AEON delight Report

Teitokanda Bldg. 1-1-1 Kandanishiki-cho, Chiyoda-ku, Tokyo 101-0054
TEL: (+81)3-4360-3558 (Main)

https://www.aeondelight.co.jp/english/

2023

Facilities, smiles,
Be sustainable.
As an "environmental value creation company,
we, the AEON delight group,
Working to solve social issues throughfacility management,
We will contribute to the realization ofa society where everyone can smile.

Table of contents/Editorial policy

Management Principle￨ Contents ￨We Pursue the Creation of "Environmental Value" forour Customers and for the Local Communities.
The environmental value we consider includes all the values
in the following; value in the business environment of the corporation,
value in the usage environment of the customers of the corporation,
value in the workplace environment employees work in and value
in the local community.
By creating environmental value, we strive to provide “delight”

Delight
SafetyComfortsuch as joy, shine and richness of mind.
To achieve that goal, we constantly aim to improve safety, security,
cleanliness and comfort, and keep stepping forward towards“the future with a dream.”

Human Environment

01 Management Principle
Table of Contents/Editorial Policy
03 Purpose
04 History
05 Business Fields
06 Services
07 Our Strengths
09 Message from the CEO
15 Value Creation
17 CFO Message

Financial and Non-Financial Highlights
Materiality
Business Segments
Special Feature: Envision YOUR Future
Sustainability Management
TCFD
Environment
Society: Human Resource Development
Society: Occupational Health and Safety
Society: Diversity/ Respect for Human Rights

40 Society: Promoting Health Management/
Supply Chain Management
41 Corporate Governance
45 Management Structure
47 Outside Director Message
48 Compliance
49 Risk Management
50 Information security
51 Seven-Year Summary
53 Company Profile/ Stock Information￨ Editorial policy ￨■ Editorial policy
The AEON delight Report 2023 is published to inform shareholders, investors,
and all other stakeholders of the Group's business activities, growth strategies,
and future outlook based on our Management Principle.
In preparing this report, we referred to the International Integrated
Framework of the IFRS Foundation and the GRI Standards of the GRI, focusing
on information that we deemed important from the standpoint of medium- andlong-term corporate value creation.

■ Organization
AEON DELIGHT CO., LTD. and AEON delight Group

WEB
01

19
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25
31
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35
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Investor Relations ▶ https://www.aeondelight.co.jp/english/ir/
Sustainability ▶ https://www.aeondelight.co.jp/english/sustainability/■ Period
March 1, 2022 – February 28, 2023
*Some sections include information for March 2023 and beyond.

■ Publication date
October 2023 (previous report published in November 2022; next reportscheduled for October 2024)■ Forward-looking statements
This report contains projections and forward-looking statements regarding ourGroup's future plans, strategies and performance. These statements are based
not only on historical facts, but also on assumptions made with information
currently available to the company. As such, actual results may differ fromprojections.

02

Purpose

History

1972 – 1977

Establishment

Established as a facility management company to ensure safety and security
following the fire at the Sennichi Department Store.
Following the fire at the Sennichi Department Store, the facilities management division of Nichii Corporation (now Aeon Retail Co., Ltd.) was spun off to form Nichii Maintenance Co., Ltd. Starting with a few
employees, we expanded our business domain from facility management services to comprehensive
building maintenance services such as security and cleaning, as well as construction-related businesses.

1978 – 2005

Business expansion and IPO

Developed business foundation by making regional subsidiaries.
Listed on the Second Section of the Osaka Securities Exchange and then on
the First Section of the Tokyo Stock Exchange and Osaka Securities Exchange.
A portion of the mural painted in the elevator hall on the second floor of the
AEON delight Group headquarters.
The mural was created to reaffirm the significance of the Group's existence
and mission and to pass our legacy on to the future by looking back to the fireat the Sennichi Department Store, the origin of AEON delight, and expressing
our business development up to the present day.

To continue protecting people’s precious places
The roots of our company can be traced back to the fire at the Sennichi Department Store in Osaka in May of 1972. It was theworst fire incident in the history of building fires in Japan, leaving 118 people dead.
With the aim of preventing such a tragic accident from ever happening again, we founded the company and developed ourexpertise and techniques in facility management to "pursue facility safety and provide an environment where customers canvisit facilities with peace of mind."
The AEON delight Group celebrated its 50th anniversary in November 2022, but our role in society remains the same as wemove forward into the next 50 years. We will continue to adapt to changes in the environment and transform ourselves to create
environmental value for our customers and local communities, and to protect people's precious places.

Our business expanded as our parent company, Nichii Corporation opened more general merchandise
stores. Around this time, we introduced a center manager system that assigned a person to be responsible for each property, which helped improve the quality of our operations. In addition, we began providing
services to office and commercial buildings outside the Nichii Group. From around 1980, we establishedregional subsidiaries in Hokkaido, Tohoku, Shinetsu, and Kyushu. In 1995, we went public on the Second
Section of the Osaka Securities Exchange (OSE). Then, after listing on the Second Section of the Tokyo
Stock Exchange (TSE), we became the first comprehensive building maintenance company to list on theFirst Section of the OSE and TSE in 2000.

2006 – 2021

Merger and business expansion

Expanded sales through merger with AEON Techno Service Co., Ltd. and CERTO Corporation.
Enhanced service offerings as a facility management business.
In 2006, we merged with AEON Techno Service Co., Ltd. a general building maintenance company in the
AEON Group, and became the largest comprehensive building maintenance company in Japan. Then, in
2010, we merged with CERTO Corporation, which operated a vending machine business and a materials
business, and expanded our services as a facility management company. Subsequently, we advanced ourbusiness by expanding overseas to China and ASEAN countries, and by launching integrated facility
management (IFM) services in response to outsourcing demand for back-office operations. In addition, we
added subsidiaries in Japan and overseas through proactive M&A to form the AEON delight Group, whichis comprised of approximately 30 companies.

WEB

50th anniversary site
▶ https://www.aeondelight.co.jp/english/50th/

Celebrating our 50th anniversary:
Looking ahead to the next 50 years
Beliefs that will never change and things that must be changed
The world is facing a variety of challenges toward achieving a sustainable society,including those related to climate change, energy, the employment environment,
and human rights. We will continue to protect people's precious places bycontinuing to transform ourselves while adapting to the changing environment
and people's values.

03

04

Business Fields

Services

AEON delight's facility management
We help companies and organizations solve various issues by building optimal customer-focused solutions with a wide variety
of services covering everything from facility operations to management.

￨ Management Services ￨Enhance and maximize facility performance
The AEON delight Group is a facility management group that offers various solutions for facilities and surrounding environments
in response to the challenges faced by customers in Japan, China, and the ASEAN region.

Office buildings andpublic facilities

Commercial facilities

For office buildings and public facilities, we
propose unique solutions to address
various issues that our customers face,from major disasters and labor shortages
to reducing environmental impact andpreventing the spread of infectious
diseases. In addition, we provide services
that enable our customers to establish
sustainable business models and further
grow their businesses.

For commercial facilities, we help customers build facilities and systems that enable
shoppers to safely, securely, and comfortably enjoy their shopping experience. In
addition, we help create commercial
facilities that are closely connected to local
communities by helping our customers
prepare business continuity plans, address
labor shortages, and reduce environmental
impact.

Hospitals andresearch facilities
Hospitals and research facilities havehigher sanitation requirements comparedto other facilities. To address this, we
provide optimal solutions that meet the
specific needs of each facility, ranging fromhighly sanitary environments achieved
through infection control to robust security
environments using advanced disasterprevention equipment.

Facility Budget Management

Energy Management

We manage all facility costs, from land, buildings,
equipment, security, and cleaning, and develop andimplement budget plans for our customers.

We comprehensively manage and optimize facilityenergy use, and offer energy-saving proposals that
optimize life-cycle costs by introducing energy-efficientequipment.

Workplaces

Business Continuity Plan (BCP)

We propose both soft and hard solutions that transformoffice spaces as well as work habits and processes.

We formulate plans that enable customers to continue
operating and promptly restore facilities in the event of adisaster, minimizing impact on corporate activities.

Maintenance Plan Development
and Management

Partner Management(Evaluation & Guidance)

We formulate and manage maintenance plans tailoredto building use, achieving both lower maintenance costs
and longer service life.

We maximize the performance of our customers'
operational partners by providing implementation andimprovement support for systematic management
methods.

￨ Operations Services ￨Optimally operate facilities

Factories and warehouses

Hotels

Stadiums andcultural heritage sites

For factories and warehouses, we support
a variety of outsourcing needs aimed at
improving management and operation
efficiency, including energy savings
through facility management. In addition,
we propose preparation solutions thatenable facilities to fulfill their production
and supply roles in the event of a majordisaster by ensuring continued operation
and rapid recovery.

For hotels, we developed an integrated
cleaning service that combines aesthetic
maintenance and infection prevention
measures by leveraging our expertise insanitation cleaning gained from ourexperience in hospitals and other facilities.
We also provide clean and comfortable
spaces in high-end and luxury class hotels.

Based on the know-how accumulated
through years of facility management, we
provide services in a wide range offacilities. We provide safety, security, andcomfort to visitors by flexibly responding tosituations that require handling an unspecified number of visitors on unpredictable
schedules.

Facility Management

Building Construction

We provide optimal operation, inspection, maintenance,and servicing tailored to each facility, and propose an
Open Network System that reduces management andoperating costs.

We provide comprehensive support (planning, layout,
design, construction, and supervision) for everythingfrom restoration work to renovation, interior work, andextensive maintenance.

Security

Vending Machines

We offer a wide range of services from facility security totraffic guidance and event security, providing uniqueplans that incorporate advanced equipment.

We contribute to improved profitability and user
satisfaction with high value-added vending machines
and product lineups tailored to customer needs.

Materials

SupportWe provide various materials such as packaging andsanitary materials for stores, and propose environmentally friendly materials as well as ways to reduce total
cost and streamline material ordering operations.

We offer a variety of services to meet the outsourcing
needs of customers for managing and operating theirfacilities and surrounding areas, including landscaping,catering, cafeteria operations, business travel arrangements, and rental conference spaces.

Cleaning
We offer cleaning services that not only maintainaesthetics but also extend the life of facilities, including
Hygiene Control Cleaning and New Standard Cleaning
services designed to enhance infection control.

05

WEB

FMNavi Service menu (Japanese)▶ https://service.aeondelight.co.jp/s/service

06

AEON delight's Strengths

Providing the best facility solutions as a group of experts
for facility management
The strength of the AEON delight Group rests in our ability to provide optimal solutions to customer issues through our diverse
variety of facility-related services and our network of expert personnel in Japan and overseas.

AEON delight's Strengths (As of February 28, 2023)

300

20,00050

years of experience

24/7
365

Our Group employs over 20,000 qualified personnel, ranging fromessential personnel for facility maintenance to those with knowledge andskills related to reducing environmental impact. These employees are
deployed to our more than 500 service locations throughout Japan. We
maintain a network of approximately 5,000 partners to uniformly provide
highly specialized services throughout Japan.
For details, see pages 36-37 Human Resource Development.

Digital transformation promotion initiatives

In the facility management industry, labor shortages and the aging of
qualified personnel are becoming major issues. In addition, demographic
trends indicate that this issue will become more severe going forward.
Against this backdrop, AEON delight is building a sustainable businessmodel through DX to continue to deliver safety and security to ourcustomers and local communities by providing highly specialized
services.

To continue providing highly specialized services while addressing labor
shortages, we are promoting the development of a new facility management model called area management. At the same time, by building the
AEON delight Platform, a data collaboration platform, we are leveraging avariety of data collected from inside and outside of facilities to propose
solutions that help resolve the issues that our customers face.

In June 2021, we were selected as a Certified Digital Transformation
Business in recognition of our digital transformation promotion system
aimed at building a sustainable business model in facility management,
which meets the criteria for certification by the Ministry of Economy,
Trade and Industry (METI).
* Certification renewed on June 1, 2023.

8,000

*

facilities undermanagement

AEON delight's Strengths▶ https://www.aeondelight.co.jp/english/service/advantage.html

Over 20,000 qualified employees

Promoting DX to build a sustainable business model

Selected as a certified digital transformation business by the Ministry of Economy, Trade and Industry (METI)

Over

Crisis Management
System￨ Expertise and personnel ￨affiliates in Japanand Asia(China, ASEAN)

locations throughout
Japan* As of August 31, 2023
* Recurring customers excluding spot contracts

Number of qualified employees(as of February 28, 2023, non-consolidated)
Total number of qualified personnel for all managed licenses
Examples ofqualifications held

WEB

30

500

certified employees

service offerings

Approx.

Network ofapproximately

Over

Over

￨ Ability to transform in response to changes in the environment ￨20,351

Building environment and sanitation management technician 1,365
Licensed electrical engineer (Type 1/2/3)

983

Qualified energy manager (heat, electricity)

213

Fluorocarbon refrigerant engineer (Type 1)

598

Eco-tuning engineer

158￨ Crisis management ￨Established a system prepared for major andwidespread disasters
We have established three AD Solution Centers (ADSC) and substitute
ADSC functions in Osaka, Komaki (Aichi Prefecture), and Tokyo as ourcore crisis management centers for disaster prevention. The ADSC
constantly collects and analyzes disaster information and remotely
monitors our facilities under management for abnormalities in order toprepare for disaster risks. In the event of a disaster, our eight Customer
Support Centers located close to the affected area quickly gather
information, and we coordinate with the ADSC and substitute locations to
respond to the disaster by leveraging our field expertise in order toquickly restore and rebuild the affected areas.
07

Customer Support Center(Kanto Regional Office)Customer Support Centers began operation in FY2021 under eight regional offices nationwide. The
remote monitoring function plays an important role in promoting area management and the AEON
delight Platform.

AD Solution Center■ Major disaster response record (example)
Great East Japan Earthquake (2011) / Kumamoto Earthquake (2016) /Torrential Rainfall in July, 2018 (West Japan) / Fukushima Earthquake(2021)For details,
see pages 25-27.

For more information on DX Promotion, including the development of area management andthe AEON delight Platform, please refer to “Special Feature: Envisioning the future of facility
management through DX”.

08

Message from the CEO

Creating a sustainable business model tomove into a new phase of growth
Since our establishment in 1972, the AEON delight Group has grown into a facility management (hereinafter referred to as "FM") corporate group that provides services throughout Asia by continuing to hone ouradvanced expertise and technical capabilities in facility management in our mission of protecting thesafety and security of facilities. We are proud to say that our on-site capabilities are highly regarded byour customers and are among the best in the FM industry.
However, the FM industry faces a labor shortage and qualified personnel are aging, and we expect thissituation to become increasingly serious going forward. The biggest challenge for the AEON delight
Group lies in finding ways to maintain and improve our on-site capabilities, which have been the sourceof our competitiveness thanks to the support of our specialized personnel.
Against this backdrop, we are promoting DX to enhance the value of our people in order to continue tofulfill our mission. We aim to be a corporate group that continues to be supported by our customers andlocal communities by providing solutions to social issues through our business model that combines
human technical skills and digital technology.

President & CEO, Group CEO

Kazumasa Hamada

0910

Message from the CEO

Progress of Medium-Term Management
Plan (FY2021 - FY2023)

Dramatic changes in the businessenvironment
The biggest factor behind our sluggish progress on the medium-term

In 2018, the AEON delight Group set forth its medium- to long-term

management plan is the dramatic changes in the business environment.

vision, AEON delight Vision 2025 (Vision 2025), in which we committed to

The spread of COVID-19, which exceeded our expectations in terms of

becoming an environmental value-creating company that resolves social

both duration and scale, the unexpected emergence of the crisis in

issues in Asia by focusing on the three pillars of our growth strategy

Ukraine, and the substantial rise in labor costs delayed our efforts toconsisting of ensuring safety and security, resolving labor shortages, andimplement key measures, and we were unable to fully achieve theaddressing environmental issues. To achieve this, we are working to

expected benefits to our business performance.

establish our corporate brand as a group of experts for facility manage-

In particular, the overall economy stagnated under the pandemic,

ment and to create regional economic zones in each of the areas wheremaking the business environment difficult for our customer companies

we operate.

and organizations, and the trend to curb real estate management costs
continued. This narrowed the scope of our activities, and we were forced
to stall our efforts to expand market share. In addition, procurement of￨ AEON delight Vision 2025 ￨Aiming to be an environment value-creating company inAsia that resolves social issues based on three pillars of
our growth strategy: "Safety and Security", "Labor force
shortage", and "Environment".

infection-prevention materials such as acrylic partitions and face masks
and gloves for business use, as well as increased demand for alcohol
disinfection cleaning at facilities where people tested positive for
COVID-19, also came into play. We prioritized these emergency responses in accordance with our mission to protect the safety and security offacilities, which resulted in delays in our efforts to implement themeasures we had originally planned. Furthermore, in the construction
business, in addition to the cancellation and postponement of renovation
construction, we faced material shortages and procurement delays due

The current medium-term management plan, which began in FY2021
and will conclude in FY2023, was formulated to accelerate growth toward
fulfilling the Vision 2025. In the medium-term management plan, we arepromoting various initiatives based on the three basic policies of customer-oriented management, DX promotion, and Group management, but
we are currently lagging far behind in terms of reaching our performancetargets.

to supply chain disruptions spurred by the outbreak of the crisis in the
Ukraine.
Restrictions on the movement of people also had a significant impact.
Due in part to the continuing difficulties in conducting on-site surveys,
objectives and goals were not accurately communicated, resulting indelays in the development of important measures where on-site work
plays a key role. In addition, we expected to execute M&A deals toaccelerate our growth as part of our medium-term management plan, but
our efforts have been substantially delayed owing to difficulties in
conducting due diligence, as well as a drop in the number of proposals.

Customer-oriented Management x DX Promotion- Promoting innovation to enter a new growth phase -② Area Management

While we experienced delays in implementing our plan, we are making

called area management as a way to continue providing highly special-steady progress in transforming ourselves to make a further leap in theized services while addressing labor shortages. Since the beginning of

post-COVID world, which has been accompanied by major changes in

FY2021, we established Customer Support Centers (CSCs) under eight

the environment. The concrete examples of our progress are our AEON

regional offices nationwide as a new organization.

delight Platform (AD Platform) and Area Management.

① AD Platform
At the AEON delight Group, we believe that customer-oriented manage-

Customer-oriented
Management

KPI (End-FY2/24)
Ratio of sales inside and outside the Aeon Group:
60%:40%Operating margin of 6.0%*. Maintain ROE level of 12%(full year) through improvement of operating margin.

End-FY2/23

End-FY2/22

ment and DX promotion are inseparable. The AD Platform was conceived
as a mechanism to collect, analyze, and process a variety of data,

63.4%:36.6%*

64.4%:35.6%

including customer feedback, facility conditions, and market trends incustomer industries, into valuable information through DX. This is

Operating income margin: 4.7%*
ROE: 10.5％

Operating income margin: 5.0%
ROE: 11.7％

something we first announced as part of Vision 2025 in 2018 in anticipation of the growing labor shortage and advances in technology, and it has
finally taken shape and can be used in the workplace.
By combining sales information from account managers assigned to

Number of facilities with area management introduced:
360 facilities

273 facilities

178 facilities

Reduction of 180 on-site staffs through area management

167 staffs

115 staffs

energy-saving measures, and other proposals. By making proposals

Continued improving businessprocesses in headquarter

Began improving business processes
in the head office divisions

customers, and we feel that this has a positive impact on our sales

Reallocation of 20% of headquarters staffs to direct
departments through consolidation of functions

each customer with various information on the facility obtained throughcameras and sensors, we are now able to suggest planned repairs,

Promotion of DX

based on quantitative evidence, we are able to better convince ouractivities.
Going forward, it will become increasingly important for companies toFull-year sales of domestic group companies:
65 billion yen*

54.5 billion yen*

52.0 billion yen

be able to make better use of data as they strive for growth. We plan tocontinue use data and improve its accuracy as well. In addition, we haverecently begun making use of generative AI technologies.

Group
Management

Overseas sales ratio: over 8%*
Convert domestic group finance and accounting
departments to shared services (full year)

9.8%*

7.8%

Continued providing support fromour finance and accounting department
for all domestic group companies

Started supporting share-based
services for all domestic
group companies

The CSCs remotely monitor multiple facilities by using a variety ofsystems and sensors, and serve the function of consolidating customer

Medium-term Management Plan: Progress of KPIs
Basic policies

At AEON delight, we are developing a new facility management model

facility information and requests in each region. Aside from providing
operational support through remote monitoring, we transferred administrative tasks such as preparing contracts and invoices, which werepreviously handled at each site, to CSCs, thereby reducing or removing
the need for resident facility management staff, enabling the developmentof area management, in which facilities are centrally managed by area.
Tasks such as drafting contracts and invoices are not necessarily
something that can only be done by experts. Going forward, we willfurther leverage technology to create an environment in which field staff
can focus on maintenance services that only the experts can perform. In
this way, we aim to further enhance the value of our experts, which are
the source of our competitiveness.
For more information on AD Platform and Area Management, please refer to"Envisioning the future of facility management through DX” on pages 25-27.

Thus, although we experienced delays resulting from global developments such as the COVID-19 pandemic and the crisis in Ukraine, we havemade steady progress in transforming our business model to adapt tochanges in the environment. We have positioned FY2023 as the year tocomplete the transformations set forth in the medium-term management
plan, and we are currently accelerating our efforts to accomplish this.
Although the benefits of these transformations will not be fullyreflected on earnings until the next fiscal year, we believe that they will
provide the foundation for the AEON delight Group to grow even more
under the new environment, which differs substantially from the previous
environment.

* Former revenue recognition standard

11

12

Message from the CEOGroup management: Domestic Group companies
are showing signs of recovery, while overseas
business is growing steadily￨ Next Medium-Term Management Plan ￨We are in the process of discussing our medium-term management planfor FY2024 onward (hereinafter referred to as the "next medium-term
management plan"). Accordingly, I cannot discuss the details at this time,① Domestic Group companies
Since FY2021, domestic Group companies have not been able toproduce the results we had initially anticipated, partly due to changes inthe environment, such as the COVID-19 pandemic and the situation in
Ukraine, but in FY2023, we are finally seeing signs of a recovery.
Earnings at Aeon Delight Connect have recovered thanks to the
expansion of contracted cleaning and maintenance services and various
types of construction work at apparel chains, restaurant chains, andbut we do not intend to make any major changes in our policy. We intend
to incorporate the strategies for solving the three social issues set forth in
Vision 2025 into the next medium-term management plan. Of the threebasic policies in the current medium-term management plan, which arecustomer-oriented management, DX promotion, and Group management, the first two are already incorporated. In other words, we will beannouncing a growth strategy that builds on the two policies as a foundation. To this end, I believe that we must transform our business model by
the end of FY2023.

Implementing ESG Management- Enhancing the drive to solve social issues To enhance our drive to resolve social issues such as ensuring safety
and security, resolving labor shortages, and addressing environmental
issues, we believe we must implement ESG management, which involves
both our business as well as the environment and society. To this end, we
will be working to strengthen our ESG management system.
In August 2021, we formulated the Basic Policies for Sustainability asa basic approach to promoting ESG management, and in April 2022, weestablished the Sustainability Committee, which is chaired by myself andoffer for technical personnel. Accordingly, we are focusing on training
branch office managers, who are the key players in rolling out area
management and other important measures. In FY2022, we held five
10-day training sessions for branch office managers, with myself, outside
directors, and senior management serving as lecturers, and all officemanagers participating. Furthermore, we are expanding training opportunities for area managers and site managers reporting to branch officemanagers. At the AEON delight Group, we will continue to enhance
employee engagement by creating job satisfaction and fulfillment, and byimproving training opportunities for employees in order to enhance thevalue of our people and maintain on-site capabilities.

includes executive officers as its members. At the AEON delight Group,
we have designated this committee as the company-wide promotion
body for ESG management, which promotes environmental, social, andGovernance initiatives

convenience stores. Earnings is also recovering over at Aeon Compass,governance initiatives, while deepening discussions on the merits of the

Our Board of Directors is composed of four internal directors and fourwhich is engaged in travel-related business, by tapping into the recovery

12 materiality issues and the details of the initiatives.

external directors, and we have established a Special Committee andin demand for business trip arrangements and organizing physicalevents.

Managing the entire supply chain
I believe we need to further enhance Group management by involving theIn addition, as part of our efforts to form a regional economic zone, we

entire supply chain consisting of the AEON delight Group and partner

acquired shares in Askmaintenance Co., Ltd. and made it into a wholly

companies in order to accelerate the formation of regional economic

owned subsidiary in April 2023. Askmaintenance provides facility

zones. Our business is only made viable thanks to the many partner

management, condominium management, construction, and othercompanies that provide services together with us. Accordingly, I believe

services with a focus on cleaning in the Kyushu area, and has a track

we must strive to streamline the entire supply chain by sharing

record of providing services to a wide range of facilities. Currently, we areframeworks such as the AD Platform and area management, as well asworking to further improve quality and management efficiency byknow-how, and establish a system that enables our partner companies tocombining the technologies and expertise that both AEON delight andgrow with us.

Ask Maintenance have accumulated.

The model case for this is our consolidated subsidiary, KankyouseibiCo., Ltd. This company is headquartered in Tochigi Prefecture, and has② China business
In China, which we have positioned as the largest growth area in Asia, weare steadily expanding our business by securing more contracts for key
target facilities such as high-end shopping centers, medical-related
facilities, and urban development areas through our core operatingcompanies.
In addition, we are actively executing growth investments with the aimof expanding our business domain, having acquired a local company withbuilt a solid business foundation in the northern Kanto area based on theirphilosophy of contributing to the local community. Much like Kankyouseibi, which is based in the northern Kanto region, we plan to makeAskmaintenance, which we made into a wholly owned subsidiary in April,
the center of the regional economic zone in the Kyushu area by growing
it into a company that is needed by customers and the local community.
In the next medium-term management plan, we also plan to launchmeasures to strengthen relationships with partner companies in areas
outside of Kyushu based on the concept of supply chain management.

Nomination and Compensation Advisory Committee composed ofindependent outside directors to enhance the effectiveness of ourEnvironmental initiatives

governance.

In recent times, rising energy costs have become a major businessand diverse, in line with the AEON delight Group's growth strategy, and ischallenge for companies and organizations. The impact on companies

capable of appropriately carrying out useful deliberations and supervisingand organizations with large facilities and multiple locations is particularly

the execution of business operations to enhance our enterprise value

significant. Due to the nature of our business, the AEON delight Groupover the medium to long term.

does not generate a large amount of greenhouse gas emissions. Accordingly, we believe that in order to step up our contribution to creating a

Furthermore, the composition of the Board of Directors is balanced

For more details on Structure of the Board of Directors, see pages 45-46.
Corporate Governance Management Structure

decarbonized society, it is not only important to reduce greenhouse gas
emissions within the AEON delight Group, but even more important toleverage our energy-saving know-how accumulated in the field of facility
management to help our customers reduce their power consumption.
The energy-saving capabilities of equipment such as air conditioning and

Finally- To Our Stakeholders -lighting are improving each year, and simply replacing older equipmentwith newer models can produce substantial power savings. We are

While our efforts were hampered by dramatic changes in the businesscurrently helping to save energy at facilities, centered on the AEON

environment, as a business leader, I sincerely regret that we have notGroup, which is a major consumer of power, by switching to LED lighting,been able to demonstrate growth in line with our plan to you since

updating air conditioning units, and selling non-fluorocarbon refrigeration

FY2021.

and freezer cases.

At the same time, our transformation toward a sustainable business

Moreover, going forward, we intend to strengthen our efforts to reduce

model that addresses changes in the business environment is steadilystrengths in servicing factories in 2021 and a local company withenvironmental impact through our business, not only by installing andprogressing. By carrying out the transformation during FY2023, I believestrengths in servicing medical-related facilities in 2022.

operating equipment with superior energy-saving performance, but also

we will be able to demonstrate an AEON delight Group entering a new

by developing a consulting business that provides full support for ourstage of growth from FY2024 onward.

Furthermore, we changed the corporate format of AEON DELIGHT(CHINA) CO., LTD. to an investment company to enhance its investment
function for these types of M&A deal as well as for new businesses.

Business expansion in Asia
In China, we will continue to expand our market share and invest aggressively through our core operating companies, with an eye to expanding

customers' decarbonization efforts, including CO2 emissions measurement and energy management for entire facilities.

forward to the continued support of our stakeholders.

our business throughout mainland China. In ASEAN, we will continue toexpand our market share and strengthen quality management in each

③ ASEAN businesscountry where we operate. In particular, in Vietnam, which is positioned
as a top-priority area in the AEON Group's ASEAN strategy and where
Aeon Mall Co., Ltd. and other AEON Group companies are accelerating

In the ASEAN business, which we expect to grow substantially over thetheir store openings, we intend to achieve substantial growth by prepar-

medium to long term, we opened a regional office in Malaysia (Kuala

ing for the influx of new openings and steadily capturing demand within

Lumpur) in FY2022 as a base for the officer in charge of the ASEAN

the AEON Group.

business to be stationed at, with the aim of strengthening the Group
governance system and formulating a growth strategy for the ASEAN

For more details on our initiatives in Vietnam, see pages 28-30.
Special Feature: Envisioning the future in a fast-growing young country

Societal initiatives
As I mentioned that we will be promoting DX to enhance the value of ourpeople at the beginning of this report, human resources are our greatest
management resource. I believe that strengthening investment in humancapital is essential to achieve sustainable growth. As a group of experts
for facility management, we have been focusing on developing experts
with both technical and human capabilities for some time. As a result of
these continued efforts, we have a total of over 20,000 qualified person-

region as a whole. Recently, we have been working on expanding ournel, including those essential for facility maintenance and those withbusiness and strengthening quality management in Malaysia, Vietnam,

knowledge and technical capabilities related to reducing environmental

Cambodia, and Indonesia, as the ASEAN economies, which had been

impact, and they are the source of our on-site capabilities.

stagnant under the pandemic, have begun to recover.

We will continue to create environmental value for our customers andlocal communities by continuously transforming ourselves. We look

However, in analyzing the reasons for the delay in implementing key
measures in the medium-term management plan, we came to the conclusion that one of the reasons was insufficient training opportunities for
managers working closely with the field, as compared to the training we

13

14

Value Creation

Contributing to the resolution of social issues as an
Environmental value-creating Company
Through our business activities, we contribute to the realization of a sustainable society by leveraging our strengths, including
our accumulated facility management skills and expertise, our specialist personnel in Japan and overseas, and our ability tocreate solutions.

Inputs(Management Resources)

Business Model / Outputs

Outcomes (Business Results)

Outcomes (Value Offered)Aspiration

Environmental value-creatingcompany that resolves social issues

Big data related tofacility management

Provision of safety & security
Comfortable, hygienic, andhealthy facility environments

Proposal / provisionof solutions
R&D collaborated withexternal institutions

Human resource
development

Economic value createdby AEON delightPartner companies
Customers
Core Competencies

Facility management
experts

Service network
across Asia

Skills and expertise
Expert personnel in Japan andoverseas (on-site capabilities)
Ability to create solutions

Research &development

AEON delight
Group companies

AEONDELIGHT PLATFORM

AEON delight
Vision 2025

Contribution to resolving
labor shortages

Net sales 471 billion yen
Global Top 10 No. 1 in Asia

Alleviating labor shortages amongcustomers and partner companies

Operating income 37 billion yen
Operating income margin
Global top-level

More efficient use of
personnel through digitaltransformation

Contribution to
global environment

Information collection,
analysis, and processing

Collection/accumulation offacility information/needs

Growth investment indigital transformationand M&A, backed byrobust financial base

Better prevention / mitigationof disasters and otheremergencies

Contribution to
decarbonizing society
Biodiversity conservation
Promotion of resource
recycling

Use of Technology
Strengthened corporate governance15

16

CFO Message

Building competitive advantage through proactive growthinvestments by leveraging our robust financial baseequipment and materials, and cost increases, and have fallen far short ofour initial earnings projections. In addition, we were not able to execute
M&A deals as initially planned under the COVID-19 pandemic. In light ofthese changes in the environment, we decided on and executed a sharebuyback of 1.5 million shares in October 2022 with the aim of efficiently
managing our capital, but our ROE remains below our target level. In thenext medium-term management plan, I believe that improving the
profitability of our business is our greatest challenge, and we will
formulate the strategies and specific action plans needed to address this.
We will steadily invest the management resources necessary to make thishappen. The Board of Directors is already discussing the cost ofshareholders' equity, which is an important measure of whether or not weare creating shareholder value, and we intend to present our approachand direction regarding this, along with our approach to return on capital,in the next medium-term management plan.

Return on Equity (ROE)
Unit (%)
15

10

0

2019

2021

2020

2022

(fiscal year)(%)

FY2019FY2020

FY2021

FY2022

12.3

14.1

11.7

10.5

Stable cash flow generation: Cash and cash equivalents at year-end

Unit (Million yen)

FY2018FY2019FY2020

FY2021

FY2022

Cash flows from operating activities

12,373

7,371

10,403

12,598

8,895

Cash flows from investing activities

12,256

13,838-7,325-386-10,715

Cash flows from financing activities-19,686-3,392-5,324-4,572-6,181

Cash and cash equivalents at end of year

43,437

61,15158,93767,52059,996

Director and Senior Managing Officer
General Manager of Financial and￨ Key Investment Domains and Approach to Financing ￨Accounting Division (CFO)

Tetsuya Akutsu

Human resources, DX, M&A￨ The Role of the CFO ￨How to execute capital investments that fuel future growth
At the AEON delight Group, we aim to become a corporate group thatsolves social issues such as ensuring safety and security, resolving labor
shortages, and addressing environmental issues in Asia through ourfacility management ("FM") business. My primary role as CFO is to help
boost our enterprise value by developing and implementing plans for the
procurement, investment, and allocation of funds to achieve this vision
for the future.

￨ Approach to Financial Strategy ￨Decisively making growth investments while
maintaining financial soundness
The FM business, which is the AEON delight Group's business domain,features a business model that does not require major fixed assets orinventories, and thus is capable of generating stable cash flow. As aresult, we have ample liquidity and a high equity ratio (65.3% at the endof FY2022). On the other hand, in order to maintain and improve our
return on capital, we need to expand our earnings base in line with the
cash accumulated and our shareholders' equity. In other words, the key
to our financial strategy is in figuring out how to execute capital
investments conducive to future business and profit growth.
Accordingly, we intend to incorporate a financial plan based on theapproach of decisively making sustainable growth investments while
maintaining financial soundness into the medium-term management planfor FY2024 onward, which we are currently preparing.
17

Highly stable management base: Equity ratio (%)
Unit (%)
70
60
50

0

2019

2020

2021

2022 (fiscal year)
Unit (%)

FY2019FY2020

FY2021

FY2022

57.6

64.0

66.2

65.3

￨ Return on Capital ￨Boosting business profitability is the biggest challenge
We focus on return on equity (ROE) as an indicator of return on capital,
and target an ROE of 12% as a general guideline. Meanwhile, ROE camein at 10.5% in FY2022, and achieving the 12% mark in FY2023 will bedifficult.
During the current medium-term management plan period (FY2021FY2023), we have been unable to fully offset the impact of changes in thebusiness environment, such as the slowdown of economic activities amid
the pandemic and the crisis in Ukraine, delays in procurement of

Our three key domains of investment for future growth are humanresources, DX, and M&A.
① Human Resources
The AEON delight Group's greatest strength is its on-site capabilities
backed by our advanced technical capabilities and expertise. To maintainthis strength, we will continue to step up investment in recruitment,
training, and other areas related to human capital. In terms of humanresource development, we will continue to enhance training fortechnicians while updating our content in line with the business environment, such as IT literacy to promote DX, and expand training opportunities for branch managers, area managers, site managers, and othermanagement personnel who work closely with the field.
② DX
Due to structural labor shortages, the FM industry is experiencing aserious shortage of manpower and an increasingly aging population ofqualified personnel. Furthermore, it is clear from the demographics thatthese trends will only become more severe in the future. Under thesecircumstances, the biggest challenge for the AEON delight Group lies infiguring out how to maintain our on-site capabilities, which is ourstrength. To address this issue, we will proactively invest our management resources in making better use of technology. Specifically, by
introducing various types of equipment and accumulating operational
know-how, we will reduce the labor and manpower required for on-site
operations and achieve centralized management in order to maintain andimprove the service we provide to our customers. Through these efforts,
we hope to provide safety and security in a sustainable manner. I believethat this transformation is made possible precisely because of AEON
delight's leading business scale and expertise in Japan, as well as ourrobust financial base.
③ M&A
M&A is one of the AEON delight Group's key strategic options to accelerate growth. However, as mentioned earlier, we were unable to fully workon our initiatives during the current medium-term management plan
(FY2021-FY2023) owing to changes in the business environment. In themedium-term management plan for FY2024 onward, we will actively
explore investment opportunities to strengthen the foundation of our FM
operations and to broaden our business domain, as well as to expand thescale and scope of our operations overseas in Asia.
In terms of investment resources, we intend to utilize cash and deposits
on hand for these investments, while securing ordinary working capitaland funds for unforeseen events. In addition, when executing large
investments such as M&A deals, we plan to look into external fundprocurement as needed. From the perspective of securing the option ofutilizing the capital markets as a means of raising funds, we also received
an external rating in 2021 (A- rating from Rating and Investment Information, Inc.)￨ Shareholder Returns ￨Aim for steady returns while balancing growth investments
We have continued to increase dividends for 18 consecutive fiscal years
since FY2005, in line with our basic policy of paying a stable dividend.
In FY2023, we plan to pay an interim dividend of 43 yen per share anda year-end dividend of 43 yen per share, for an annual dividend of 86 yen
per share, assuming that we reach our earnings forecast. This amounts toa consolidated dividend payout ratio of 40% and an increase of 1 yen per
share from FY2022, marking the 19th consecutive year of dividend
increases. Our basic capital policy is to maintain a stable dividend payout
ratio of 40%, and we plan to boost shareholder returns by steadily
growing earnings. In addition, we will look into further enhancing
shareholder returns, balancing the investments in human resources, DX,
M&A, and other areas for future growth, as mentioned previously.
Going forward, we will continue to meet the expectations of our
stakeholders by achieving healthy growth in business and earnings overthe medium to long term. We look forward to your continued guidanceand support.
18

Financial and Non-Financial Highlights

Financial data (Consolidated)
Net Sales

Non-financial data (Non-consolidated)
Reduction in Power Consumption by Installed
Energy-Saving Equipment

Net Sales Composition by Segment

Lighting equipment(Billion yen)
320
300

308.5

303.7

300.0

292.3

Facility Management

64.7 Billion yen

21.3 %

Security Services

49.4 Billion yen

16.3 %

250

2017

2018

2019

2020

2021

2022

60,0003,590

22.5 %

68.3 Billion yen

Cleaning Services0

Refrigerated display cases(MWh)80,000

317.6
302.9

Air conditioning equipment

Construction Work
Materials / Supplies
Sourcing Services

52.0 Billion yen

17.1%

41.5 Billion yen

13.7%

Vending Machine Services

9.4 Billion yen

3.1%

Support Services

18.0 Billion yen

6.0 %

1,296

1,615
1,645

20,406

34,775(MWh)10,00029,897

8,000

（%）
6

16.0
15

10

12.9
4.4

13.0

5.2

15.2
5.1

15.7
5.0

(Billion yen)
12

11.6
10.6

15.8

9.3

33,404

24,691

2019

213.3

5

5.2

187.2

8
4

203.5

2022

(FY)

3,000

1,455
121.7

122.9

2018

2019

2020

2021

2022

0
(FY)

467

509

427

381

3,702
1,560

0

2017

2018

Payout ratio

82

84

85

（%）
80

2019

2020

Total assets(Billion yen)
150

144.6
134.0

80
70
60
50

61
50.1

63

65

60

90

51.3

40

34.7

30

120

35.1

39.4

41.8

136.9

136.5
64.0

59.5
89.1

54.6
75.5

40

3,693

3,691

3,707

3,722

1,760

1,712

1,660

1,618

2021

2022

0
(FY)

9

2017

2018

2019

2020

2021

2022

0
(FY)

1,087

1,203

1,202

12.0

12.0

10.1

8.2

8.1

8.5

2017

2018

2019

8.0

7.5

7.3

2021

2022

1,220

2018

2019

2020

2021

2022

(FY)

57.6
81.2

88.2

Net assets

Capital-asset ratio

142.8

（%）
70

66.2
95.4

150.6

15

15

2.6

50

5

30

8

2017

2018

2019

2020

2021

2022

0
(FY)

2.1

1.5

1.2

2018

2019

2020

2021

2022

WEB

1.0
(FY)

50.0

50.0
50

6
5

27.3

2.0

7

0

2017

2.5

50.0

8

4

1.5
1.3

（%）
60

6

2.3
9

14

(FY)

Ratio of Outside Directors(People)
10

50.0

16

10

0

Number of Independent Directors

（%）
3.0

65.3
99.3

Ratio of women

Number of women in managerial positions(People)20

2020*Includes permanent employees, contract employees, and fixed-term employees

Number of Independent Directors/
Ratio of Outside Directors

Number/Ratio of Women in Managerial Positions*New revenue recognition standard has been adopted from FY2022.

19

11.2

0

2017

10
0

12.2
11.0

3

1,074

0

30

20

Female

6

60
20

(FY)

(Year)
15

12

1,000

Total Assets/Net Assets/Capital-Asset Ratio

Dividend per share

(Yen)
90

2022

Male
Female)*Includes permanent employees, contract employees, and fixed-term employees

Dividend per Share/Payout Ratio (%)

2021

Female)
Male

944

2017

Male

2,000

3

0

2020

100

4
5

2019

*Amounts correspond to the ratio of shares held in equity method affiliates
Kikugawa Ishiyama Solar Co., Ltd. and Kikugawa-Horinouchiya Solar Co., Ltd.

Average Length of Service

Average number of temporary employees (

348

322
3,712

200

6.4

6.3
4.3

4,000

2018

2,000

26,1652021

2020

Employees ((People)
5,000

10.1

233.7

2017

7,477

4,000

Number of Employees/
Average Number of Temporary Employees

(Yen)
300

7,912

47,64633,3562018

Net income attributable to parent company shareholders
Net income per share

Operating income margin

Operating income

7,717

6,000

*Estimated annual electricity use reduction in facilities where data is available(Billion yen)
20

7,600

0

2017

Net Income Attributable to Parent Company
Shareholders/Net Income per Share

7,806

24,2660(FY)

Operating Income/Operating Income Margin

8,016

1,794

17,73720,0004,849

20,168

9,688

40,000

Amount of Solar Power Generated

4

4

4

40
30

4

20

23.1
2

10

0

2017

2018

2019

2020

2021

2022

0
(FY)

Financial Data and Results ▶ https://www.aeondelight.co.jp/english/ir/financial/
ESG Data ▶ https://www.aeondelight.co.jp/english/sustainability/data.html
20Materiality

The AEON delight Group promotes ESG management, which helps resolve social issues through our business and enhances
our enterprise value. In 2021, we identified 12 Materiality issues in five domains, including ensuring safety and security, resolving labor shortages, and addressing the environment as we set forth in our Management Principles and the AEON delight
Vision 2025, as well as using technology and enhancing governance, which we believe are necessary to achieve sustainablegrowth. In addition, we have set 2030 targets for each of the five domains. We will also contribute to achieving the SDGs
through group-wide initiatives to resolve social issues.

12 Materiality issues and 2030 Targets

Labor Shortage

Safety and Security

5 AreasOpportunities for our Group

Risks to our GroupGrowing need for facilities/equipment resilient
against disasters and infrastructure outages
Growing demand for high-quality services in Japanand abroad

Difficulties in continuing operations due todisaster or infrastructure outage

Providing hygienic/healthy living
environments

Growing need for hygienic/healthy living environments

Decline in corporate image if infectious
disease impact is not prevented
Growing health risks accompanying
increased employment of elderly personnel

Resolving labor shortages

Promote recruitment of diverse personnel
Growing need for improved productivity and operational efficiency

Risk of contract non-fulfillment and lost
opportunities due to lack of personnel

Improving productivity through efficient
allocation of talent

Expand AEON delight Economic Zone by strengthening Group management and relationship withpartner companies

Risk of decline in service quality due toinsufficient personnel training

Improve quality and productivity by securing
diverse personnel
Expanding need for services as women enter theworkforce

Risk of contract non-fulfillment and lost
opportunities due to lack of personnel
Decline in corporate power due to inadequate communication skills and multicultural understanding

Develop new services by strengthening relationships with local communities, partner companies,
and relevant government agencies

Risk of non-compliance, including affiliates
and partner companies
Risk of not gaining trust/understanding
when expanding overseas due to inadequate handling of target country risks(changes in political, economic, and social
environments)

Appropriate labor management

Improve productivity and job satisfaction by reducing employee morbidity and providing comfortable
work environments

Risk of difficulties in securing personnel
due to inadequate enforcement of properlabor management
Employee accident and mental health risks
during work

Climate change and global warming
countermeasures

Growing need for energy-saving and renewableenergy use

Increased cost burden due to environmental measures and soaring energy prices

12 Material Issues

Providing safe living environments

Promoting diversity and inclusion

Promoting multi-stakeholder engagement

Vision (KGI)
Contribute to improving people's qualityof life by providing services that ensurea safe, secure, hygienic, and healthy
environment in and around facilities.
Provide a facility environment that
protects lives by fully preparing fordisasters such as windstorms, floods,
and major earthquakes, and quickly
respond when such disasters occur.

Results2030 Targets

FY2021

Related SDGs

FY2022

Expand provision of safe and secure services● 20% of sales from BCP and

3.8%

3.7%

22.1%

22.4%

23.7%

21.3%

268 hours

230.3 hours

139 accidents

72 accidents

2.5%

3.7%

Of 822 total vehicles,
591 gasoline/diesel vehicles,
230 hybrid vehicles,
1 electric vehicle
14.9%

Of 752 total vehicles,
467 gasoline/diesel vehicles,
284 hybrid vehicles,
1 electric vehicle
18.0%

15%

7.6%

infection control-related services*1

Improve business continuity by resolving labor shortages

Offer employees a work environmentthat improves job satisfaction andmakes it easier for them to work bycreating a vibrant organizational culturethat enables a diverse workforce tofully demonstrate their abilities.
Establish strong partnerships by building mutual trust with business partners
and striving to ensure legal compliance,
fair trade, thorough compliance, andrespect for human rights throughout the
supply chain.

● 30% female managers on aconsolidated basis● 50% reduction in consolidated
annual employee turnover rate
(regular employees, contract
employees, and temporary
employees) compared to FY2021● 50% reduction in consolidated
annual overtime per personcompared to FY2021● 30% reduction in number ofconsolidated annual work-related
accidents*2 compared to FY2021

Contribute to resolving labor shortages
in society by providing facility management and peripheral services thatenable customers to streamline operations and reduce manpower.

Environment

Expand environmentally-friendly business

Nature conservation and environmental
impact reduction

Growing need for environmentally friendly products and services

Decline in corporate image and brandpower due to water pollution, increased
plastic waste, etc.
Stricter laws and regulations related towaste, etc.

Promote resource recycling, preserve
biodiversity, and create a decarbonizedsociety by providing solutions that meetsociety's expectations.
Promote initiatives to reduce environmental impact by procuring and operating responsibly and working withstakeholders in the supply chain.

● 10% of sales from GHG emission

reduction related services*3● Zero gasoline and diesel vehicles,
including hybrid vehicles, forbusiness (consolidated)● 50% of sales in the materials businessfrom environmentally friendly products● 50% recycling rate (bottle-to-bottle)

in vending machine businessCorporate
GovernanceUse ofTechnology▼ Initiatives to support the above activities

21

Use of Technology

Raise productivity, improve operational efficiency,
and develop new services through digital transformation driven by IoT, sensors, AI, etc.

Decline in service quality and market share
due to lagging digital transformation
Risk of information leaks

Addressing information society risks

Growing need to strengthen facility information
security

Risk of cyber-attacks leading to operational
shutdown or information leak

Curtail costs with prompt problem detection/resolution through strengthened governanceAdverse effect on corporate activities anddamage to social reputation due to inadequate governance systems
Risk of harm to business performance due
to inability to handle target country risks
when expanding overseas (changes inpolitical, economic, and social environments)

Strengthening Group governance*1 BCP services include disaster prevention and countermeasure construction, provision of remote monitoring systems, infection control measures, infection control cleaning (New Standard
Cleaning), sales of related materials, and construction work related to droplet and contact infection control measures.
*2 Work-related accidents resulting in four or more days of absence from work
*3 Includes installation of energy management systems, freon management, installation of EV chargers, installation of energy-saving equipment (lighting, air conditioning, refrigeration cases),
installation of water-based floor coding agents, etc.

Deliver benefits and new value by
incorporating DX to improve productivity and streamline operations in ourcustomers' and our own supply chain.

Earn the trust of society and enhanceenterprise value by complying withvarious laws and regulations and bybuilding a strong corporate governancesystem within AEON delight and the
AEON delight Group.

Leverage the latest technology to research and develop new services● Enable unmanned management through robotization of facilities● Reduce facility lifecycle costs by using FM big data and AI to diagnose buildings● Develop solutions business leveraging our unique FM data

Establish robust Group governance system in Japan and abroad● Establish a ‘three lines of defense’ structure● Corporate Culture Committee and Group Governance Enhancement Promotion

Committee continue to operateWEB

Material Issues Materiality identification process▶ https://www.aeondelight.co.jp/english/sustainability/management/materiality.html

22

Business Segments

The AEON delight Group operates
its facility management business under seven segments￨ Facility Management ￨￨ Security ￨￨ Sales composition ￨In the facility management segment, we provide maintenance checks,
inspections, and servicing of building equipment and facilities.

The security services segment offers general security services including
facility security, crowd and traffic control, and high-value transport
security.

Support Services*Various facilities (centralized monitoring, electricity, water supply and drainage,
air conditioning, fire protection, sanitation, etc.)￨ Segment profit composition ￨Support Services

Facility
Management

6.0%

21.3％

Vending Machine
Services

4.6%
Materials / Supplies
Sourcing Services

FY2022
Total sales
303.7 billion yen

13.7%

8.4%

The construction work segment provides planning, design, and construction services for major repairs and store interiors, as well as proposals
and construction related to energy conservation and CO2 reduction, andenergy data management services.

17.1%

16.3％

17.1%

In the cleaning services segment, we provide building and facility cleaning
services.

FY2022Gross profit
23.7 billion yen

Construction Work

Security Services

Construction Work￨ Construction Work ￨24.5％

Vending Machine
Services

3.1%
Materials / Supplies
Sourcing Services￨ Cleaning ￨Facility
Management

2.0%

13.8％

Cleaning Services

Cleaning Services

22.5％

29.6％

￨ Business results by segment ￨ (last 3 years)
Sales(Million yen)
80,0002020

70,00060,00061,53858,22352,08447,239 49,478
44,39353,06043,01540,65740,000In the materials/supplies sourcing services segment, we purchaseindirect goods on behalf of customers and procure materials and otheritems.

The vending machine services segment is engaged in the operation ofbeverage vending machines, ornamental plants, and air purifiers for smoke.

2022

56,49741,54430,000￨ Vending Machines ￨2021

66,963 68,336
62,45964,79450,000￨ Materials/Supplies Sourcing ￨Security Services

25,453 26,353

20,0009,466

10,00016,04915,837

18,0700Facility
Management

Security
Services

Cleaning
Services

Construction
Work

Materials / Supplies Vending Machine
Sourcing Services
Services

SupportServices

2020

2021

Segment profit(Million yen)
9,000

8,106

8,000

7,324

7,000

￨ Support ￨

6,000
5,000

In the support services segment, we provide agency, education, andhuman resource services.

5,495
5,175

● Intra-facility delivery ● Shopping cart and basket collection

1,000● Plant management ● Car and bicycle parking management● Reception services ● Travel agency ● Others

3,880 4,080
3,583

3,435 3,279
3,307

3,000
2,000

7,014

5,810

4,000

[Examples of services offered in the support segment]

2,467

2,560
1,999

653
0
-1,0002022

Facility
Management

Security
Services

Cleaning
Services

Construction
Work

608

1,083

Materials / Supplies Vending Machine
Sourcing Services
Services

441 462-75
SupportServices*New revenue recognition standard has been adopted from FY2022.

WEB
23

Segment Information▶ https://www.aeondelight.co.jp/english/ir/financial/segment.html

24

Special Feature: Envision YOUR Future

Envisioning the future of facility management through DX① AEON delight Platform, a data collaboration platform

Build a sustainable business model andcontinue ensuring safety and security

At AEON delight, we have established the AEON delight Platform, a datacollaboration platform that produces valuable data for customers by
inputting and analyzing a variety of data acquired from both within andoutside of facilities, and we are working to promote the use of thisplatform.

AEON delight is taking on the challenge of transforming its business model through DX as the facility management industry
faces a labor shortage and the aging of qualified personnel.

In FY2022, we established a system to centrally manage a group ofmajor systems within the company and link them to data visualization
tools. This enables us to extract, analyze, and process the data we wantfrom various systems, and we have begun to make use of the resulting
information.

AEON delight Platform
Customer Support Center

AEON delight Platform
Existing customers

Facility under management
Facility management
and operation
information

Solutions that help
resolve problems

Account manager
Potential customers

Customer/industry
information
Collect, analyze, and process avariety of data into valuable information
Specifically, how is the platform being used?
AEON delight Co., Ltd.
General Manager of IT Division andManager of DX Promotion Department

Keita Akita
ProfileApr. 1995

Joined Japan Maintenance Hokkaido Co., Ltd.
(currently AEON delight Co., Ltd.)
Sep. 2015 Office Manager of Hokkaido East Office of
AEON delight's Hokkaido Regional Office
Mar. 2019 Regional Office Manager of AEON delight's Hokkaido
Regional Office
Mar. 2023 General Manager of IT Division andManager of DX Promotion Department (current)

What is the reason AEON delight isworking on DX?
The reason we are working on DX is so that we can continue to ensure thesafety and security of the facilities entrusted to us by our customers byproviding highly specialized services. Today, the opportunities for facility
management companies to demonstrate their expertise are expanding ona global level, including in disaster prevention and mitigation against
increasingly severe and frequent natural disasters, and in energy-saving
measures to curb global warming. At the same time, the field of facility
management, which is responsible for the day-to-day operation offacilities, faces a major challenge in ensuring business continuity given
the labor shortage and the aging of qualified personnel.
There is an urgent need to build a business model that can provide
ever more specialized services with fewer people. DX is a means toachieving this.

25

Please tell us about the specifics ofyour DX initiatives.
Currently, we are working on the following three major initiatives.
① AEON delight Platform, a data collaboration platform② DX of business processes③ Leveraging generative AI technologies
I will explain each of these initiatives below.

One example would be for presenting a facility repair proposal. In thepast, this was an area that relied heavily on the skills of individual facility
management staff, but we can use the platform to extract equipment inneed of repair based on evidence (proof and reasoning) from pre-populated data such as the manufacturer, model number, year and month of
installation, and past failure history of the various types of equipment.
This gives us the ability to make accurate and well-planned repair
proposals to our customers. In addition, as customers face a major
challenge in dealing with rising energy costs, we use data analysis tomake a variety of proposals, such as examining optimal energy conservation plans for individual facilities by comparing and analyzing energy
consumption in real time among facilities of similar use and size.

② DX of business processes
At AEON delight, in addition to improving the quality and quantity offacility information distributed on the AEON delight Platform, we arepromoting the rollout of a new facility management model called area
management, while streamlining resident facility management operations
through the use of digital devices, with the aim of building a sustainablebusiness model that addresses labor shortages.

Efficiently manage multiple facilities by area fromthe Customer Support Center

OfficesCommercial
facilities

Data accumulation*1 Customer Support Center
Began operation at the beginning of FY2021 under eight regional offices in Japan.
By using various systems and sensors, the center remotely controls multiple
facilities and consolidates customer facility information and requests in eachregion.

Hospitals

CSC

Customer Support Center
PatrolFacility data
Customer needs

PatrolFacility data
Customer needs
Small and medium
facilities

Factories

Other large
facilities■ Area management
Area management is a new facility management model that manages
multiple facilities primarily by patrolling each area, and involves reducing
on-site operations by transferring some operations to a Customer
Support Center*1 equipped with remote monitoring functions.
We began full-scale implementation in FY2021, and have reduced
labor at 312 facilities*2 to date, saving a cumulative total of 210*2 resident
facility management staff positions.

Remote management■ Streamlining resident facility management

operations by using digital devices

Starting in FY2022, we began using digital devices to further streamline
our field operations. We built a system that automates routine tasks suchas facility inspections and reporting by using cameras and sensors, aswell as visualizing power consumption for each facility, and have
implemented the system in 257 facilities*2 to date.
*2 As of August 31, 2023.

26

Special Feature: Envision YOUR Future

Shift to area management to address labor shortages

BeforeManage facilities individually with resident facility
management staff stationed at each facility

Contracted personnel:
2.5 people

Contracted personnel:
1.5 people

Contracted personnel:
1 person

After
Share facility management staff in the area byleveraging the CSC and reducing on-site workload
Area

0.5
persons

0.5
persons

CSC

PatrolWork onnewly contracted
properties,
etc.

Unmanned

Manager's coverage to include on-site operations by having it learn our
accumulated know-how on the management and operation of various
facilities and information on incidents and accidents, as well as the
response manuals.
In addition, we plan to not only use the generative AI to streamline
business processes, but also to integrate it with the AEON delight
Platform with the aim of improving the quality of output.

What is your future vision forfacility management using DX?

• Constantly keep facilities safe and secure by achieving the above
two points, and help solve issues faced by customers and local
communities by analyzing the accumulated data and proposing thebest solutions for each facility.

Facility management in the near future (illustration)

DisasterPrevention Center

After
Automaticallycollect measurement
data overthe network

OCR(character
information recognition)
camera27

AEON DELIGHT(VIETNAM) CO., LTD.
Executive Chairperson and President

Hisayo Takami

Travel back andforth between thedisaster prevention
center and the facility
for each inspection

At AEON delight, we are also working on making use of generative AI
technologies. As a first step, we developed the AI Manager, a uniquechat-based AI for employees. This tool, which we launched in October
2023, enables employees to quickly ask questions and get appropriate
responses in various work-related situations by having the AI learn ourinternal regulations and manuals. We believe that this will reduce the timeand communication costs associated with searching through manuals,
and will lead to a substantial improvement in administrative efficiency.
Furthermore, going forward, we plan to expand the scope of the AI

The AEON delight Group is expanding its facility management business not only in Japan but also in China and ASEAN countries.
In particular, Vietnam is an area where we expect to see major growth going forward. We established a local subsidiary, AEON
DELIGHT (VIETNAM) CO., LTD. (hereinafter AEON delight Vietnam) in December 2012 and have been expanding our business inVietnam.

• Alerts are automatically sent to facility management staff and theCustomer Support Center in the event that abnormal values indicating a malfunction or accident are detected.

Automate facility inspection work with DX (illustration)③ Leveraging generative AI technologies

Contribute to the development of Vietnam and become
a company that employees are proud of and can envisiona future with

• Be able to check any data from anywhere by connecting facilities toa network and continuously collecting operational data from all
equipment in facilities.

This is the vision I have for facility management in the near future. In
addition, I believe that it needs to be AEON delight that makes thishappen.

BeforeEnvisioning the future in a fast-growing young country

ProfileOct. 1996 Joined AEON Techno Service Co., Ltd. (currently AEON delight)
Mar. 2011 Acting General Manager of Hokuriku-shinetsu
Regional Office of AEON delightMar. 2012 General Manager of General Affairs Department of
AEON delightJun. 2014 General Manager of Energy Saving System Sales
Department II of AEON delightMay 2018 Regional Office Manager of Kyushu Regional Office of
AEON delightAug. 2019 Executive Officer and Group Compliance Division
Manager of AEON delight
Apr. 2022 Executive Chairperson and President of AEON DELIGHT(VIETNAM) CO., LTD. (current)

What kind of country
do you feel Vietnam is?
Check any data youneed for operations
no matter where
you areInstantly identify
signs of malfunctions
and accidents
through alerts

Leverage a variety
of data to makeproposals tocustomers

Vietnam has a very young population, with an average age of 33 years,
and the total population is about to surpass 100 million soon. In addition,
the country is entering a demographic bonus period in which the working
population accounts for about 70% of the total population. With suchabundant labor resources, the country is in the midst of achieving major
economic growth.
What I have found when actually interacting with Vietnamese people isthat they are earnest, hardworking, and very kind to others. Since myarrival in 2022, I have regularly visited workplaces around the country tolisten directly to the voices of employees in the field. Although I am quite
used to it now, in the beginning, I often had to wander around from one

place to another, staring at the map on my smartphone without knowing
where I was going. When I was wandering around, some local people
would approach me, a complete stranger, and try to help me out. This
happened more than a few times. When someone is struggling, they can’t
leave them alone. This national trait brings a nostalgic feeling forJapanese people. When looking within the company, in addition to thisnational trait, I often encounter such situations where I sense a strong
focus on teamwork. The way employees cooperate with each other atwork and the way all employees, young and old, male and female, unite
to enjoy company events to the fullest, brings me energy as a businessleader.

28

Special Feature: Envision YOUR Future

What is AEON delight
Vietnam's business?

Furthermore, another service that is unique to Vietnam is the parking
system. Over 80% of households in Vietnam own a motorcycle, making it
the most widely used means of transportation for citizens. Because there
are so many people using motorcycles, preventing motorcycle theft is achallenge in facility parking lots. In Vietnam, most parking lots aremanaged only by security officers, but we offer a more accurate accessmanagement service (parking system service) that combines conventional services, where security officers guide, organize, and manage parking
spaces, with plate number management using cameras.

Similar to what we do in Japan, AEON delight Vietnam (hereinafter, thecompany) offers facility management services, focusing on facility
management, security, cleaning, energy conservation, and various typesof renovation construction. In addition to the six Aeon Mall storesoperating in Vietnam, we provide services to a variety of local facilities,
including the Embassy of Japan in Vietnam, the Consulate-General ofJapan in Ho Chi Minh City, department stores and commercial facilities
for Japanese companies, and factories of manufacturing companies.

Motorcycles are the most popular means of transportation for the peopleof Vietnam

Are there any services unique
to AEON delight Vietnam?
Do you collaborate withother AEON Group companies?

One service we offer that no other company does is Customer Security(hereinafter, CS). CS is a security service that integrates information desk
functions. Originally, when the Aeon Tan Phu Shopping Center, the first
Aeon Mall store in Vietnam, opened in January of 2014, we were unable
to acquire a license for security services owing to restrictions on foreign
capital investment. As a substitute, we developed the CS service byreferencing the attendant service we provided in Japan, where attendants

Currently, there are a total of eight AEON Group companies, including ourcompany, operating in Vietnam. The presidents of these companies meeton a regular basis to exchange information, and we have a very good
relationship with each company.
The AEON Group has positioned Vietnam as a top priority area in the
ASEAN region, and plans to accelerate the opening of new Aeon Malls
and other stores. To make this a success, it is important for each company to combine forces as One AEON. At AEON delight, we are also preparing for the rush of new Group commercial facility openings by hiring andtraining personnel and further improving the quality of our services. At thesame time, we are working to strengthen our business foundation bybuilding a service supply system in the southern area centering on Ho Chi
Minh City, where we already have a base, and the northern area centering
on Hanoi, as well as in the central area in Hue City and Da Nang City,
where we plan to newly expand our business from FY2024 onward.

What future do you envision as therepresentative of AEON delight Vietnam?
Despite the temporary slowdown amid the COVID-19 pandemic, we havesteadily expanded our business to date, thanks to our earnest, hardworking, and team-oriented employees. On the other hand, the turnover rate
is very high in Vietnam as a whole, and employee retention is positioned
as one of the management issues for companies, and our company is no
exception.
As a business leader, I still have much to do to improve the retention
rate of employees, who are the source of our competitiveness, bycreating attractive positions for them through business expansion andnew service development, fostering an organizational culture that encourages employees to proactively take on challenges that fulfill each individual's desire to grow, and developing and expanding benefit programs to
support these efforts. Through these efforts, we aim to create a company
where each and every employee can be proud of their work and envisiona better future with. Through this, both the country of Vietnam and AEON
delight Vietnam will continue to grow, and our employees can be happierthan ever. This is the future I envision.

CS staff that responds to customer inquiries
as a moving information desk.
There are a number of CS staff who have beenpromoted to site managers in charge of the
field, as knowledge of all aspects of the facility
and strong communication skills are required.
roamed around facilities and served as guides. In addition to patrollingthe building and responding to inquiries from visitors and calling out tocustomers in need, the attendants also check for abnormalities in thebuilding and, if necessary, take initial action and coordinate with facility
staff, security officers, cleaning staff, and other personnel. The attendantssmoothen facility operations and are highly appreciated by facility owners
and visitors alike. The CS service was adopted by all Aeon Mall storesand is now a familiar feature at local Aeon Malls, creating a safe, secure,and comfortable environment for the facilities while building AEON
delight's brand.
In addition, Vietnamese people love hot pot dishes, and many of the
facilities that we manage have restaurants that serve hot pot dishes.
Because of this, there have been many small fire incidents since we firstbegan operations. To address this, we established a specialized teamdedicated to fire prevention, and in addition to regular in-house training,
we conduct training in cooperation with local fire departments andconduct educational activities such as education and guidance on fire
prevention management for all facility employees. We refer to this fire
prevention service as fire control locally, and I believe this is somethingunique that we offer.

29

Fire control team members teaching facility employees how to use fire
extinguishers.

More than 90% of employees participate in the annual company team building trip

30

Sustainability Management■ Risk Management| Basic Approach |As a part of the AEON delight Vision 2025, we have stated that the AEON
delight Group aims to become an environmental value-creating company
that resolves social issues in Asia. In addition, we have defined threesocial issues as pillars of our growth strategy, which are ensuring safety
and security, resolving labor shortages, and addressing environmental
issues.
The social conditions surrounding our business activities will continue
to change dramatically, and the demands and needs of society forcompanies are likely to change as well. With the aim of creating a sustainable society, the AEON delight Group has been promoting ESG management since 2021, which is based on the two pillars of reducing risk andtaking advantage of business opportunities.
In August 2021, we established the Basic Policies for Sustainability asa basic approach to promoting ESG management. In addition, we
identified issues that we believe require special attention as material
issues in 2021. We identified 12 items in five domains, including ensuringsafety and security, resolving labor shortages, and addressing theenvironment, as well as using technology and enhancing governance,
which we believe are necessary to achieve sustainable growth, and areworking on initiatives to address these items.

Company-wide risk management process
The AEON delight Group implements risk management in response toimportant risks based on the AEON delight Group Basic Regulations for
Risk Management. The Risk Management Committee selects key risks
based on a risk assessment, and each appointed key risk owner is
responsible for implementing and monitoring risk mitigation measures.
The Risk Management Committee receives reports from key risk owners,
evaluates and analyzes them, and reports to the Board of Directors.

FY2022 Subcommittee discussion topics
Subcommittee

Discussion topic

Human rights,
safety and health

Implementation of human rights training
Promotion of health and safety measures throughthe Central Health and Safety Committee
Promotion of health management

Environment

Formulation of environmental policies andestablishment of environmental targets

Supply chain

Discussion on establishing a code of conduct
for business partners (ongoing in FY2023)

For details, see pages 49 Risk Management

For details, see pages 21-22 Materiality

Sustainability-related risks| Basic Policies for Sustainability |AEON delight’s management philosophy is “We Pursue the Creation of ‘Environmental Value’ for our Customers and for the Local Communities.” Based on this management philosophy, we will contribute to solving social issues and achieving a sustainable society by creating"environmental value" in all aspects of our business together with our many stakeholders.
● We will strive to create a safe, secure, hygienic, and healthy usage environment in and around our facilities.
● By providing solutions that meet society's expectations, we will contribute to achieving a decarbonized society, conserving biodiversity, and promoting recycling.
● We will comply with laws and social norms, build relationships of mutual trust with our business partners, and conduct fair business activities throughout the supply chain.
● We will respect the human rights of each individual and create a vibrant organizational culture in which diverse human resources can demonstrate their abilities.
● As a corporate citizen, we will engage in social contribution activities that aim for a better environment and society.

Formulated on August, 2021

The AEON delight Group views climate change risks under the TCFD andrisks under the materiality issues as sustainability-related risks. The
Sustainability Committee evaluates, analyzes, and responds to thesesustainability-related risks.

■ Indicators and targets
In FY2021, we have identified 12 materiality issues that are social issues
that we will focus on, and have set 2030 targets for each of these items.
The Sustainability Committee monitors the status of initiatives related tomateriality issues. In addition, we disclosed our results for FY2021 andFY2022. With regard to the 2030 targets, we are looking into the possibility of revising them in the future to align them with the direction of the next
medium-term management plan to be launched in FY2024 onward.
For details, see pages 21-22 Materiality■ GovernanceManagement system to promote ESG management
In April 2022, we established the Sustainability Committee as a company-wide promotion body for ESG management, and have been promoting
discussions on how to resolve social issues and create a sustainable
society through our business activities. The committee is chaired by the
President and convenes at least twice a year, calling together the
executive officer in charge of ESG, the executive officers in charge ofrelated operations, and other relevant affiliates.
The Sustainability Committee determines the highest priority issues
based on the Basic Policies for Sustainability and Materiality (key issues),
formulates related policies, targets, and key measures, and manages
their progress. For priority issues, we established subcommittees headedby an executive officer to ensure effective implementation of initiatives.
The results of these activities are reported annually to the Board of
Directors.

Promotion structure chart centered on
the Sustainability Committee

Board of Directors
Approve

ReportSustainability Committee
Committee Chairperson: President and Representative Director

Subcommittees by theme
Diversity
Environment

Supply chain

Subcommittee Chairperson: Executive Officer
Instruct

Business Unit

HQ, regional office,branch office, area, site

31

ReportSales
department

FY2023 subcommittee meetings

Diversity subcommittee| Sustainability Committee Meeting Report |In FY2022, the first year of operating the Sustainability Committee, we
identified human rights, safety, and health, as well as the environment
and the supply chain, as issues that society is highly concerned about
and that we must address as a priority. For each issue, we established asubcommittee with an executive officer serving as the subcommittee
chair. The Human Rights, Safety, and Health subcommittee focused on
activities related to respecting human rights, occupational safety andhealth, and health management, with the Environment subcommittee
focused on our energy use and waste emissions, and the Supply Chain
subcommittee on supply chain management related to the environment,
human rights, and other issues.
In FY2023, we dissolved the Human Rights, Safety and Healthsubcommittee as a developmental step, and established a new Diversity
subcommittee to complement the Environment and Supply Chain
subcommittees. The Diversity subcommittee discussed measures toincrease the ratio of female employees and managers at AEON delight,
while the Environment subcommittee newly set GX as a theme to workon.

Environmental subcommittee

FY2022 Sustainability Committee meetings
Management
department

Meeting date

Key discussion topics

June 2022

Established committee,
explained subcommittee activities

October 2022

Subcommittee interim activity reportFebruary 2023

Subcommittee activity report,
FY2023 implementation policy

Supply chain subcommittee

32

TCFD

Endorsed TCFD recommendations and formulated strategies

Risk/Opportunity

Overall Evaluation

Timeframe

Increase in procurement costs due to supply chain disruptions

MediumMedium-term

Opportunity

Expansion of demand for support to strengthen disaster prevention
response and early recovery measures in anticipation of more severe
natural disasters

Mediumto large

Medium-term

Risk

Operational impact (reduction or shutdown of distribution center functions), inability to operate stores, inventory loss from damaged and discarded merchandise
Decrease in earnings due to work restrictions, operational impact, employee
injuries and illnesses, and difficulty in recruiting human resources due to theincreased number of extremely hot days

MediumMedium-term

Opportunity

Expansion of demand for cleaning and disinfection services in response toincreased risk of infectious diseases due to global warming

Small

Medium-term

Area of impact

Physical risk
The AEON delight Group supports the Task Force on Climate-related Financial Disclosures (TCFD) recommendations to promote
understanding and disclosure of the impact of climate change on our business activities. We will explain the AEON delight Group's
strategy and initiatives on climate change and our indicators and targets based on the TCFD's recommendations.
WEB

Aeon decarbonization vision（Aeon Co., Ltd.)▶ https://www.aeon.info/en/sustainability/datsutanso/

Sourcing

Direct operation

Material Issues▶ https://www.aeondelight.co.jp/english/sustainability/management/materiality.html
Disclosure Based on TCFD Recommendations▶ https://www.aeondelight.co.jp/english/sustainability/environmental/tcfd.html
For more details on Governance and Risk Management, see pages 31-32 Sustainability Management

We have adopted ESG management, which is designed to solve social
issues through business, and have identified Materiality issues, which
include climate change and global warming countermeasures and nature
conservation and environmental impact reduction. In addition, as amember of the AEON Group, we will support initiatives to reduce total
GHG emissions from stores to zero in accordance with the AEON
Decarbonization Vision.
After considering both the opportunities and risks associated withclimate change, we believe that the opportunities for business activities
will outweigh the risks if we properly manage the risks and enhance ourcrisis response capabilities developed over the years to counter disasters

and other crises, while also reinforcing our customer decarbonization
support services, including services aimed at reducing energy consumption in facilities. We will continue to extensively analyze the risks andopportunities that climate change poses to our business, confirm thedirection of our own initiatives, and reflect them in our management
strategies, thereby improving the resilience to climate change for ourGroup and our customers. Furthermore, we will proactively disclose
information regarding our efforts to address climate change in order tohelp create a decarbonized society and ensure our sustainable growth as
a company.

| Strategy |The Group has selected the "less than 1.5°C/ 2°C scenario," in which theimpacts on the transitional side become apparent, and the "4°C scenario," in which the impacts on the physical side become apparent, as
published by the Intergovernmental Panel on Climate Change (IPCC) andthe International Energy Agency (IEA). For the time frame, we selected
2030 for the medium term and 2050 for the long term. The analysis
covered all domestic businesses (excluding certain support businesses),
which comprise about 90% of the Group's sales.

Introduction of carbon tax and increased costs

Increase in renewable energy procurement costs

We expect a carbon tax to be introduced in Japan, but we estimate thatthe additional cost will be limited to less than 1% of the Group's net
income based on our calculations. We will continue our efforts toconserve energy in order to reduce the impact on our business.

In the event that the AEON delight Group switches 100% of our electricity
procurement to renewable energy sources in order to achieve the AEON
Decarbonization Vision, which aims to reduce the total amount ofgreenhouse gas emissions from AEON Group stores to zero, we expect
the additional cost is expected to be limited to less than 1% of ourGroup's net income.

Significant risks/opportunities and their impact* For transition risk, "SDS" (IEA WEO2020, less than 2°C scenario), "NZE" (IEA Net Zero by 2050, 1.5°C scenario), SSP1-1.9, SSP1-2.6 (IPCC AR6, less than 2°C scenario) (equivalent to RCP2. 6 of AR5) are referenced for less than 1.5°C/ 2°C scenarios. For physical risk, SSP2-7.0 (IPCC AR6, 4°C scenario) (equivalent to RCP8. 5 of AR5) and STEPS (IEA,
4°C scenario) are referenced for 4°C scenarios.

Growing demand for decarbonization and services
for energy saving

Occurrence of major disasters caused byclimate change

The AEON delight Group provides a wide variety of services to help
combat global warming, including support for energy conservation invarious types of facilities, fluorocarbon management services, andproposing environmentally friendly materials. We will continue to develop
solutions that fully support our customers' decarbonization efforts.

We immediately establish an emergency response headquarter in theevent of a major or wide-area disaster. By leveraging our internal andexternal networks, we have supported our customers' crisis management
by restoring damaged facilities, dispatching support personnel,
coordinating with relevant government agencies, and procuring
equipment and supplies for disaster response. We are working to further
enhance our disaster resilience, with the AD Solution Centers (in Osaka
City and Komaki City, Aichi Prefecture), which serve as core disasterprevention centers in the event of a disaster, constantly collecting andanalyzing disaster information and remotely monitoring managed
facilities for abnormalities to prepare for the risks posed by disasters. In
addition, our Headquarters in Chiyoda-ku, Tokyo, is equipped to function
as a substitute AD Solution Center. Going forward, we will continue todevelop disaster prevention and mitigation systems, including business
continuity plans (BCPs), not only for ourselves but also for our customers.

Risk/Opportunity

Area of impact

Overall Evaluation

Timeframe

Transition risk
Sourcing

Risk

Direct operation

Risk

Opportunity

We propose energy-saving air conditioning equipment and large-scale
facilities, including LED lighting, which can significantly reduce electricity
consumption, in addition to introducing BEMS (Building and Energy Management System), an energy management system that monitors, controls, andvisualizes electricity consumption in buildings and other structures.

■ Implementing an open network system
We propose the introduction of an open network system that networks thevarious equipment in a facility and enables centralized management in real time.
This system allows customers to operate their facilities efficiently by making fulluse of remote operations and also contributes to energy saving in the facilities.

■ Providing fluorocarbons management services
We provide simple and periodic inspections for Class 1 Specified Products*, aswell as administrative services on behalf of customers based on the Act on
Rational Use and Appropriate Management of Fluorocarbons, which requires
maintenance and the creation of a database. We also actively propose to ourcustomers the introduction of fluorocarbon-free refrigerated showcases, which
are more energy-efficient and have a very low GWP (Global Warming Potential).
* Class 1 Specified Products: Refers to products such as commercial air conditioners and commercial refrigeration and freezing equipment in which chlorofluorocarbons are used.

As a result of the scenario analysis, we identified the following as important risks and opportunities for our Group.

33

Products & Services■ Proposing energy reduction in facilities

Selection of scenario

Products & Services

Risk

Increase in raw material prices due to introduction of carbon tax

Small

Medium-term

Introduction, rise, and expansion of the scope of carbon tax

Small

Medium-term

Increase in electricity and fuel costs

Small

Medium-term

Capture demand for environmentally friendly products and services

MediumShort-term

Reduction of cost burden for customers by providing services related toenergy conservation (renewable energy, energy saving, LEDs, sensors,cooling systems, etc.)

MediumShort-term■ Proposing environmentally-friendly commercial products
Based on the Aeon Plastic Usage Policy, which aims to halve the amount ofdisposable plastic by 2030 (compared to 2018), we are promoting the
reduction of plastic materials used in stores. We are also working onchanging spoon and fork materials to paper and wood, including FSC-certified materials, and have developed a four-layer paper straw in-house that isboth strong and water-resistant. In addition, we propose the use of plastic
shopping bags and packaging materials that incorporate biomass plastics
and inks containing biomass-derived ingredients to our customers.
WEB

For details, see pages 07-08 AEON delight's Strengths| Indicators and targets |AEON Decarbonization Vision
Based on the AEON Decarbonization Vision, the AEON Group aims to
reduce the total amount of greenhouse gas emissions from its stores tozero. The AEON delight Group will also contribute to the decarbonizationof society by promoting energy conservation at customer facilities andother measures to combat global warming, as well as through selling
environmentally friendly products.

Materiality-based targets
The AEON delight Group has identified 12 materiality issues as priority
issues to be addressed. We set 2030 targets for each materiality issue,and have established environmental targets for "climate change/global
warming countermeasures" and "nature conservation and environmental
impact reduction".
For details, see pages 21-22 Materiality

Sustainable Resource Use▶ https://www.aeondelight.co.jp/english/sustainability/environmental/resource.html

34

Environment

Society

Aiming to balance a prosperous life with environmental
conservation

Human Resource Development

In FY2022, the AEON delight Group formulated the AEON delight Environmental Policy. At the same time, we set targets andmeasures by issue with regard to the environmental impact of our company and launched new initiatives.

| AEON delight Environmental Policy |Our business objective is to provide optimal solutions for customer facilities, while working to ensure that our services and products are
sustainable and contribute to both the enrichment of people's lives and the preservation of the global environment.
In promoting our efforts, we will operate an environmental management system that will be reviewed regularly and continuously improved toenhance our environmental performance.

| Human Resource Development Policy |1

We will work to reduce greenhouse gas emissions in all of our business activities and in customer facility environments in order to createa decarbonized society.

2

We will promote conservation activities based on an understanding of the impacts and benefits of our business activities on the ecosystem.

3

We will work to promote resource recycling to ensure sustainable resource use.

4

We will comply with all laws and regulations related to environmental matters and strive to prevent pollution. In addition, we will disseminate this policy to our employees and all those who support our business activities, and make it widely available to the public.

5

We will work with our customers, partners, and many others to expand the circle of our efforts in each local community.

① We will care for the safety and health of our employees and will not neglect to invest in our human resources.
② We will respect the knowledge, skills, and experience of our employees as assets and continue to invest effectively in education toenhance their value.
③ We will support our employees in their professional development and acquisition of qualifications so that they can work with professionalism and pride in their respective fields.
④ We will provide training programs linked to company policies to motivate and inspire employees to contribute to management and theimprovement of business performance.

Human Resource Development System

Environmental Management Promotion system▶ https://www.aeondelight.co.jp/english/sustainability/environmental/management.html

WEB

AEON delight Group, as a group of facility management experts, focuses on the development of professionals with both technical capabilities and human capabilities in order to continue contributing to the resolution of issues faced by our customers andlocal communities.
AEON delight recognizes that the shortage of labor and the aging of qualified personnel in the facility management industry is a
critical issue that must be addressed. In addition to transforming our business model through digital transformation, we will
work to secure human resources through a combination of external recruitment and internal training, such as internal training
for technology, management, and qualifications, internal and Group recruitment, and early development of young talent.

| Environmental Targets |Career grade

G1

G2

G3

Position

New employee

In charge

Emergency response seminar

The AEON delight Group is working to reduce Scope 2 greenhouse gas(GHG) emissions by purchasing environmental value equivalent to theamount of electricity used at our Headquarters, as well as by reducing
electricity consumption under our existing environmental management

system. In addition, for Scope 1 emissions, we have decided to reducefossil fuel consumption by switching our company-owned vehicles. Our
specific targets are as follows.

Technical training

M3

S1

Electrical, HVAC, firefighting, plumbing, andrefrigeration maintenance management

Practical facility management,
maintenance, and inspection

Seminar for managers entrustedwith hospital cleaning

S2

SE

Office manager, headquarter general manager,
regional office manager, and division manager

Area manager & site manager

Basic facility management

Type 1 and 2 electrical engineer

Environmental targets for areas

Environmental targets for sites

1

Prepare for emergencies

1

Prepare for emergencies

1

1% reduction in electricity consumption compared
to 20222

Reduction of electricity consumption

2

Contribute to promoting efficient resource use

3

Appropriately manage waste

2

Initiatives toward our 2030 Targets (Environment)

4

Reduction of electricity consumption

Qualification training

Type 1 fluorocarbon refrigerant engineer

Licensed electrical engineer (Type 2/3)

Fire protection engineer Building environment and sanitation management technician Type 1 and 2 sanitation supervisor Type 3 refrigeration equipment supervisor
Certified facility manager
Class 1, 2 and 3 building cleaning technicians
New employee training
Follow-up training

Management training

Management candidate training

Office manager training

Training for new and current appointments (area managers and site managers)■ FY2022 GHG emissions (non-consolidated)

Executive and executive candidate training

Aeon Business School | Aeon DNA University

Scope1 (direct emissions from fuel use)

Scope2 (indirect emissions from electricity use)

2623t-CO| Promoting proper waste disposal |From FY2022, we also began disclosing our industrial waste emissions.
We properly manage waste while complying with various laws andregulations, such as the Waste Management and Public Cleansing Act
and the Construction Recycling Act, and conduct legal complianceassessments under the ISO 14001 framework.

Industrial waste emissions (non-consolidated)

35

M2

Sequence control and maintenance Firefighting equipment inspection services Instructor training for regional office technical training staff

Environmental targets for the headquarters,
regional offices, and branch offices

844t-CO

Chief

M1

2017

2018

2019

2020

2021

2022

12,328t

16,528t

15,942t

19,774t

18,808t

18,449t

2022
Breakdown ofindustrial waste

Others2

Mixed construction
waste

19.7%

Sludge18.4%

Glass waste
Concrete waste
Ceramic waste

16.2%

Mixed waste

15.5%

Metal waste

12.9%

Debris8.3%

Plastic waste

4.2%

Alkali waste

2.5%

Wood waste

1.9%

Other

0.4%

Overseas trainee

Overseas pre-deployment training

Self-development (Engineer Study, Aeon Self Study, Aeon Study Program)

Initiatives to improve
technical capabilities and expertise
In order to develop professional personnel with both technical capabilities and hospitality skills, we maintain our own Group training facility,
AEON delight Academy Nagahama in Nagahama City, Shiga Prefecture.
We have training equipment for electrical, HVAC, firefighting, etc., as well
as space for learning cleaning operations, and provide about 30 types ofpractical training programs. In addition to training for 14 public qualifications related to the work, we offer content tailored to each participant's
level, such as management techniques in electrical, HVAC, plumbing,and firefighting equipment, emergency response methods, cleaning, andmore.

Training facility AEON delight Academy Nagahama

Outline of Education and Training
Fiscal Year

2019

2020

2021

2022

Number of training courses

237

200

425

346

Total number of trainees

10,025

4,865

11,84014,953Training hours per person

20

9

21

28

Training cost per person(thousands of yen)

75

60

82

108
36

Society

Initiatives to encourage employees
to acquire qualifications
Carrying out facility management operations requires a number ofqualifications. We also encourage employees to acquire qualifications inorder to foster a culture where they are encouraged to actively learn andenhance their expertise.
The Engineer Study program provides subsidies to all AEON delight
Group employees for up to 50% of the cost of taking and purchasing
distance learning courses, e-learning courses, and textbooks for 16
qualifications, with a maximum subsidy of 100,000 yen. In FY2002, we
provided subsidies of 2.13 million yen to 159 employees. From FY2022,
we launched a program to provide assistance with examination and initial
registration fees for eligible certifications, even if the certification was
obtained outside of the Engineer Study program.
For new graduates, we require them to acquire the qualification of a
Type 2 Electrical Engineer at the time of their entry-level training. We also
aim to have them obtain the Type 3 Chief Electricity Engineer or Building
Environment and Sanitation Management Technician certification within
three years. In addition, we manage 207 types of qualifications held by
our employees and provide allowances to our employees for holding
qualifications and appointments. In FY2022, we provided 63.58 million
yen (basic qualification allowance) as allowances for qualifications held.
Starting in FY2023, we will provide rewards to those who acquire thequalifications, and will also publish the information in the company
newsletter to motivate employees to acquire qualifications.

| Grade system and evaluation system |As a framework for grading employees, we have introduced a Career
Grade Certification System that treats and trains employees according totheir individual abilities, regardless of their academic background, age,gender, or nationality. There are seven career grades, with corresponding
positions from general manager and regional office manager to chief at
each level. We maintain fairness by determining appointees through a
Career Grade Appointment Exam, which consists of a personnel
evaluation, a written test, and an interview. In addition, from March 2023,
we introduced a Specialist System for employees holding electrical,
construction, and other high-level certifications to perform duties basedon their specialized knowledge and skills. With a multilayered career paththat enables employees to move back and forth between the Career
Grade Certification System and the Specialist System, we aim to secure
professional human resources while helping employees achieve their
desired career paths and lifestyles.
The evaluation system is also based on the job system, and personnel
evaluations are conducted with the aim of ensuring fair treatment,
demonstrating abilities, and building careers. Personnel evaluations are
conducted from two angles: a competence evaluation based on
expertise, ability, and subordinate development, and an achievement
evaluation based on performance, policy matters, and progress against
self-set targets. To enhance buy-in, employees set their own targets
semiannually, and their progress is monitored through mid-year
interviews, with feedback provided on progress.
For more details on the Career Grade Certification System and Position,
see pages 36 Human Resource Development System

For details on the number of key qualified personnel,
see P07-08 AEON delight’s strengths| Management Talent Development System |With the aim of systematically developing management talent, theNomination and Compensation Advisory Committee engages in discussions regarding the development of management talent. The committee
selects candidates for executive officers and senior management
positions (regional office managers, general managers, managers, etc.)
and deliberates on career plans and placement plans that will lead to thedevelopment of the candidates.
Furthermore, starting FY2022, in addition to the existing management
training, we newly introduced an branch office manager training programand conducted training five times during the year for 34 eligible branch
office managers. For the area manager and site manager positions, which
serve as the head of each area and facility under the branch officemanager position newly created in FY2022, we held five training sessionsfor 437 employees for a total of five days to indicate AEON delight’s
direction and clarify their own roles.

Achieving diverse workstyles
with flexible work
We employ a monthly flexible working hour system, which enables us toflexibly adjust working hours according to the volume of work, thereby
curbing overtime and preventing long working hours.
Furthermore, we took the COVID-19 prevention measures as anopportunity to introduce a remote work system in FY2021. We are also
working to diversify work locations, with all employees, seconded
personnel, and temporary employees approved by the company having
the option of working from home, a leased satellite office, or a mobile
office, in addition to taking the conventional route of commuting to theoffice.
WEB

Human Resource Management▶ https://www.aeondelight.co.jp/english/sustainability/social/hr.html
Labour Practices▶ https://www.aeondelight.co.jp/english/sustainability/social/employee.html

Occupational Health and Safety| Basic Approach || Health and Safety Education |For the AEON delight Group, safety and security is a fundamental
concept that ties into our management principle. In addition to providing
safety and security to customer facilities, we aim to create a working
environment that meets health and safety standards for all affiliates,
including our employees and our partner companies. My Promise, which
defines the basic attitude of our employees, states that “I will give safety
top priority and strive to prevent any accidents”. In addition, we recognize
the risk of accidents on the job in “appropriate labor management” aspart of our Materiality. Based on our basic policy on occupational safety
and health, we strive to promote occupational safety and health inaccordance with labor-related laws and regulations.

In addition to special safety training for handling electricity at the time ofjoining the company, we provide special training based on the Industrial
Safety and Health Act and in-house training for employees who performhazardous work in the field of construction work and facility management. The Clean Crew Delight Handbook, which all cleaning personnel,
including those from partner companies, carry at all times, also contains
points to keep in mind to prevent accidents from occurring during work,
and we regularly review the handbook together.
Furthermore, the AD Solution Center collects and shares information
on incidents and accidents through the Incident and Accident System,
analyzes and identifies the causes, and raises awareness to prevent
recurrence. Information on all incidents and accidents, including occupational accidents at contracted properties, is collected at all times andshared with the Quality Control Division, which issues reminders to eachsite as needed. In an effort to prevent recurrence, the results of theseanalyses are shared and disseminated to all workplaces in the AD
Solution Center Newsletter published once a month, as well as in acollection of accident response case studies that summarize points tokeep in mind to prevent accident recurrence during operations.

Basic Policy on Occupational
Safety and HealthWith respect for people as the basic philosophy, we strive
to prevent occupational accidents and maintain the healthof all employees by adhering to safety and healthstandards and promoting safe and healthy activities
tailored to the actual conditions in the workplace.

| Occupational Safety and Health System |In accordance with the Safety and Health Management Regulations andthe Safety and Health Committee Regulations, we determine policies andtargets for safety and health activities, identify issues, and take actions
for improvement.
In accordance with the Industrial Safety and Health Act, we set up a
Safety and Health Committee at workplaces with 50 or more employees,
and also held Workplace Safety and Health Meetings as an activity in linewith the Safety and Health Committee at workplaces with less than 50
employees, which is not required by law. In addition, the labor-management convenes the Central Safety and Health Committee as a mechanism to oversee the entire company. The Central Safety and HealthCommittee has the executive officer in charge of human resources as the
manager responsible for health and safety, and the health and safety
managers of relevant business segments and Group companies attend
the committee meetings.

| Simulation training using VR |We began incorporating virtual reality (VR) tools into our safety and healthtraining from September 2022, with the aim of improving hazard sensitivity and acquiring proper work procedures through simulated accident
experiences. The VR content is designed to boost effective learning,highlighting the following three incidents that can lead to serious
accidents in facility management operations and quizzing participants onimportant points.
(1) Arc flash injuries caused by electrical equipment(2) Falling down from a stepladder(3) Falling into or over a manhole
The VR tool is permanently available at our training facility AEON
delight Academy Nagahama, and a total of 539 people, mainly Chief
Electricity Engineers, went through the VR training program in FY2022. In
FY2023, we plan to expand the scope of the program to include new hires
in facilities management, cleaning, and support services, and provide
training to approximately 1,300 employees. In addition to facility management, we also plan to develop VR content related to other operations
such as security and cleaning management going forward.

| Central Safety and Health Committee || Young People’s Future Discussion Project |In FY2023, we carried out activities under the Young People's
Future Discussion with the aim of fostering young talent who willtake on the challenges of business creation and business modeltransformation with an eye toward future management issues anddisruptive innovation. Fourteen young employees in their 20s and
30s, selected from all over Japan, participated in a total of ten
activities over a four-month period under the three themes of DX
of business processes, use of cutting-edge technology, and new
business.
They put together a proposal that combined social issues with
AEON delight Group resources, and made a final presentation to
the management team.

The Central Safety and Health Committee formulates a safety and healthmanagement activity plan every year with basic policies, priority
initiatives, and monthly priority safety and health activities, and strives toimprove safety and health by following the PDCA cycle. Each workplaceholds a monthly Health and Safety Committee meeting based on theannual plan, and each regional office and the Central Health and Safety
Committee monitor the activities to ensure continuous improvement.
In addition, to prevent recurrence, we analyze the causes of pastoccupational accidents, formulate countermeasures, and, if necessary,
make rules for horizontal deployment.

Occupational accident frequency rate

Occupational accident
frequency rate37

VR screen (example)

2019

2020

2021

2022

1.77

2.50

3.80

2.71

Picture of employee wearing VR goggles

38

Society

Diversity

Promoting Health Management

In our Basic Policies for Sustainability, we have stated that we will"create a vibrant organizational culture in which diverse human resources can demonstrate their abilities". In addition, we believe that promoting diversity is not only a way to solve social issues, but also an essential factor in ensuring sustainable growth and creating business opportunities, and we have positioned it as one of our Materiality issues.
We prohibit discrimination on the basis of race, nationality, ethnicity,
gender, age, place of birth, religion, educational background, physical ormental disability, sexual orientation and gender identity, and aim to be acompany where each and every employee can fully exercise their individuality and skills.

| Diversity in management and recruits |The Company and its group have grown through multiple mergers andconsolidations since its establishment, and its employees and managers
all come from a diverse range of companies. For AEON delight(non-consolidated), the ratio of mid-career hires in management positions is already about 50% as of FY2021.
The Company also strives to recruit the best possible personnel
regardless of nationality, country of origin, or gender. It hires employeesof various nationalities and countries of origin, mainly from China and theASEAN region where the Company has business operations. Of theCompany's (non-consolidated) new graduate hires for fiscal 2023, 41.3%
were women and 10.9% were non-Japanese.

Initiatives to achieve work-life balance
Introduction of annual hourly paid leave system
In July 2023, we introduced an annual hourly paid leave system thatenables employees to take paid leave in one-hour increments as a flexible
way of taking leaves to support diverse work styles. Full-time, contract,
temporary, and part-time employees are eligible for up to five days ofleave per year.

Creation of the Childcare and Nursing Care Guidebook
In April 2023, we created the Childcare
and Nursing Care Guidebook, which
outlines the system for employees totake leave and work during childbirth,childcare, and nursing care. In collaboration with the labor union, we prepare
key points regarding legal revisions
such as maternity and paternity leave,
as well as internal regulations, benefit
schemes, and internal consultation
services. We aim to create a comfortable work environment by helping
employees balance work and family life.

Extending the retirement age to 65
Gender wage
gap

Paternal leaveacquisition rate

All workers
Breakdown
Regular workers (full-time employees)
Non-regular workers(contract, temporary, part-time)
Contract and temporary employees
Part-time employees
13.0%: 57.1%: 81.2%: 68.3%: 81.8%: 75.6%

Average of 116.2 days
FY2022

Non-consolidated

From March 2022, we extended the retirement age for regular employees
from 60 to 65, in order to actively leverage their experience, skills, andknowledge regardless of age. The same job categories and work systems
apply to employees after the age of 60. There is no retirement age forpositions after reaching 60 years of age, and the salary system is basedon job duties and positions, creating an environment in which eachgeneration can play an active role. Even after reaching the mandatory
retirement age of 65, employees may be rehired up until they reach theage of 70 if they request it and it is approved by the company.
WEB

Diversity▶ https://www.aeondelight.co.jp/english/sustainability/social/diversity.html

Respect for Human Rights
In accordance with our Basic Sustainability Policy and Aeon's Human
Rights Policy, we adhere to the human rights norms set forth in theInternational Labor Organization's (ILO) ILO Declaration on Fundamental
Principles and Rights at Work, and respect human rights by supportingand practicing the United Nations Guiding Principles on Business andHuman Rights.
AEON delight conducts human rights training and awareness programsfor its directors and all employees to disseminate its human rights policy
widely in the workplace and to put respect for human rights into practicein business operations.
In FY2022, we conducted human rights training for 13,052 participants.
We set up training programs for officers, managers, and general employees by job level and at the time of hiring, with themes ranging from basic
knowledge of human rights to business and human rights. In addition, we
appointed human rights awareness officers at each of our Group companies to hold regular meetings to promote understanding of and resolve
issues related to human rights. In FY2023, in addition to our past
initiatives, we began performing human rights due diligence. We set six
categories of issues under the three aspects of human rights violations byour own employees, business partners, and local communities, and39

conducted an assessment with a total of 33 check items and identified thehuman rights risks that we believe have the greatest negative impact onhuman rights as key human rights issues. Going forward, we will begin
activities to prevent and mitigate these issues.

Key human rights issues identified
Working environment in the AEON delight Group
Harassment in the AEON delight Group and at business partners
Working environment for foreign workers in the AEON delight
Group and at business partners
Code of Conduct in the AEON delight Group and at business partners
Occupational safety and health in the AEON delight Group and at
business partners

WEB

Human Rights Basic policy▶ https://www.aeondelight.co.jp/english/sustainability/social/respect.html

AEON delight Group is committed to maintaining and improving thehealth of its employees in accordance with the Aeon Commitment to
Health & Productivity Management. We will promote the health andproductivity of our employees through "promotion of mental and physicalhealth" and "creation of a safe, secure, and energetic workplace."
Aeon's belief is that human resources are our greatest management
resource for realizing the health and happiness of employees andcustomers and for contributing to local communities. Based on thisbelief, Aeon aims to be a corporate Group whose diverse workforce ishealthy, able to demonstrate their abilities, and continues to play anactive role. The management issue we want to solve through health andproductivity management is to ensure that each employee is healthy both
physically and mentally, that they want to continue working for a longtime, and that they are motivated to work.
The health of employees is the cornerstone of company activities.
Based on the belief that only when employees are healthy can we provide
services that bring health and happiness to local customers, Aeon
announced the Aeon Commitment to Health & Productivity Managementin 2016 and have been promoting health and productivity management.
In addition, AEON delight and three AEON delight Group companies
received the Health & Productivity Management Outstanding Organization certification for the first time in March 2023 from the Nippon Kenko
Kaigi.

Aeon Commitment to Health & Productivity Management
Aeon will support the health of its employees and their families.
And together with its employees, Aeon will realize
the health and happiness of local communities.

Ultimate goals of health management
Increase employee satisfaction / Reduce turnover /Increase labor productivity

Promotion policy❶ Mental and physical health❷ Creation of a safe, secure, and energetic workplace❸ Company-wide health promotion

Promotion goals
Target for FY2022
100% attendance at regular health checkups (Actual: 99.96%)
13% reduction in the number of smokers from the previous year

AEON delight Group companies with
the Health & Productivity Management
Outstanding Organization certification
AEON DELIGHT ACADEMY CO., LTD.
AEON DELIGHT SECURITY CO., LTD.
AEON compass Co., Ltd.
WEB

Promoting Employee Health▶ https://www.aeondelight.co.jp/english/sustainability/social/health.html

Supply Chain Management
AEON delight Group's Basic Sustainability Policy stipulates that we will“build relationships of mutual trust with our business partners andconduct fair business activities throughout the supply chain.”
To foster mutual trust and promote continuous development throughfair transactions with partner companies, we conduct questionnaires forbusiness partners to monitor the actual status of our transactions. In
FY2021, we conducted a web-based survey of 1,713 partner companiesof eight Group companies. After reporting the results of the survey to theBoard of Directors, we identified priority issues that need to be addressedand have implemented measures to resolve these issues. We also
provide feedback to the partner companies that responded to the survey,
and ask for their cooperation in responding to future surveys. From
FY2023, we plan to introduce the new Aeon Compliance Hotline andBusiness Partner Hotline, while also checking our compliance with
Aeon's Human Rights Policy.
In March 2022, we announced our endorsement of the Declaration ofPartnership Building*. AEON delight views this declaration as a means ofcoexistence and co-prosperity with our partner companies throughsustainable relationship building, as well as a way to add value andpromote fair business practices throughout the supply chain.
* Established by the Council for the Promotion of Partnership Building for the
Future, whose members include the Chairman of Keidanren, the President of
the Japan Chamber of Commerce and Industry, the President of RENGO, andrelevant ministers. In order to build a sustainable relationship where large andsmall companies can grow together, company representatives have declared
coexistence and co-prosperity throughout the supply chain, new partnershipsthat transcend size and af filiation, and adherence to desirable businesspractices between parent companies and subcontractors.

Declaration of Partnership Building (Excerpt)
We aim for coexistence and co-prosperity by establishing a newmechanism for value-added improvement, in addition to leveraging DX to share and visualize information throughout the
supply chain and improve operational efficiency.
Along with supply chain initiatives, we will contribute to therealization of a sustainable society by promoting efforts tocombat climate change and global warming and reduce ourenvironmental footprint.
In accordance with the Basic Sustainability Policy, we will strive
to comply with laws and regulations, conduct fair business,ensure compliance, and respect human rights throughout our
supply chain based on a relationship of mutual trust.

WEB

With Our Partners▶ https://www.aeondelight.co.jp/english/sustainability/social/partner.html

WEB

AEON delight “Declaration of Partnership Building” (Japanese)▶ https://www.biz-partnership.jp/declaration/8306-19-00-tokyo.pdf

40Corporate Governance

Basic Philosophy| Approach to the Composition of the Board of Directors |Based on our Management Principle, "We pursue the creation of 'environmental value' for the customers and for the local
communities," we fulfill our responsibilities to our stakeholders through sustainable growth of our company and by increasing
the value of our company, and implement an optimal corporate governance system designed to best meet the needs of society
and the business environment.
In AEON delight Corporate Governance Guidelines, we have defined our corporate governance system as "a mechanism thathelps to bring about sustainable growth of our company by maintaining balance between 'offense' and 'defense' in the fourareas as follows":

AEON delight is a Company with Board of Corporate Auditors, and our
corporate auditors and Board of Corporate Auditors audit theperformance of duties of our directors and Board of Directors. AEON
delight’s Board of Directors fulfills both executive and supervisory
functions, and we have introduced an executive officer system to speed
up the decision-making process in the area of execution, delegating theexecution of business in specific areas to executive officers.

The Board of Directors is composed of a diverse group of directors
with various backgrounds of expertise and experience, and we stipulatethat the number of directors shall not exceed 20 to ensure that thefunctions of the Board of Directors are effective and efficient. In addition,
we maintain at least two independent and neutral independent outside
directors. Currently, we have eight directors, of which half, or four
members, are independent outside directors.

Overview of each organization and committee
1

Means for integrating the business activities of the members (executives and employees) of our enterprise under one policy or vector and then utilizing
managerial resources to the maximum degree2Basic promises that underpin the trusting relationships with stakeholders who support our enterprise

3

Preparedness for unexpected ordinary or extraordinary events

4Rules each enterprise should follow for surviving as a member of society

WEB

Name

Number ofmeetings
in FY2022

Board of Directors and Key Meetings
Board of Directors

17

The Board of Directors plays the second most important role in AEON delight's corporate governance system after
the General Meeting of Shareholders. The Board of Directors makes important management decisions and provides
highly effective supervision of Directors, Executive Officers, and other senior management.

Board of Auditors

15

The Board of Corporate Auditors serve a key supervisory function with regard to decisions made and duties
executed by the Directors and Board of Directors. The Board of Corporate Auditors audits the execution of duties bydirectors and senior management, makes decisions on the selection, dismissal, and non-reappointment of accounting auditors, as well as on accounting audits and other matters required by laws and regulations.

16

The Management Committee consists of Managing Officers and above and other members as necessary depending on thecontent of the discussions, and discusses important management matters such as management policies and strategies. In
particular, proposals to be submitted to the Board of Directors are submitted after thorough deliberation by the Management Committee to ensure that the Board of Directors can deliberate on matters fully and make appropriate decisions.

Corporate Governance Basic Philosophy▶ https://www.aeondelight.co.jp/english/sustainability/governance/corporate.html#ctr1386| Corporate Governance Structure Chart | (as of May 22, 2023)
Management
Committee

Ordinary General Meeting of Shareholders
Propose, Vote

InsideOutsideMale/Female Male/Female Chairperson

Appointments and Removals

Accounting Auditor

Audit Report

Propose, Vote

Accounting
Audit

Nomination andCompensation
Advisory Committee
Evaluation Advisory
Committee

Request, Advise

Request, Advise

Special Committee

Report,Approve

ReportParticipate

Internal control
Status report

ReportBoard of Directors

Audit

4 Inside Directors

Business
performance
reportingby directors

Business Execution
Structure of AEON delight41

8

Evaluation Advisory
Committee

1

The Evaluation Advisory Committee was established to strengthen the independence and objectivity of the Board of
Directors. The Committee analyzes and evaluates the effectiveness of the Board of Directors as a whole andprovides advice and recommendations to the Board of Directors.

0

The purpose of the Special Committee is to ensure that the opinions of minority shareholders and other stakeholders
are appropriately reflected in the Board of Directors from a standpoint independent of management and controllingshareholders. The Committee’s chair and all members are independent Outside Directors, and meetings are held
when there is a concern about a conflict of interest between controlling shareholders and minority shareholders.

Report,ProposeSustainability
Committee

3

Chairperson: President & CEO
The Sustainability Committee has been established to promote sustainability as a company-wide promotion bodyfor ESG management. The committee determines and implements priority initiatives based on the Basic Policies for
Sustainability and Materiality.

Risk Management
Committee

2Chairperson: Group Governance General Manager
The Risk Management Committee anticipates the AEON delight Group's current and potential risks through analysis
and evaluation, and establishes a system to reduce major risks and minimize losses.

Group Governance
Enhancement
Promotion Committee

12

Chairperson: Group Governance Division Manager
The Group Governance Enhancement Promotion Committee is responsible for monitoring the status of ongoing
initiatives by the Recurrence Prevention Committee, which was established when accounting irregularities werediscovered at a subsidiary, and for holding discussions regarding the Group's governance and compliance systems.

Corporate Culture
Committee

2Chairperson: Group Governance Division Manager
The Corporate Culture Committee engages in discussions regarding the AEON delight Group's common philosophy,
company-wide dissemination of the Delight Way, and creating the environment for transforming the organizational
culture.

Group Corporate Audit Department
Audit

Audit

Key Internal Committees
Meeting ofGroup Auditors

Approve

Consolidated Subsidiaries
Auditors of Consolidated Subsidiaries
Directors, Executive Officers
Business
Department

Supervise

Sales
Department

Report, Approve
Risk Management Committee
Corporate Culture Committee
Group Governance Enhancement Promotion Committee

Nomination andCompensation
Advisory Committee

The Nomination and Compensation Advisory Committee was established to advise and report to the Board of
Directors on the nomination and appointment of directors and corporate auditors and on the determination of theircompensation, thereby enhancing transparency and objectivity. The Nomination and Compensation Advisory
Committee advises and reports to the Board of Directors on the selection and nomination of candidates for Director
and Corporate Auditor, succession planning for the President & CEO, Group CEO AEON DELIGHT CO., LTD., andincentive plans and compensation for Directors.

Special Committee

ReportSupervise
Management Committee
Regional Office Management
Committee
AEON delight Group Company
Presidents' Committee
Operational Strategy Committee
Progress Review Committee
Credit Management Committee

Board of Auditors
3 Outside corporate
auditors(incl. 2 Independent Director)

President & CEO
Sustainability
Committee

Assess,Confirm

Voluntary Advisory Bodies to the Board of Directors

1 Internal corporate auditor

4 Outside Directors(incl. 4 Independent Directors)

ReportManagement
Departments

Overview

Division,
Regional Office,Branch Office,
Area, Cite

= Four-party coordination:
Auditors, Group Corporate Audit Department,
Accounting Auditor, Outside Directors

WEB

Corporate Governance Overview of Current Corporate Governance System▶ https://www.aeondelight.co.jp/english/sustainability/governance/corporate.html#ctr1388

42

Corporate Governance

Effectiveness assessment of
the board of directors
Evaluation process
The Evaluation Advisory Committee, a voluntary advisory body to theBoard of Directors, administered a self-evaluation based on a questionnaire* in March 2023, and analyzed and evaluated the results. Based on
the results of the analysis and evaluation by the Evaluation Advisory
Committee and an opinion from the Company’s legal counsel, the Boardof Directors assessed the effectiveness of the Board of Directors at a
meeting held on May 19, 2023.
* Self-evaluation based on a questionnaire: All directors and corporate auditors
responded to a questionnaire regarding the effectiveness of the Board of Directors.

■ Evaluation items① Composition of the Board of Directors② Operation of the Board of Directors③ Agenda of the Board of Directors④ Structure to support the Board of Directors⑤ Roles and responsibilities of the Board of Directors⑥ Others■ Overview of evaluation results
We evaluated that the effectiveness of decision-making and supervisionof business execution by the Board of Directors is being maintained inline with the Company's basic approach to corporate governance. The
composition of the Board of Directors is designed to ensure the effective
operation of the Board of Directors, with half of the members beingoutside directors, in consideration of its role as a supervisory function for
management, and the appointment of female directors to embrace
diversity. In terms of operations, we saw improvements in managing theagenda of the Board of Directors meetings based on an annual plan, andin ensuring that outside directors are briefed on the agenda in advanceaccording to a schedule, which helps facilitate effective discussions at
the Board of Directors meetings. On the other hand, we recognize theneed to continue improving existing issues, such as carrying out discussions on important management issues such as business portfolios,
reporting on the status of business execution, and succession planning.

| Criteria for Selection and Independence |AEON delight has established the following criteria for the appointment of
inside directors, outside directors, and corporate auditors. In addition, weemphasize the importance of ensuring independence in appointing
outside directors, and have established our own criteria for determining
independence on top of the requirements for independent directors as
stipulated by the Tokyo Stock Exchange.

■ The selection criteria for candidate internal directors
1. To have character and knowledge suitable to be director.
2. To have sufficient experiences and knowledge useful to the oversightof the business of our company and its relevant companies. To haveexcellent capacity for business management judgment and business
operation.
3. To be able to bear responsibilities for basic policies, strategic planningand business operation of our company and its group companies andbe accountable for the board of directors.

■ The election criteria for candidate external directors
1. To have character and knowledge suitable to be director.
2. To agree with our company’s business philosophy and code of
conducts.

43

3. To have rich experiences as management such as chief executive
officer or have equivalent experiences and knowledge.
4. To be able to make a judgment independently from our company’s
management team.
5. To be able to attend board of directors meetings of our company mostof the time.
6. To meet our company’s criteria of independence.

■ Selection of Corporate Auditors
In making the selection, one or more persons with sufficient knowledge offinance and accounting shall be appointed.

■ Independence criteria for outside directors
Based on the independence criteria stipulated by the Tokyo Stock
Exchange and the Companies Act, the Company defines the criteria for
determining the independence of outside directors at the Company as
those who satisfy the requirements set forth below.
1. A person who is not currently, or has not been for the past 10 years, an
executive director, executive officer, corporate officer, or employee(hereinafter referred to as “executive person”) of the Company, its
subsidiaries, parent company, or sister companies
2. A person who does not fall into any of the following categories atpresent or in the past three years(a) A major shareholder of the Company (a person who directly or
indirectly holds 10% or more of the voting rights of the Company)or an executive person of such a shareholder(b) Partners of the Company's accounting auditor or employees
engaged in the audit of the Company(c) An executive person of the Company's major lender (a lender
whose lending amount exceeds 2% of the Company's consolidated
total assets)(d) An executive person of a major business partner of the Company(a business partner whose transactions with the AEON delight
Group exceed 2% of the annual consolidated sales of the saidbusiness partner)(e) Lawyers, certified public accountants, certified tax accountants, orother consultants who receive annual remuneration exceeding 10
million yen from the AEON delight Group other than remuneration
as directors.
(f) An executive person of a non-profit organization that receives
more than 10 million yen in donations and more than 2% of total
revenues from the AEON delight Group.
(g) Spouses or relatives up to the second degree of kinship of theabove 1 and (a)-(f).
WEB

About Board of Directors and Auditors
Reasons for Appointment of Outside Directors and Outside Auditors▶ https://www.aeondelight.co.jp/english/sustainability/governance/officer.html

Policy on Measures to Protect Minority
Shareholders in Conducting Transactions
with a Controlling Shareholder
AEON delight belongs to a corporate group consisting of Aeon Co., Ltd.
(pure holding company; “Aeon Co. Ltd.”) and Aeon Co., Ltd. consolidated
subsidiaries and equity-method affiliates.
The Company makes its own independent management decisions
related to daily business operations, and confers with or reports to Aeon
Co. Ltd. concerning key management issues. The growth of Aeon Co.,
Ltd. and its group companies leads to more business opportunities for
the Company.
Therefore, the Company believes that collaboration and maximizationof synergies with Aeon Group companies will contribute to the expansionof minority shareholders' interests.

In accordance with Article 9 "Prevention of transactions that go
against shareholders’ interests" of the Company's Guidelines, theCompany ensures the economic rationality of the terms and conditions oftransactions with Aeon Co., Ltd. and its group companies from theperspective of protecting minority shareholders, and concludes particularly important contracts through resolutions at meetings of the Board of
Directors attended by outside directors and outside corporate auditors
who are designated as independent officers and corporate auditors as
stipulated by the Tokyo Stock Exchange, Inc.
In addition, we established a special committee in May 2022 as anadvisory body to the Board of Directors, with the chairman and all
members being independent outside directors, for the purpose of
appropriately reflecting the opinions of minority shareholders and otherstakeholders in the Board of Directors from a standpoint independent ofmanagement executives and controlling shareholders in the event ofmatters that may cause conflicts of interest between controllingshareholders and minority shareholders.

Other Special Circumstances which may have
Material Impact on Corporate Governance| Strategically held shares |■ Approach to strategic shareholdings
We may hold shares of other companies besides subsidiaries andaffiliated companies to a reasonable extent for strategic purposes, suchas to maintain and strengthen medium- to long-term relationships andpartnerships with such companies. On the other hand, we do not holdshares for purposes other than strategic shareholding, such as forinvestment purposes, as a general rule. For strategic shareholdings, we
disclose our purpose of holding these shares.

FY2022 Strategic shareholdings
Total amount shownon balance sheet(millions of yen)

Number ofcompanies
Unlisted shares

866

Shares other than unlisted shares

8

2,254

■ Verification of reasonableness by the Board of Directors

The Company's parent company is Aeon Co., Ltd. and Aeon Co., Ltd. holds
27,613,000 shares (55.96% of voting rights) of the Company's stock. The
Board of Directors of the Company consists of eight directors, including
four outside directors, and is in a position to make independent management decisions. In addition, the Company has appointed three outside
corporate auditors, including two independent officers, to ensure greater
independence in management decisions, and to make its own decisions
regarding management decisions in terms of business operations andfund procurement.
Furthermore, the Company has one officer who concurrently serves as
an executive officer of Aeon Co., Ltd. and has introduced a framework toprotect the interests of minority shareholders by, for example, notallowing the said officer to participate in resolutions on matters related totransactions with controlling shareholders, etc. and consulting a special
committee composed of independent outside directors on matters where
there is concern about a conflict of interest between the controllingshareholders and minority shareholders.

The Board of Directors annually reviews major strategic shareholdings toensure that there are no issues with the aims and rationale for holding
these shares, taking into account medium- to long-term economic
rationale and future prospects. Specifically, we compare our cost ofcapital to the combined benefits of dividends, business profits, and stock
price changes, and then we verify the overall results by taking into
account qualitative information from our business and operating
divisions. As a rule, we sell the shares that we decide not to continue
holding as a result of the verification.

■ Criteria for exercising voting rights
When exercising voting rights, we determine whether to approve ordisapprove each proposal after carefully examining whether it contributes
to maintaining or strengthening a good business relationship with AEON
delight, whether it contributes to the medium- to long-term growth of theinvestee company and AEON delight, and whether there is no obvious
risk that a decline in the stock price would cause AEON delight to suffera significant loss.

￨ Executive Compensation ￨The compensation of directors consists of basic compensation,
performance-linked compensation, and stock options as an incentive toboost medium- and long-term enterprise value, the total amount of which
is set within the amount approved beforehand at the general meeting ofshareholders. Compensation for corporate auditors is determinedthrough discussions among corporate auditors and within the limits of thetotal compensation approved at the general meeting of shareholders.

Due to their roles, compensation for outside directors and corporate
auditors is limited to the basic compensation, which is not linked toperformance.
The Board of Directors determines the compensation of directors
within the scope of the resolution passed at the general meeting ofshareholders and in accordance with the recommendations of theNomination and Compensation Advisory Committee.

Executive compensation for FY2022
Classification of Officers

Total amount of compensation by type (Millions of yen)
Total amount ofcompensation, etc.
Of those listed on the left,
Stock
Basic
Bonuses(Millions of yen) remuneration options
non-monetary compensation, etc.

Number of
eligible
directors

Directors(excluding Outside Directors)

95

53

14

27

14

5

Corporate Auditor(excluding Outside Corporate Auditors)

2

2

—

—

—

1

Outside Directors andOutside Corporate Auditors

61

61

—

—

—

8

* The total amount of non-monetary compensation to Directors (excluding Outside Directors) consisted of stock options totaling 14 million yen.

WEB

About Board of Directors and Auditors
Policy on Determining Remuneration Amounts and Calculation Methods▶ https://www.aeondelight.co.jp/english/sustainability/governance/officer.html
44Corporate GovernanceManagement Structure■ Number of shares held
■ Date of Birth| Directors | (As of May 19, 2023)

Mar. 1987
Nov. 2006
Mar. 2007
Sep. 2008
Mar. 2011
Mar. 2013
Feb. 2015
Mar. 2017
Mar. 2018
May 2018
Dec. 2018
Jul. 2019
Dec. 2019
Apr. 2020
Jul. 2021| Auditors | (As of May 19, 2023)

Kazumasa Hamada

Goro Miyamae

President & CEOGroup CEO

Director andSenior Managing Officer
China business

Tetsuya Akutsu■ 1,100■ Dec. 30, 1964

■ 1,200■ Nov. 17, 1965■−
■ Mar. 21, 1967

Joined JUSCO Co., Ltd. (currently AEON Co., Ltd.)
Head of Management Planning Department of Posful Corporation(currently AEON Hokkaido Corporation)
Executive Officer, Posful Corporation (currently AEON Hokkaido
Corporation)
General Manager of Control Division of AEON Retail Co., Ltd.
Executive Officer, AEON Retail Co., Ltd.
Director and Control and Accounting Officer of Aeon Co., Ltd.
Regional Office Manager of Kitakanto and Niigata Company of
AEON Retail Co., Ltd.
Director and Senior Managing Officer, AEON Retail Co., Ltd.
Senior Managing Executive Officer, AEON Retail Co., Ltd.
Temporarily transferred to AEON delight Co., Ltd. (Advisor)
President and CEO, AEON delight Co., Ltd.
Representative of Commissioner, PT Sinar Jernih Sarana (current
position)Group CEO, AEON delight Co., Ltd.
General Manager of Financial and Accounting Division (CFO),
AEON Delight Co., Ltd.
Representative Director, President and CEO, AEON delight Co.,
Ltd. (current position)
Director of AEON delight (China) Co., Ltd. (current position)

Jan. 1999
Jun. 2007
Mar. 2008
Mar. 2010
May 2016
Nov. 2018
Jul. 2019
Mar. 2020Feb. 2021
Mar. 2021
May 2022
Dec. 2022
Mar. 2023

Joined Japan Maintenance Co., Ltd. (currently AEON delight Co.,Ltd.)Manager, QMS Department, Crisis Management & QMS Division
Manager, Cleaning Business Department, Cleaning Business
Division
General Manager, Cleaning Business Division
Executive Officer and General Manager of Cleaning Business
Division
Executive Officer and General Manager of Service Network
Promotion Division
Executive Officer and Manager of Kanto Regional Office
Executive Officer in charge of overseeing East Japan operations
Executive Officer in charge of overseeing Marketing DX
Managing Director in charge of overseeing Marketing DX
Director and Managing Director in charge of overseeing
Marketing DX
Director and Managing Officer in charge of overseeing China
business
Senior Managing Officer in charge of overseeing China business(current position)
Chairperson and General Manager of Aeon Delight (China) Co.,
Ltd. (current position)

Independent Director

New Appointment

Hiroyuki Watanabe

Takashi Kuroda

Director

Outside Auditor

Independent Auditor

Tsukasa Takahashi

Director andSenior Managing Officer
General Manager of Financialand Accounting Division (CFO)

Apr. 1989
Apr. 2014
Apr. 2016
Apr. 2018
Apr. 2019
Apr. 2020

May 2021
May 2023

Joined The Industrial Bank of Japan, Limited (currently Mizuho
Bank, Ltd.)
General Manager of Investor Relations Department of Mizuho
Financial Group, Inc.
General Manager of Strategic Planning Department of Mizuho
Financial Group, Inc. and Mizuho Bank, Ltd.
Project Team Manager of Overseas Coordination Infrastructure
Establishment Project of Mizuho Bank, Ltd.
Senior Executive Officer, General Manager of Global Corporate
Coordination Department of Mizuho Financial Group, Inc. andMizuho Bank, Ltd.
Senior Executive Officer, Deputy Officer in Charge of Global
Corporate Company of Mizuho Financial Group, Inc.
Executive Officer, Joint Division Manager of Global Corporate
Division of Mizuho Bank, Ltd.
Managing Officer, General Manager of Financial and Accounting
Division (CFO) of AEON DELIGHT CO., LTD.
Director and Senior Managing Officer, General Manager ofFinancial and Accounting Division and CFO of AEON DELIGHT CO.,LTD. (current position)

Outside Auditor■−■ Jul. 17, 1958
Apr. 1982
Sep. 2003
May 2006
Sep. 2006
Apr. 2008
Jun. 2012
Nov. 2012
Apr. 2014
Apr. 2015
Jun. 2017
Sep. 2018
Oct. 2018
May 2021
Mar. 2022

Joined Isejin Jusco Co., Ltd. (currently Aeon Co., Ltd.)
General Manager of Administration Division of Kanto Company of
JUSCO Co., Ltd.
Representative Director of AEON Financial Project Co., Ltd.
(currently, AEON Bank, Ltd.)
Director in charge of overseeing Human Resources and General
Affairs, and Public Relation
Director and Managing Executive Officer in charge of Human
Resources and General Affairs
Director, Senior Managing Executive Office, and Head ofCorporate Management Division
Director of AEON CREDIT SERVICE CO., LTD. (currently, AEON
Financial Service Co., Ltd.)
Representative Director and Senior Managing Executive Officer,
Head of Sales Division of AEON Bank, Ltd.
President and Representative Director
Director and Executive Vice President of AEON Financial Service Co., Ltd.
Executive Officer in charge of Human Resources and Administration,
Administration & Risk Management of Aeon Co., Ltd.
Director of AEON Financial Service Co., Ltd. (current position)
Director, AEON delight Co., Ltd. (current position)
Executive Vice President and Executive Officer in charge of
Human Resources and Administration, Administration & Risk
Management of Aeon Co., Ltd. (current position)

Independent Director

Independent Director

Yoshiaki Hompo

Keiji Yoshikawa

Asako Takada

Outside Director

Outside Director

Outside Director■−■ Jul. 12, 1964
Apr. 1987
Nov. 2000
Dec. 2006
Sep. 2008
Apr. 2014
Apr. 2015
Apr. 2016
Jun. 2018
Apr. 2019
Apr. 2019
Jun. 2019
Apr. 2021
May 2022

Joined The Chuo Trust and Banking Company, Limited (currently
Sumitomo Mitsui Trust Bank, Limited)
Director and General Manager of Administration Division of DBMG
Inc.
Affiliates Department of AEON Co., Ltd.
Temporarily transferred to The Daiei, Inc.
Project Team Leader, AEON Financial Service Co., Ltd.
Manager of Strategy Department
Executing Officer in charge of overseeing strategy of AEON Bank,Ltd.
Director and Executive Officer in charge of Business Planning
Director, Executive Officer and General Manager of Business
Planning Division
Director in charge of Business Planning of AFS Corporation Co.,Ltd.
Director and Executive Officer, Head of Business Planning Divisionof AEON Bank, Ltd.
Director, Managing Executive Officer, and Head of Corporate
Management Division
Outside Auditor, AEON delight Co., Ltd. (current position)■−■ Dec. 10, 1962
Apr. 1989
Apr. 1994
Apr. 2006
Apr. 2007
Apr. 2010
Apr. 2012
Apr. 2013
May 2013
Mar. 2019
Jun. 2020

Registered with the Osaka Bar Association and Joined Katsube
Law Office (currently Katsube Takahashi Law Office)Partner, Katsube Takahashi Law Office (current position)
Part-time Instructor, Kwansei Gakuin University Law School
Part-time Instructor, Kyoto University Law School
Vice President, Osaka Bar Association
Visiting Professor, Kyoto University Law School
Special Professor, Kyoto University Law School
Outside Auditor, AEON delight Co., Ltd. (current position)
Outside Auditor, Nippon Electric Glass Co., Ltd. (current position)
Outside Auditor, NIPPON SHOKUBAI CO., LTD. (current position)

New Appointment

Independent Auditor

Independent Director

Mari Ebisui

Takafumi Fujimoto

Outside Auditor

Auditor■−■ Oct. 8, 1960■−
■ Mar. 23, 1965

Toshio Shimada

New Appointment

Outside Director■ 1,900■ Apr. 20, 1949
Apr. 1974
Apr. 1983
May 1988
Jan. 1991
Jul. 2001
Apr. 2003
Jul. 2007
Oct. 2008
Apr. 2010
Jan. 2014
Nov. 2014
Apr. 2015
Jun. 2015
Jun. 2016
Apr. 2017
May 2017
Apr. 2018
Aug 2021

Joined the Ministry of Transport (General Affairs Division of Civil
Aviation Bureau)
Seconded to Geneva Office of Japan National Tourism
Organization (JNTO)First Secretary of Permanent Delegation of Japan to theOrganisation for Economic Cooperation and Development (OECD)
Deputy Assistant Vice-Minister
Deputy Director-General (Maritime Bureau & Ports and Harbours
Bureau) of Minister’s Secretariat of Ministry of Land,
Infrastructure, Transport and Tourism
Senior Vice President (Logistics & International Division), Japan Post
Deputy Vice Minister for Tourism Policy, Minister’s Secretariat of
Ministry of Land, Infrastructure, Transport and Tourism
Commissioner of Japan Tourism Agency
Professor at Tokyo Metropolitan University
Special Adviser of Japan Tourism Agency
Adjunct Professor of Tokyo Institute of Technology
Research Professor of Faculty of Urban Environment, Tokyo
Metropolitan University
Outside Director, THE KEIHIN CO., LTD. (current position)
Chief, UNWTO Regional Support Office for Asia and the Pacific(current position)
Visiting Professor of Tokyo University of Engineering
Outside Director, AEON delight Co., Ltd. (current position)
Visiting Professor at Tokyo Metropolitan University (current position)
Director and Chairman of Tobu Top Tours Co., Ltd.

■ 600
■ Jul. 6, 1950
Apr. 1973
Jun. 2004
Jan. 2008
Jun. 2008
Feb. 2012
Apr. 2012
Jun. 2015
Jun. 2018
May 2021
Jun. 2021■−■ Jun. 4, 1957

■ 300
■ Mar. 20, 1964

Joined Nippon Sheet Glass Co., Ltd.
Corporate Officer, General Manager of Information &Telecommunication Device Division, and Plant Manager ofSagamihara Plant
Corporate Officer and General Manager of IT Business Unit
Director, Executive Officer, and Head of Specialty Glass Worldwide
Director, Representative Executive Officer, and Executive Vice
President and CPMO (Chief Project Management Officer)
Director, Representative Executive Officer, and President and CEO
AdvisorOutside Director of Kansai Paint Co., Ltd. (current position)
Outside Director, AEON delight Co., Ltd. (current position)
Outside Director and Member of the Audit and Supervisory
Committee of Fujikura Ltd. (current position)

Apr. 1987
Jan. 1988
Apr. 2002
Apr. 2003
Apr. 2008
Apr. 2011
Sep. 2015
Apr. 2021
May 2021
Apr. 2022

Joined E.F. Hutton & CO., Inc.
Joined Morgan Stanley Japan Limited
Lecturer of Faculty of Business Administration, Takachiho
University
Assistant Professor of Faculty of Business Administration
Associate Professor of Hosei Business School of Innovation
Management
Professor of Hosei Business School of Innovation Management(current position)
Director of Global MBA Program, Hosei Business School of
Innovation Management (current position)
General Manager of Recurrent Education Office of Hosei
University (current position)
Outside Director of AEON delight Co., Ltd. (current position)
Advisor on regrowth of The Asahi Shimbun Company (current
position)

Apr. 1980
Jul. 1990
Aug. 1992
Nov. 1997
Mar. 2000
Mar. 2002
Jul. 2003
Mar. 2004
Jan. 2011
Mar. 2015
Mar. 2019
Jun. 2021
May 2023

Joined Japan Gasoline Co.,Ltd.
Joined Sanwa Research Institute Corp. (currently Mitsubishi UFJ
Research and Consulting Co., Ltd.)
Joined JGC Information Systems Co., Ltd.
Joined CAC Co.,Ltd. (currently CAC Holdings Corporation)
Executive Officer and General Manager of Corporate Planning
Department
Director and Senior Vice President of Corporate Plannning
Department
Managing Director and Senior Vice President of Corporate
Division
President and CEO
Representative Director and Chairman
Chairman and Director
Special Advisor (current position)
Outside Director, Bandai Namco Holdings Inc. (current position)
Outside Director, AEON DELIGHT CO., LTD. (current position)

Apr. 1985

Joined Ajinomoto General Foods, Inc. (currently Ajinomoto AGF,
Inc.)
Certified as certified public tax accountant in the United States
Joined KPMG Peat Marwick Tokyo (currently KPMG Tax
Corporation)
Jul. 2001 Representative Director, Ebisui Accounting & Consulting (current
position)
Registered as a United States certified public accountant (USCPA)
Apr. 2008 Registered as a Certified Fraud Examiner (CFE)
Jun. 2016 Director of JAPAN Society of U.S. CPAs
Jun. 2020 Outside Director of Ricoh Leasing Company, Ltd. (current position)
Apr. 2021 Advisory Board Member of Japan Corporate GovernanceResearch Institute (current position)
May 2022 Outside Auditor, AEON delight Co., Ltd. (current position)
April 2023 Auditor, The Japan Academy of Family Business(current position)
Nov. 1997
Mar. 1998

Apr. 1987
Oct. 2009
Oct. 2011
Feb. 2013
Jan. 2014
Aug. 2015
Apr. 2017
Sep. 2018
Jan. 2020
Jan. 2021
May 2022
May 2023

Joined National Police Agency
Director of Community Police Affairs Division, Community Safety
Bureau of National Police Agency
Chief of Kagawa Prefectural Police Headquarters
Executive Assistant to the National Public Safety Commission,Commissioner-General’s Secretariat, National Police Agency
Director, Community Safety Bureau, National Police Agency
Personnel Division, Commissioner-General’s Secretariat, National
Police Agency
Chief Inspector General, Commissioner-General’s Secretariat,
National Police Agency
Deputy Vice-Minister for Policy Coordination, Commissioner-General’s Secretariat, National Police Agency
Chief of Osaka Prefectural Police Headquarters
Director-General, Criminal Investigation Bureau, National Police
AgencyAdvisor of AEON CO., LTD. (current position)
Auditor of The Daiei, Inc.
Auditor of AEON CREDIT SERVICE CO., LTD. (current position)
Auditor of AEON DELIGHT CO., LTD. (current position)
Auditor of AEON RETAIL CO., LTD. (current position)| Executive Officers | (As of May 19, 2023)
Managing Directors

45

Executive Officers

Noriaki Ikuta

Keiji Sagata

Yasuo Miyake

Kiichi Goto

Hiroshi Kato

Akira Inada

Guan Zhujuan

Tsutomu Taniguchi

Akira Ogata

Marketing DX

Group Strategy

General Manager ofAffiliated Companies
Division

Materials and Vending Machines
Business

General Manager of Construction Work
Division

General Manager of Corporate Sales Divisionof Sales Division

Chairperson and General Manager of Wuhan Xiaozhu
Comprehensive Facility Management Service Co., Ltd.

COO of ASEAN Business

General Manager of Managing

Hiroki Miyamoto

Liuhang Chen

General Manager ofSales Division

COO of China business

Souichi Yamaguchi

Hiroaki Ochi

Takayuki Kojio

Daisuke Ninomiya

Emiko Ishii

Jouji Kitabayashi

General Manager of Group Control
Division

General Manager of Group Governance Division,
Organizational Culture Reform

General Manager of Service Development Division
and Director of Aeon delight Laboratory

General Manager of Group Personnel andGeneral Affairs Division

General Manager of President's Officeand ESG Promotion Office

General Manager of Quality Control
Division46

Outside Director Message

Compliance

My role is to raise concerns and questions

Ensuring compliance through commitment to the
Delight Way
We constantly strive to ensure Group-wide commitment to the Delight Way, which comprises our Management Principle, Codeof Conduct, and My Promises, as the basic philosophy for all employees.
Of these, My Promises places greatest importance on legal compliance, and sets out the fundamentals of compliance for executives and employees.

Outside Director (Independent Director)
Evaluation Advisory Committee (Chairperson)
Special Committee (Chairperson)

Yoshiaki Hompo| Board Governance |My impression of AEON delight's Board of Directors is that their
discussions are lively, very serious, and earnest. I attend the Board of
Directors meetings of several companies and I can say that thediscussions are probably most lively at AEON delight. There are times
when we, the outside directors, point out things that are painful to hear or
express doubts about initiatives, but I feel that the president himself iseager to have free discussion and is making an effort to lead thediscussion in this direction.
They also make every effort to manage the agenda appropriately and keep
to the schedule. While necessary matters are thoroughly addressed, there
is also an appropriate balance, with plenty of time allocated for discussing
important matters. I believe this is the result of organizing the agenda andmaking an appropriate distinction between what should and should not be
discussed at the Board of Directors meetings. In addition, the secretariat's
proficiency has also improved, with advance briefings and appropriate
coordination and provision of information with the Executive Committee
and other bodies. There used to be some delays in providing the materials
needed for discussion, but I believe this has improved considerably overthe past six years.
I think that it is because of these circumstances that what needs to be
discussed at the Board of Directors meetings is being discussed appropriately. However, whether this actually addresses business issues is adifferent story. I believe it is my role as an outside director to always
present my concerns and doubts from a fair, impartial, and objective
standpoint.
For example, we occasionally find that management policies are notaccurately communicated to the field and are not properly implemented. If
there are more cases like these, the distance between management andthe field will gradually grow wider, so I have been expressing my concerns47

at Board of Directors meetings whenever I notice them. On the other hand,
we also make sure that directors do not interfere with execution by giving
unnecessary orders or making comments that could confuse the field.

A sense of unity throughout
the company is the key to the future

Code of Conduct

My Promises

1 I am always grateful to the many other individuals who provide help andsupport, and I never forget to act with humility.
1 I always act with integrity and sincerity in every situation.
1 I always work to improve myself so as to offer services that exceed customer
expectations.
1 I continually challenge myself, without hesitation, to help AEON delightto create environmental values.
1 I always act as a good corporate citizen in serving local communities.
1 I always seek to improve and maintain a delightful workplace and to respect
my fellow employees.

1 I promise never to violate relevant laws and regulations.
1 I will comply with the quality manuals and never betray thecustomer's trust.
1 I will give safety top priority and strive to prevent any accidents.
1 I will never fail to report, communicate, and consult withcustomers and my superiors on any relevant matters.
1 I will abide by contracts with customers.
1 I promise to do my utmost to prevent environmental pollution.

| Compliance training |We conduct annual Code of Conduct and human rights training forexecutives and all employees of the company. We strive to ensure
thorough compliance through “Executive Compliance Training” for Group
company CEOs and executives, “AEON Code of Conduct Senior Employee Training” for department and branch office managers, and “Aeon
Code of Conduct General Employee Training” for general employees.
In addition, in FY2023, we began offering monthly compliance training
for all employees, including part-time employees. The aim is to provide adeeper understanding of compliance, and the training covers actual
compliance issues that are common in the workplace, such as anger
management and harassment, falsification of attendance data, and more.

AEON delight is the largest facility management company in Japan, but weare currently not in a dominant position. If possible, I would like to see
AEON Delight become the first name that comes to mind when people thinkof facility management in the future. This is something we must go throughin order to achieve our AEON delight Vision 2025 targets of becoming a
Global Top 10 and No. 1 company in Asia. To make this happen, I think
there needs to be a greater sense of unity throughout the company.
Looking at AEON delight's employees, I feel that they see their role insociety only within the framework of their business, such as facility
management and cleaning. It seems to me that the vision of AEON delight's
growth strategy, consisting of ensuring safety and security, resolving labor
shortages, and addressing the environment, may not be widely disseminated. Once the vision is disseminated, resolving the company's issues will tie
into self-actualization for the employees themselves, which would further
enhance their sense of pride and responsibility. What is important is figuring
out how to create an atmosphere and corporate culture where people cantalk about these things with each other, as well as figuring out a way to put
together a framework to achieve this. In reality, this can be difficult given the
many factors involved, such as figuring out how to train employees, how
the organization should look, and how management should be. As an
outside director, I will work hard to help create a corporate culture where
AEON delight and its employees can work together in the same direction
with a sense of unity.

I will consistently comply with rules and regulations.

Employee and business partner
reporting systems
We have established the AEON delight Code of Conduct 110
whistle-blowing hotline to handle consultations brought by employees
regarding issues that arise in their daily work. Operation of the hotline has
been entrusted to impartial legal professionals, ensuring that employees
can, regardless of personal involvement, raise issues related to corporate
ethics violations that they are unable to discuss with superiors.
On April 1, 2021, we also established a “Business Partner Hotline” toensure that transactions are carried out fairly. In dealing with our Group
companies, partners can report by telephone, fax, or e-mail any legal
violations, actions that harm the rights of individuals or companies, orabuse of a dominant position. Whistle-blower information is kept
confidential and will not adversely affect transactions.

Japan

AEON delight Code of Conduct 110 (lawyer’s office) and
Aeon Code of Conduct 110 (three points of contact:internal representative, external representative, andlawyer's office)

China

AEON delight Code of Conduct 110 (external representative), Aeon Code of Conduct 110 (two points of contact:internal representative and lawyer’s office)ASEAN

AEON delight Code of Conduct 110 (external representative), Aeon Code of Conduct 110 (two points of contact:internal representative and lawyer’s office).

Materials actually used in monthly compliance training

Number of Code of Conduct Training participants(Senior and General Employees) (Non-consolidated)(people)10,000

8,909

8,699

9,108

9,376

*Supports Malay, Vietnamese, Khmer, and Indonesian languages

9,462

AEON delight Code of Conduct 110
Business Partner Hotline
5,000

Tel.: (+81)120-10-2322 / FAX: (+81)6-6365-5432
e-mail:info@kansaichuo.com
0

2018

2019

2020

2021

2022

Number ofwhistle-blower
cases in FY2022

214 cases

(FY)

48

Risk Management

Information Security

Implementation of risk management to address major risks

Strengthening security for personal information andinformation assets

The AEON delight Group has established the AEON delight Group Basic Regulations for Risk Management to address risks
during normal times, and we manage risks across the entire AEON delight Group under the supervision of the Board of Directors.

￨ Basic Policy ￨AEON delight Group has adopted the following approach and measures
to risk management.

■ Approach to Risk Management● We manage various risks that may have a serious impact and cause
losses in a centralized and continuous manner.
We identify and analyze risks, specify major risks, consider risk
countermeasures (avoidance, mitigation, transfer, retention), anddevelop measures to reduce losses accompanying the materializationof major risks. If a risk materializes, we take appropriate and speedy
action as an organization to minimize damage to customers and otherpersons concerned, and to restore operations as quickly as possible.
● With the understanding that in the event of a wide-area or majordisaster, we have a mission to fulfill our social responsibility and role inresponding to the disaster, preventing secondary damage, andrestoring operations as soon as possible. Accordingly, we will continue
to make the necessary preparations and ensure that we are able totake the best possible actions to minimize damage and continue
operations of high social importance in the event of a crisis.
● The entire AEON delight Group implements PDCA activities to promoterisk management.

￨ Risk Management Initiatives ￨AEON delight Group has established the following systems to makenecessary decisions and take actions against various foreseeable risks inthe course of its business activities.

❶ From a list of 94 risks (FY 2023) in 12 areas compiled by the General
Manager of Risk Management and the Group Internal Control Department, which is in charge of risk management, the Risk Management
Committee, consisting of executive officers, selects key risks withparticularly major impact.
❷ The Risk Management Committee appoints a Key Risk Owner for eachkey risk. The Key Risk Owner addresses key risks by directing the risk
managers of related departments and Group affiliates and holding risk
management manager meetings as necessary.
❸ The Risk Management Committee receives reports on the status of
measures to address key risks from the key risk owners, evaluates andanalyzes the content of these reports, and reports the results to theBoard of Directors on a regular basis. In addition, if a risk materializes
and serious damage is expected, the General Manager of Risk
Management promptly reports it to the President.
❹ For risk management under normal times, each AEON delight division
is designated as a Risk Management Department and is responsible
for monitoring the risk management status of risks related to its own
division, preventing risk events from occurring, and mitigating losses
under the supervision of the risk manager.
❺ The Group Internal Control Department examines risk scenarios andmonitors the status of measures taken by each Group company, andreports the status of such measures to the Risk Management Committee on a regular basis.
❻ The Group Corporate Audit Department evaluates the effectiveness ofrisk management through audits and other means.
❼ In the event of a wide-area or major disaster or other event that hinders
business continuity, we establish an disaster response headquarters
headed by the President in accordance with the basic rules forbusiness continuity in times of crisis (Basic Rules for BCP) and rules
established in association with these rules, to enable more rapid
decision-making and execution than under normal circumstances. In
addition, we provide education and training in accordance with thebusiness continuity plan, and continuously improve the plan.
❽ The Risk Management Committee discusses and works to review andidentify risks with respect to potential risks and risks newly requiring
attention that have not yet materialized.

AEON delight Group Risk Management
Organization Chart

President
Risk Management Committee

Key Risk Owner* Key risk unit
(appointed by Risk
Management Committee)

Risk Manager(Division Manager, etc.)

Chairperson

Department in charge ofrisk management(Group Internal Control
Department)

Risk Manager(Division Manager, etc.)￨ Basic Policies on Information Security ￨Based on its Basic Principles of “Pursuing peace, respecting humanity, and contributing to local communities, always with the customer’s
point of view as its core,” Aeon recognizes the importance of information security and is committed to protecting important information fromvarious threats to contribute to a secure and prosperous life. We believe that the information we hold is an important asset for conducting ourbusiness activities and creating added value, and we will manage it properly and securely to build solid relationships of trust with our customers, local communities, business partners, shareholders, and other stakeholders of Aeon.
To make this happen, we have established the following Basic Policies on Information Security as a guideline to ensure that all Aeon employees have a high degree of awareness regarding information security and take action accordingly.

WEB

Privacy Policy Personal Information Protection Policy▶ https://www.aeondelight.co.jp/english/privacy/■ Management system■ Key Initiatives

In accordance with the IT Governance Guidelines, the AEON Group has
established a hierarchical governance system with Aeon Co., Ltd. at the
top. Based on the AEON delight Group Information Security Management
Regulations, we set an information security system for the entire AEON
delight Group, including all domestic and overseas Group companies,
and established the following management system.
With the Officer in charge of Marketing DX as the AEON delight
Group's Chief Information Security Officer, we hold Information Security
Committee meetings to decide on measures to strengthen information
security and promote company-wide implementation of these measures.
In addition to identifying and assessing risks related to information
security and implementing countermeasures, we monitor information
security through internal audits. Furthermore, the AEON-CSIRT*, aspecialized team established by the AEON Group to respond to security
incidents, is working to build a system to prevent incidents and enhance
responses to the increasingly sophisticated cyber-attacks that may affectbusiness continuity.

1. Education for employees*Computer Security Incident Response Team

Board of Directors

General Manager of Risk Management(appointed director or executive officer)

The AEON delight Group has positioned "Responding to the Risks of the Information Society" as one of our Materiality issues,
and we are committed to continuously maintaining and improving our level of information security.
To ensure information security and the protection of personal information, we are strengthening information security for personal information and information assets entrusted to us by our stakeholders in accordance with the AEON delight Group Information Security Management Regulations and the Regulations on Protection of Personal Information.

Secretariat

Key risks in FY2023
Ⅰ. Securing human resources
Ⅱ. Human resource development
Ⅲ. HR strategy
Ⅳ. Group company management(appropriate accounting)
Ⅴ. Maintenance and management ofbusiness registration and licensing
VI. Establishing a system with partnercompanies

Risk Manager(Manager in charge of subsidiary)

Organization chart

Department incharge of risk(site, etc.)

Department incharge of risk
(department, etc.)

Department incharge of risk
(team, etc.)

Risk Manager of subsidiary(appointed directorof subsidiary)

Risk Manager of subsidiary(appointed directorof subsidiary)

AEON-CSIRTAD Group Chief Information
Security Officer

Group companies

AD Group
Information
Security Manager

AD Group
Information
Security Promoter

Chief Information Security Officer

Information Security
Internal Auditor
Department incharge of risk
(regional office, etc.)

2. Protection of personal information

Information Security Committee
Secretariat: IT Infrastructure Department

AD Group
Information Security
Internal Auditor

We provide information security and personal information protection
training for all AEON delight employees via e-learning once a year to
educate them about our policies, information breach incidents, andsafety management measures to be taken by each and every employee.
In addition, the AEON Group has prepared an Information Security
Handbook, which sets forth rules for initial response and reporting in theevent of a virus attack, as well as basic security rules for normal times,
and we distribute this handbook to our employees. Furthermore, we
strive to improve employee security literacy through rank-specific training
for new employees and newly appointed managers, and by regularly
disseminating news, including measures against targeted e-mail attacks,
support fraud, and raising awareness of standards for handling external
storage media. From FY2022, we began offering a DX training program
aimed at acquiring the IT Passport to approximately 500 full-time employees in their 20s, which has helped them acquire basic knowledge of
information security, among other things.

Information Security
Manager

We have established the Personal Information Protection Policy, Privacy
Policy, and AEON delight Group Regulations on Protection of Personal
Information, and have implemented appropriate safety management
measures to protect the personal information that we possess. We
announce any changes to the Personal Information Protection Policy/Privacy Policy on our website and properly obtain the consent of the individual to whom the information pertains when required by law. In addition,
each department conducts an annual inventory of the personal information management ledger to list the status of personal information,
conducts risk analysis, confirms and corrects safety management
measures, and deletes personal information that no longer needs to beretained.

Information Security
Promoter
Department
Information Manager
System Administrator

49

50

Seven-Year Summary

7 Year Financial and Non-Financial Summary
2016

Consolidated Financial Indicators

2017

2018

2019

2020

2021

2022

Unit

Net sales

Million yen

292,607292,396

302,915

308,582

300,085

317,657

303,776

Operating income

Million yen

14,13912,90913,03016,001

15,23015,733

15,814

Ordinary income

Million yen

14,263

13,381

13,362

15,94915,26815,78916,006

Net income attributable to parent company shareholders

Million yen

7,093

6,397

6,415

9,348

11,680

10,665

10,152Comprehensive income

Million yen

7,862

7,707

6,007

9,039

12,32911,52911,003

Net assets

Million yen

84,604

89,14375,53981,28688,281

95,421

99,391

Total assets

Million yen

137,870

144,678

134,071

136,917

136,565

142,859

150,628

Net assets per share

Yen

1,558.51

1,636.89

1,465.94

1,578.77

1,746.88

1,890.76

1,991.86

Net income per shareYen

134.99121.68122.92

187.21233.69213.26203.54

Diluted net income per shareYen

134.62

121.34122.61186.94233.47213.12203.40Equity ratio

%

59.4

59.5

54.6

57.6

64.0

66.2

65.3

Return on equity (ROE)

%

8.9

7.6

8.1

12.3

14.1

11.7

10.5

Price/earnings ratio

times

25.7

30.9

33.7

17.6

13.6

14.0

14.6

Cash flows from operating activities

Million yen

11,703

13,56812,373

7,371

10,403

12,598

8,895

Cash flows from investing activities

Million yen

2,233(2,666)

12,256

13,838(7,325)(386)(10,715)

Cash flows from financing activities

Million yen(2,400)(3,264)(19,686)(3,392)(5,324)(4,572)(6,181)

Cash and cash equivalents at end of year

Million yen

31,00438,72243,437

61,15158,93767,52059,996

t-CO2

---

---

---

---

---

1,463

1,468

t

14,831

12,328

16,52815,942

19,77418,80818,449Consolidated total number of employees

person12,55813,43020,87722,062

20,117

20,20021,719Number of employees

person

4,004

4,034

4,050

4,074

4,118

4,174

4,231

Number of female employees

person

298

322

348

381

427

467

509

Number of managers

person

616

622

618

607

662

609

675

Number of female managers

person

8

9

8

7

15

16

14

Annual paid leave acquisition rate

%

50.2

51.3

54.1

64.7

63.5

64.9

74.3

Paternal leave acquisition rate

%

0.0

12.5

18.2

6.4

3.1

7.2

13.0

Maternal leave acquisition rate

%

100.0

87.5

81.8

100.0

100.0

100.0

95.2

Employment rate of persons with disabilities

%

1.45

1.75

2.11

2.25

2.12

2.13

2.42

Occupational accident frequency rate

%

---

4.60

4.59

1.77

2.50

3.80

2.71

Number of directors

person

13

13

11

6

6

8

8

Number of outside directors

person

2

3

3

3

3

4

4

Non-Financial Indicators
Greenhouse gas emissions (Scope1,2)Industrial waste emissions*New revenue recognition standard has been adopted from FY2022.
*Non-financial indicators other than the consolidated number of employees are shown on a non-consolidated basis.

51

WEB

Financial Data and Results ▶ https://www.aeondelight.co.jp/english/ir/financial/
ESG Data ▶ https://www.aeondelight.co.jp/english/sustainability/data.html
52Corporate Profile / Stock Information￨ Stock information ￨￨ Corporate profile ￨Company Name ● AEON DELIGHT CO., LTD.
Founded●●Capital3,238 million JPY

Description of Business ● Facility Management

November 16, 1972

Number of Employees●

4,231 Group total: 21,719

Headquarters

Teitokanda Bldg. 1-1-1 Kandanishiki-cho, Chiyoda-ku, Tokyo 101-0054

Osaka Office

Minamisemba Heart Bldg. 2-3-2 Minamisemba, Chuo-ku, Osaka City, Osaka 542-0081

Total number of issued shares ● 50,669,633

Stock code

●

9787

Fiscal year end●

End of February

Total number of shareholders●

21,104

Stock exchange●Tokyo Stock Exchange, Prime Market￨ Major shareholders ￨Shareholders￨ Offices ￨Japan

AEON DELIGHT CO., LTD.

AEON DELIGHT ACADEMY CO., LTD.
Kankyouseibi Co., Ltd.
AEON COMPASS CO., LTD.
Hakuseisha CO., LTD.
AEON DELIGHT CONNECT CO.,LTD.
AEON DELIGHT SECURITY CO., LTD.
Askmaintenance Co., Ltd.

China

AEON DELIGHT (SHANGHAI) COMPREHENSIVE FACILITY MANAGEMENT SERVICE CO., LTD.
Zhejiang Metelan Property Management Co., Ltd.
AEON DELIGHT (CHINA) CO., LTD.
Aeon Delight (Jiangsu) Comprehensive Facility Management Service Co., Ltd.

Cambodia Vietnam

No of shares held (thousands)% of issued shares

AEON CO., LTD.

27,61355.90

The Master Trust Bank of Japan, Ltd. (Trust account)

3,509

7.10

AEON delight Business Partner Stock Ownership Association

1,287

2.61

SMBC Nikko Securities Inc.

772

1.56

SSBTC CLIENT OMNIBUS ACCOUNT

654

1.32

Custody Bank of Japan, Ltd. (Trust account)

645

1.31

THE BANK OF NEW YORK MELLON 140044

581

1.18

The Nomura Trust and Banking Co., Ltd. (Trust account)

544

1.10

AEON delight Employee Stockholding Association

533

1.08

BNP PARIBAS LONDON BRANCH FOR
PRIME BROKERAGE CLEARANCE ACC FOR THIRD PARTY

513

1.04

* Aside from the number of shares listed above, the Company holds 1,270 thousands treasury shares (2.51% of shares held relative to the total number of shares issued).
* The ratio of stock holding is the ratio relative to the total number of shares issued (excluding the treasury stock).
* Percentages have been rounded off to three decimal place.

Wuhan Xiaozhu Comprehensive Facility Management Service Co., Ltd.

AEON DELIGHT(VIETNAM)CO., LTD.

￨ Shares by type ￨Malaysia
AEON DELIGHT(MALAYSIA)SDN. BHD.

￨ Shareholders by type ￨AEON delight=● Headquarters／● Regional Office
Domestic Group companies=● Headquarters

Indonesia

Overseas Group companies=● Headquarters／● Branch Office

PT Sinar Jernih Sarana

WEB

AEON delight Group▶ https://www.aeondelight.co.jp/english/corporate/group.html

Treasury stock

11.43%

15.04%Japan

AEON DELIGHT ACADEMY CO., LTD.

AEON DELIGHT CONNECT CO.,LTD.

Hakuseisha CO., LTD.

AEON DELIGHT SECURITY CO., LTD.

AEON COMPASS CO., LTD.

Askmaintenance Co., Ltd.

10.43%

Individuals andothersForeign institutions
and individuals￨ Major consolidated subsidiaries ￨ (As of September 30, 2023)

Financial
institutions

2.51%

Securities firms

Total numberof shares

16

Foreign institutions
and individuals

Treasury stock

1

50,669Total number ofshareholders

228

21,104thousands
Other Japanese
corporations

Individuals andothers

56.57%

20,513WEB

Kankyouseibi Co., Ltd.

319

Financial institutions

Securities firms

4.02%

Other Japanese
corporations

27

Stock Information▶ https://www.aeondelight.co.jp/english/ir/stock/information.html

Overseas

AEON DELIGHT (CHINA) CO., LTD. [China]

AEON DELIGHT (MALAYSIA) SDN. BHD. [Malaysia]

Aeon Delight (Jiangsu) Comprehensive Facility Management Service Co., Ltd. [China]

AEON DELIGHT (VIETNAM) CO., LTD. [Vietnam]

Wuhan Xiaozhu Comprehensive Facility Management Service Co., Ltd. [China]

PT Sinar Jernih Sarana [Indonesia]

AEON DELIGHT (SHANGHAI) COMPREHENSIVE FACILITY MANAGEMENT SERVICE CO., LTD. [China]
Zhejiang Metelan Property Management Co., Ltd. [China]

53*Figures are as of February 28, 2022, unless otherwise stated.

54