Inside Directors. Moreover, KOIDE Hiroko has contributed to improving the effectiveness of theBoard of Directors by actively and assertively providing advice and oversight particularly in terms of the approach toformulating medium- to long-term strategies based on robust strategic discussions, the importance of a marketing-oriented
way of thinking such as identifying target and needs, and aspirations for the new developer business. As for Board
committees, she serves as a member of the Nomination Committee and a member of the Remuneration Committee, and has
been working to strengthen the functions of managers by fulfilling expectations and roles associated with those committees.
As a member of the Nomination Committee, she has confirmed the status of future candidates for positions in senior
management based on the Succession Plan and contributed to the executive decision-making process that ensures objectivity,transparency, and continuity. As a member of the Remuneration Committee, she has contributed to reviews of appropriate
remuneration levels for bonuses and stock-based remuneration and operating rules in the officer remuneration system.
(Note) The above-mentioned Outside Directors are independent officers, which are required to be put in place by the Tokyo
Stock Exchange, Inc. and the Nagoya Stock Exchange, Inc. for the protection of general shareholders.

SEKI Tadayuki
Independent(Note)- 55 -

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¥139 million(ii) Total cash and other financial profits to be paid by the Company and its¥338 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
Services relating to adoption of the accounting standard for revenue recognition, etc.

(4) Rationale for Audit Committee’s agreement on remuneration of the Accounting Auditor
The Audit Committee furnished its agreement with respect to the amount of remuneration, etc.
provided to the Accounting Auditor, which has been deemed appropriate upon conducting a review
regarding audit appropriateness with respect to the Accounting Auditor’s audit plan, its execution ofduties, the basis used for calculating remuneration estimates and other factors.

(5) Policy for determining dismissal or non-reappointment of Accounting Auditor
The Audit Committee is to take necessary measures that include dismissing the Accounting Auditor
upon gaining consent of all Audit Committee members, or otherwise making decisions on proposals to
dismiss or not reappoint the Accounting Auditor submitted to the Shareholders Meeting, in the eventthat 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 340 of theCompanies Act of Japan, or if a situation arises whereby the audit of the Company has been significantly
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.
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 Group must be to help enable us to realize theideals of the Group Mission Statement.
The Company, which is a 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 stakeholders
Through its business activities, the Company strives to build relationships of trust with all of its
stakeholders.

- 56 -

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 also 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, carry out the roles and responsibilities in the Board of Directors as listed below. They do soin accordance with their fiduciary responsibility and accountability to shareholders, and with the aim ofrealizing 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 Sustainability Policy, the Group Medium-term
Business Plan, the Group Management Policy for the fiscal year, and other fundamental
management policies, and carrying out multifaceted and objective deliberations that include
evaluation of risks with respect to the aforementioned;(ii) Making decisions appropriately in terms of overall policy and plans pertaining to the Groupmanagement on the basis of the direction noted above and overseeing progress and results of theplans;(iii) Developing an environment conducive to encouraging offense-oriented management geared toachieving discontinuous growth;(iv) Taking steps to build and develop an internal control system for the Group overall, and otherwise
overseeing the operational status of such system;(v) Overseeing conflicts of interest between related parties; and(vi) On the basis of summary reports furnished by the Nomination Committee, overseeing the progressof succession planning for President and Representative Executive Officers, personnel assignment
plans pertaining to managerial talent and Executive Officer training, in consultation with theNomination Committee.
(5) Systems of corporate governance
The Company is currently adopting a company with three committees (nomination, audit andremuneration committees) as its organizational structure. The reasons are as follows.
(i)

The Company will strengthen the Board of Directors’ oversight function for business execution
by separating oversight from execution. In addition, the Company aims to enhance the- 57 -

sophistication 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 adopting acompany with three committees (nomination, audit and remuneration committees) organizational
structure. 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 a global
perspective for overseas investors and others.
6.

Operation of the Board of Directors
Composition of the Board

8 Directors who do not execute business (including 6 Outside Directors) and 2
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 Sustainability Policy, the Group Medium-term Business Plan,
the Group Management Policy for the fiscal year, and matters relating to importantbusiness execution such as asset acquisition.

Operational status

Held at least once every month, in principle. With the majority of Directors being
independent Outside Directors, the Board of Directors functions as a venue forconstructive discussions and deliberations, beyond being solely a decision-making
body for important matters, and is a key to the enhancement of corporate
governance.

Comment from Chairperson of
the Board

Since adopting a system in fiscal 2022 in which the majority of the Company’s
Board of Directors is composed of independent Outside Directors, we have aimed
to enhance the Board’s oversight function and to realize more effective
deliberations than in the past. Furthermore, the Board set issues and conducted
proceedings to ensure thorough discussion on the Company’s robust growthstrategy, an issue identified in previous fiscal year’s evaluation of the effectivenessof the Board of Directors. In particular, the Board of Directors held focuseddeliberations on “progress of the current Medium-term Business Plan,” “the fiscal
2023 Group management policy,” “the next Medium-term Business Plan,” and “theGroup’s future vision” as highly effective and strategically important matters.
For fiscal 2023, the final year of the current Medium-term Business Plan, we aremonitoring the achievement of single fiscal year profit targets while carefully
following changes in economic conditions. Furthermore, to create a platform to leadto regrowth in the next Medium-term Business Plan, we hope to contribute toenhanced corporate value by advancing discussions that connect to the execution ofhigh-quality strategies.

Director
YAMAMOTO Ryoichi(Evaluation of effectiveness of the Board of Directors)
The Company conducted its eighth evaluation of the effectiveness of the Board of Directors between
September and October 2022. Based on the results of the prior questionnaires given to all Directors, athird-party organization conducted individual interviews, and those details were discussed at a meetingof the Board of Directors held in October 2022.
The results of the evaluation of effectiveness showed that the Company’s Board of Directors had
worked to resolve the various issues raised in the previous fiscal year, and that the effectiveness of boththe Board of Directors and the three statutory committees had been mostly ensured. Meanwhile, issues
raised to improve the effectiveness of the Board of Directors further in the future included “strengthen
monitoring of the current Medium-term Business Plan,” “ensure thorough discussion on the Company’s
robust growth strategy,” and “further improve the effectiveness of the three statutory committees.”
Regarding “strengthen monitoring of the current Medium-term Business Plan,” we strengthened
monitoring of progress by clarifying the key performance indicators (KPI) used to measure the progressof our measures. In terms of “ensure thorough discussion on the Company’s robust growth strategy,”
we held discussions to clarify the Group’s overall direction for clearer definition of the Group’s future
vision and for the formulation of the next Medium-term Business Plan. Moreover, regarding “further- 58 -

improve the effectiveness of the three statutory committees,” we have been continuing discussions at
each committee aimed at resolving issues.
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.
7. Operations of each Committee(1) Nomination Committee
Composition of Committee

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

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

13

Number of meetings attended

All 4 members attended all 13 meetings.

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
and Executive Officers of the Company. The committee also obtains opportunities
to gain insights into the personalities and ideas of candidates by conducting
interviews, etc., as necessary, and strives to ensure greater objectivity, transparency
and rationality.
The Nomination Committee has positioned the management team succession plan,
which is necessary to generate the sustainable growth of the Company, as a central
issue and continues to conduct related deliberations. As for development ofcandidates for the next generation of managers, the committee evaluates theirperformance and conducts interviews based on the results of the human resources
diagnosis, and discusses roles and reassignments for the development andstrengthening of potential successors and ties this 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)
YAGO Natsunosuke- 59 -

(2) Audit Committee
Composition of Committee

4 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

22

Number of meetings attended

All 4 members attended all 22 meetings.

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 from Executive Officers and those
responsible for each of the Group companies at Audit Committee Meeting (held 18
times), a meeting body held apart from the Audit Committee, regarding the main
strategies in the second year of the Group’s Medium-term Business Plan, thedevelopment and operation of an internal control system, and the compliance andrisk management system to gain understanding of their current status.
The Audit Committee will work to further strengthen and enhance theorganizational audit system through mutual cooperation with the Internal Audit
Division, Accounting Auditors, and Audit & Supervisory Board Members of Group
companies, from the perspective of increasing the effectiveness and accuracy ofaudits. It will also continue to work to establish a high quality corporate governancestructure that is worthy of social trust and to conduct audits in a fair and impartial
manner to contribute to the growth of the Group and the enhancement of its
corporate value.

Director (Outside)
HAKODA Junya(3) Remuneration Committee
Composition of Committee

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

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

12

Number of meetings attended

All 4 members attended all 12 meetings.

Comment from Chairperson of
the Committee

Pursuant to the Officer Remuneration Policy formulated in April 2017 andsubsequently revised, the Remuneration Committee examines the overall level ofofficer remuneration and the ratio of performance-linked remuneration, as well as
the ratio of stock-based remuneration therein against preset peer group. By doing
so, the Company maintains objective and appropriate remuneration level andsystem at all times.
Regarding the Officer Remuneration System and Officer Remuneration Policy
revised in accordance with the Medium-term Business Plan that commenced infiscal 2021, we examined trends utilizing surveys by third-party organizations
concerning the overall level of officer remuneration, the ratio of performancelinked remuneration, and stock-based remuneration for officers. At the same time,
for bonuses that reflect the status of individual officer’s achievements, we review
each officer’s goal setting and evaluation results as well as evaluation items,
evaluation weights and evaluation rank determination process, to ensure that theend result will be shown with greater fairness and objectivity.
In order to maintain an appropriate remuneration system and remuneration levels
to compensate officers adequately for their work and commensurate with theiroffices and the role entrusted to them as professional managers, we will continue tooperate the system appropriately going forward.

Director (Outside)
UCHIDA Akira- 60 -

8. System and policies of the Company(1) Systems to Ensure the Appropriateness of Operations <Basic Policy for Establishment of Internal
Control System> (revised on May 26, 2022)
The Basic Policy for Establishment of Internal Control System is not presented in the paper-based
documents to be delivered to shareholders who requested the delivery of paper-based documents inaccordance with the laws and regulations and the Article 16 of the Company’s Articles of Incorporation.
It is presented in “Other Items Presented in Electronic Format for the 16th Annual Shareholders
Meeting (Items Excluded From Delivered Paper-Based Documents)” on the Company’s website(https://www.j-front-retailing.com/) (in Japanese) and the website for posted informational materials
for the general meeting of shareholders (https://d.sokai.jp/3086/teiji) (in Japanese). Please refer to that
release.
You can access here to read the entire contents of the Basic Policy for Establishment of Internal
Control System. (https://www.j-front-retailing.com/english/company/internalcontrol.html) (in English).
(2) Operational status of systems to ensure the appropriateness of operations <Basic Policy for
Establishment of Internal Control System> (FY2022)
The Company endeavors to maintain its internal control system and properly operate such system on
the basis of its “Basic Policy for Establishment of Internal Control System.” Details regarding theoverall status of such operations during the current fiscal year are as follows.
I.

Group Management System(i) Board of Directors
1) To separate supervisory and executive functions and ensure the effectiveness of discussions at
the Board of Directors, the Board of Directors is comprised of a majority of independent
Outside Directors who have no risk of a conflict of interest with the Company’s shareholders.
2) The Board of Directors deliberates on material issues related to the Group management. As forthe findings of and issues raised by the Board of Directors, there are demands 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 theBoard of Directors meetings for fuller discussions at such meetings. The effectiveness of theBoard of Directors is being improved through these initiatives.
3) The Board of Directors met 15 times in the current fiscal year. Their discussions included
monitoring of the Medium-term Business Plan, the establishment of a developer operatingcompany and the Group’s future vision, as well as matters defined in the Companies Act and/or
the Articles of Incorporation. In addition, the Board of Directors evaluates the state ofdeveloping and operating the various items stipulated in the “Basic Policy for Establishment ofInternal Control System” and confirms there are no major problems.
4) 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.
(ii) Management execution framework
1) As an executive organization, the Company has established optimal strategy units for effective,
faster strategy execution. Following on the mission of the President and Representative
Executive Officer, the Executive Officer, who is the Senior Executive General Manager,
prepares missions for each strategy unit in order to realize the Medium-term Business Plan and
the Annual Execution Plan. These units execute business and support the operations andmanagement of operating subsidiaries in line with its duties and mission.
2) The roles and responsibilities of the Company as a holding company include planning,
formulating and spreading the Group Vision, the Group Medium-term Business Plan and theGroup Management Policy for the fiscal year; managing the progress and performance of these
activities; establishing business portfolio management (optimal allocation of management- 61 -

resources), human resources management, shareholder management and corporate governancegroup-wide. With regard to business execution matters of operating subsidiaries, in order topromote speedy management decisions and clarify management responsibilities, standards havebeen established for delegating authority to operating companies, excluding matters that havea significant impact on Group management, and operations are conducted in accordance withthese 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’s
management. The matters discussed are reviewed at the Group Policy Meeting, each segment’s
Medium-term Business Plan Progress Meeting, and the Related Businesses Results andStrategy Examination Meeting to help 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.
(iii) Internal Control Structure1) Under the direction of President and Representative Executive Officer, the Company has
established a department and person responsible for internal control. This department andperson develop and manage the internal controls regarding the Companies Act and the internal
control system regarding the Financial Instruments and Exchange Act at the Company andoperating subsidiaries.
2) With regard to internal controls over financial reporting, the Company and operating
subsidiaries maintain and operate internal systems to ensure the reliability of financial reportingin line with the Financial Instruments and Exchange Act and various associated laws andregulations.
3) 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.

II. Risk Management System
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 Officersof the Company, presidents of operating subsidiaries, and others.
2) The Risk Management Committee regularly discusses, identifies, and evaluates risks(uncertainties), prioritizes them and reflects them in strategies, monitors related countermeasures,and submits related reports to the Board of Directors.
3) The Risk Management Committee met three times in the current fiscal year to discuss current
corporate risks based on an analysis of the macro environment and a risk survey. The committee
also discussed the nature of effective future risk management based on a review of the risk
management system in the current Medium-term Business Plan. Additionally, the committee
decided on the Group risk list for the coming fiscal year and discussed the external disclosure
policy for risk management.
4) For hazard risks such as large-scale earthquakes, fires, and accidents, the Company has establisheda 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, the Company, based on its “Crisis Management Rules” and“Business Continuity Manual” to be followed in case of a large-scale natural disaster, made efforts
to improve its ability to respond to a wide range of crisis events by conducting BCP drills several
times, including at our operating companies. Regarding our response to infectious diseases, withthe safety and security of our customers and employees as our top priority, we have implemented
hygiene management practices to help prevent outbreaks and other measures to help prevent the- 62 -

spread of disease based on our “New Infectious Disease Response Manual” in line with the Crisis
Management Rules.

III. Legal Compliance System(i) Compliance promotion system
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 persons responsible for compliance are also put at operating subsidiaries, andcarry out daily supervision and direction of business operations that are in accordance with laws
and regulations and internal company rules.
3) The Compliance Committee met three times during the current fiscal year to discuss issues in
the Group’s internal organizational culture and initiatives aimed at reform. The committee also
discussed the response to the aggregated reports to the whistle-blowing system.
4) In order to spread efforts to ensure compliance, those responsible for compliance at each Group
company meet three times a year to increase compliance awareness and implement activities
within the entire Group. We also conducted trainings on the theme of compliance and corporate
culture for officers and those in charge of compliance of each Group company.
(ii) 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
posting analysis of issues reported and the status of responses to them on our in-house portal
site. As a result, 49 cases related to labor-management relations and other issues were reported,and are being dealt mainly by the secretariat.

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
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 the 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 of audit
under COVID-19, and are performing audits. During the current fiscal year, we conducted
operational audits on the status of legal compliance with the Labor Measures Comprehensive
Promotion Act, the Antimonopoly Act, and other statutes, as well as the status of development ofoperational rules and regulations and their compliance. We also conducted audits based on themes
such as the status of implementation of work style reforms and the status of management ofconfidential information and personal information.
- 63 -

V. Structure of the Audit Committee
1) The Audit Committee, which is chaired by an Outside Director, is composed of four members
including 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, andthen 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. In addition, it receives regular audit reports
from the Internal Audit Division on the status of improvements regarding issues identified throughinternal audits.
4) To grasp important decision-making processes and the status of the execution of duties, full-timemembers of the Audit Committee not only attend important committees and other meetings, suchas the Group Management Meeting, but also peruse important documents relating to the executionof business such as approval circulars.
5) During the fiscal year under review, the Audit Committee met 22 times. Apart from the Audit
Committee, efforts are being made at the Audit Committee Member Meeting to gain understandingof the current situation regarding execution by carrying out audits on execution of duties of all of
the Executive Officers of the Company. Moreover, the Audit Committee works closely with the
Audit & Supervisory Board Members of the Group companies through regular meetings to share
recognition of auditing issues and exchange opinions.

VI. System for storage and management of information(i) Confidential information management
The Company ensures that the documents associated with the execution of duties by the
Executive Officers and Directors, as well as the minutes and relevant materials (including
electronic records) of the meetings held by Executive Officers and Directors are appropriately
stored and managed by each of the responsible departments based on laws and regulation as wellas internal rules.
(ii) Information security management
The Company has formulated information security policies and IT governance policies anddistributes them within the Group, and based on these policies, the individual departments incharge conduct information security management. Reports on the status of management of
information systems and related matters are made at the Board of Directors, the Audit Committee,
and the Group Management Meeting regularly and when necessary.
The Company’s “IT governance policy, regulations, and rules” are intended to minimize
potential IT related risks and to increase corporate value; based on these, through measures suchas the Regular IT Governance Meeting and System Development Meeting, the Company controls
activities ranging from the development of IT strategy to its implementation. We also promote
efforts to ensure compliance with our information security policy through ongoing training related
to targeted e-mail attacks and incident response.

- 64 -

(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.
A party attempting this kind of Large-Scale Purchase, which would not contribute to the corporate
value of the Group and, by extension, the common interests of its shareholders (hereinafter, the“Large-Scale Purchaser”), would not be appropriate as a party controlling the Company’s financial
and business policy decisions. Accordingly, the Company believes that it is the duty of theCompany’s Board of Directors, which is entrusted by the shareholders to manage the Company, torespond to this kind of Large-Scale Purchase by ensuring that processes such as provision of
information by the Large-Scale Purchaser and considerations and evaluations by the Company’s
Board of Directors are carried out, and securing sufficient time for the Company’s Board of Directors
and shareholders to consider the details of the Large-Scale Purchaser’s proposal in order to prevent
damage to the corporate value of the Group and, by extension, the common interests of its
shareholders.
II. Frameworks contributing to realization of basic policy
Since the foundation of Daimaru and Matsuzakaya, the Group has long been engaged in thekimono and department store businesses based on their corporate philosophies and traditional spirit:“Service before profit (those who place service before profit will prosper),” “Abjure all evil andpractice 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 spirit, 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,
aimed at realizing 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.

- 65 -

III. Framework to prevent parties deemed inappropriate in light of basic policy from controlling thefinancial and business policy decisions of the Company
At present, the Company has not specifically stipulated a concrete framework for a case in whicha Large-Scale Purchaser appears, commonly known as takeover defense measures.
Nevertheless, the Company believes that, in order to prevent damage to the Group’s corporate
value if a Large-Scale Purchaser appears, it is necessary to carefully examine the impact a LargeScale Purchase would have on the Group’s corporate value after ascertaining certain information
about the Large-Scale Purchaser. Such information would include the nature of the Large-Scale
Purchaser, the purpose of the Large-Scale Purchase, the Large-Scale Purchaser’s proposed financial
and business policies and their policy for handling shareholders, the Group’s customers, business
partners, employees, the communities that surround the Group, and other stakeholders.
Accordingly, if this occurs, the Company will establish an independent committee composed of
Outside Officers and experts with viewpoints that are independent from the Company’s management
personnel and Inside Directors. If the Company judges that the said Large-Scale Purchaser isinappropriate in light of the aforementioned basic policy after considering advice and opinions fromthe committee, the Company will act to secure the Group’s corporate value and, by extension, thecommon interests of shareholders 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 management personnel and Internal
Directors of the Company is assured. 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 maintain the positions of the officers of the Company.

(4) Basic Capital Policy
The Company believes that any increase in free cash flow and improvement in ROE should help toensure its sustainable growth and increase corporate value over the medium to long term. To 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” after taking into
consideration the business environment and risk readiness.
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.
The key financial indicators for the achievement of the Medium-term Business Plan are ROE for
capital efficiency, consolidated operating profit and ROIC for business profitability, free cash flow for
profitability and safety, and equity ratio attributable to owners of the parent (equity ratio) for financial
soundness.
- 66 -

(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 financial and non-financial information about theCompany in a fair, timely and appropriate manner, we aim to improve management transparency andhelp stakeholders better understand the Company.
Amounts in millions of yen presented in the business report above have been rounded down to the nearest one million
yen.

- 67 -

Consolidated Financial Statements
Consolidated Statement of Financial Position (As of February 28, 2023)
Item
AssetsAmountCurrent assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other current assets

201,860
39,874
129,121
10,836
16,932
5,094

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

919,092
469,401
119,501
995
187,247
7,797
41,402Item
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)Amount317,953
63,530133,835
28,411
29,975
1,527
2,397
58,276

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

431,589
185,593
136,414
35,29016,754
8,699
48,366469

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

749,542

Non-controlling interests

12,02579,711
3,137
9,897

Total equity
Total assets
1,120,953
Total liabilities and equity(Note) Amounts have been rounded down to the nearest one million yen.

- 68 -

359,385
31,974
189,068(14,466)
10,654142,153

371,410
1,120,953

Consolidated Statement of Profit or Loss (From March 1, 2022 to February 28, 2023)(Millions of yen)
Item

Amount359,679(190,142)

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

169,536(144,682)
4,540(10,336)

Operating profit
Finance income
Finance costs
Share of profit (loss) of investments accounted for using equity
method19,059871(5,218)

Profit before tax
Income tax expense

16,873(2,611)

Profit14,262

Profit attributable to:
Owners of parent
Non-controlling interests

14,23725(Note)

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

- 69 -

2,161

14,262

Consolidated Statement of Changes in Equity (From March 1, 2022 to February 28, 2023)(Millions of yen)
Equity attributable to owners of parent
Other components of equity

Balance as of March 1, 2022

Share capital

CapitalsurplusTreasurysharesExchangedifferenceson translationof foreign
operations

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

31,974

188,894(14,780)

60

(1)

9,516

–

9,574

Profit

–

–

–

–

–

–

–

–

Other comprehensive
income

–

–

–

148

(1)

822

1,177

2,147

Total comprehensive income

–

–

–

148

(1)

822

1,177

2,147

Purchase of treasury shares

–

–

(8)

–

–

–

–

–

Disposal of treasury shares

–

(0)

1

–

–

–

–

–

Dividends

–

–

–

–

–

–

–

–

Changes resulting fromadditions to consolidation

–

–

–

–

–

–

–

–

Share-based paymenttransactions

–

175

322

–

–

–

–

–

Transfer from othercomponents of equity toretained earnings

–

–

–

–

–

109

(1,177)(1,067)

–

174

314

–

–

109

(1,177)(1,067)

31,974

189,068(14,466)209(2)10,448–10,654

Total transactions withownersBalance as of February 28,
2023

Equity attributable to ownersof parent

Total

Total

Noncontrollinginterests

134,705

350,368

11,751

362,120

14,237

14,23725

14,262

–

2,147

(6)

2,140

Total comprehensive income

14,237

16,38418

16,402

Purchase of treasury shares

–

(8)

–

(8)

Disposal of treasury shares

–

0

–

0

(7,857)(7,857)(64)(7,921)

Changes resulting fromadditions to consolidation

–

–

319

319

Share-based paymenttransactions

–

497

–

497

1,067

–

–

–

Total transactions withowners(6,789)(7,368)255(7,113)

Balance as of February 28,
2023

142,153359,385

12,025

371,410

Balance as of March 1, 2022
ProfitOther comprehensive
incomeDividends

Transfer from othercomponents of equity toretained earnings(Note)

Retainedearnings

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

- 70 -

[Reference]
Consolidated Statement of Cash Flows (Summary) (From March 1, 2022 to February 28, 2023)(Millions of yen)
Item

AmountCash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) 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.

- 71 -

65,480(13,371)(105,694)(53,585)
93,278181
39,874

Non-consolidated Financial Statements
Non-consolidated Balance Sheet (As of February 28, 2023)
J. Front Retailing Co., Ltd.
Item
AssetsCurrent assets
Cash and deposits
Short-term loans receivable fromsubsidiaries and associates
Accounts receivable - other
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
Deferred tax assets
Other
Allowance for doubtful accounts
Deferred assets
Bond issuance costs(Note)

AmountItem
Liabilities
110,851 Current liabilities
31,087
Short-term borrowings
Accounts payable - other
75,100
Income taxes payable
4,939
Accrued expenses
124
Deposits received(400)
Provision for bonuses
Provision for bonuses for directors
and other officers
Provision for officer remuneration
BIP trustOther

463,264
219
185
34

1,348
1,348

461,695
1,762
378,341
81,000
472
619
(500)
186
186

(Millions of yen)Amount49,97145,530
725
121
719
2,337
194
122
178
41

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

188,20980,000105,780
76

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

238,180

Valuation and translation adjustments
Valuation difference on available-for-salesecurities

Total net assets
Total assets
574,302
Total liabilities and net assets
Amounts have been rounded down to the nearest one million yen.

- 72 -

1,575
777

336,043
31,974
248,874
9,474
239,400
68,71968,71968,719(13,526)

78
78
336,121574,302Non-consolidated Statement of Income (From March 1, 2022 to February 28, 2023)
J. Front Retailing Co., Ltd.
(Millions of yen)
Item

AmountOperating revenue
Dividend income
Consulting fee income

9,379
5,859

15,238General and administrative expense

6,278

Operating profit
Non-operating income
Interest income
Dividend income
Other

8,959
672
69
45

787

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

888
383
30
159

1,462

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

8,284
8,284
(1,276)
1,112

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

- 73 -

(163)
8,448

Non-consolidated Statement of Changes in Equity (From March 1, 2022 to February 28, 2023)
J. Front Retailing Co., Ltd.
(Millions of yen)
Valuation andtranslation
adjustments

Shareholders’ equity
Retainedearnings

Capital surplus

Share capital

Other retained
earnings
Legal capital Other capitalsurplussurplusRetainedearnings
brought
forwardTreasurysharesTotal shareholders’equityValuationdifference on
available-forsale securities

Total net
assetsBalance as of March 1,
2022

31,974

9,474

239,400

68,200(13,816)

335,2337

335,241

Dividends of surplus

–

–

–

(7,928)–(7,928)–(7,928)

Profit

–

–

–

8,448

–

8,448

–

8,448

Purchase of treasury
shares

–

–

–

–

(8)

(8)

–

(8)

Disposal of treasury
shares

–

–

(0)

–

299

299

–

299

Net changes in items
other than shareholders’equity

–

–

–

–

–

–

70

70

Total changes during
period

–

–

(0)

519

290

809

70

879

31,974

9,474

239,400

68,719(13,526)

336,04378

336,121

Balance as of February 28,
2023(Note)

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

- 74 -

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

Report of Independent Auditors
April 10, 2023
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, 2022 through February 28, 2023.
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 16th fiscal year from March 1, 2022 throughFebruary 28, 2023 in conformity with accounting principles with the omission of a part of the disclosure
items required under IFRS as allowed by the latter part of Paragraph 1, Article 120 of the Regulation on
Corporate Accounting.
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.
Other Information
The other information refers to the business report and its supplementary schedules. Management is
responsible for preparing and disclosing the other information. In addition, the Audit Committee is
responsible for overseeing the Executive Officers’ and Directors’ performance of duties within themaintenance and operation of the reporting process for the other information.
The scope of our audit opinion on the consolidated financial statements does not include the content of theother information, and we do not express an opinion regarding the other information.
Our responsibility in auditing the consolidated financial statements is to read through the other information,and in the process of reading it, we examine whether there are material differences between the otherinformation and the consolidated financial statements or the knowledge we have gained in the auditing
process, and we also pay attention as to whether there are any indications in the other information of material
errors besides such material differences.
If we determine there to be material errors in the other information based on the work we have performed,- 75 -

we are required to report those facts.
There are no matters to report regarding the other information.
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 accounting principles with the omission of a part of the disclosure items required under
IFRS as allowed by the latter part of Paragraph 1, Article 120 of the Regulation on Corporate Accounting,and for 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 accounting principles with the omission ofa part of the disclosure items required under IFRS as allowed by the latter part of Paragraph 1, Article 120of the Regulation on Corporate 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.
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 sufficient andappropriate 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 consolidated
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 overall presentation of the consolidated financial statements and the notes thereto
are in accordance with accounting principles with the omission of a part of the disclosure items required
under IFRS as allowed by the latter part of Paragraph 1, Article 120 of the Regulation on Corporate
Accounting, as well as evaluate the overall presentation, structure and content of the consolidated
financial statements, including the related notes thereto, and whether the consolidated financial
statements fairly represent the underlying transactions and accounting events.
・ 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- 76 -

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 ethical requirements
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, andwhere 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.

- 77 -

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

Report of Independent Auditors
April 10, 2023
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 16th fiscal year fromMarch 1, 2022 through February 28, 2023.
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 16th fiscal year
from March 1, 2022 through February 28, 2023 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 non-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.
Other Information
The other information refers to the business report and its supplementary schedules. Management is
responsible for preparing and disclosing the other information. In addition, the Audit Committee is
responsible for overseeing the Executive Officers’ and Directors’ performance of duties within themaintenance and operation of the reporting process for the other information.
The scope of our audit opinion on the non-consolidated financial statements, etc. does not include thecontent of the other information, and we do not express an opinion regarding the other information.
Our responsibility in auditing the non-consolidated financial statements, etc. is to read through the otherinformation, and in the process of reading it, we examine whether there are material differences between
the other information and the non-consolidated financial statements, etc. or the knowledge we have gainedin the auditing process, and we also pay attention as to whether there are any indications in the otherinformation of material errors besides such material differences.
If we determine there to be material errors in the other information based on the work we have performed,
we are required to report those facts.
- 78 -

There are no matters to report regarding the other information.
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 the non-consolidated financial statements, etc. that are free frommaterial 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
basis of accounting and disclosing, as applicable, matters related to going concern in accordance withaccounting 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
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 the 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 that is
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 the nonconsolidated financial statements, etc. 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 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.
- 79 -

We also provide the Audit Committee with a statement that we have complied with the ethical requirements
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, andwhere 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 16th fiscal year from March 1, 2022 throughFebruary 28, 2023. 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 and plans stipulated by the Audit Committee and the division ofduties, etc., Audit Committee Members, in coordination with the departments in the Company related
to internal control, participated in key meetings, including via online methods, received reports from
Directors, Executive Officers, and others regarding the matters related to the performance of theirduties, and when necessary, requested explanations of those reports. Audit Committee Members also
reviewed key decision documents, and conducted surveys of the operations and assets. Further,regarding subsidiaries, Audit Committee Members worked to communicate with Directors, Executive
Officers, Audit & Supervisory Board Members, and other parties at those subsidiaries, and whennecessary travel to the head office and other places of business and conduct hearings with themregarding their business.

(ii) Additional consideration was given to the basic policy set forth in Item 3 (a), Article 118 of theRegulations for Enforcement of the Companies Act and activities set forth in Item 3 (b), Article 118 of
the same Regulations, as noted in the Business Report, based on the status of deliberations at themeeting of the Board of Directors and other key meetings.
(iii) Regular reports were received regarding the results of audits carried out by the internal audit
departments based on the initial plan, and information was shared.
(iv) Discussions were carried out after receiving an explanation by the Accounting Auditor regarding theaudit plan, and opinions were exchanged after receiving the report on the audit results. Moreover, 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 also received
reports from them regarding the performance of their duties, and when necessary, asked for further
explanation regarding those reports. At the same time, Audit Committee Members received notice fromthe Accounting Auditor in accordance with “the system for ensuring appropriate execution of theirduties” (as enumerated in each Item of Article 131 of the Regulation on Corporate Accounting) incompliance with the “Quality Control Standards Relating to Auditing” (adopted by the BusinessAccounting 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.

- 81 -

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
to the applicable laws and regulations, and the Articles of Incorporation, and that they accurately
present the situation 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 ofIncorporation.
(iii) The Audit Committee confirms that decisions by the Board of Directors regarding the Company’s
internal control systems are fair and adequate, and found no areas that require mention regarding thedescription of the internal control systems in the Business Report and the performance of duties byDirectors and Executive Officers.
(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 Regulations 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 tomaintain the positions 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 10, 2023
Audit Committee
J. FRONT RETAILING Co., Ltd.
HAKODA Junya(seal)
Chairperson of Audit Committee
HAMADA Kazuko(seal)
Audit Committee Member (full-time)
SATO Rieko(seal)
Audit Committee Member
SEKI Tadayuki(seal)
Audit Committee Member(Note) Audit Committee Members, namely, HAKODA Junya, 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 -