Annual Securities Report(Report pursuant to Article 24, Paragraph 1 of the Financial Instruments and Exchange Act)

Fiscal year
(The 88th term)

From: April 1, 2023
To: March 31, 2024

MARUI GROUP CO., LTD.
(E03040)

This document was prepared based on the Company’s Annual Securities Report in Japanese.
In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.
The accompanying consolidated financial statements are audited by PricewaterhouseCoopers Japan LLC.

[Cover page][Document title]

Annual Securities Report[Clause of stipulation]

Article 24, Paragraph 1 of the Financial Instruments andExchange Act of Japan[Place of filing]

Director-General, Kanto Local Finance Bureau[Filing date]June 24, 2024

[Fiscal year]

The 88th term (from April 1, 2023 to March 31, 2024)[Company name]

Kabushiki Kaisha MARUI GROUP[Company name in English]

MARUI GROUP CO., LTD.

[Title and name of representative]

Hiroshi Aoi, President and Representative Director[Address of head office]3-2, Nakano 4-chome, Nakano-ku, Tokyo, Japan[Telephone number]+81-3-3384-0101 (main)[Name of contact person]

Masakazu Iizuka, General Manager, Financial Department[Nearest place of contact]

3-2, Nakano 4-chome, Nakano-ku, Tokyo, Japan[Telephone number]+81-3-3384-0101 (main)[Name of contact person]

Masakazu Iizuka, General Manager, Financial Department[Place for public inspection]

Tokyo Stock Exchange, Inc.
(2-1 Nihombashi Kabutocho, Chuo-ku, Tokyo, Japan)

1

PART I: COMPANY INFORMATIONI. OVERVIEW OF COMPANY
1. Summary of Business Results(1) Business results of group
Term

84th

85th

86th

87th

88th

Fiscal year ended

March 2020

March 2021

March 2022

March 2023

March 2024

247,582

206,156

209,323

217,854

235,227

40,415

14,52035,54736,364

38,77625,396

2,267

17,791

21,473

24,667

23,645

10,43013,42322,30825,736290,330

290,100

262,052

246,562

253,628

885,969

901,231920,026

961,950

1,003,501

Operating revenue
Ordinary profit
Profit attributable to ownersof parent
Comprehensive income
Net assets
Total assets(Millionsof yen)(Millionsof yen)(Millionsof yen)(Millionsof yen)(Millionsof yen)(Millionsof yen)Book value per share(Yen)

1,351.57

1,350.58

1,307.04

1,299.97

1,348.13

Earnings per share(Yen)

117.58

10.58

85.81

109.37130.70

Diluted earnings per share

(Yen)

－

－

－

－

－

Equity ratio

(%)

32.7

32.1

28.4

25.6

25.2

Return on equity

(%)

8.8

0.8

6.5

8.5

9.9

Price earnings ratio(Times)

15.4

196.6

26.2

18.5

18.7

Cash flows from operating
activities
Cash flows from investing
activities
Cash flows from financing
activities
Cash and cash equivalents at
end of period
Number of employees[In addition, average numberof part-time employees](Millionsof yen)(Millionsof yen)(Millionsof yen)(Millionsof yen)39,90922,193

11,51916,71738,003(20,315)(16,241)(13,760)(22,382)(18,266)(25,487)(5,600)770

18,259(7,879)40,827

41,17939,70852,42164,560

5,130

4,855

4,654

4,435

4,290

[1,453][1,487][1,530][1,447][1,404]

Notes:(Persons)

1. The Group has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31,2020), etc., from the beginning of the 86th term. These accounting standards, etc., have been retroactively applied tofigures for the summary of business results for the 85th term.
2. The Company’s shares held under the performance-linked share-based remuneration for its Directors, etc. and an
incentive plan for employees in management positions are included in treasury shares reported in the consolidatedbalance sheets. In the calculation of book value per share, these shares of treasury shares are included in the numberof treasury shares to be deducted from the number of shares issued and outstanding at the end of the year. Theseshares of treasury shares are also included in the number of treasury shares to be deducted from the average numberof shares during the period in the calculation of earnings per share and diluted earnings per share.
3. Diluted earnings per share are not stated as there are no dilutive shares.

2

(2) Business results of reporting company
Term

84th

85th

86th

87th

88th

Fiscal year ended

March 2020

March 2021

March 2022

March 2023

March 2024

23,507

21,202

18,314

19,796

40,63916,93314,805

14,25812,241

32,70916,246

12,32166,6497,354

30,67135,92035,92035,92035,92035,920223,660,417

223,660,417

208,660,417

208,660,417

208,660,417

197,399

208,147

229,052

201,745

214,918

754,167

751,539

826,510

844,688

870,444920.66970.791,144.36

1,065.48

1,144.07

50.00

51.00

52.00

59.00

101.00[28.00][25.00][26.00][29.00][50.00]Operating revenue
Ordinary profit
ProfitShare capital
Total number of sharesissued and outstanding(Millionsof yen)(Millionsof yen)(Millionsof yen)(Millionsof yen)(Shares)(Millionsof yen)(Millionsof yen)Net assets
Total assets
Book value per share(Yen)

Dividend per share[Of which, interim dividend
per share](Yen)

Earnings per share

(Yen)

75.22

57.47

321.4537.46

162.51

Diluted earnings per share

(Yen)

－

－

－

－

－

Equity ratio

(%)

26.2

27.7

27.7

23.9

24.7

Return on equity

(%)

8.1

6.1

30.5

3.4

14.7

Price earnings ratio(Times)

24.1

36.2

7.0

54.0

15.0

(%)

66.5

88.7

16.2

157.5

62.2

367

373

241

254

270

[22]

[23]

[23]

[27]

[29]

83.4

97.5

107.5

100.0

123.4

[90.5][128.6][131.2][138.8][196.2]

Payout ratio
Number of employees[In addition, average numberof part-time employees]
Total shareholder return[Benchmark: TOPIX Net
Total Return Index](Persons)(%)

Highest share price

(Yen)

2,795

2,317

2,413

2,581

2,628

Lowest share price

(Yen)

1,607

1,514

1,832

1,956

2,025

Notes:

1. The Company’s shares held under the performance-linked share-based remuneration for its Directors, etc. and the
incentive plan for employees in management positions are included in treasury shares reported in the nonconsolidated balance sheets. In the calculation of book value per share, these shares of treasury shares are included in
the number of treasury shares to be deducted from the number of shares issued and outstanding at the end of the year.
These shares of treasury shares are also included in the number of treasury shares to be deducted from the average
number of shares during the period in the calculation of earnings per share and diluted earnings per share.
2. Diluted earnings per share are not stated as there are no dilutive shares.
3. Total shareholder return (TSR) has been calculated based on the share price of ¥2,235 as of March 31, 2019.
4. The highest and lowest share prices refer to those of the First Section of the Tokyo Stock Exchange before April 3,
2022, and those of the Prime Market of the Tokyo Stock Exchange after April 4, 2022.

3

2. History
The Group was launched on February 17, 1931, when Chuji Aoi founded an installment sales business in Nakano-ku,
Tokyo, Japan, after separating from Maruni Shokai Co., Ltd. On March 30, 1937, it was reorganized into a corporate
entity (MARUI CO., LTD.; capital of ¥50,000; Chuji Aoi, President).
The history of the Company and its main subsidiaries and associates since the Company’s founding is as follows.
July 1941

Suspended business and temporarily closed all stores due to wartime business restrictions.

August 1946

Resumed business in cash furniture sale with a temporary store in Nakano.

December 1950

Resumed installment sales.

August 1959

Established Marui Koukoku Jigyosha Co., Ltd. (currently AIM CREATE CO., LTD.).

January 1960

Renamed the monthly payment system to “credit” to structurally improve and modernize the Company.

March 1960

Issued the first credit card in Japan.

October 1960

Established Marui Unyu Co., Ltd. (currently MOVING CO., LTD.).

April 1963

Listed stock on the Second Section of the Tokyo Stock Exchange.

June 1965

Stock designated to be listed on the First Section of the Tokyo Stock Exchange.

August 1966

Became the first in the industry to introduce computers.

April 1974

Introduced POS system and launched an online credit inquiry system to simplify contracting work.

May 1974

Opened the New Shinjuku Marui (currently Shinjuku Marui Main Building).

September 1975

Began offering on-the-spot approval at stores for “Akai Card” credit cards.

February 1981

Began a cash advance business, celebrating the 50th anniversary of founding.

September 1984

Established M&C SYSTEMS CO., LTD.

July 1987

Established CSC Service Co., Ltd. (currently MARUI FACILITIES Co., Ltd.).

September 1988

Published “Voi” mail-order catalogue.

December 1994

Relocated the head office to 3-2, Nakano 4-chome, Nakano-ku, Tokyo.

October 2003

Opened Kobe Marui, the first store in the Kansai region.

February 2004

Opened Kitasenju Marui, the largest Marui store to date.

October 2004

Established Marui Card Co., Ltd. (currently Epos Card Co., Ltd.).

November 2004

Established MRI Co., Ltd.

March 2006

Launched the EPOS card.

September 2006

Opened Namba Marui, the first store in Osaka.

October 2007

November 2015

The Company switched to a holding company system via a corporate demerger, renamed MARUIGROUP CO., LTD.
The retail business was succeeded by a newly established company, MARUI CO., LTD., and the credit
card business was succeeded by Epos Card Co., Ltd.
Established MARUI HOME SERVICE Co., Ltd.
Opened Yurakucho Marui.
Established Epos Small Amounts and Short Term Reserve CO., LTD. (currently Epos Small Amount andShort Term Insurance Co., Ltd.).
Established the MARUI GROUP Corporate Governance Guidelines.

April 2016

Opened Hakata Marui, the first store in the Kyushu region.

February 2018

Established TSUMITATE SECURITIES PREPARATORY CO., LTD. (currently tsumiki Co., Ltd.).

January 2020

Established D2C & Co. Inc.

April 2021

Established MARUI GROUP NEW BUSINESS CREATION CO., LTD. (currently okos Co., Ltd.).

April 2022

Stock listing transferred from the First Section to the Prime Market due to the Tokyo Stock Exchange’s
revised market classification
Established Muture Corporation (joint venture with Goodpatch Inc.)

February 20134

3. Description of Business
The Group is a corporate group that operates Retailing and FinTech businesses in an integrated manner and iscomprised of the Company, a holding company, and its 22 subsidiaries and five associates.
The details of each business and main Group companies of the Group are as follows. Businesses are categorized in thesame manner as segments.
Retailing
The following five consolidated subsidiaries, as well as non-consolidated subsidiaries and associates not accounted forusing the equity method, engage in businesses, including the rental and the management of commercial property,
purchasing and sale of clothes and accessories, space production, advertising, total fashion distribution, generalbuilding management, etc.
<Consolidated subsidiaries>
MARUI CO., LTD., AIM CREATE CO., LTD., MOVING CO., LTD., M&C SYSTEMS CO., LTD., MARUIFACILITIES Co., Ltd.
<Non-consolidated subsidiaries and associates not accounted for using the equity method>MARUI KIT CENTER CO., LTD., MIZONOKUCHISHINTOSHI Co., Ltd., etc.
FinTechThe following seven consolidated subsidiaries, as well as non-consolidated subsidiaries and associates not accounted
for using the equity method, engage in businesses, including credit card services, cash advance services, rent guarantee
services, information system services, real estate rental, investment trust sales, small-amount short-term insurance
services, etc.
<Consolidated subsidiaries>
Epos Card Co., Ltd., MRI Co., Ltd., M&C SYSTEMS CO., LTD., MARUI HOME SERVICE Co., Ltd., MARUIHOME SERVICE MANAGEMENT Co., Ltd., tsumiki Co., Ltd., Epos Small Amount and Short Term Insurance Co.,Ltd.
<Non-consolidated subsidiaries and associates not accounted for using the equity method>
D2C & Co. Inc., okos Co., Ltd., etc.
In addition to the above, subsidiaries and associates of the Company rent/lease real estate properties from relatedparties that are not subsidiaries or associates, namely, NAKANO Co., Ltd. and another company.
As the Company is a specified listed company, etc., consolidated figures shall be applied to numerical standards
defined in comparison with the scale of the listed company among the criteria for regarding a material fact as minor
pertaining to insider trading regulations.

5[Organization Chart]
The Group’s organization is as illustrated below.

64. Subsidiaries and Associates
Company Name

Location

Share capital(Millions ofyen)

Principal businessHolding ratioof votingrights (%)

Relationship(Consolidated subsidiaries)
MARUI CO., LTD. (Notes 3 and 4)

Nakano-ku, Tokyo

100

Epos Card Co., Ltd. (Notes 3 and 5)

Nakano-ku, Tokyo500

MRI Co., Ltd.

Nakano-ku, Tokyo

500

AIM CREATE CO., LTD.

Nakano-ku, Tokyo100

MOVING CO., LTD.

Toda-shi, Saitama

100

M&C SYSTEMS CO., LTD. (Note 3)

Nakano-ku, Tokyo100

MARUI FACILITIES Co., Ltd.

Nakano-ku, Tokyo100

MARUI HOME SERVICE Co., Ltd.

Nakano-ku, Tokyo100

MARUI HOME SERVICEMANAGEMENT Co., Ltd.

Nakano-ku, Tokyo10

tsumiki Co., Ltd.

Nakano-ku, Tokyo

100

Epos Small Amount and Short Term
Insurance Co., Ltd.

Nakano-ku, Tokyo

200

Notes:

Operation of Marui/ModiStores, Online Shoppingand Mail-order
Credit Card Business,
Credit Loan BusinessCollection andManagement ofReceivables Business,
Credit Check Business
Proposal of Commercial
Facilities Category,
Design and Interior
Decoration, Operationand Management,
Planning and Making ofAdvertisement
Trucking Business,
Forwarding Business
Software Development,
Computer Operation
Building Management
Service Business,
Security Service
Business
Real-Estate Rental
Business
Real-Estate Rental
Business
Sales of Tsumitate NISA
applicable investment
trustsSmall-amount short-term
insurance services

100.0Management advisory, etc.
Interlocking directorship…Yes

100.0

Management advisory, etc.
Interlocking directorship…Yes

100.0 Management advisory, etc.
[100.0] Interlocking directorship…Yes

60.0

100.0
100.0
100.0

Management advisory, etc.
Interlocking directorship…Yes

Management advisory, etc.
Interlocking directorship…Yes
Management advisory, etc.
Interlocking directorship…Yes
Management advisory, etc.
Interlocking directorship…Yes

Management advisory, etc.
Interlocking directorship…Yes
100.0 Management advisory, etc.
[100.0] Interlocking directorship…No
100.0

100.0

Management advisory, etc.
Interlocking directorship…Yes

95.0[95.0]

Management advisory, etc.
Interlocking directorship…No

1. Figures in brackets in the “Holding ratio of voting rights” column indicate the ratio of indirect holdings.
2. In addition to the above relations, funds are borrowed and loaned between the Company and the Group companies
under a cash management system that centrally manages Group funds.
3. A specified subsidiary.
4. Operating revenue (excluding internal operating revenue from other consolidated companies of the Group) of
MARUI CO., LTD. is greater than 10% of consolidated operating revenue.
Primary profit (loss) information, etc.
Operating revenue: ¥60,141 million; Ordinary profit: ¥792 million; Loss: ¥1,560 million;
Net assets: ¥205,123 million; Total assets: ¥245,861 million
5. Operating revenue (excluding internal operating revenue from other consolidated companies of the Group) of Epos
Card Co., Ltd. is greater than 10% of consolidated operating revenue. However, primary profit (loss) information,etc., is omitted as the said operating revenue is greater than 90% of operating revenue of “FinTech” stated in
Segment Information.

75. Employees(1) Consolidated basis

As of March 31, 2024
Number of employees (Persons)Name of segment
Retailing

2,144 [

648]

FinTech1,876 [

727]

270 [

29]

4,290 [

1,404]

Corporate (Common functions)
Total
Notes:

1. The number of employees represents the number of active employees, exclusive of the average number of part-time
employees during the fiscal year (calculated based on prescribed monthly working hours) which is shown in brackets
in the number of employees column.
2. Corporate (Common functions) refers to the number of employees of the Company, a pure holding company, that is
not attributable to a particular segment. Most of them belong to the administration division or the investment
division.

(2) Non-consolidated basis
Number of employees(Persons)
270 [29]
Notes:

Average age(Years old)
39.4

Average length of service(Years)15.5

As of March 31, 2024
Average annual salary(Yen)
6,341,400

1. The number of employees represents the number of active employees, exclusive of the average number of part-time
employees during the fiscal year (calculated based on prescribed monthly working hours) which is shown in brackets
in the number of employees column.
2. Average annual salary includes bonuses and other non-standard payments.

(3) Labor unions
The Group has MARUI GROUP UNION, which is a member union of UA ZENSEN. Management-labor relations
have been smooth, and there are no items of note to report.
(4) Percentage of female employees in management positions, percentage of male employees taking childcare leave,and differences in wages between male and female employees

Name

Fiscal year under review
Percentage ofPercentage of Differences in wages between male and female employees(Notes 1 and 3)
female employees male employees
in management taking childcare
Part-time andpositions (%)
leave (%)
All employees Regular employees
fixed-term(Note 1)
(Note 2)
employees

Filing company
MARUI GROUP CO.,LTD. (Note 4)

22.4

100.0

77.8

72.0

91.6

－

－

108.5

98.2

108.5

Consolidated subsidiaries
Epos Card Co., Ltd.
(Note 5)
Notes:

1. The figures are calculated in accordance with the provisions of the Act on the Promotion of Women’s Active
Engagement in Professional Life (Act No. 64 of 2015). The percentage of female employees in management positions
is as of April 1, 2024.
2. The figures are calculated based on the ratio of employees who took childcare leave, etc. or leave for childcare purposes
as stipulated in Article 71-4, Item 2 of the Ordinance for Enforcement of the Act on Childcare Leave, Caregiver Leave,
and Other Measures for the Welfare of Workers Caring for Children or Other Family Members (Ordinance of the
Ministry of Labor No. 25 of 1991), in accordance with the provisions of the Act on Childcare Leave, Caregiver Leave,
and Other Measures for the Welfare of Workers Caring for Children or Other Family Members (Act No. 76 of 1991).
3. The number of employees is calculated by taking into account the number of employees converted based on theirworking hours.
4. MARUI GROUP CO., LTD., which is the reporting company, hires, assigns, and trains all employees except for parttime employees, etc. Because employees assigned to each Group company are seconded, the figures for the reporting
company include employees seconded to subsidiaries. Accordingly, the number of employees on which the calculation
is based differs from the number of employees stated in “(2) Non-consolidated basis.”
5. Epos Card Co., Ltd. is a consolidated subsidiary subject to disclosure in accordance with the provisions of the Act on
Promotion of Women’s Active Engagement in Professional Life (Act No. 64 of 2015). The figures for each company
are based on directly hired employees only and do not include employees in management positions or those eligible
for childcare leave.

8<Supplementary explanation for each numeric value>
Indicators related to human resources of the Group are described in “II. BUSINESS OVERVIEW, 2. Sustainability
Approach and Initiatives, 2. The Group’s idea of human capital management.” For detailed performance data on
human capital management, please refer to the “Social” category in the ESG Data Book for the fiscal year ended
March 31, 2024.
ESG Data Book
(https://www.0101maruigroup.co.jp/sustainability/lib/databook.html) (in Japanese)<Factors behind the differences in wages between male and female employees and the Company’s approach>
Trends in the differences in wages between male and female employees have improved compared to the previous
year, as described below.

There is no difference in treatment by gender in the Group’s wage system, and the biggest factor behind thedifferences in wages is the low percentage of female employees in high-level positions with higher wages, such as
management positions. When broken down by position, the difference is 85.8% to 95.8%. The main factor behinddifferences even within the same position is the impact of the short-hour work system. As of March 2024, 99.2% of
employees using the short-hour work system are women, and when time corrections are made for employees who
work short hours, the difference in wages by position is 91.4% to 96.0%.
Given these circumstances, the Group aims to diversify its decision-making tier (management positions and above,
including Directors and Executive Officers) as part of its efforts to create an organization that is conducive to thecreation of innovation. We have established the “vitality index of female employees” as our own indicator tovisualize these efforts, and we are promoting women’s participation and advancement in the workplace.
In order to promote women’s participation and advancement in the workplace, we are implementing a “Gender
Equality Project” that works to review the mindset of fixed gender roles, with the aim of improving the “mindset of
fixed gender roles where men should work while women should do housework and raise children” and increasing
the percentage of “female employees who wish to work in high-level positions.” We are also implementing “career
design training” for 26-year-old male and female employees reaching major life events, as well as project activities
led by employees in management positions to improve “workstyles for employees in management positions.”
We will continue these efforts going forward, striving to eliminate the differences in wages between male and female
employees by aiming to be an organization where the burden of housework and childcare does not fall9

disproportionately on women and where both men and women can naturally balance their work and family
responsibilities.

10II. BUSINESS OVERVIEW
1. Management Policies, Management Environment, and Issues to Be Addressed
Forward-looking statements in this document are based on the judgment of the Group at the end of the fiscal year
under review.
■ Basic management policies
The Group’s mission is to work together with our stakeholders to help build an inclusive society that offers happinessto all, based on our corporate philosophy of “continue evolving to better aid our customers” and “equate thedevelopment of our people with the development of our company.”
The Group aims to promote harmony and the expansion of the interests and happiness of all stakeholders, including
customers, shareholders, investors, communities and society, and business partners, employees and future generations.
In order to achieve this goal, we endeavor to create value that we can share with our stakeholders by taking theirperspectives into consideration as we deliberate and take action on all matters. We hope to promote “co-creation
management” to improve our corporate value as a result of these endeavors.
For details of the Group’s co-creation management, please refer to the Co-Creation Management Report 2023 and the
VISION BOOK 2050.
Co-Creation Management Report (https://www.0101maruigroup.co.jp/en/ir/lib/i-report.html)
VISION BOOK 2050 (https://www.0101maruigroup.co.jp/en/sustainability/lib/s-report.html)

Corporate value = Intersection of the interests and happiness of all stakeholders
Harmonization and expansion of the intersection = Increase in the corporate value

11■ Medium-term management plan
Amid the expected rapid changes in the business environment, we have formulated a five-year medium-term
management plan that ends in the fiscal year ending March 31, 2026, with the aim of further increasing our corporate
value.
1) Changes in the business environment
Toward 2030, we will face three big transformations: “from current generations to future generations,” “transition ofdigital technologies from the introduction stage to the development stage,” and “from tangible assets to intangible
assets,” and companies that cannot respond to the sensibilities of future generations such as digitalization,
sustainability, and well-being may have a risk of rapidly losing their reputation at the time of a generational change insociety.
2) Future course• Through co-creation with future generations, we will achieve both social issue solutions and improvement incorporate value.
• Through stores and FinTech, we will aim to offer a “platform that connects online and offline.”• Through expansion of investments in new businesses, co-creation and other intangible assets in addition to humanresources and software, we will evolve into a company that solves social issues.
• Inviting stakeholders as board members, we will promote stakeholder management for the “harmonization of
stakeholder interests and happiness.”3) Specific initiatives<Business strategy>(Overview of the Group business)• We will create a business model that integrates the three pillars consisting of Retailing, FinTech, and the newly
added “investing for the future.” Investing for the future includes co-creative investments and investments in new
businesses.

12Retailing• We will further promote the transformation in department store-type operations advanced thus far, and realize new
growth. We will position stores as a platform for “integration of online and offline,” hold various events of new
businesses to be developed mainly with e-commerce, and promote creation of stores where customers will be
brought in by events. We will also aim to commercialize events along with FinTech with a view to developing
events not only in Marui stores but in commercial facilities across Japan.
FinTech• With the new cards and apps that launched in April 2021, we will aim to dramatically enhance the user experienceand further improve LTV. In addition, we will introduce credit cards that support individual “interests” such as
credit cards in collaboration with anime content, which grew to become the second pillar after Gold cards.
• We will review membership recruitment that largely relies on physical stores to increase the ratio of online
applications for membership and reinforce approaches for maximization of household share mainly through thegrowing areas of e-commerce, online services, and rent fees, aiming at ¥5.3 trillion of transaction volume in thefiscal year ending March 31, 2026, which is more than double the volume in the fiscal year ended March 31, 2021.
• Furthermore, 500 thousand customers pay their bills for renewable energy with their EPOS card, and we will
tackle both reductions in CO2 emissions and improvement of LTV.
Investing for the future• With regard to “investing for the future,” we will create innovation for balancing the impact of sustainability, wellbeing, and profits. We will aim at creating innovation within the Company through investments in new businesses
and introducing innovation from outside the Company through co-creative investment.
• With regard to new businesses, we will establish unique business models where media, stores, and FinTech areintegrated with e-commerce at the center.
• With regard to co-creative investment, we will proceed with an approach for growing together and creating value
based on the co-creative philosophy, and seek both earnings contributions to Retailing and FinTech as well as
financial returns.
<Capital measures>• The Retailing segment generated more earnings and stabilized its profits after the stores adopted a fixed-term
rental system, but the equity ratio remains at a high level. Thus, we plan to redistribute surplus capital and improve
our balance sheet to achieve a consolidated equity ratio of around 25%.
• We expect our core operating cash flow to be ¥230.0 billion for the next five years and plan to allocate ¥80.0
billion for investment for growth including investment for the future, ¥50.0 billion for share buybacks to optimize
our capital, ¥100.0 billion for shareholder returns (consisting of ¥80.0 billion for dividends and ¥20.0 billion forshare buybacks).

* Share buybacks for capital optimization completed in the fiscal year ended March 31, 2023. Measures for shareholder
returns have changed from the fiscal year ended March 31, 2024.

13

<Shareholder returns>(Basic policy)
With respect to shareholder returns, the Group’s basic policy will be one of ongoing, appropriate profit sharing.
• The Company will endeavor to continuously increase the level of dividends based on the long-term growth in
EPS to realize high growth coupled with high returns. It will aim to realize ongoing, long-term dividend increases,
targeting a dividend on equity ratio (DOE) of approximately 8%.
• Share buybacks are flexibly conducted after comprehensively considering a range of factors including thefinancial conditions and share price, for improving capital efficiency and enhancing shareholder interest.
Treasury shares acquired through share buybacks will, in principle, be cancelled.
• Dividend standards and treasury stock acquisition policies are regularly verified and revised as appropriate.
(Background to the formulation of the basic policy)
The Group has promoted capital optimization in line with the business structure transformation. At the time of thetransformation to a business structure centered on FinTech, the Group conducted approximately ¥100.0 billion worthof share buybacks by the fiscal year ended March 31, 2021 under a policy of reducing the equity ratio of the FinTech
segment to approximately 10% in line with the average in the industry, and achieved this target. In the current fiveyear medium-term management plan that ends in the fiscal year ending March 31, 2026, the Group conducted ¥50.0
billion worth of share buybacks over a two-year period to redistribute capital in the Retailing segment that has become
surplus due to the transition to fixed-term rental agreements for our stores. Through such share buybacks, the equity
ratio which had remained high lowered to approximately 25%, our target level, in the fiscal year ended March 31,
2023.
The Group has optimized the capital structure and achieved a target for the balance sheet, so it has decided to use a
dividend on equity ratio (DOE) as a new dividend indicator from the fiscal year ended March 31, 2024, and continue
to aim to achieve high growth and high returns. The Group has decided to flexibly conduct the process for sharebuybacks, comprehensively considering a range of factors including the financial conditions and share price to improve
capital efficiency and shareholder returns, instead of the existing plan-based method.
<Impact>• Under the Group’s 2050 Vision announced in 2019, targets related to sustainability and well-being have been
defined as “Impact.” As part of our initiatives toward 2030, we have made some changes to the three targets of“work together with future generations to create the future,” “work together to bring happiness to individuals,”and “create a co-creative ecosystem,” and set the key items for initiatives as main KPIs under the medium-term
management plan. Going forward, we will advance concrete initiatives with the aim of achieving these KPIs.
• In addition, aiming at co-creation management which realizes the interests and happiness sought by stakeholders
together, we will invite stakeholders as board members to evolve the governance structure.

144) Main KPIs
Impact-related KPIs for the fiscal year ending March 31, 2031 are as follows. To achieve the Impact, we will realize
EPS of ¥200 or more, ROE of 13% or more, and ROIC of 4% or more for the fiscal year ending March 31, 2026.

15

■ The future corporate value we seek to achieve
Going forward, we will further increase human capital investment to increase our corporate value. Intangible assets
account for 90% of corporate value in the United States, but only 32% among Japanese companies. Our Group’s
intangible asset ratio as of March 2023 is 44%, but we aim to raise it to 80%, in line with American companies, by
2030 by investing in human capital, thereby increasing our corporate value.

Source: Created by the Company based on OCEAN TOMO “INTANGIBLE ASSET MARKET VALUE STUDY”(2020)

With respect to our future corporate value goals, we seek to raise ROE to roughly 25% and increase our PBR to 5.

16

2. Sustainability Approach and Initiatives
Forward-looking statements in this document are based on the judgment of the Group at the end of the fiscal year
under review.
1. The Group’s idea of sustainability
I. Overall sustainability
In 2016, the Group took its first steps toward practicing future-oriented sustainability management, an approach that
integrates its business with consideration for the environment, the resolution of social issues, and corporate governanceinitiatives. We have redefined our business approach targeted for “every individual” to that featuring “inclusion” andreorganized our core themes. We believe that these will also contribute to the realization of the United Nations
Sustainable Development Goals (“SDGs”).
Furthermore, in 2019 we formulated the MARUI GROUP’s 2050 Vision, our long-term vision for 2050, to achieve
full-fledged sustainability management, and declared the slogan “Harnessing the power of business to build a worldthat transcends dichotomies.”
As stated in the previous section “Medium-term management plan,” in 2021 we defined our targets related tosustainability and well-being as “Impact” based on the 2050 Vision. “Impact” consists of three co-creation objectives
described as “work together with future generations to create the future,” “work together to bring happiness toindividuals,” and “create a co-creative ecosystem.”
We aim to achieve both the solution of social issues and profits through its business, and the key approaches for impact
and profit are defined as main KPIs in our medium-term management plan. Please refer to “(4) Indicators and targets”
for specific indicators.
(1) Governance
We will develop a management structure that is inclusive of stakeholders to promote harmony and the expansion of
the interests and happiness of all stakeholders.
Stakeholder Management

Aiming at co-creation management which realizes the interests and happinesssought by stakeholders together, we will invite stakeholders as board members
to evolve the governance structure.

Sustainability Management

We have been verifying activities as necessary for the promotion ofsustainability management, and are confirming our progress on the key
performance indicators (KPI) for evaluating sustainability in our businesses. In
order to strengthen our sustainability management system, we establishedSustainability Advisors and the Sustainability Committee as an advisory bodyto the Board of Directors in 2019. Committee members, including external
experts and members from younger generations, have engaged in deeper
dialogue about the future, including issues on Group-wide sustainability
strategies and initiatives. The Committee has also actively reported and maderecommendations to the Board of Directors.

Promotion of Risk Management

We established the MARUI GROUP Code of Conduct as the foundation forsustainability management. Under that Code of Conduct, we formulated the
MARUI GROUP Human Rights Policy, the MARUI GROUP Occupational
Health and Safety Policy, the MARUI GROUP Environmental Policy, etc. In
addition, in order to respond to the volatile operating environment while
accelerating business structure reforms through digitization and technologicalinnovation, we appointed a Chief Digital Officer (CDO). Moreover, tostrengthen measures in response to information security risks, we establishedthe Information Security Committee and appointed a Chief Security Officer(CSO) to serve as the highest-level authority on security responsible formanaging and protecting Groupwide information assets. The effectiveness ofthese policies is verified once a year and all Group employees are familiarizedwith them through training and other activities. We will review them as
required and promote risk management suitable for the times in the future.

Cultivation of Future Leaders

In April 2017, we launched the Co-Creation Management Academy (CMA)
future leader development program. Each year 10 to 20 candidates are selected,
and through this program we seek to discover and cultivate future leaders under
the guidance of our External Directors.

(2) Strategy
The Group’s mission is to “contribute to co-creating an inclusive society that offers happiness to everyone” guided by
the management philosophy of “Continue evolving to better aid our customers” and “Equate the development of ourpeople with the development of our company.” The Group shall offer “happiness” as not only economic affluence but
spiritual affluence through merging finance and retailing and aim to realize a society where all people, not just somepeople, can become “happy.”
17

Along with our formulation of 2050 Vision, our long-term vision for 2050, we have selected social issues to prioritize
in our efforts, and we have defined our ideals for 2050 as being a world in which nations, races, and nature areinterconnected.
By promoting our business model, which integrates the three pillars of Retailing, FinTech, and investing for the future(co-creative investment + investments in new businesses), based on our foundation of co-creation, we will balance
impact and profit.
We have defined the initiatives to be carried out by the Group in the form of three themes and nine key targets. By
working to achieve 2050 Vision, we will strive to create a flourishing and inclusive society that offers happiness to all.
■ Work together with future generations to create the future
We will take steps toward creating an eco-friendly and sustainable future by helping realize a carbon-neutral society,providing sustainable options, and supporting future generations in creating businesses.

Help realize a carbon-neutral society<Reduction of the Group-wide emissions>
The medium- to long-term targets for reducing greenhouse gas emissions
formulated in September 2019 were certified as “targeting 1.5°C” by theinternational initiative known as Science Based Targets (SBT). Furthermore, we
obtained a certification for our SBT Net Zero targets in August 2023. Groupwide
targets to reduce greenhouse gas emissions are as follows:
By 2030, from the level in the fiscal year ended March 31, 2017,- An 80% reduction in combined volume of Scope 1*1 and Scope 2*2
emissions- A 35% reduction of Scope 3*3 emissions
By 2050, from the level in the fiscal year ended March 31, 2017, achieve
net-zero by reducing the total Group-wide Scope 1 and 2 emissions andScope 3 emissions by 90%, and removing carbon from any residual
emissions
Achievement for the fiscal year ended March 31, 2024
• Reduction of 30,599 tons in combined emissions of Scope 1 (8,115 tons)
and Scope 2 (22,483 tons)
A 74.1% reduction compared to the fiscal year ended March 31, 2017
• A reduction in Scope 3 (241,570 tons)
A 50.6% reduction compared to the fiscal year ended March 31, 2017
Resulting in greenhouse gas emissions intensity*4 of 6.6, 88.0% of the levelin the previous fiscal year.
We became a member of RE100 in July 2018 and will source 100% of the electricity
used in our business activities from renewable energy by 2030. The ratio ofrenewable energy for the fiscal year ended March 31, 2024 was 70.7%.
*1) Greenhouse gas emissions from its use of fuel*2) Greenhouse gas emissions from its use of electricity, etc.
*3) Greenhouse gas emissions from its value chain*4) Calculated based on the ratio of greenhouse gas emissions (tons) toconsolidated operating profit (¥1 million)<Reduce societal CO2 emissions through co-creation with customers>
MARUI GROUP launched the Project for Promoting Shift to Renewable Energy
with UPDATER, Inc. (previously Minna-denryoku, Inc). The Group will take action
to reduce CO2 emissions together with its customers by offering services where its
cardholders can easily apply for Minna-denryoku’s renewable energy. Together
with our 500,000 customers, we aim to reduce CO2 emissions by 1 million tons by
the fiscal year ending March 31, 2026.

Achieve sustainable consumption andreform our lifestyles

We will help bring about sustainable consumption and lifestyles by providing
options through stores, cards, and investing for the future.

Support future generations in creating
businesses

We will accelerate investment and financing that supports future generations increating businesses through co-creative investment in future generation ofentrepreneurs and EPOS Owner Card business.

18

■ Work together to bring happiness to individuals
We will support pursuit of interests, uniqueness, health, and choices of how to make their money work for them ofindividuals, accelerating the realization of a society where every person feels empowered.

Support individuals in pursuing theirinterests

We will support individuals in pursuing their ‘interests’ by creating new
businesses, including anime, Korean cosmetics, and K-pop, as well as throughco-creative investments. We will also issue credit cards in collaboration withvarious content, hold in-store events, and carry out other highly uniqueinitiatives to further expand our business in this area.

Support individuals for their uniquenessThrough a business model that integrates the three pillars of Retailing,
FinTech, and investing for the future, we will support individuals for theiruniqueness by providing inclusive options with respect to areas such asallergies, sizes, LGBTQ issues, and support for people with disabilities.

Support individuals for their health

We will provide choices, such as femtech, health technology, and mindfulness,to support the health which is the foundation of life stages, thus supporting thehealth of individuals.

We will support individuals in their choices of how to make their money workfor them by providing financial inclusion opportunities, primarily by issuing
Support individuals in their choices of how tocredit cards through credit co-creation, and through investments thatmake their money work for them
contribute to society while building assets, such as supportive investment(social bonds).

■ Create a co-creative ecosystem
By using our Group assets, we will create a co-creative ecosystem with stakeholders and inspire innovation.

Provide co-creation platforms

We will support future generations of entrepreneurs by providing co-creation
platforms for spurring innovation such as Future Accelerator Gateway, Marui
Co-Creation Pitch, and the Teens Apps Awards, and by leveraging our Group
platform such as our stores and credit cards.

Innovate the workstyles and organizations

Through project-based organizations such as co-creative teams, DX training,
and the like, we will create environments that are consistently conducive toinnovation and we will promote personnel development.

(3) Risk management
The Group identifies risks and opportunities in order to track and assess sustainability-related issues. The identified
risks and opportunities are managed in terms of strategy formulation and individual business operations through a
promotion system led by the Sustainability Committee. The content of deliberations by the ESG Committee consistingof officers of Group companies (credit card services, retailing, facility management, distribution, general building
management, etc.), is regularly reported and discussed at the Compliance Promotion Board chaired by the
Representative Director, or at the Sustainability Committee, an advisory body to the Board of Directors. Reports andadvice are provided to the Board of Directors as necessary for specific items. Going forward, strategies and measures
will be examined based on a myriad of factors. External factors on which information will be shared include trends insociety that may impact corporate strategies as well as legal and regulatory revisions. Internal factors examined will
include progress in the measures of Group companies and future risks and opportunities.

19

(4) Indicators and targets
The Group has set three targets as impact-related KPIs for the fiscal year ending March 31, 2031, based on co-creation:“work together with future generations to create the future,” “work together to bring happiness to individuals,” and“create a co-creative ecosystem.” We are carrying out specific initiatives for achieving these KPIs.
To assist in rapidly realizing these impact-related KPIs, Group companies and divisions have formulated medium-term
management plans, and progress on these plans is monitored annually at progress report meetings for the management.

20II. Initiatives related to climate change and endorsing the Task Force on Climate-related Financial Disclosures (TCFD)
Climate change should be considered as a climate crisis today. Recognizing climate change as one of its most importantmanagement priorities, MARUI GROUP aims to “limit the rise in the global temperature to below 1.5°C above preindustrial levels,” as presented in the Paris Agreement. The Group has strengthened its governance system to actively engage
in creating a carbon-neutral society based on the long-term targets of the Paris Agreement in accordance with the MARUI GROUP
Environmental Policy as revised in March 2022. At the same time, the Group has analyzed the potential impact of climate change
on business, and is promoting initiatives in capturing opportunities for growth and responding appropriately to relevant risks
resulting from climate change. The Group endorsed the recommendations of the TCFD, which was established by the

Financial Stability Board, and disclosed information in its annual securities report for the fiscal year ended March 31,
2019, based on these recommendations. We conducted repeated analyses and expanded the disclosure of information
concerning opportunities and physical risks due to climate change in our annual report for the fiscal year ended March
31, 2020. As we continue to focus on enhancing our information disclosure in the future, we will benchmark theappropriateness of the Group’s responses to climate change using the TCFD recommendations to promotesustainability management.
(1) Governance
The Sustainability Committee is an advisory body to the Board of Directors, established for the purpose of examining
and discussing the Group’s basic policies and major items related to climate change. In addition, the ESG Committee
has been established to improve the level of management of relevant risks, and through the Compliance Promotion
Board, chaired by the Representative Director, we manage risks for the entire Group. In formulating business strategies
and implementing investment and financing, we will strengthen our governance related to climate change based on
this system by comprehensively discussing and making decisions with considerations for the MARUI GROUP
Environmental Policy and other major items related to climate change.
(2) Strategies(Business risks and opportunities)
Recognizing that a 4°C rise in the average global temperature resulting from climate change would have an enormous
impact on society, we believe it is important to work to help limit global warming to below 1.5°C above pre-industrial
levels. In order to strengthen our ability to respond to scenarios below 2°C (with a target of 1.5°C), we will identify
the impact of climate-related risks and opportunities on our business, and proceed to formulate relevant strategies.
The Group promotes a business model integrating Retailing and FinTech with “investing for the future” that consistsof co-creative investment and investment in new businesses. Climate change would pose such risks as damages tostores, facilities, etc., from floods caused by typhoons and torrential rains, and an increase in costs due to theintroduction of carbon taxes along with tightened regulations. On the other hand, we view the provision of goods andservices responding to increased consumer environmental awareness and investing in eco-friendly companies as theGroup’s business opportunities.
(Analysis and calculation of financial impacts)
Financial impacts on businesses are analyzed based on our climate change scenario, etc., and calculated by item as theamount of impact on income anticipated within the period through 2050. As physical risks, even if a rise in temperatureis held below 1.5°C, we anticipate that flood damage will abruptly occur due to typhoons, torrential rains, etc. Theserisks are expected to affect rent revenues, etc., due to suspension of store operations (approx. ¥1.9 billion) and cause
building damages (approx. ¥3.0 billion). We assessed the transition risks by estimating increases in future energyrelated costs, which are expected to be renewable power procurement costs (approx. ¥0.8 billion) and the introductionof carbon taxes (approx. ¥2.2 billion). The relevant opportunities are expected to have an impact on store revenue as aresult of proposing lifestyles to highly environmentally conscious consumers (approx. ¥1.9 billion), long-term revenue
due to an increase in cardholders (approx. ¥2.6 billion), and returns from investment in environmentally friendly
companies (approx. ¥0.9 billion). We project long-term revenue owing to an increase in recurring payments due tocardholders using electrical power from renewable energy, leading to the conversion of regular cardholders to Gold
cardholders (approx. ¥2.0 billion), a reduction of procurement costs resulting from entering the power retailingbusiness (approx. ¥0.3 billion), and exemption from carbon taxes (approx. ¥2.2 billion). We will conduct analysis
regularly based on various future trends and continue to review our evaluations and disclose relevant information.

21

(Assumptions)Target period2020 to 2050

Scope

All businesses of MARUI GROUP

Calculation
requirements

Analyses based on climate change scenarios (IPCC, IEA, etc.)
Calculation of financial impacts assumed during the period byitem
Calculation of risks in the amount of impact if an event occurs
Calculation of opportunities for lifetime value (LTV), inprinciple
Not considering infrastructure enhancements such as public
works and technology advancements, etc.

Opportunities

Transition risks

Physical risks(Risks and opportunities associated with climate change)
Changes
Risks faced by
Description of risks
in society
MARUI GROUP
Impact on rent revenues, etc., due to businesssuspension
Suspension of store
Flood damage
operations
Building damages due to flooding (recovery of
due to typhoons,
power supply facilities, etc.)
torrential rains,*1
etc.
Groupwide suspension of business activities due toStop of system centerssystem outage
Increase indemand forrenewable energy

Rise in renewableenergy prices

Tightening ofgovernment’s
environmental
regulations

Introduction of carbon
taxes

Changes insociety

MARUI GROUP’s
opportunities

Enhancedenvironmental
consciousness
and change inlifestyles

Propose sustainable
lifestyles

Response to demand
from general households
for renewable energy

Financial
impacts
Approx.
¥1.9 billion
Approx.
¥3.0 billion
Response
completed*2

Increase in energy costs due to renewable energy
procurement

Approx.
¥0.8 billion(Annual)Tax increase due to carbon taxes

Approx.
¥2.2 billion(Annual)

Revenue from bringing in eco-friendly tenants, orother efforts

Financial
impacts
Approx.
¥1.9 billion

Increase in sustainability-minded credit
cardholders

Approx.
¥2.6 billion

Returns from investments in eco-friendly
companies

Approx.
¥0.9 billion

Revenue from cardholders using electrical powerfrom renewable energy

Approx.
¥2.0 billion

Description of opportunities

*3

*4

*5

Diversificationof electricity
procurement

Entry into the power
retailing business

Reduction in intermediary costs due to direct
procurement of electricity

Approx.
¥0.3 billion(Annual)Tightening ofgovernment’s
environmental
regulations

Introduction of carbon
taxes

Exemption from carbon taxes from achieving
zero greenhouse gas emissions

Approx.
¥2.2 billion(Annual)*1. Assuming flooding of a river that will have the most significant effects based on hazard maps (Arakawa River)(three-month effect on two stores in the watershed areas)*2. Assuming no financial impacts as a backup center has been established*3. Increased rent revenues and credit card usage*4. Calculated revenue from credit card admission and usage*5. Estimated revenue from an increase in the number of Gold card holders after making recurring payments, etc.
22

(3) Risk management
MARUI GROUP performs scenario analyses to track and assess the impacts of climate change on its business andidentify climate change-related risks and opportunities. The identified risks and opportunities are managed in terms ofstrategy formulation and individual business operations through a promotion system led by the Sustainability
Committee. The content of deliberations by the ESG Committee consisting of officers of Group companies (credit
card services, retailing, facility management, distribution, general building management, etc.), is regularly reported
and discussed at the Compliance Promotion Board chaired by the Representative Director, or at the Sustainability
Committee, an advisory body to the Board of Directors. Reports and advice are provided to the Board of Directors asnecessary for specific items. Going forward, strategies and measures will be examined based on a myriad of factors.
External factors on which information will be shared include climate change and other trends that may impact corporate
strategies as well as legal and regulatory revisions. Internal factors examined will include progress in the measures ofGroup companies and future risks and opportunities.
(4) Indicators and targets- Our Groupwide greenhouse gas emission reduction targets are as follows: an 80% reduction in emissions attributable
to Scope 1 and Scope 2 and a 35% reduction attributable to Scope 3 from the level in the fiscal year ended March 31,2017 by 2030 (a 90% reduction in the total emissions attributable to Scope 1 and Scope 2 as well as Scope 3 fromthe level in the fiscal year ended March 31, 2017 by 2050); and they were certified as “targeting 1.5°C” by the SBT
initiative in September 2019.
- The Group has set a target of procuring 100% of the electricity used in its business activities from renewable powersources by 2030 (medium-term target: 70% by 2025) and became a member of RE100 in July 2018.
2. The Group’s idea of human capital management
Based on the philosophy that we should “equate the development of our people with the development of our company,”
the Group has been working to reform the corporate culture since 2005, with the aim of continuously improving
corporate value. In order to reform our corporate culture, we have simultaneously promoted measures related to“Corporate Philosophy,” “Culture of Dialogue,” “Workstyle Reforms,” “Promotion of Diversity,” “Culture of
Voluntary Participation,” “Intra-Group Companies Profession Changes and Transfers,” “Dual-Axis Evaluation of
Performance and Values,” and “Well-being,” etc.
For performance data on the Group’s human capital management, please refer to the “Social” category in the ESG
Data Book for the fiscal year ended March 31, 2024.
ESG Data Book
(https://www.0101maruigroup.co.jp/sustainability/lib/databook.html) (in Japanese)<Initiatives aimed at reforming the corporate culture>1) Corporate Philosophy
The Group’s human capital management is based on the management philosophy that we should “equate thedevelopment of our people with the development of our company.” With regard to this philosophy, by setting up a
dialogue forum for employees to discuss their reasons for working and what they wish to accomplish at the Company,
we reconciled the Company’s purpose with the purposes of individuals. Over a period of more than ten years, morethan 4,500 employees participated in this dialogue forum. As a result, the retirement rate temporarily increased due tothe retirement of people who could not share the same philosophy, but since then, the retirement rate (excluding those
who retired at the mandatory retirement age) has remained at a low level of around 3%. In addition, the turnover rate
within three years of joining the Company is about 13%, which is far below the national average, showing that thefoundation for the “mutually chosen relationship” between the Company and individual employees has been
established.
2) Culture of Dialogue
Although communication used to be a one-way street, the Group has fostered a “culture of dialogue” through two-way
communication. Discussions and meetings are always conducted interactively in accordance with the following sevenguidelines: “1. Start with a declaration that opinions can be safely expressed,” “2. Do not set a particular purpose,” “3.
Do not seek conclusions,” “4. Listen attentively,” “5. Speak in response to other people’s remarks,” “6. Do not rejectother’s opinions, and “7. Include intervals to allow discussions to develop.”3) Workstyle Reforms
We are aiming not only to create a comfortable work environment, but also to transform our corporate culture from
one in which the essence of work is “providing time” to one in which value is placed on “creating value.” As a resultof project activities conducted by employees, overtime per person decreased significantly from 11 hours per month in
the fiscal year ended March 31, 2008 to approximately 5.3 hours in the fiscal year ended March 31, 2024.

23

4) Promotion of Diversity
Since 2014, we have been promoting organizational reform by advocating for diversity in three aspects: “gender,”“age group,” and “individuals.” With regard to gender diversity, we started a project to promote women’s participation
and advancement in the workplace in the fiscal year ended March 31, 2014. In addition, as a result of promoting
initiatives based on our own KPI called the “vitality index of female employees,” the rate of male employees taking
childcare leave reached 100% for the sixth consecutive year in the fiscal year ended March 31, 2024, and the percentage
of female employees who wish to work in high-level positions also improved to 58%. From the fiscal year ended
March 31, 2022, we have set new goals of “encouraging the taking of paternity leave” and “reviewing the gender roledivision between men and women,” and have embarked on more substantive initiatives.

5) Culture of Voluntary Participation
For over a decade, we have promoted a culture of voluntary participation by employees so as to encourage theindividual initiatives of our employees and form an autonomous organization where innovation is generated. We
provided our employees with a wide range of self-driven opportunities, such as official projects and initiatives, andthe Medium-Term Management Visionary Committee. During the fiscal year ended March 31, 2024, the percentageof employees who voluntarily participated reached approximately 90%.

246) Intra-Group Companies Profession Changes and Transfers
Based on the culture of voluntary participation by employees, we have been promoting full-fledged intra-Group
companies profession changes and transfers that span various businesses across the Group since 2013. By the fiscal
year ended March 31, 2024, approximately 85% of all Group employees have experienced profession changes. In a
survey conducted in 2016, approximately 86% of the respondents said that changes in professions contributed to their
growth. We believe that this system develops a capacity for diversity and resilience of each employee. Going forward,
we will further promote the secondment of our employees to other companies, particularly the investees of co-creative
investment, to develop human resources that are resilient to change.

7) Dual-Axis Evaluation of Performance and Values
In the personnel evaluation system, we aim to realize the corporate philosophy of “developing our people” byconducting evaluations not only based on performance, but also by having superiors, colleagues, and subordinates
conduct a comprehensive evaluation related to values.
8) Well-being
Since 2016, the Group has been working on the well-being of employees with the aim of creating an organization withvitality that enables each and every employee to engage in work enthusiastically and energetically. Led by Director,
Senior Executive Officer and CWO (Chief Wellbeing Officer) Ms. Reiko Kojima, we aim to realize the happiness ofeach and every person in the organization through the “Resilience Program for Executives” and the “Well-being
Promotion Project” in which employees voluntarily participate.

25

<Improving employee engagement by reforming the corporate culture>Through eight measures, which include unique Company initiatives, we have updated our corporate culture, which
serves as our management OS, creating a new OS. As a result of these measures, employee engagement has improved.
Comparing the engagement indicators we measure in-house between 2012 and 2023, work “expectation” scores haverisen from 46% to 80%, workplace “respect” scores have risen from 28% to 64%, and scores relating to “leveraging
their own strengths” have risen from 38% to 51%, all major improvements.

(1) Strategy
MARUI GROUP’s 2050 Vision, which was formulated in 2019, sets forth a vision of transcending dichotomies
between impact and profit. By reforming our corporate culture, we have become able to create innovation in order toachieve this vision. However, these innovations are still but tiny “seedlings.” We must increase the number of these“seedlings” that bear the twin leaves of impact and profit and grow them into mighty trees bearing many fruit to evolve
into a company that solves social issues.

26

To overcome the difficult hurdle of balancing the pursuit of profit with the solving of social issues, it is essential thateach person brings their full creativity to bear. This is why we are working to create an organization in which people
can experience “flow” through their work.
“Flow” is a concept advanced by psychologist Mihaly Csikszentmihalyi, in which people’s abilities and the level ofchallenges they are tackling are well-matched, so they become completely absorbed in their challenges and lose trackof time. By experiencing flow, people can leverage their full creative abilities, surmounting difficult obstacles andachieving personal growth. The experience of flow produces a feeling of happiness. Our goal is to create organizations
where people can experience flow through their work, thereby achieving our ideals while contributing to the happinessof each and every worker. We will achieve this through two initiatives: “workstyle and organization innovation” and“DX promotion.”■ Innovate the workstyles and organizations
In our workstyle and organization innovation, we are promoting the creation of project-based workstyles andorganizations. Employees who wanted to realize an impact have reached out of their own accord and gathered together
across Group company lines, promoting innovation by working using a project approach. Until now, this workstylehas been an exceptional one. In the future, we will expand the use of this project approach so that it is no longer ararity, but instead the standard way of doing work.

27

i. Expansion of official initiatives
We will bring the total number of our official initiatives up to 12, an increase of three teams from the previous year.
The official initiatives seek to achieve both impact and profit and cover a range of themes. Team members who
voluntarily came together to tackle these themes are creating innovation through project-based activities that span
organization lines, both inside and outside each company.

28

ii. Organizations without section managers
Section managers manages people and team, but is not the head of the team, but a supporter of the team. Instead ofbeing at the top, being side by side to the team members, creating a flat organization. Each member is independent andself-driven, encouraging creativity as a team.

iii. Early appointment to managerial positions
By revising the personnel system, for those who can be expected to contribute to higher corporate value, early
promotion will be encouraged as a part of investment in human capital. Minimum age for promotion to manager has
been changed from 29 to 26. Preparing a stage where young talents can play an active role will allow for moreinnovations.

29

■ Promotion of DX
In order to bridge the gap between the status quo and the vision, the power of digital is indispensable. We must utilize
the leverage and speed of digital technology to rapidly implement a cycle of hypothesis verification.

30

i. Hiring professionals with Muture
In April 2022, we partnered with a leading UX design company, Goodpatch and established Muture, and began hiring
professionals that could not be hired under the Group brand. Some of the best talents in the industry have joined us
and are contributing to the development of lifestyle apps and OMEMIE.
ii. Tech organizational development
Through Muture, recruiting progressed, however, a new challenge has emerged. While experts are now developing
products, in order to expand product development throughout the Company and ensure its continuity, organization asa whole must transform into an agile organization. Until now, we have specialized in so-called core systems, but going
forward we will develop a tech organization completely unlike our past organizations with the goal of solving social
issues.

iii. Inviting a CDXO
To promote our agile organization development, in June 2023 we invited Naofumi Tsuchiya from Goodpatch Inc. toserve as our Executive Officer and Chief Digital Transformation Officer (CDXO). Mr. Tsuchiya possesses high levelknowledge regarding organization development and can apply the perspectives of both a digital specialist and an
enterprise manager.
In addition, besides education and training expenses, which have already been included in human resources investment,
we redefined “human capital investment” to include the following: Personnel expenses related to new businesses thatwere included in R&D expenses, personnel expenses of co-creative teams, and personnel expenses for employees intheir first year of intra-Group companies profession change or transfer. Among the profit and loss items for a single
fiscal year, these are items that lead to an increase in corporate value over the medium to long term. As a result of thisredefinition, human capital investment for the fiscal year ended March 31, 2024 amounted to ¥9.3 billion.

31

(2) GovernanceIn order to link our management strategy and human resource strategy, the Human Resource Strategy Committee was
newly established in April 2022 as an advisory body to the Board of Directors. Mr. Tomoo Ishii, Chief Human Resource
Officer (CHRO) and Senior Managing Executive Officer, was appointed as the chairperson, while Ms. Etsuko Okajima,an External Director, was appointed as a committee member. The Human Resource Strategy Committee, in cooperation
with the Strategy Committee, serves its role of recommending human resource strategies to the Board of Directors.
(3) Risk management
We believe that growth of the Group can be attained by the development and contribution of each employee. If
competition intensifies for the securing of human resources, an outflow of human resources occurs, and a consequent
shortage in future management personnel becomes apparent, these may affect the evolution and continuity of ourbusiness. The Group emphasizes the importance of human capital investments to accumulate the intangible assets thatare a wellspring of future corporate value, based on the culture where all of our employees can tackle new challenges.
We are currently creating an environment where employees can fully realize personal growth and are highly motivatedowing to our conducting of systematic human resource investments from a variety of angles. These investments include
education and training programs based on open application, the official Group project teams that engage in discussions
on important topics for Group management, and the official Group initiatives aimed at encouraging each and every
employee to demonstrate their creativity and create value. These efforts also include the implementation of the CoCreation Management Academy (CMA) Future Leader Development Program, which cultivates human resources
capable of promoting management reforms, as well as the secondment of employees to start-up companies.
In order to acquire human resources, we proactively use new methods for recruiting new graduates, such as long-term
internships, which allows us to establish early contacts with talented students and increase their engagement with theCompany. With regard to mid-career recruitment, in order to further expand the FinTech and e-commerce businesses,
in addition to the core system human resources that have been trained in-house thus far, we are promoting therecruitment of web-related system human resources to respond quickly to the user interface and user experience(UI/UX). To secure recruitment, the MARUI GROUP is clearly communicating its unique business model and growthstrategy to the recruitment market, and is recruiting human resources with UI/UX design expertise through Muture, ajoint venture with Goodpatch, a leading UI/UX design company established in 2022.
(4) Indicators and targets
To further reform our corporate culture, by declaring ourselves to be a social experiment company, we will foster aculture that accepts failure and encourages challenge. To this end, behavioral KPIs, such as the number of at bats andthe number of attempts to take on challenges, have been defined.
By experimenting a lot and failing fast, we will encourage fail fast and fail forward to cumulate the know-how forsuccess, aiming to become a company that continues to drive innovation.

In the five years from the fiscal year ended March 31, 2017 to the fiscal year ended March 31, 2021, we invested ¥32.0
billion in human capital. If we look at the marginal profit of new businesses created during that period, such as ouranime business, rent guarantees, and co-creative investment, as returns, then over the ten-year period from the fiscal
year ended March 31, 2017 to the fiscal year ending March 31, 2026, we will produce ¥56.0 billion in returns. With
regard to investment profitability and capital efficiency, using an IRR measurement model to calculate return, for aninvestment recovery period ending with the fiscal year ending March 31, 2026, the anticipated IRR would be 12.7%,
exceeding the cost of shareholders’ equity. We will use this measurement model to perform further benefit verificationand carry out human capital investment that contributes to greater corporate value.

32

The human capital investment IRR of 12.7% also exceeds the hurdle rate for tangible investments (primarily for stores,etc.) of 10%. We will therefore achieve highly efficient enterprise operation by expanding our human capital
investment to ¥65.0 billion or more over a five-year period while increasing our investment effectiveness.

33

◇ Indicators related to human capital management34

* The percentage of “female employees who wish to work in high-level positions” has been changed to include women up to the age of 54 as of the disclosure for the fiscal year ended March 31, 2024
(this change has also been applied to previous fiscal years).

35

3. Business and Other Risks
Matters stated in the business overview and financial information of our securities report that may affect the judgment ofinvestors are as follows. Forward-looking statements in this document are based on the judgment of the Group at the endof the fiscal year under review.
1. Major risks(1) Risks concerning business strategies
1) Risks concerning Retailing and FinTech environments- Changes in consumption trends- Occurrence and intensification of competition- Expansion of the e-commerce market, and diversification of settlement methods- Revision of the taxation system and relevant laws
(Impact)
The Group’s operations integrate Retailing and FinTech. The Group conducts operations at sales offices centered on theTokyo metropolitan area and sales offices located throughout the country. We anticipate to see a decline in the numberof visiting customers and transactions at stores due to changes in markets causing sluggish consumer spending, such as
fluctuations in business conditions, changes in economic conditions, the declining population, intensifying competition,
the expansion of the e-commerce market, and the rise in the sharing economy. In addition, the share of credit card usage
in the market is expected to shrink as a result of the technological advances such as the diversification of settlementmeans associated with the transition to cashless payments, or changes in consumer behaviors. If these risks become
apparent, the financial position and business results of the Group may be affected.
In store operations, the Group has been building a stable earnings structure by transitioning to a business structure focusedon shopping centers and fixed-term rental agreements. However, a downturn in the real estate market triggered by the
COVID-19 pandemic may cause tenants to move out and accordingly increase the vacancy rates and cause a reduction
in rent income. In addition, operating revenue, profit and the financial position of the Group may be affected by theposting of impairment loss due to fluctuations in land prices, increased tax burden due to a revision of the taxation system,and other factors.
Furthermore, allowance for doubtful accounts is provided with respect to operating receivables (accounts receivable installment and operating loans) of cards that account for a large share of the Group’s total assets, based on the occurrenceof receivables in arrears, historical bad debt ratios, etc. However, payments in arrears and uncollected receivables could
increase due to worsening economic conditions, changes in relevant laws, or other factors. The financial position andbusiness results of the Group may be affected by a sharp increase in bad debt expenses or allowance for doubtful accounts,
etc. Provision for loss on interest repayment has been provided to prepare for the repayment of interest on cash advances,by projecting the amount of future repayments based on the past actual repayments. However, if the amount of provision
is insufficient for the amount of future claims for interest repayment, additional costs may be incurred.
(Countermeasures)
In Retailing, we will continue to advance the transformation of the department store business, which we have beenworking on since before the COVID-19 pandemic. For Marui and Modi stores, in addition to expanding shopping centers,
fixed-term rental agreements, and dining and service-related businesses, given the current social environment where
digital technology has been widely applied in many areas, we will position physical stores as stores that “do not sell” so
as to make them function as platforms for connecting online and offline stores to support the e-commerce businesses
opening physical stores. Furthermore, we plan to create “eventful stores” that will host various events tailored to theinterests of each customer on an ongoing basis. Through these measures, we intend to further promote growth linked
with FinTech measures and increase our earnings.
Recognizing the promotion of the transition to cashless payments as a big opportunity, the FinTech segment responds todiversified payment methods by increasing EPOS Gold and Platinum cardholders and encouraging them to use their
EPOS card as their main card by implementing the strategy of maximizing the share of EPOS card payments amonghousehold finances, such as the rent guarantee services business. Moreover, aiming to realize financial inclusion withthe goal of providing everyone with the financial services they need when they need them, regardless of income or age,
we provide initial credit by utilizing big data based on credit expertise acquired from the time of our founding, as wellas credit monitoring under the belief that “creditability should be built together with customers.” We have achieved alow ratio of delinquent debt by increasing credit limits based on usage frequency and transaction amounts and payment
history.

362) Risks concerning co-creative investment- Uncertainty of return on investment- Risk of impairment loss on investment in unlisted companies- Fluctuations in prices of investment securities(Impact)
As part of the measures to accelerate investments in intangible assets, the Group is promoting co-creative investment
with the aim of adopting innovation from outside the Group. We aim to create value greater than the sum of individual
businesses by building a business model based on three business pillars: Retailing, FinTech, and investing for the future,
which refers to co-creative investment and investment for new businesses.
In executing co-creative investment, we conduct a preliminary detailed review through confirmation of the financial
conditions and contracts of prospective investees, etc., and interviews with their management, to fully examine risks.
However, in cases where a problem that cannot be identified through preliminary investigation is found, e.g., theoccurrence of a contingent liability or the discovery of unrecognized debt, or depending on future business performanceor changes in business policies of the investees, or a stock market downturn due to international disputes or financial
crises, the expected outcome may not be achieved, or an impairment loss may be recorded. Furthermore, the value oflisted shares held by the Group may be affected by price fluctuations depending on stock market trends.
(Countermeasures)
In selecting investees of co-creative investment, we prepare our own plan based on a business plan obtained from theinvestee and make investment decisions after checking profitability including not only financial returns but also
cooperative returns to be generated from cooperation with the Group. Most importantly, in co-creative investment, we
believe that we can contribute to mitigating investment risks and increasing returns by realizing co-creation by uniting
resources of the credit card business, the retailing business, and human resources involved in them, with intangible assets
such as investees’ know-how and skills, and by greatly contributing to the achievement of their business plans anddevelopment as a corporation.
In principle, we will not engage in cross-shareholdings except for cases in which such holdings are deemed necessary
for maintaining or building upon collaborative or transactional relationships that are strategically critical for improving
corporate value. At a meeting of the Board of Directors held in February 2016, it was determined that the Company had
already established sufficiently strong business relationships with cross-shareholding counterparties, and it was therefore
decided to undertake a phased reduction in cross-shareholdings out of consideration for asset efficiency and stock pricefluctuation risks.
In addition, when making investment decisions, we refer to evaluations by external organizations, such as antisocial
forces investigations, and conduct due diligence on the entrepreneurs’ dedication to solving social issues, their character,the overlap with the Group’s policies and vision, and other factors. Moreover, we regularly monitor the business growth
process after investment as a shareholder from the perspective of sustainability.
(2) Risks concerning natural disasters, infectious disease, etc.
1) Risks concerning large-scale disasters- Stagnation of economic activities and decline in consumption activities- Damage to assets held and occurrence of repair costs- Suspension of business activities due to damages to offices and systems, and adverse impact on employees(Impact)
The Group conducts operations at sales offices centered on the Tokyo metropolitan area and sales offices locatedthroughout the country. In the event of a natural disaster such as a large-scale earthquake or storm/flood, or a terrorist
attack in areas where sales offices are located, the sales offices may be forced to suspend business activities due to thedisruption of social infrastructure, etc., and this may affect the financial position and business results of the Group.
(Countermeasures)
The Group prepares against various disasters and accidents by taking measures such as introducing an employee safety
confirmation system, formulating a disaster countermeasures manual, implementing earthquake-resistant measures forbuildings, facilities, systems, etc. (including data backup), fire, disaster, and flood prevention drills, and stocking
necessities. In the event of an earthquake, etc., the Group Earthquake Disaster Response Headquarters is established andGroup companies work together to establish systems that enable business continuity.

372) Risks concerning climate change- Damages to stores and facilities from typhoons, torrential rains, etc.
- Introduction of carbon taxes, etc. along with the tightening of regulations(Impact)
The financial position and business results of the Group may be affected by damage to stores from flooding caused bytyphoons and torrential rains, and an increase in expenses due to the introduction of carbon taxes, etc.
(Countermeasures)
The Group believes it is important to capture opportunities for growth and respond appropriately to relevant risks
resulting from climate change. The details of the initiatives related to climate change and endorsing the TCFD areprovided in “2. Sustainability Approach and Initiatives, 1. The Group’s idea of sustainability, II. Initiatives related toclimate change and endorsing the Task Force on Climate-related Financial Disclosures (TCFD).”
3) Risks concerning infectious disease- Stagnation of economic activities and decline in consumption activities- Refraining from or suspending business activities at stores due to the spread of infection- Suspension of business activities due to infection of employees(Impact)
The Group conducts operations at sales offices centered on the Tokyo metropolitan area and sales offices locatedthroughout the country. If an outbreak of infectious diseases occurs in areas where sales offices are located or if measures
such as voluntary restraints on going out are taken to prevent the spread of infection, the financial position and businessresults of the Group may be affected by restrictions on business activities such as suspension of store operations.
Furthermore, it may become difficult to continue business due to the spread of infection among employees.
(Countermeasures)
In order to deal with the risk of the spread of infectious diseases, employees mainly based at offices remotely work fromhome as much as possible. For those who work in departments that require in-office work, such as call centers anddistribution centers, we have created systems for working in shifts or working at offices dispersed in various locations,and prepared thorough measures for preventing droplet infection. In addition, we have implemented situation-specificmeasures for preventing infections among our customers and employees at sales offices, such as installing alcohol
antiseptic solution dispensers, requiring them to wear a mask, and practicing social distancing.
(3) Risks concerning corporate operations
1) Risks concerning fund procurement- Constraining fund procurement- Raising fund procurement interest rates(Impact)
The FinTech segment is expected to grow, with card shopping transactions increasing and financial services including
rent guarantee expanding. Amid this situation, the Group expects to see a growing demand for funds owing to an increasein operating receivables (accounts receivable - installment and operating loans). Accordingly, new funds will be neededin addition to handling repayments and redemption of funds previously procured. We anticipate that risks concerning
fund procurement will grow as the procurement amount will gradually increase in the future.
In the case of turmoil in the financial market, fund procurement may be constrained. Furthermore, a substantial
deterioration of the business results of the Group or a rapid decline in its creditability would make it difficult to borrowfrom financial institutions and hinder issuance of corporate bonds. If these risks become apparent, they may materiallyaffect the financing of the Group.
In addition, as fund procurement interest rates fluctuate depending on the market environment or other factors,
procurement costs may sharply rise depending on such trend, and this may affect the financial position and businessresults of the Group.
(Countermeasures)
The Group seeks to maintain a level of interest-bearing debt to around 90% of the value of operating receivables in order
to control the risk arising from an increase in debts.
In raising funds necessary for operating activities, we will diversify the procurement methods we use by indirectly
procuring funds from financial institutions, directly procuring funds through the issuance of corporate bonds and38

commercial paper, as well as liquidating operating receivables. We also utilize these procurement methods in a balancedmanner.
In order to cope with the risk of refinancing, we maintain consistent annual repayment and/or redemption levels bycontrolling the years of procurement. We have established a system to ensure procurement even if fund procurement isrestricted, by executing commitment line contracts or establishing overdraft facilities with financial institutions for suchamounts to ensure liquidity.
As for the procurement funding interest rate, we control sudden increases in procurement costs due to the fluctuations inmarket interest rates by maintaining fixed interest rates.
2) Risks concerning information security- System failure due to an accident, defect, etc.
- Unauthorized entries and access from outside, and virus infection- Leakage of customer information(Impact)
i. System-related
The Group employs a variety of computer systems and communication networks. In the event of a system error due to a
hardware or software defect, or a communication network failure, a system delay, a service outage or the alteration of a
website due to unauthorized access from outside, etc., it may affect the financial position and business results of theGroup.
ii. Personal information-related
The Group maintains EPOS cardholder information and other personal information of many customers and stakeholders.
If, by any chance, customer information is leaked or fraudulent use occurs, the Group may suffer the risk of losing social
creditability and incurring liability for damages, which may affect the business results of the Group.
(Countermeasures)
i. System-related
The Group has implemented measures to ensure stable operation of systems by adopting redundant configurations,replacing systems regularly, applying patches to computers, and protecting them from computer viruses or unauthorized
entries. In addition, the Group strives to further strengthen information security through risk assessments conducted byoutside consultants, regular implementation of vulnerability assessments, and other measures. In addition, when using
cloud services or other services provided by other companies, we verify their safety in advance by conducting security
checks.
ii. Personal information-related
The Group recognizes the enhancement of Groupwide information security, such as the protection of customer
information and other information assets held by the Group against unauthorized access or cyber attack, as a top
management priority. By establishing the MARUI GROUP Information Security Policy and the MARUI GROUP
Privacy Policy, we are working to properly manage and protect all the personal information obtained.
Specifically, based on the Act on the Protection of Personal Information, other laws and regulations, and relevant
guidelines, standards, etc., we take safety management measures concerning personal information. Our Group companies
handling particularly large amounts of personal information have acquired the “PrivacyMark” and practice appropriate
handling of personal information.
3) Risks concerning human resources- Shortage of management personnel- Intensified competition for securing human resources(Impact)
We believe that growth of the Group can be attained by the development and contribution of each employee. If
competition intensifies for the securing of human resources, an outflow of human resources occurs, and a consequent
shortage in future management personnel becomes apparent, these may affect the evolution and continuity of our business.
(Countermeasures)
The Group emphasizes the importance of human capital investment to accumulate the intangible assets that are awellspring of future corporate value, based on the culture where all of our employees can tackle new challenges. We are
currently creating an environment where employees can fully realize personal growth and are highly motivated owing toour conducting of systematic human resource investments from a variety of angles. These investments include educationand training programs based on open application, the official Group project teams that engage in discussions on important
topics for Group management, and the official Group initiatives aimed at encouraging each and every employee to39

demonstrate their creativity and create value. These efforts also include the implementation of the Co-Creation
Management Academy (CMA) Future Leader Development Program, which cultivates human resources capable ofpromoting management reforms, as well as the secondment of employees to start-up companies.
In order to acquire human resources, we proactively use new methods for recruiting new graduates, such as long-term
internships, which allows us to establish early contacts with talented students and increase their engagement with theCompany. With regard to mid-career recruitment, in order to further expand the FinTech and e-commerce businesses, inaddition to the core system human resources that have been trained in-house thus far, we are promoting the recruitmentof web-related system human resources to respond quickly to the user interface and user experience (UI/UX). To secure
recruitment, the MARUI GROUP is clearly communicating its unique business model and growth strategy to therecruitment market, and is recruiting human resources with UI/UX design expertise through Muture, a joint venture with
Goodpatch, a leading UI/UX design company established in 2022.
2. Risk management system
The Group maintains six committees, i.e., Public Relations IR Committee, Internal Control Committee, ESG Committee, Information
Security Committee, Safety Control Committee, and Insider Trading Prevention Committee to control high-risk areas in business
operations and strive for speedy operational improvement and the prevention of accidents. At the same time, the Compliance Promotion
Board, chaired by the Representative Director, is set up to coordinate the functions of all committees.

The Group enhances the effectiveness of risk management by holding regular meetings participated by Executive
Officers as well as establishing and holding meetings of the above committees to realize close coordination, risk
information sharing, and speedy decision making and implementation of countermeasures.
The Group has also formulated the MARUI GROUP Information Security Policy, which specifies the policies andmeasures for ensuring the security of information assets, the MARUI GROUP Tax Policy, which provides guidelines forcomplying with tax laws and minimizing tax risks, and the MARUI GROUP Anti-Corruption Policy, which serves as abasis for conducting sound corporate activities that are free of abuses of power or authority, unethical behavior, and allother forms of corruption. The effectiveness of these policies is verified once a year and all Group employees arefamiliarized with them through training and other activities.

40

4. Management’s Analysis on the Company’s Financial Condition, Results of Operations and Cash Flow Conditions
Forward-looking statements in this document are based on the judgment of the Group at the end of the fiscal year
under review.
(1) Summary of operating results, etc.
A summary of the financial position, operating results, and cash flows (“operating results, etc.”) of the Company andits consolidated subsidiaries (the “Group”) in the fiscal year under review is as follows.
Consolidated business results- EPS came to ¥130.7 (+20% or +¥21.3 year on year), exceeding the year-earlier result and reaching a record high due
to increased income. ROE came to 9.9% (+1.4% year on year), higher than the cost of shareholders’ equity of 7.8%.
ROIC was 3.6% (+0.1% year on year), higher than the weighted average cost of capital (WACC: 3.5%).

* ASBJ Statement No. 29 (Accounting Standard for Revenue Recognition), etc. have been applied to the figures shown above.

- Total Group transactions were ¥4,487.2 billion (+13% or +¥529.9 billion year on year), exceeding ¥4 trillion for the
first time and reaching the highest ever due to the growth in credit card transaction volume in the FinTech business,
which drove the overall results.
- Operating revenue was ¥235.2 billion (+8% year on year), operating profit was ¥41.0 billion (+6% year on year),and profit was ¥24.7 billion (+15% year on year), for the third consecutive year of increased revenue and increased
profit.
* In “4. Management’s Analysis on the Company’s Financial Condition, Results of Operations and Cash Flow
Conditions,” amounts expressed in billions of yen have been rounded off to the first decimal place.

* ASBJ Statement No. 29 (Accounting Standard for Revenue Recognition), etc. have been applied to the figures shown above.

41

Breakdown of changes in operating profit- Income on transfer of receivables through the liquidation of receivables (¥7.4 billion) increased by ¥1.0 billion fromthe previous fiscal year, while depreciation and expenses, etc. (¥7.3 billion) increased by ¥1.3 billion, resulting in a¥0.3 billion decrease in operating profit.
- Substantial operating profit, excluding the impact of the liquidation of receivables mentioned above, increased by¥2.6 billion from the previous fiscal year (+¥3.3 billion in the Retailing segment, +¥0.2 billion in the FinTech
segment).
☐ Breakdown of changes in operating profit

Business results by segment- In the Retailing segment, operating profit was ¥7.0 billion (+93% year on year), an increase of ¥3.3 billion from theprevious fiscal year. ROIC was 2.6% (+1.2% year on year).
- In the FinTech segment, operating profit was ¥42.4 billion (-0% year on year), a decrease of ¥0.1 billion from theprevious fiscal year. ROIC was 4.9% (-0.1% year on year).
☐ Operating revenue and operating profit by segment* ASBJ Statement No. 29 (Accounting Standard for Revenue Recognition), etc. have been applied to the figures shown above.

42

<Retailing segment>- As socio-economic activities are returning to normal with the classification of COVID-19 shifted to Class 5, thetransaction volume rose due to a year-on-year increase in the number of customers at Marui and Modi stores and anincrease in unit purchase prices. In addition, the area of unutilized sections of stores, which had temporarily increased
due to withdrawal of original private brand sales areas, significantly decreased thanks to the progress in the
introduction of new tenants. Operating profit rose for the third consecutive year as the increased value of the facilities
due to the introduction of new tenants also led to an increase in profit.
- Aiming to create value unique to brick-and-mortar stores, we are introducing experience-providing tenants that are
not focused on the “sales of goods,” as well as schools, restaurants, and services. As a result, the tenant area of nonproduct sales category was 61% (+5% compared with the previous fiscal year) of the entire store area, marking a
steady progress in the category shift.
☐ Change in composition of tenants in non-product sales category- We have been putting efforts into creating “eventful stores” so that customers can always enjoy themselves wheneverthey visit our stores. Among such efforts, Marui’s store opening support service “OMEMIE,” which started in 2022,
allows businesses to complete online the whole process from searching for spaces to set up stores at nationwide
Marui and Modi stores to signing contracts. The service is widely used by businesses such as direct-to-consumer(D2C) brands and sole proprietors, and has been successful in bringing in tenants who have never opened stores at
Marui before. As a result, the variety of events has expanded, including trial sessions and workshops for services
provided by new tenants.
- For e-commerce, in addition to expanding event-type e-commerce collaboration with stores, we increased webrelated professionals to improve the user interface and user experience of our e-commerce sites. As a result, thetransaction volume of the e-commerce sites improved year on year for the ninth consecutive quarter, and e-commercetransactions amounted to ¥23.0 billion (+12% year on year).

43☐ Changes in e-commerce transaction volume<FinTech segment>- While operating profit for the fiscal year ended March 31, 2024 decreased, operating profit excluding the effect of
the liquidation of receivables in the second half rose by ¥1.5 billion due in part to successful countermeasures against
card rewards, credit handling fees, etc., which were factors of a temporary increase in expenses in the first half.
☐ Breakdown of changes in operating profit of FinTech- As socio-economic activities have picked up steam in line with the containment of the COVID-19 pandemic, among
others, strong growth was seen in travel and entertainment. In addition, through approaches for maximization ofhousehold share, which have been strategically underway, recurring payments such as rent, e-commerce transactions,and utilities increased. As a result, credit card transaction volume was ¥1,049.5 billion in the fourth quarter (+12%
year on year), and ¥4,117.2 billion in the fiscal year (+14% year on year), reaching a record high.

44☐ Breakdown of card credit transaction volume- Transaction volume of installment and revolving payments increased to ¥392.5 billion, a 15% increase from theprevious fiscal year and balance of installment and revolving payments including liquidated receivables reached arecord high of ¥436.5 billion, a 9% increase from the previous fiscal year.

45☐ Balance of installment and revolving payments (including liquidated receivables)- The number of new EPOS cardholders reached 810 thousand (+70 thousand cardholders year on year), as the numberof online applications grew. The number of card memberships as of the fiscal year-end totaled 7,590 thousand
members (+270 thousand memberships year on year), a record high.
- In addition to our Gold cards, which have been a driver of our business growth to date, we are also enhancing ourmeasures with respect to credit cards that support individual interests, such as our anime and other content-related
cards. Young people make up a higher percentage of holders of these credit cards that support individual interests
than they do for holders of ordinary credit cards, bringing two to seven times higher LTV (lifetime value) to thesecards. Cards created in collaboration with anime, games, and entertainment content have many passionate fans, andthey tend to quickly become recognized through social media and are therefore highly compatible with online
membership applications. For these credit cards that support individual interests, proposals have been raised fromnot only employees in the FinTech segment but also those engaged in retailing and co-creative investments. A large
number of projects have been born. At stores, we provided hands-on opportunities such as events that are linked withcredit cards that support individual interests. For e-commerce, we developed and sold collaboration goods. As
exemplified above, we provide unique experience value through initiatives that only a company with credit cards,
stores, and e-commerce can undertake. We will continue to step up our Group-wide efforts to increase the numberof highly loyal members and achieve further growth in transaction volume and the number of new cardholders. The
number of new holders of credit cards that support individual interests rose to 350 thousand (+70 thousand
cardholders year on year), and they now account for 43% of all new credit cardholders (+6% year on year).
☐ New memberships46

☐ Number of cardholders

Indicators of LTV stability
As a result of the change in our business model, “recurring revenue”, which includes rent revenues from our storesand card commissions, has increased to account for a larger proportion of total sales and profits, altering the Group’s
revenue structure. Recurring revenue, which is recurring revenue from contracts with customers and business partners,
can be viewed as “contracted future recurring revenue” for the following fiscal year and beyond, and can be used as
an indicator to measure the stability of earnings. These are important elements of the Group’s long-term managementthat emphasizes lifetime profit (LTV).
- Recurring revenue (on a gross profit basis) for the fiscal year under review was ¥140.9 billion (+7% year on year),and the ratio of recurring revenue to gross profit was 67.0% (±0% year on year).
- At the end of the fiscal year under review, contracted future recurring revenue was ¥379.5 billion (+6% year onyear), and it is expected to generate future earnings approximately 1.8 times the gross profit of the fiscal year underreview. The calculation of contracted future recurring revenue is based on the remaining contract years for rent
revenues, the repayment period for installment and revolving fees and interest on cash advances, the period until
expiration dates for (recurring) affiliate commissions, and the guarantee period for rent guarantees.
☐ LTV management indicators

Note: Gross profit used in calculating the gross profit-based recurring revenue and its composition includes selling, general andadministrative expenses paid by business partners on a recurring basis.

47

Financial position- Operating receivables (accounts receivable - installment and operating loans) amounted to ¥590.2 billion (+¥8.4
billion year on year) as a result of an increase in credit card transaction volume. Total assets were ¥1,003.5 billion(+¥41.6 billion year on year).
- Interest-bearing debt (excluding lease obligation) amounted to ¥594.4 billion (+¥11.3 billion year on year).
- Shareholders’ equity amounted to ¥253.3 billion (+¥7.1 billion year on year), and the equity ratio was 25.2% (-0.4%
year on year).
☐ Balance sheet48

Cash flows- Net cash provided by operating activities was ¥38.0 billion (¥16.7 billion provided in the previous fiscal year). Core
operating cash flow which excludes outflows associated with changes in operating receivables, etc. decreased by¥0.2 billion from the previous fiscal year to ¥39.1 billion, partly owing to an increase in income taxes paid.
- Net cash used in investing activities was ¥18.3 billion (¥22.4 billion used in the previous fiscal year), partly owing
to ¥14.8 billion used in the purchase of property and equipment as well as intangible assets, and ¥3.6 billion used forthe purchase of investment securities.
- Net cash used in financing activities was ¥7.9 billion (¥18.3 billion provided in the previous fiscal year), partly owing
to an inflow of ¥11.1 billion due to an increase in interest-bearing debt, ¥3.4 billion used in the purchase of treasury
shares, and ¥15.2 billion of dividends paid.
☐ Cash flows

Note: The Group uses core operating cash flow, which excludes outflows associated with changes in operating receivables(accounts receivable - installment and operating loans), as an indicator of profitability and soundness.

49

Production, orders received, and sales
1) Production
This item does not apply to the Company and its subsidiaries and associates.
2) Orders received
Certain operations in the Retailing and FinTech segments are based on orders received, and orders received in thefiscal year under review were ¥11,302 million (139.3% of the previous fiscal year), bringing outstanding orders
received to ¥4,561 million (203.6% of the previous fiscal year) as of the end of the fiscal year under review.
3) SalesSales results by segment in the fiscal year under review were as follows.
Segment

Amount(Millions of yen)

Year on year (%)

Retailing
Revenue from fixed term tenants,
etc.

41,348113.1

Consignment revenue

1,620

68.7

Commissions on consignment sales
(net)

5,513

88.8

Rent revenue and others

4,469

92.9

Related business revenue

17,252

89.3

Retailing total

70,203101.4

165,023111.1

235,227

108.0

FinTechTotal
Notes: 1.
2.

Amounts above represent operating revenue from customers outside the Group.
Retailing sales results calculation methods were revised to include the “rent revenue and others” profit equivalentamount in operating revenue from the fiscal year ended March 31, 2016, and to include the “contracted sales”
profit equivalent amount in operating revenue from the fiscal year ended March 31, 2021. Sales results (transaction
volume) corresponding to sales revenue under previous standards (in and before the fiscal year ended March 31,2015) amounted to ¥298,331 million (+9.4% year on year).

4) Procurement
Product procurement amount in the fiscal year under review was as follows.
Segment

Amount(Millions of yen)

Year on year (%)
1,276

Retailing

89.0(2) Management’s Analysis on the Company’s Financial Condition, Results of Operations and Cash Flow Conditions
regarding Operating Results
Management’s Analysis on the Company’s Financial Condition, Results of Operations and Cash Flow Conditions
regarding the Group’s operating results is as follows. Forward-looking statements below are based on the judgment of
the Group at the end of the fiscal year under review.
1) Important accounting estimates and assumptions used in such estimates
The Group’s consolidated financial statements are prepared in accordance with accounting principles generally
accepted in Japan (“Japanese GAAP”). In preparing these consolidated financial statements, we use estimates andassumptions that affect the reported amounts of assets, liabilities, revenues and expenses; however, figures basedon these estimates and assumptions may differ from actual results.
The significant accounting estimates and assumptions used in the preparation of the consolidated financial
statements are described in “V. FINANCIAL INFORMATION, 1. Consolidated Financial Statements, Etc., (1)Consolidated Financial Statements, NOTES TO CONSOLIDATED FINANCIAL STATEMENTS,SIGNIFICANT ACCOUNTING ESTIMATES.”

50

2) Analysis of operating results, financial position, and cash flows
As described in “(1) Summary of operating results, etc.”
Information on financial resources and liquidity of capital are described in “3. Business and Other Risks” and “V.
FINANCIAL INFORMATION, 1. Consolidated Financial Statements, Etc., (1) Consolidated Financial
Statements, NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, FINANCIAL INSTRUMENTS.”■ Connectivity between non-financial information and financial information
To increase its corporate value, the Group, as its policy, proactively discloses useful information whether it be financial
or non-financial, if such information is deemed beneficial to aiding constructive dialogue with stakeholders. The Group’s
Annual Securities Report discloses non-financial information including sustainability and indicators for LTV, such asrecurring revenue, which the Group deems to be important for management.
The abovementioned non-financial information is useful for stakeholders to evaluate increase, impairment, etc. of theGroup’s corporate value. Additionally, data and assumptions that serve as a basis for non-financial information may
affect related accounting estimates and other items in the preparation of financial information, including consolidated
financial statements, and the Group therefore places emphasis on connectivity between these two types of information.
Specifically, the Group uses the identical underlying data and assumptions for non-financial information and related
financial information, thereby ensuring connectivity between non-financial information and financial information that is
subject to the audit attestation.
5. Important Business Contracts
Not applicable.
6. Research and Development Activities
Not applicable.

51III. EQUIPMENT AND FACILITIES
1. Overview of Capital Investments, Etc.
In the fiscal year under review, the Group made capital investments totaling ¥15,520 million, including sales floor
renovations of stores and investment in system infrastructure.
Capital investment by segment was as follows:
Amount(Millions of yen)Segment
Retailing

12,810

FinTech4,803

Adjustments(2,093)
15,520

Total
Note:

Amounts above include intangible assets in addition to property and equipment.

2. Major Facilities
Major facilities were as follows.
(1) Filing company
As of March 31, 2024
Carrying amount (Millions of yen)
Facility(Location)
Head office(Nakano-ku, Tokyo)

Segment－

Description Buildings
andstructures
Office15
facilities

Land
[m2]

Leasedassets

Other

－
[－]

－

179

Total
195

Number of
employees
270[29]

Notes: 1. “Other” in carrying amount includes intangible assets in addition to property and equipment.
2. The number of employees represents the number of active employees, and the average number of part-time employees
in the fiscal year (calculated based on prescribed monthly working hours) is shown in brackets (“[ ]”) in the number of
employees column.

52

(2) Domestic subsidiaries
As of March 31, 2024
Major subsidiaries

MARUI CO.,LTD.

Epos Card Co.,Ltd.

Facility(Location)

Carrying amount (Millions of yen)Segment Description Buildings
Land
Leased
and
Other
Total
2
assetsstructures [m ]Marui Group
Head office(Nakano-ku, Tokyo)

Retailing

Nakano Marui(Nakano-ku, Tokyo)

Stores, etc.
Retailing (incl. officefacilities)

Officefacilities

Shinjuku Marui
Retailing Stores, etc.
(Shinjuku-ku, Tokyo)
Shibuya Marui
Retailing Stores, etc.
(Shibuya-ku, Tokyo)
Kichijoji Marui
Retailing Stores, etc.
(Musashino-shi, Tokyo)
Kashiwa Marui
Retailing Stores, etc.
(Kashiwa-shi, Chiba)
Machida Marui
Retailing Stores, etc.
(Machida-shi, Tokyo)
Omiya Marui
Retailing Stores, etc.
(Saitama-shi, Saitama)
Kinshicho Marui
Retailing Stores, etc.
(Sumida-ku, Tokyo)
Ueno Marui
Retailing Stores, etc.
(Taito-ku, Tokyo)
Kokubunji Marui
Retailing Stores, etc.
(Kokubunji-shi, Tokyo)
Soka Marui
Retailing Stores, etc.
(Soka-shi, Saitama)
Marui City Yokohama(Yokohama-shi,
Retailing Stores, etc.
Kanagawa)
Marui Family
Mizonokuchi
Retailing Stores, etc.
(Kawasaki-shi,
Kanagawa)
Marui Family Shiki
Retailing Stores, etc.
(Shiki-shi, Saitama)
Marui Family Ebina
Retailing Stores, etc.
(Ebina-shi, Kanagawa)
Kobe Marui
Retailing Stores, etc.
(Kobe-shi, Hyogo)
Kitasenju Marui
Retailing Stores, etc.
(Adachi-ku, Tokyo)
Namba Marui
Retailing Stores, etc.
(Osaka-shi, Osaka)
Yurakucho Marui
Retailing Stores, etc.
(Chiyoda-ku, Tokyo)
Hakata Marui
Retailing Stores, etc.
(Fukuoka-shi, Fukuoka)
Totsuka Modi
(Yokohama-shi,
Retailing Stores, etc.
Kanagawa)
Shizuoka Modi
Retailing Stores, etc.
(Shizuoka-shi, Shizuoka)
Toda Product Center
Delivery
Retailing
center(Toda-shi, Saitama)
Stores,Head office, etc.
office(Nakano-ku, Tokyo and FinTech
facilities,
elsewhere)
etc.

53

Numberofemployees

3,016

6,199
[4,278]－

1,332

10,549

408
[52]

4,380

219
[3,207]

－

118

4,718

9
[7]

4,235

5,735
[1,861]－

4,096

14,067

1,857

5,136
[1,311]－[－]4,500[1,567]

－

108

7,102

－

383

1,400

－

775

6,421

4,513
[2,182]
－
[－]

－

302

7,949

－

1,163

2,058

6,780
[6,059]
－
[－]
－
[－]
2,480
[4,010]

－

59

8,187

－

551

2,016

－

2,287

2,832

－

31

3,233

44
[21]
13
[5]
11
[8]
9
[5]
12
[4]
10
[6]
17
[6]
18
[7]
10
[16]
8
[7]

1,016
1,146
3,132
895
1,347
1,464
545
722
664

－
[－]

－

6,685

7,350

24
[8]

3,307

10,856[4,053]－

1,647

15,810

34
[9]

1,846

1,747
[3,603]
－
[－]
－
[－]
8,653
[4,892]－[－]
22,328[2,912]
－
[－]

－

604

4,199

－

760

1,844

620

763

1,711

－

1,136

14,194

－

1,093

2,110

－

684

27,023

－

939

2,880

12
[11]
18
[8]
10
[3]
33
[14]
18
[5]
47
[5]
23
[2]

1,084
327
4,403
1,016
4,009
1,940
1,201

1,916
[1,283]

－

294

3,412

6
[7]

845

2,485
[1,504]

－

17

3,349

1,029

1,407
[22,415]

－

15

2,452

4
[2]
1
[－]

813

550
[586]

1

5,544

6,910

1,618
[677]

Major subsidiaries

Facility(Location)

AIM CREATE
CO., LTD.

Head office, etc.
(Nakano-ku, Tokyo andelsewhere)

MOVING CO.,LTD.

Product center, etc.
(Toda-shi, Saitama)

M&C SYSTEMS
CO., LTD.

System center, etc.
(Toda-shi, Saitama andelsewhere)

Head office, etc.
MARUI
FACILITIES Co., (Nakano-ku, Tokyo andLtd.
elsewhere)
MARUI HOMESERVICE Co.,
Ltd.
Notes:

Rental condominiums,
etc.
(Musashino-shi, Tokyoand elsewhere)

Carrying amount (Millions of yen)
NumberSegment Description BuildingsofLand
Leasedemployees
and
Other
Total
2
assetsstructures [m ]Office261
49
Retailing facilities,
91
－
73
215
[208]
[42]
etc.
Officefacilities,
280
1,251
Retailing
1,049 [6,693]
－
1,497
3,798
[259]
sales offices,
etc.
Retailing Office
216
1,100
and
facilities,
1,029 [3,145]
522
1,859
4,512
[13]
FinTech etc.
Officefacilities,
22
450－
Retailing solar power
10
418
451
[10,042][112]
generation,
etc.
Officefacilities,
76
2,362
FinTech
－
2,495
144
5,002
[10]
rental[3,973]
housing, etc.

1. “Other” in carrying amount includes intangible assets and guarantee deposits in addition to property and equipment.
2. The number of employees represents the number of active employees, and the average number of part-time employees
in the fiscal year (calculated based on prescribed monthly working hours) is shown in brackets (“[ ]”) in the number of
employees column.
3. Of the stores, etc. above, 377,521 m2 of floorspace is rental floorspace from buildings outside the Group.

3. Plans for New Additions or Disposals, Etc. of Facilities(1) Significant new facilities, etc.
Major plans for facilities as of the end of the fiscal year under review were as follows.

Company

Facility(Location)

Segment

Planned investment
amountTotal
AmountDescription
amountpaid(Millions (Millionsof yen)of yen)Fundprocurement
methodConstruction

Completion

Expectedrevenue(annual)During2026

Undecided

MARUICO., LTD.

Shibuya Marui(tentative
Store
name)
Retailing(rebuilding)(Shibuya-ku,
Tokyo)

10,500

1,219

Own funds,
etc.

October
2023

MARUI
CO., LTD.

Store
renovations

3,200

－

Own funds,
etc.

April 2024 March 2025

Note:

RetailingStoreinterior

Planned facilities are transferred to the non-current assets account as they are acquired or completed.

(2) Disposal of significant facilities, etc.
Not applicable.

54－

IV. CORPORATE INFORMATION
1. Information on the Company’s Shares, Etc.
(1) Total number of shares, etc.
1) Total number of sharesClass of shares

Number of authorized shares (Shares)

Common stock

1,400,000,000
Total

1,400,000,0002) Number of shares issued and outstanding

Class of shares

Number of shares
Number of sharesissued and outstanding issued and outstanding
as of the end of theas of the filing datefiscal year (Shares)(Shares)(March 31, 2024)(June 24, 2024)

Stock listing/registration

Details

Common stock

208,660,417

208,660,417

Prime Market of Tokyo
Stock Exchange

The number of shares perunit of shares is 100.

Total

208,660,417

208,660,417－－(2) Stock acquisition rights
1) Details of stock option plans
Not applicable.
2) Details of rights plans
Not applicable.
3) Other stock acquisition rights, etc.
Not applicable.
(3) Exercise status of bonds with stock acquisition rights containing a clause for exercise price adjustment, etc.
Not applicable.
(4) Changes in the total number of shares issued and outstanding, share capital, etc.

Date
November 30,
2021
Note:

Changes in the total
Total number of
Changes in
Balance of share Changes in legal Balance of legal
number of shares issued shares issued andshare capital
capitalcapital surplus capital surplus
and outstanding
outstanding(Millions of yen) (Millions of yen) (Millions of yen) (Millions of yen)(Thousands of shares) (Thousands of shares)(15,000)

208,660－

35,920－91,307

The total number of shares issued and outstanding decreased owing to the cancellation of 15,000 thousand shares of treasury
shares on November 30, 2021.

55

(5) Status by shareholder classification
As of March 31, 2024
Status of shares (1 unit = 100 shares)
Classification

National and
Financial
local
institutions
governments

Number ofshareholders(Persons)
Number ofshares held
(Units)Shareholding
ratio (%)

Japanese
Foreign shareholders
financial
Other
instruments
corporations Other thanbusiness
Individuals
individuals
operators

Individuals
and other

Total

Shares less than
one unit(Shares)

－

69

38

297

352

88

36,13936,983－－

886,464

65,575

294,024

423,480178

413,3222,083,043

356,117

－

42.56

3.15

14.11

20.33

0.01

19.84

100.00－Notes: 1. Of the 20,040,231 shares of treasury shares, 200,402 units are included in “Individuals and other” and 31 shares areincluded in “Shares less than one unit.”
2. Figures under “Financial institutions” above include 7,665 units of shares held under the BIP Trust and the ESOP Trust.

(6) Major shareholders
As of March 31, 2024

Name

The Master Trust Bank of Japan, Ltd.
(Trust Account)
Custody Bank of Japan, Ltd. (Trust
Account)

Address

Number of shares
held to total
Number of shares number of shares
heldissued and(Thousands ofoutstanding
shares)(excluding treasury
shares)(%)

8-1, Akasaka 1-chome, Minato-ku, Tokyo

43,331

22.98

8-12, Harumi 1-chome, Chuo-ku, Tokyo

24,805

13.15

Aoi Real Estate Co., Ltd.

21-3, Jinnan 1-chome, Shibuya-ku, Tokyo

6,019

3.19

TOHO CO., LTD.

2-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo

3,779

2.00

AOI SCHOLARSHIPFOUNDATION

3-2, Nakano 4-chome, Nakano-ku, Tokyo

3,317

1.76

MUFG Bank, Ltd.

7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo

2,904

1.54

Tadao Aoi

Shibuya-ku, Tokyo

2,784

1.48

JP MORGAN CHASE BANK 385781(Standing proxy: Mizuho Bank, Ltd.)

25 BANK STREET, CANARY WHARF, LONDON,
E14 5JP, UNITED KINGDOM(15-1, Konan 2-chome, Minato-ku, Tokyo)

2,484

1.32

Karasuyama Co., Ltd.

2-3, Uchisaiwai-cho 2-chome, Chiyoda-ku, Tokyo

2,454

1.30

Eiwa Real Estate Co., Ltd.

5-1, Yurakucho 1-chome, Chiyoda-ku, Tokyo

2,382

1.26

94,263

49.98

Total

－

Notes: 1. The Company holds 20,040 thousand shares of treasury shares, which are excluded from the major shareholders above.
Treasury shares held by the Company does not include shares of the Company held by the BIP Trust or the ESOP
Trust.
2. The Company received a report regarding the possession of shares by Nomura Securities Co., Ltd. and its joint holders
as of April 30, 2021 as follows, in a statement of large-volume holdings (statement of changes) made available to the
public on May 11, 2021. However, as the Company was unable to confirm the number of substantial shareholding asof the end of the fiscal year under review, the major shareholders above are based on the shareholder register.

56

Name

Address

NOMURA INTERNATIONAL PLC

1 Angel Lane, London EC4R 3AB, United
Kingdom

Nomura Asset Management Co., Ltd.

2-1, Toyosu 2-chome, Koto-ku, Tokyo

Number ofshares held(Thousands ofshares)Number of shares
held to total
number of sharesissued andoutstanding
(%)

286

0.13

16,282

7.28

3. The Company received a report regarding the possession of shares by Mizuho Securities Co., Ltd. and its joint holders
as of October 15, 2021 as follows, in a statement of large-volume holdings made available to the public on October 22,
2021. However, as the Company was unable to confirm the number of substantial shareholding as of the end of the
fiscal year under review, the major shareholders above are based on the shareholder register.

Name

Address

Number ofshares held(Thousands ofshares)Number of shares
held to total
number of sharesissued andoutstanding(%)

Mizuho Securities Co., Ltd.

5-1, Otemachi 1-chome, Chiyoda-ku, Tokyo

360

0.16

Asset Management One Co., Ltd.

8-2, Marunouchi 1-chome, Chiyoda-ku, Tokyo

10,665

4.77

Asset Management One International
Ltd.

30 Old Bailey, London, EC4M 7AU, UK

438

0.20

4. The Company received a report regarding the possession of shares by MUFG Bank, Ltd. and its joint holders as of
October 9, 2023 as follows, in a statement of large-volume holdings (statement of changes) made available to the public
on October 16, 2023. However, as the Company was unable to confirm the number of substantial shareholding as ofthe end of the fiscal year under review, major shareholders above are based on the shareholder register.

Name

Address

Number ofshares held(Thousands ofshares)Number of shares
held to total
number of sharesissued andoutstanding(%)

MUFG Bank, Ltd.

7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo

3,630

1.74

Mitsubishi UFJ Trust and Banking
Corporation

4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo

7,988

3.83

Mitsubishi UFJ Asset Management
Co., Ltd.

9-1, Higashi-shinbashi 1-chome, Minato-ku, Tokyo

4,111

1.97

5. The Company received a report regarding the possession of shares by Sumitomo Mitsui Trust Asset Management Co.,
Ltd. and its joint holders as of January 31, 2024 as follows, in a statement of large-volume holdings (statement ofchanges) made available to the public on February 6, 2024. However, as the Company was unable to confirm thenumber of substantial shareholding as of the end of the fiscal year under review, major shareholders above are basedon the shareholder register.

Name

Address

Number ofshares held(Thousands ofshares)Number of shares
held to total
number of sharesissued andoutstanding(%)

Sumitomo Mitsui Trust AssetManagement Co., Ltd.

1-1, Shibakoen 1-chome, Minato-ku, Tokyo

4,492

2.15

Nikko Asset Management Co., Ltd.

7-1, Akasaka 9-chome, Minato-ku, Tokyo

9,705

4.65

57

(7) Voting rights
1) Shares issued and outstanding
As of March 31, 2024
Classification

Number of shares(Shares)Number of voting rights(Units)Description

－

－

－

－

－

－

－

－

－

－

－

Non-voting shares
Shares with restricted voting rights(treasury shares, etc.)
Shares with restricted voting rights(other)Shares with full voting rights(treasury shares, etc.)
Shares with full voting rights (other)
Shares less than one unit

(Treasury shares)
Common shares
20,040,200
Common shares
188,264,100
Common shares
356,117

1,882,641－
Shares less than one unit
(100 shares)－

Total number of shares issued and208,660,417－－
outstanding
Total voting rights held by all
1,882,641－－
shareholders
Note: The number of common shares under “shares with full voting rights (other)” includes 766,500 shares (7,665 units of voting
rights) held under the BIP Trust and the ESOP Trust.

2) Treasury shares, etc.
As of March 31, 2024

Shareholder name(Treasury shares)
MARUI GROUP CO., LTD.
Total

Shareholder address

3-2, Nakano 4-chome,
Nakano-ku, Tokyo－

Number of
Number of
Number ofshares held toshares held Total number ofshares held
total number ofunder the names shares held
under own nameshares issuedof others(Shares)(Shares)and outstanding(Shares)(%)
20,040,200－

20,040,200

9.60

20,040,200－

20,040,200

9.60

Note: 766,500 shares of the Company held under the BIP Trust and the ESOP Trust are not included in the above number of treasury
shares.

58

(8) Details of officer and employee stock ownership scheme
BIP Trust
1. Overview of the scheme
In the fiscal year ended March 31, 2017, the Company and 14 of its Group subsidiaries, etc. (MARUI CO., LTD., Epos
Card Co., Ltd., etc.; collectively, “Applicable Subsidiaries”) introduced the BIP Trust for Directors and Executive
Officers of the Company (excluding External Directors and non-residents of Japan) and directors of Applicable
Subsidiaries (excluding external directors and non-residents of Japan; together with Directors and Executive Officersof the Company, “Eligible Directors, etc.”), in order to increase their motivation to contribute to improved performanceand corporate value of the Group over the medium to long term.
The details of the trust agreement under the scheme are as follows.
Details of the BIP Trust agreement
Type of trust

Money trust other than a specified individually operated monetary trust (third-party benefit trust)

Trust objective

To incentivize Eligible Directors, etc.

Settlor

The Company

Trustee

Mitsubishi UFJ Trust and Banking Corporation (Joint trustee: The Master Trust Bank of Japan, Ltd.)

Beneficiaries

Eligible Directors, etc. who satisfy the beneficiary criteria

Trust administrator

A third party with no special interests with the Company (certified public accountants)

Trust period

August 29, 2016 ~ August 31, 2024 (scheduled to be extended until August 31, 2026 due to anamendment to the trust agreement)

Exercise of voting rights

Non-exercise

Class of shares to be acquired

Common shares of the Company

Timing of acquisition of shares

September 1, 2016 ~ September 6, 2016
August 16, 2019 and August 19, 2019
May 21, 2021
August ~ November 2024 (planned)

Method of acquiring shares

To be acquired from the stock market (planned)

Holder of vested rights

The Company

Residual assets

The Company, the holder of vested rights, shall receive any residual assets within the scope ofthe reserve for trust fees, which is the trust money less share acquisition funds.

Notes: 1. At the Board of Directors’ meeting held on May 14, 2024, it was resolved that this scheme be continued by extending
the trust period so as to promote the Company’s co-creation sustainability management. The changes other than thetrust period and the timing of acquisition of shares specified above are provided in (4) Officer compensation, etc.,
under 4. Corporate Governance.
2. The Trust may be extended by amending the trust agreement and entrusting additional money when the extended trust
period of the Trust expires.

2. Total number of shares to be acquired by Eligible Directors, etc.
Up to 400,000 shares
3. Scope of persons eligible for beneficiary rights and other rights under this officer stock ownership plan
Eligible Directors, etc. who satisfy the beneficiary criteria

59

ESOP Trust
1. Overview of the scheme
In the fiscal year ended March 31, 2017, the Company introduced the ESOP Trust incentive plan for employees of theGroup in management positions (“executive employees”), in order to increase their motivation to contribute toimproved performance and corporate value over the medium to long term.
Through the introduction of this scheme, executive employees can enjoy the economic benefits of an increase in the
Company’s share price, and therefore they are prompted to execute business operations with share prices in mind, andenhance their morale. In addition, voting rights to the Company’s shares in the ESOP Trust assets are exercised so as
to reflect the intention of executive employees who are the beneficiary candidates.
The details of the trust agreement under the scheme are as follows.
Details of the ESOP Trust agreement
Type of trust

Money trust other than a specified individually operated monetary trust (third-party benefit trust)

Trust objective

To incentivize executive employees

Settlor

The Company

Trustee

Mitsubishi UFJ Trust and Banking Corporation (Joint trustee: The Master Trust Bank of Japan, Ltd.)

Beneficiaries

Executive employees who satisfy the beneficiary criteria

Trust administrator

A third party with no special interests with the Company (certified public accountants)

Trust period

August 29, 2016 ~ August 31, 2024 (scheduled to be extended until August 31, 2026 due to anamendment to the trust agreement)

Exercise of voting rights

Voting rights for the Company’s shares shall be exercised in accordance with the instructionsof the trust administrator, which shall reflect the intention of the beneficiary candidates.

Class of shares to be acquired

Common shares of the Company

Timing of acquisition of shares

September 7, 2016 ~ September 15, 2016
August 16, 2019
May 21, 2021
August ~ November 2024 (planned)

Method of acquiring shares

To be acquired from the stock market (planned)

Holder of vested rights

The Company

Residual assets

The Company, the holder of vested rights, shall receive any residual assets within the scope ofthe reserve for trust fees, which is the trust money less share acquisition funds.

Notes: 1. At the Board of Directors’ meeting held on May 14, 2024, it was resolved that this scheme be continued by extending
the trust period so as to promote the Company’s co-creation sustainability management.
2. The Trust may be extended by amending the trust agreement and entrusting additional money when the extended trust
period of the Trust expires.

2. Total number of shares to be acquired by executive employees
Up to 250,000 shares
3. Scope of persons eligible for beneficiary rights and other rights under this employee stock ownership plan
Executive employees who satisfy the beneficiary criteria60

2. Acquisition of Treasury Shares, Etc.
Class of shares: Acquisition of common stock under Article 155, Item 3, Article 155, Item 7, and Article 155, Item 13of the Companies Act(1) Acquisition resolved by a general meeting of shareholders
Not applicable.
(2) Acquisition resolved by the Board of Directors
Number of shares(Shares)Classification
Resolution by the Board of Directors (May 9, 2023)(Acquisition period: June 1, 2023 ~ March 31, 2024)

Total amount(Yen)

22,000,000

40,000,000,000

Treasury shares acquired before the fiscal year under review－－

Treasury shares acquired during the fiscal year under review

1,482,600

3,364,601,600

Total number and value of remaining shares subject to the resolution

20,517,400

36,635,398,400

93.3

91.6

－

－

Ratio of un-exercised portion as of the date of filing (%)

93.3

91.6

Resolution by the Board of Directors (May 14, 2024)(Acquisition period: June 1, 2024 ~ September 30, 2024)

11,000,000

20,000,000,000

Percentage of un-exercised portion as of the fiscal year-end (%)
Treasury shares acquired during the period

Treasury shares acquired before the fiscal year under review－－

Treasury shares acquired during the fiscal year under review－－

Total number and value of remaining shares subject to the resolution－－

Percentage of un-exercised portion as of the fiscal year-end (%)－－

Treasury shares acquired during the period－－

Ratio of un-exercised portion as of the date of filing (%)

－

－

Note:

Treasury shares acquired during the period does not include shares acquired from June 1, 2024 to the filing date of thissecurities report.

(3) Acquisition not resolved by the general meeting of the shareholders or the Board of Directors
Classification

Number of shares(Shares)

Total amount(Yen)

Treasury shares acquired during the fiscal
year under review

21,6372,517,542

Treasury shares acquired during the period

8,405

209,899

Notes: 1. Treasury shares acquired during the fiscal year under review were due to the purchase of shares less than one unit of
1,047 shares and the free-of-charge acquisition of stock of 20,590 shares related to the restricted stock grant plan.
2. Treasury shares acquired during the period were due to the purchase of shares less than one unit of 87 shares and thefree-of-charge acquisition of stock of 8,318 shares related to the restricted stock grant plan.
3. Treasury shares acquired during the period do not include shares acquired from June 1, 2024 to the filing date of thissecurities report.

61

(4) Status of disposal and ownership of treasury shares acquired
Fiscal year under review
Classification
Treasury shares acquired offered forsubscription
Treasury shares acquired that werecanceled
Treasury shares acquired that weretransferred for merger, share exchange,
share issuance, or company split
Other(treasury shares acquired that were
disposed as restricted stock to employees of
the Company)
Number of treasury shares held

Number of shares(Shares)

PeriodTotal disposal
amount(Yen)

Number of shares(Shares)

Total disposal
amount
(Yen)

－

－

－

－

－

－

－

－

－

－

－

－

11,40027,633,600－－

20,040,231－

20,048,636－

Notes: 1. The number of treasury shares held during the period does not include shares acquired and shares less than one unit
sold from June 1, 2024 to the filing date of this securities report.
2. The number of treasury shares held during the fiscal year under review does not include 766,567 shares of the Company
held under the BIP Trust and the ESOP Trust.
3. The number of treasury shares held during the period does not include 766,567 shares of the Company held under the
BIP Trust and the ESOP Trust.

3. Dividend Policy
The Group has promoted capital optimization to date in line with the business structure transformation. First, in
responding to transformation to a business structure centered on FinTech, the Group acquired treasury stock worth
approximately ¥100.0 billion under a policy of reducing the equity ratio of the FinTech segment to approximately 10%
in line with the average in the industry and achieved this target in the fiscal year ended March 31, 2021. Next, in thecurrent five-year medium-term management plan that ends in the fiscal year ending March 31, 2026, the Group acquired
treasury stock worth ¥50.0 billion by the fiscal year ended March 31, 2023 to eliminate surplus capital in the Retailingsegment. As a result, the Group has optimized the capital structure and achieved its target equity ratio of approximately
25% for the balance sheet. Accordingly, the Group has decided to change its capital policy to use a dividend on equity
ratio (DOE) as a new indicator from the fiscal year ended March 31, 2024.
The Group will aim for a DOE of about 8%, and as for dividends, the Group will aim to achieve both high growth andhigh returns.
Based on the above policy, it was resolved that the year-end dividend for the fiscal year under review be ¥51 per share,
and that together with the interim dividend of ¥50 per share, the annual payment of dividends for the fiscal year underreview shall be ¥101 per share, an increase of ¥42 per share compared with the previous fiscal year.
The basic policy of the Company is to pay dividend of surplus twice a year, one interim and one year-end. The Company
stipulates in its Articles of Incorporation that it may pay interim dividends as of the record date of September 30 of eachyear by a resolution of the Board of Directors. Year-end dividends are subject to resolution by the general meeting ofshareholders.
Dividends of surplus for the fiscal year under review are as follows:
Date of resolution

Total dividend amount(Millions of yen)

November 14, 2023
Resolution by the Board of Directors
June 24, 2024
Resolution by the Ordinary General
Meeting of Shareholders

62

Dividend per share
(Yen)
9,505

50

9,619

51

4. Corporate Governance(1) Overview of corporate governance1) Basic corporate governance policy
Based on our corporate philosophy to “continue evolving to better aid our customers” and “equate the developmentof our people with the development of our company,” the Group will support our employees as they strive to help
customers, and thereby pursue medium- to long-term improvements in corporate value by creating a virtuous cycle
through which the development of people drives the development of the Company. Accordingly, the Company has
positioned the corporate governance as a top management priority and established the MARUI GROUP Corporate
Governance Guidelines (the “Guidelines”) at the Board of Directors’ meeting held on November 6, 2015, for the
purpose of ensuring that its management is sound, highly transparent, efficient and capable of generating profits.
These Guidelines will be continually reexamined and refined to promote the improvement of the Company’s
corporate governance.
For details of these Guidelines, please visit the MARUI GROUP Corporate Governance Guidelines on the
Company’s website. (https://www.0101maruigroup.co.jp/en/ci/governance/)2) Overview of the corporate governance structure and reasons for adoption• The MARUI GROUP is a Company with Company Auditor(s) which has in place a Board of Directors

comprised of six Directors and an Audit & Supervisory Board comprised of four Audit & Supervisory Board
Members.
• Of the six Directors, three are External Directors, as the system seeks to strengthen the supervisory function of

the Board of Directors by facilitating lively discussions centered on the External Directors who have been
designated as independent directors. In addition, the term of office of each Director is one year with the aim ofclarifying transparency and management responsibility in business execution. The Board of Directors holds
meetings in principle 10 times a year and engages in active deliberations and supervises the execution of duties
by Directors.
• Of the four Audit & Supervisory Board Members, two are External Audit & Supervisory Board Members.
• In accordance with the Group’s authorization rules, the duties of Directors and Executive Officers are explicitly

defined, and the Group’s Directors and Executive Officers perform their duties in an efficient and swift manner.
• The Group has set up the Management Committee that is comprised of Executive Officers appointed by the

Board of Directors and seeks to accelerate operational decision-making by commissioning such committee tomake important management decisions regarding execution of duties within the scope of the Group’s
authorization rules.
• The following four committees have been established to serve as advisory bodies to the Board of Directors.

i) Nominating and Compensation Committee (consists of three or more members, of which at least two

are External Directors): For enhancing transparency and objectivity in the appointment of Directors
and Executive Officers with titles, and in the determination of compensation for Directors andExecutive Officersii) Sustainability Committee: For promoting co-creation sustainability managementiii) Strategy Committee: For discussing and examining strategic issues of the entire Group and of each business,with the aim of achieving sustainable growth in corporate valueiv) Human Resource Strategy Committee: For discussing and examining strategic issues of human resources
for the entire Group, with the aim of achieving sustainable growth in corporate value• Through the Public Relations IR Committee, Internal Control Committee, ESG Committee, Information

Security Committee, Safety Control Committee, and Insider Trading Prevention Committee, the Group shallstrive to enhance its level of control over high-risk areas in its business operations. The Compliance Promotion
Board, chaired by the Representative Director, is set up as a coordinating function of all committees, in order
to conduct Groupwide risk management.

63• The composition of each body is as follows. (The ◎ symbol indicates the chair or leader of the body)

○

○

○

◎

○

○

○

◎

○

○

◎

TakeshiEbiharaDirector, Managing
Executive Officer
Director, Senior
Executive Officer
Audit &
Supervisory Board
Member (Full time)
Audit &
Supervisory Board
Member (Full time)
Audit & Supervisory
Board Member(External)
Audit & Supervisory
Board Member(External)
Senior Managing
Executive Officer
Senior Managing
Executive Officer
Managing
Executive Officer
Managing
Executive Officer
Managing
Executive Officer
Senior Executive
Officer

Masahisa Aoki

Executive Officer

Tatsuo Niitsu

Executive Officer○

Jiro Ishioka

Executive Officer○

Takahiro
MatsumotoExecutive Officer

Yuko Shiota

Executive Officer

AtsushiNagasao

Executive Officer

Masami Endoh

Executive Officer

Hirotsugu Kato
Reiko Kojima
Hitoshi Kawai
Hajime Sasaki
Yoko Suzuki
HiroakiMatsumoto
Masao
Nakamura
Tomoo Ishii
Yoshinori Saito
Masahiro Aono
Akikazu Aida

Insider Trading
Prevention
Committee○

Safety Control
Committee◎

Information Security
Committee○○

ESG Committee

Director (External)○

Internal Control
Committee

○

○

○

◎

Public Relations IR
Committee

Director (External)

Compliance
Promotion Board○

Human Resource
Strategy Committee

Director (External)

EtsukoOkajimaYasunori
NakagamiPeter David
Pedersen

Strategy Committee◎

Sustainability
Committee

Board of Directors

Hiroshi Aoi

President andRepresentative
Director,
Representative
Executive Officer

Nominating andCompensation
Committee
Management
Committee

Position

Audit &
Supervisory Board

Name

○

○

○

○

○

○

○

○

◎
○

○

◎

○

○
○
○

○

○

◎

○

◎

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

◎

○

○

○

○

○

○

○

◎

○

○
◎

○

○

○

○

○

○

○
○

○

○

○

○

○

○

Other members(persons)

－

－

－

－

2

－

－

5

2

8

9

7

11

3

Total

6

4

9

3

7

5

4

17

13

19

11

16

14

10

64

• The following is a diagram of our structures for supervising business execution and management and ourinternal control and risk management systems:3) Other items related to corporate governance
Implementation of internal control systems and risk management systems• The Group has established internal control systems from the perspective of Group management in order tofacilitate sound, transparent, and efficient management.
• The Group’s Code of Conduct shall be fully communicated to promote sound corporate activities grounded onhigh ethical standards of the Group.
• In order to ensure Groupwide compliance with laws, regulations, and rules of the Company, the Group prepares

operation manuals for every category and encourages internal training.
• The Group manages risks pursuant to the MARUI GROUP Information Security Policy, which specifies thepolicies and measures for ensuring the security of information assets, the MARUI GROUP Tax Policy, which
provides guidelines for complying with tax laws and minimizing tax risks, and the MARUI GROUP AntiCorruption Policy, which serves as a basis for conducting sound corporate activities that are free of abuses ofpower or authority, unethical behavior, and all other forms of corruption.
• The General Affairs Department and the Audit Department work together to promote internal controls andminimize managerial risks by documenting and monitoring the Group companies’ operations, foreseeable risks,and relevant countermeasures.
• The MARUI Group Hot Line (internal notification system) is maintained as a means for the prevention andearly detection of problems by allowing direct contact with external lawyers.
• The Group resolutely refuses to have any connection with antisocial forces that threaten the order and safetyof society and shall reject any unwarranted demands, and is committed to strengthening ties with external
specialized organizations such as the police and lawyers in establishing systems to eliminate antisocial forces.
Systems established to ensure the appropriateness of business operations of Group subsidiaries
The Group has a reporting system for subsidiaries to report important decisions to the Company in accordancewith the authorization rules of the Group, and governs the appropriateness of business execution by thesesubsidiaries as a pure holding company.

65

Overview of D&O insurance
The Company has entered into a directors and officers liability insurance agreement (hereinafter the “D&O
insurance”) with an insurance company as provided under Article 430-3, Paragraph 1 of the Companies Act.
Under the agreement, any damage incurred when a Director or Audit & Supervisory Board Member has
assumed liability for damages as a result of execution of duties (excluding those that fall under the grounds for
exemption as stipulated in the insurance agreement) shall be compensated. However, in order to ensure that theperformance of duties by insured persons is not compromised, there is a certain limit on the amount ofcompensation. Damages under the said limit will not be covered by the insurance policy. In addition, theinsurance premiums of the D&O insurance have been fully paid by the Company. The Company plans to renew
the agreement with the same details during their terms of office.
Overview of liability limitation agreements
In accordance with the provisions of Article 427, Paragraph 1 of the Companies Act, the Company concludes
agreements with each External Director and External Audit & Supervisory Board Member to limit their liability fordamage, as stipulated under Article 423, Paragraph 1 of the same Act. Based on these agreements, his/her liability shallbe limited to the higher of a predetermined amount of ¥10 million or more or the amount specified by laws andregulations.
Number of Directors
The Company has stipulated in its Articles of Incorporation that there shall be no more than 15 Directors andno more than five Audit & Supervisory Board Members.
Requirement for a resolution to elect Directors
The Company stipulates in its Articles of Incorporation that a resolution for the election of Directors shall be
adopted by a majority vote of shareholders present holding not less than one-third of the shares with voting
rights held by shareholders entitled to exercise their voting rights, and that the resolution shall not be via acumulative vote.
General meeting of shareholders resolutions that can be delegated to the Board of Directors
a. Acquisition of treasury shares
In accordance with the provisions of Article 165, Paragraph 2 of the Companies Act, the Company stipulates in
its Articles of Incorporation that it may, by a resolution of the Board of Directors, acquire treasury sharesthrough market transactions to enable a flexible capital policy.
b. Interim dividends
In accordance with the provisions of Article 454, Paragraph 5 of the Companies Act, the Company stipulates in
its Articles of Incorporation that it may, by a resolution of the Board of Directors, pay interim dividends ofsurplus to shareholders or registered pledgees of shares as of the record date of September 30 of each year. The
purpose of this provision is to enable the return of profits to our shareholders in a flexible manner.
Requirement for a special resolution at the general meeting of shareholders
For the purpose of ensuring that the general meeting of shareholders is operated smoothly, the Company
stipulates in its Articles of Incorporation that a special resolution at the general meeting of shareholders,provided for in Article 309, Paragraph 2 of the Companies Act, shall be adopted by a two-thirds or more voteof shareholders present holding not less than one-third of the shares with voting rights held by shareholders
entitled to exercise their voting rights. The purpose of relaxing the quorum for special resolutions at the general
meeting of shareholders is to ensure that the meeting proceeds smoothly.
4) Activities of the Board of Directors and the four advisory committees
The Company has established advisory committees that report to and make recommendations to the Board of
Directors. The activities of the Board of Directors and the four advisory committees are as follows:(Details of deliberations)
1. Board of Directors
Regarding the details of deliberations, the Board of Directors not only deliberated on important matters inaccordance with the authorization rules, but also confirmed the status of major businesses such as retailing and
FinTech, and reports from each advisory committee. In addition, the Board of Directors held active discussions
on specific management issues such as future leader development, human capital management, succession plans,
and officer compensation plans.

66

2. Nominating and Compensation Committee
Regarding the details of deliberations, the Nominating and Compensation Committee deliberated on sharebased remuneration plans and decided on ratings, compensation, and other matters.
3. Sustainability Committee
Regarding the details of deliberations, when developing the medium-term management plan that ends in thefiscal year in March 2026, the Sustainability Committee made recommendations to the Board of Directors
regarding the reorganization of the issues in the “Impact” section of the plan, which sets targets for sustainability
and well-being, and the partial amendment to the Articles of Incorporation in order to “clarify the practice ofthe corporate philosophy.”
4. Strategy Committee
Regarding the details of deliberations, the Strategy Committee discussed on issues and future directions foreach business, and held active discussions on clarifying the ideal business model for evolving into a company
that solves social issues, and made recommendations to the Board of Directors.
5. Human Resource Strategy Committee
Regarding the details of deliberations, the Human Resource Strategy Committee worked closely with theStrategy Committee to discuss the recruitment and development of human resources and innovations in theorganization and work style required to realize the Company’s evolution into a company that solves social
issues.
(Status of attendance)
The individual attendance at the meetings during the fiscal year under review is as follows:(Number of attendance / Number of times held)
Name

Position

Board ofDirectors

Nominating andCompensation
Committee

Sustainability
Committee

Strategy
Committee

Human Resource
Strategy
Committee

Hiroshi Aoi

President andRepresentative
Director,
Representative
Executive Officer

10/10

4/4

5/5

12/12

5/5

Etsuko Okajima

Director (External)

10/10

4/4

－

12/12

5/5

Yasunori Nakagami

Director (External)

9/10

4/4

－

12/12

－

Peter David
Pedersen

Director (External)

9/10

－

5/5

－

－

10/10

－

5/5

12/12

－

10/10

－

5/5

－

－

－

－

－

－

5/5

－

－

4/5

12/12

5/5

Hirotsugu Kato
Reiko Kojima
Tomoo Ishii
Akikazu Aida

Director, Managing
Executive Officer
Director, Senior
Executive Officer
Senior Managing
Executive Officer
Managing
Executive Officer(Note) Positions are as of the date of submission.

67

(2) Directors, Audit & Supervisory Board Members, and Executive Officers
1) Directors, Audit & Supervisory Board Members, and Executive Officers
7 men, 3 women (female ratio of 30%)
Position

Name

Date of birth

Career history
Jul. 1986
Jan. 1991
Apr. 1991
Jan. 1993
Aug. 1993

President andRepresentative
Director,
Representative
Executive Officer

Apr. 1995
Hiroshi Aoi(Jan. 17,
1961)

Jan. 2001
Jun. 2004
Apr. 2005
Oct. 2006
Apr. 2019

Director

Etsuko Okajima(May 16,1966)

Oct. 2022
Apr. 1989
Jan. 2001
Jul. 2005
Jun. 2007
Jun. 2014
Nov. 2015
Dec. 2015
Dec. 2020
Jun. 2024

Director

Yasunori
Nakagami(Mar. 25,
1964)

Director

Peter David
Pedersen(Nov. 29,1967)

Apr. 1986
Jul. 1991
Mar. 2005
Oct. 2013
Jun. 2021
Sep. 2000
Jan. 2015
Feb. 2020
Aug. 2020
Jun. 2021
Jun. 2022

Joined the Company
General Manager, Sales Planning Headquarters
Director and General Manager, Sales Planning Headquarters
Director and General Manager, General Manager’s Office,Sales Promotion Headquarters
Director and Deputy General Manager, Sales Promotion
Headquarters and General Manager, Sales Planning Division
Managing Director and Deputy General Manager, Sales
Promotion Headquarters and General Manager, Sales Planning
DivisionManaging Director and General Manager, Sales Promotion
Headquarters
Executive Vice President and Representative Director
President and Representative Director
President and Representative Director Representative
Executive Officer
President and Representative Director Representative
Executive Officer, CEO (Incumbent)
Director, Aoi Scholarship Foundation (Incumbent)
Joined Mitsubishi Corporation
Joined McKinsey & Company
Representative and CEO, GLOBIS Management Bank
President & CEO, ProNova Inc. (Incumbent)
External Director, the Company (Incumbent)
External Director, LANCERS, Inc. (Incumbent)
Outside Director, SEPTENI HOLDINGS CO., LTD.
(Incumbent)
Director, euglena Co., Ltd. (Incumbent)
Member of the Board, Independent, KADOKAWACORPORATION (Incumbent)
Joined Arthur Andersen & Co. (currently Accenture Japan Ltd)
Joined Corporate Directions, Inc.
Representative Director, Asuka Corporate Advisory Co., Ltd.
Chief Executive Officer, Misaki Capital Inc. (Incumbent)
External Director, the Company (Incumbent)
President, E-Square Inc.
Representative Director, General Incorporated Association
NELIS
Professor, Shizenkan University Graduate School of
Leadership & Innovation (Incumbent)
Representative Director, Specified Nonprofit Corporation
NELIS (Incumbent)
External Director, the Company (Incumbent)
Independent Outside Member of the Board, Meiji Holdings
Co., Ltd. (Incumbent)

68

Term of Shares held
office (Thousands)(Note 3)

1,556

(Note 3)－(Note 3)－(Note 3)0

Position

Name

Date of birth

Career history

Term of Shares held
office (Thousands)

Mar. 1987 Joined the Company
Apr. 2013 General Manager, Corporate Planning Division
Apr. 2015 Executive Officer and General Manager, Corporate Planning
Division
Oct. 2015 Executive Officer and General Manager, Corporate Planning
Division and IR Department
Jun. 2016 Director and Senior Executive Officer
General Manager, Corporate Planning Division and IR
Department
Oct. 2016 Director and Senior Executive Officer
General Manager, Corporate Planning Division and IR
Department
In charge of ESG Promotion
Director,
Apr. 2017 Director and Senior Executive Officer
Managing
Hirotsugu Kato (Jul. 30, 1963)(Note 3)General Manager, IR Department
Executive Officer
In charge of Corporate Planning and ESG Promotion
Oct. 2017 Director and Senior Executive Officer CDO
General Manager, IR Department
In charge of Corporate Planning and ESG Promotion
Apr. 2019 Director and Managing Executive Officer CFO
General Manager, IR Department
In charge of Finance, Investment Research, Sustainability, and
ESG Promotion
Apr. 2021 Director and Managing Executive Officer CFO
In charge of IR, Finance, Sustainability, and ESG Promotion
Feb. 2024 Director and Managing Executive Officer CFO
In charge of Group FP&A, IR, Finance, Sustainability, and
ESG Promotion (Incumbent)
May 2000 Company Physician, Furukawa Electric Co., Ltd.
Apr. 2002 Outpatient Physician, Department of Psychosomatic Medicine,
Yokohama Rosai HospitalMar. 2010 Acquisition of Doctor of Medicine
Apr. 2011 Company Physician, the Company (Incumbent)
Apr. 2014 General Manager, Health Management Division
Apr. 2019 Executive Officer, General Manager, Health Management
Division
Apr. 2020 Executive Officer, General Manager, Wellness Promotion
Director, Senior(Sep. 26,
Reiko Kojima
Division(Note 3)
Executive Officer
1975)
May 2021 Executive Officer, CWO (Chief Wellbeing Officer), General
Manager, Wellness Promotion DivisionJun. 2021 Director, Executive Officer, CWO (Chief Wellbeing Officer),
General Manager, Wellness Promotion Division
Apr. 2022 Director, Executive Officer, CWO (Chief Wellbeing Officer),
General Manager, Wellbeing Promotion Department
Apr. 2023 Director, Senior Executive Officer, CWO (Chief Wellbeing
Officer), General Manager, Wellbeing Promotion Department(Incumbent)

69

10

0

Position

Audit &
Supervisory
Board Member(Full time)

Audit &
Supervisory
Board Member(Full time)

Audit &
Supervisory
Board Member

Name

Date of birth

Career history

Term of Shares held
office (Thousands)

Apr. 1989 Joined The Mitsubishi Bank, Ltd. (currently MUFG Bank,
Ltd.)
Jan. 2013 General Manager, Business Planning Division, Mitsubishi UFJ
Morgan Stanley Securities Co., Ltd.
Oct. 2014 General Manager, Corporate Banking Group No. 2, Corporate
Banking Division No. 8, The Bank of Tokyo-Mitsubishi UFJ,
Ltd. (currently MUFG Bank, Ltd.)(Jan. 17,
Hitoshi Kawai
Jun. 2016 Executive Officer, General Manager, Corporate Banking(Note 4)
1967)
Group No. 2, Corporate Banking Division No. 8, The Bank ofTokyo-Mitsubishi UFJ, Ltd. (currently MUFG Bank, Ltd.)May 2017 Executive Officer, Branch Manager, Kyoto Branch, The Bankof Tokyo-Mitsubishi UFJ, Ltd. (currently MUFG Bank, Ltd.)
Apr. 2020 Executive Officer, MUFG Bank, Ltd.
Jun. 2020 Audit & Supervisory Board Member (Full-time), the Company(Incumbent)
Mar. 1986 Joined the Company
Oct. 2007 Director and General Manager, Card Planning Department,
Epos Card Co., Ltd.
Apr. 2012 Director and General Manager, Original Merchandise
Department, MARUI CO., LTD.
Apr. 2013 Executive Officer, the Company
Director and General Manager, Sales Department 3, MARUICO., LTD.
Jun. 2014 Director, Executive Officer, the Company
Managing Director and General Manager, Specialty Store(Nov. 24,
Department, MARUI CO., LTD.
Hajime Sasaki(Note 5)1963)
Apr. 2015 Director and Senior Executive Officer in charge of retailingand store operation business, the Company
Senior Managing Director, MARUI CO., LTD.
Apr. 2016 Senior Executive Officer, the Company
President and Representative Director, MARUI CO., LTD.
Apr. 2019 Senior Executive Officer in charge of Architecture, theCompany
President and Representative Director, AIM CREATE CO.,LTD.
Jun. 2022 Audit & Supervisory Board Member (Full-time), the Company(Incumbent)
Apr. 1998 Registered as Attorney, Joined Takagi Godo Law OfficeNov. 2002 Partner, Suzuki Sogo Law Office (Incumbent)
Mar. 2018 Outside Director, Member of the Audit Committee,
Bridgestone Corporation (Incumbent)
Jun. 2018 Outside Director, Audit & Supervisory Committee Member,
Yoko Suzuki (Sep. 21, 1970)(Note 4)
Nippon Pigment Company Limited (Incumbent)
Jun. 2020 External Audit & Supervisory Board Member, the Company(Incumbent)
Jun. 2022 Outside Director of the Board, Japan Pulp & Paper Co., Ltd.
(Incumbent)

70

0

9

3

Position

Name

Audit &
Supervisory
Board Member

Date of birth

Career history(Oct. 7,
1958)

Apr. 1981 Joined the Tokyo Regional Taxation Bureau
Jul. 2006 District Director, Chichibu Tax Office
Jul. 2016 Chief Internal Inspector, Commissioner’s Secretariat of
National Tax Agency
Jul. 2018 Regional Commissioner, Kumamoto Regional Taxation
BureauSep. 2019 Registered as Certified Tax Accountant
Established Hiroaki Matsumoto Certified Tax Accountant
OfficeSep. 2020 Outside Audit & Supervisory Board Member, Yazaki
Corporation (Incumbent)
Jun. 2021 Outside Corporate Auditor, KAKEN PHARMACEUTICAL
CO., LTD. (Incumbent)
Jun. 2022 External Audit & Supervisory Board Member, the Company(Incumbent)

HiroakiMatsumoto

Term of Shares held
office (Thousands)

0(Note 5)

Total

1,582

Notes: 1. Directors Etsuko Okajima, Yasunori Nakagami, and Peter David Pedersen are External Directors.
Ms. Etsuko Okajima is scheduled to retire as External Director of LANCERS, Inc. on June 28, 2024.
2. Audit & Supervisory Board Members Yoko Suzuki and Hiroaki Matsumoto are External Audit & Supervisory Board
Members.
3. From the close of the Ordinary General Meeting of Shareholders for the fiscal year ended March 31, 2024 up to theclose of the Ordinary General Meeting of Shareholders for the fiscal year ending March 31, 2025.
4. From the close of the Ordinary General Meeting of Shareholders for the fiscal year ended March 31, 2024 up to theclose of the Ordinary General Meeting of Shareholders for the fiscal year ending March 31, 2028.
5. From the close of the Ordinary General Meeting of Shareholders for the fiscal year ended March 31, 2022 up to theclose of the Ordinary General Meeting of Shareholders for the fiscal year ending March 31, 2026.
6. The Company has appointed one Substitute Audit & Supervisory Board Member for the purpose of preparing for thecase in which the number of Audit & Supervisory Board Members falls below the minimum number stipulated in laws
and regulations in accordance with the provisions of Article 329, Paragraph 3 of the Companies Act. The career historyof this Substitute Audit & Supervisory Board Member is as follows.
Name

Akira Nozaki

Date of birth

Career history(Nov. 20, 1957)

Apr. 1988 Registered as Attorney
Mar. 2003 Representative, Nozaki Law Office (Incumbent)
Jun. 2017 Audit & Supervisory Board Member, J-OIL MILLS, Inc.
(Incumbent)

71

Shares held(Thousands)－

The Company has adopted an Executive Officer System to strengthen management and execution systems
group-wide. The following 17 Executive Officers are not serving concurrently as Directors of the Company:
Senior Managing Executive Officer Masao Nakamura

CSO
In charge of Real Estate and Architecture
President and Representative Director, MARUI HOME SERVICE Co., Ltd.
Senior Managing Executive Officer Tomoo Ishii
CHRO
In charge of General Affairs, Personnel, Audit and Wellbeing Promotion
Managing Executive Officer
Yoshinori Saito
In charge of FinTech BusinessPresident and Representative Director, Epos Card Co., Ltd.
Managing Executive Officer
Masahiro Aono
In charge of Retailing BusinessPresident and Representative Director, MARUI CO., LTD.
Managing Executive Officer
Akikazu Aida
CDO
In charge of Corporate Planning, Co-Creation with Future Generations, and CoCreative Investment
General Manager, Digital Transformation OfficeSenior Executive Officer
Takeshi Ebihara
CIO
President and Representative Director, M&C SYSTEMS CO., LTD.
Executive Officer
Naofumi Tsuchiya
CDXO (part-time)
Executive Officer
Masahisa Aoki
Representative Director and CEO, tsumiki Co., Ltd.
Executive Officer
Tatsuo Niitsu
Director and General Manager, E-Commerce Business Department, MARUI CO.,LTD.
Executive Officer
Ayumi Hiromatsu
Director, M&C SYSTEMS CO., LTD.
General Manager, Store System Development Department
Executive Officer
Jiro Ishioka
General Manager, Sales Planning Division, MARUI CO., LTD.
Executive Officer
Takahiro Matsumoto General Manager, General Affairs Division
Executive Officer
Yuko Shiota
General Manager, Sustainability Department
General Manager, ESG Promotion Department
Executive Officer
Atsushi Nagasao
General Manager, Corporate Planning Division
Executive Officer
Fumitaka Marutani Managing Director and General Manager, Sales Planning Division, Epos Card Co.,
Ltd.
Executive Officer
Takeaki Yamane
Director and General Manager, FinTech Business Department, Epos Card Co., Ltd.
Executive Officer
Masami Endoh
General Manager, Group FP&A Department
CDO: Chief Digital Officer
CWO: Chief Wellbeing Officer
CSO: Chief Security Officer
CHRO: Chief Human Resource Officer
CIO:
Chief Information Officer
CDXO: Chief Digital Transformation Officer

722) External Directors and Audit & Supervisory Board Members
The Company appoints three External Directors and two External Audit & Supervisory Board Members.
Ms. Etsuko Okajima has ample experience and knowledge concerning human resource development and startups
in addition to corporate management. She has performed her duties as External Director of the Company properly
by raising questions and giving advice and opinions from her viewpoint and an independent, objective position. As
the Company believes that she can contribute to the reinforcement of supervisory function for management of theCompany, the Company has appointed her as an External Director. Ms. Etsuko Okajima is also a Director of euglena
Co., Ltd., with which the Company has formed a business and capital alliance and the Company has approximately
1.6% of the total number of issued shares of the same company as of March 31, 2024. The same company
participated in special events hosted by the Company at Marui stores, setting up its booths. However, the amount of
the charge for the setup of the booths paid by the same company to the Company was less than ¥1 million for themost recent fiscal year, and she therefore satisfies the “Criteria for Independence for External Directors and Audit& Supervisory Board Members” of the Company. Ms. Etsuko Okajima is also an External Director of LANCERS,
Inc., with which the Company has formed a business and capital alliance and the Company has approximately 2.4%of the total number of issued shares of the same company as of March 31, 2024. The Company had no specifictransactions with the same company in the most recent fiscal year, and she therefore satisfies the “Criteria for
Independence for External Directors and Audit & Supervisory Board Members” of the Company. As Ms. Etsuko
Okajima is in an objective position with no potential risk of posing a conflict of interest with general shareholders,the Company has filed a notification of her appointment as an independent director.
Mr. Yasunori Nakagami has advanced insights in corporate management with a view toward capital markets that has
been developed through ample experience at management consulting companies and an investment managementcompany. He has performed his duties as External Director of the Company properly by raising questions and giving
advice and opinions from his viewpoint and an independent, objective position. As the Company believes that hecan contribute to the reinforcement of supervisory function for management of the Company, the Company has
appointed him as an External Director. Misaki Capital Inc., where Mr. Yasunori Nakagami serves as Chief Executive
Officer, manages investment funds which hold shares of the Company such as MISAKI ENGAGEMENT MASTER
FUND, a shareholder of the Company, but the voting rights of the Company’s shares that the same company holds
are less than 10% of the standard stipulated in the “Criteria for Independence for External Directors and Audit &Supervisory Board Members” of the Company and therefore, he satisfies the criteria. As Mr. Yasunori Nakagami isin an objective position with no potential risk of posing a conflict of interest with general shareholders, the Company
has filed a notification of his appointment as an independent director.
Mr. Peter David Pedersen has advanced insights in sustainability management at the global level that has beendeveloped through ample experience at environmental and CSR consulting companies. He has performed his duties
as External Director of the Company properly by raising questions and giving advice and opinions from his
viewpoint and an independent, objective position. As the Company believes that he can contribute to thereinforcement of supervisory function for management of the Company, the Company has appointed him as anExternal Director. Mr. Peter David Pedersen gave opinions on sustainability management as Advisor of the Company
until June 2021. The total amount of activity participation fees for Specified Nonprofit Corporation NELIS paid by
the Company was ¥1 million for the most recent fiscal year, and he satisfies the “Criteria for Independence forExternal Directors and Audit & Supervisory Board Members” of the Company. As Mr. Peter David Pedersen is inan objective position with no potential risk of posing a conflict of interest with general shareholders, the Company
has filed a notification of his appointment as an independent director.
Ms. Yoko Suzuki has abundant experience and knowledge gained from serving as external director and audit
committee member, etc. at other companies, in addition to a high level of expertise as a lawyer. She is also wellversed in corporate legal affairs and legality audits. The Company has appointed her as an External Audit &Supervisory Board Member with the belief that she would contribute to fair audits of the Company as an External
Audit & Supervisory Board Member. As Ms. Yoko Suzuki is in an objective position with no potential risk of posing
a conflict of interest with general shareholders, the Company has filed a notification of her appointment as anindependent director.
Mr. Hiroaki Matsumoto is certified as a tax accountant and has experience and broad insight as external auditor atother companies, in addition to professional knowledge and experience in the accounting field. Based on the above
reasons, the Company believes that he can contribute to fair audit as External Audit and Supervisory Board Memberof the Company, and has appointed him as an External Audit & Supervisory Board Member. As Mr. Hiroaki
Matsumoto is in an objective position with no potential risk of posing a conflict of interest with general shareholders,the Company has filed a notification of his appointment as an independent director.
The Board of Directors held ten meetings in the fiscal year under review. Ms. Etsuko Okajima, Ms. Yoko Suzuki,
and Mr. Hiroaki Matsumoto attended all ten meetings, and Mr. Yasunori Nakagami and Mr. Peter David Pedersen
attended nine out of the ten meetings. All members expressed their opinions appropriately as necessary.

73The Company’s criteria for the independence of External Directors and Audit & Supervisory Board Members are as
follows:<Criteria for Independence of External Directors and Audit & Supervisory Board Members>
MARUI GROUP CO., LTD. (hereinafter the “Company”) aims to ensure the appropriate levels of objectivity andtransparency necessary for effective corporate governance. For this reason, it has established the following criteria for
determining the independence of external directors, external Audit & Supervisory Board members, and candidates forthese two positions. Individuals that meet all of these criteria are judged to be sufficiently independent from theCompany.
1. The individual must not be a person involved in operation *1 of the Company, its subsidiaries, or its associates(hereinafter, collectively, the “Group”) and must not have been a person involved in operation during the past 10
years.
2. The individual must not be a major supplier*2 of the Group or a person involved in operation of a major supplier.
3. The individual must not be a major customer*3 of the Group or a person involved in operation of a major customer.
4. The individual must not be a major shareholder of the Company possessing direct or indirect holdings equating to
10% or more of voting rights or a person involved in operation of a major shareholder.
5. The individual must not be a person involved in operation of an entity that possesses direct or indirect holdings
equating to 10% or more of the total voting rights of the Group.
6. The individual must not be a consultant, a certified public accountant or other accounting specialist, or a lawyer orother legal specialist receiving large amounts of monetary payments or other financial assets *4 from the Group thatare separate from the compensation paid for services as a director or Audit & Supervisory Board member. The
individual also must not belong to a company or other organization that receives such payments or assets.
7. The individual must not receive large amounts of monetary payments or other financial assets *4 as donations fromthe Group and must not belong to a company or other organization that receives such donations.
8. The individual must not be the accounting auditor of the Company. The individual also must not belong to acompany or other organization that serves as the accounting auditor of the Company.
9. The individual must not have been applicable under items 2. to 8. during the past five years.
10. The individual must not be a relative*5 of an individual that qualifies under items 2. to 8. (only applicable to relativesof important persons involved in operation *6 for all items except items 6. and 8.).
11. The individual must not be a person involved in operation of another company with which the Group is in aninterlocking relationship of external officers.*7
Notes:

1. A “person involved in operation” is defined as an executive director, executive officer, or employee with

operational execution responsibilities of a stock company; a director of a non-company legal entity ororganization; or individuals serving persons in similar positions or at similar companies, non-company
legal entities, or organizations.
2. A “major supplier” is defined as an entity that fulfills one of the following conditions:• A supplier group (the corporate group to which the supplier that serves as the direct transaction
counterparty belongs) that provides products or services to the Group and to which payments madeby the Group equated to ¥100 million or more and represented more than 2% of the total
consolidated net sales (consolidated operating revenue) or transaction revenues of the suppliergroup in the most recently completed fiscal year.
• A supplier group with which liabilities of the Group are associated and for which the applicableliabilities equated to ¥100 million or more and represented more than 2% of the consolidated total
assets of the supplier group as of the end of the most recently completed fiscal year.
3. A “major customer” is defined as an entity that fulfills one of the following conditions:• A customer group (the corporate group to which the customer that serves as the direct transaction
counterparty belongs) to which the Group provides products or services and whose total amountof payments to the Group equated to ¥100 million or more and represented more than 2% of theconsolidated operating revenue of the Group in the most recently completed fiscal year.
• A customer group possessing liabilities that are associated with the Group and that equated to ¥100
million or more and represented more than 2% of the consolidated total assets of the Group as ofthe end of the most recently completed fiscal year.
• A financial group (the financial group to which the customer that serves as the direct transaction
counterparty belongs) from which the Group procures funds through borrowings and from which
the total amount of borrowings represented more than 2% of the consolidated total assets of theGroup as of the end of the most recently completed fiscal year.

74

4. A “large amount of monetary payments or other financial assets” refers to monetary payments or otherfinancial assets equated to a total of ¥10 million or more within the most recently completed fiscal year.
5. A “relative” is defined as a spouse or a relative within the second degree.
6. “Important persons involved in operation” refers to directors, executive officers, and employees with

operational execution responsibilities ranked as division manager or higher, or individuals with similar
operational execution authority.
7. An “interlocking relationship of external officers” refers to the relationship in which a person involvedin operation of the Group serves as an External Director or Audit & Supervisory Board Member ofanother company, and a person involved in operation of said company serves as an External Director or
Audit & Supervisory Board Member of the Company.
3) Coordination between supervision or audits by External Directors and External Audit & Supervisory Board Members
and internal audits, corporate audits, and accounting audits, and relationship with internal control departments
The Corporate Planning Division and the Audit Department are responsible for supporting the External Directors andExternal Audit & Supervisory Board Members, and strive to strengthen the system to convey information by
distributing reference materials for meetings of the Board of Directors in advance and fully explaining their content.
Coordination between the External Audit & Supervisory Board Members and the Accounting Auditor is detailed in“(3) Audits.”
4) Officer Skill Matrix
The Group has decided that there were 14 skills*1 comprising shared skills and unique skills required for achieving thedesired impact through the advancement of its management and medium-term management plan. The table below
clarifies skills held by each officer in light of their experience, knowledge and abilities, and shows overall strengths
held by each officer using the CliftonStrengths®*1 assessment developed by Gallup, Inc., of the United States.
● Shared Skills: Common skills required for the Board of Directors to appropriately fulfill its function● Unique Skills: Unique skills necessary for implementing the medium-term management plan

The CliftonStrengths®: 34 strengths and four domains that represent personal qualities*1 Basis for the skills held by each officer and details on CliftonStrengths® are described on the Company’s website.
©2021 Gallup, Inc. Unauthorized reproduction and replication is prohibited. Gallup®, StrengthsFinder®, CliftonStrengthsFinder®, and the names of the 34 Clifton StrengthsFinder are trademarks of Gallup, Inc.

75

Name

Shared Skills●●

Hirotsugu Kato

●

●

●

●

Hitoshi Kawai●●

HiroakiMatsumoto●Tomoo Ishii●

Yoshinori Saito●●

Masahiro Aono●●

Akikazu Aida●●

Takeshi Ebihara●

Naofumi Tsuchiya ●
●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

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●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

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Yoko Suzuki

Masahisa Aoki●●

Masao Nakamura

●

●

●

Reiko Kojima

Hajime Sasaki●●

CliftonStrengths®
Investments instart-up companies
New businessdevelopment

Peter David
Pedersen●Fintech●●Retailing●●

Digitaltransformation

Yasunori
Nakagami●

Well-being●

Sustainability●

Innovation

Etsuko Okajima●

Risk management●

Corporate
governance●

Finances

Human resource
management
Management
strategy
formulation
Corporate
management

Hiroshi Aoi

Unique Skills

●

●

●

●

Tatsuo Niitsu

76

●

●

●

●

●

●

Domain of Overall Strengths:
Top 5 CliftonStrengths®

1. Futuristic, 2. Ideation
3. Learner, 4. Belief
5. Individualization
1. Activator, 2. Communication
3. Maximizer, 4. Individualization
5. Achiever
1. Strategic, 2. Activator
3. Ideation, 4. Futuristic
5. Command
1. Strategic, 2. Input
3. Futuristic, 4. Responsibility
5. Connectedness
1. Harmony, 2. Analytical
3. Responsibility, 4. Consistency
5. Individualization
1. Maximizer, 2. Learner
3. Arranger, 4. Achiever
5. Self- Assurance
1. Ideation, 2. Responsibility
3. Deliberative, 4. Strategic
5. Arranger
1. Maximizer, 2. Strategic
3. Ideation, 4. Adaptability
5. Relator
1. Positivity, 2. Includer
3. Achiever, 4. Communication
5. Strategic
1. Harmony, 2. Responsibility
3. Consistency, 4. Discipline
5. Deliberative
1. Individualization, 2. Arranger
3. Maximizer, 4. Woo
5. Communication
1. Analytical, 2. Significance
3. Responsibility, 4. Restorative
5. Relator
1. Consistency, 2. Harmony
3. Analytical, 4. Significance
5. Relator
1. Positivity, 2. Maximizer
3. Ideation, 4. Intellection
5. Woo1. Woo, 2. Achiever
3. Communication, 4. Positivity
5. Analytical
1. Harmony, 2. Responsibility
3. Positivity, 4. Includer
5. Restorative
1. Strategic, 2. Activator
3. Ideation, 4. Woo
5. Communication
1. Positivity, 2. Maximizer
3. Harmony, 4. Individualization
5. Includer
1. Individualization, 2. Ideation
3. Arranger, 4. Maximizer
5. Futuristic

Name

Shared Skills

Unique Skills●●

Jiro Ishioka●●

Fumitaka
Marutani

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Takeaki Yamane
Masami Endoh

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Yuko Shiota
Atsushi Nagasao●●

Takahiro
Matsumoto

Investments instart-up companies
New businessdevelopment

Digitaltransformation●

FintechWell-being●

Retailing

Sustainability

Innovation

Risk management

Corporate
governance

Finances

Human resource
management
Management
strategy
formulation
Corporate
management

Ayumi Hiromatsu

CliftonStrengths®

●

●

●

●

77

Domain of Overall Strengths:
Top 5 CliftonStrengths®

1. Ideation, 2. Arranger
3. Developer, 4. Responsibility
5. Includer
1. Strategic, 2. Maximizer
3. Learner, 4. Achiever
5. Ideation
1. Harmony, 2. Achiever
3. Deliberative, 4. Analytical
5. Responsibility
1. Learner, 2. Intellection
3. Achiever, 4. Significance5. Context
1. Harmony, 2. Analytical
3. Maximizer, 4. Relator
5. Positivity
1. Deliberative, 2. Strategic
3. Self-Assurance, 4. Consistency
5. Adaptability
1. Analytical, 2. Deliberative
3. Relator, 4. Individualization
5. Competition
1. Maximizer, 2. Input
3. Intellection, 4. Learner
5. Arranger

(3) Audits
1) Corporate auditsa. Organization and members for corporate audits- The Audit & Supervisory Board of the Company is comprised of two Audit & Supervisory Board Members (Full-time)
and two Audit & Supervisory Board Members (Part-time), two of whom are External Audit & Supervisory Board
Members.
Position
Audit &
Supervisory Board
Member(Full time)(Chair)Audit &
Supervisory Board
Member(Full time)
External Audit &Supervisory Board
MemberName

Career summary

Hitoshi Kawai

He has held important posts at MUFG Bank, Ltd. and other companies.
Based on his abundant experience, he has excellent insight into finance,accounting, governance, and other areas.

Hajime Sasaki

He has extensive operational experience in the Group’s retail business, aswell as management experience as Director of Epos Card and President of
AIM CREATE, and is familiar with each of the Group’s businesses.

Yoko Suzuki

She appropriately performs her duties based on her legal expertise andexperience she has cultivated over many years as a lawyer.

External Audit &He is a certified public tax accountant and appropriately performs his
Supervisory Board Hiroaki Matsumoto
duties based on his expertise and experience in the accounting field.
Member- To support the execution of duties of Audit & Supervisory Board Members, two staff (one with concurrent
posts) with necessary expertise and skills have been assigned.
b. Frequency of Audit & Supervisory Board meetings and attendance status of each Audit & Supervisory Board
Member
The Audit & Supervisory Board met 15 times during the fiscal year under review. The attendance of each Audit& Supervisory Board Member is as follows:
Name

Number of meetings

Number of attendance

Attendance rate

Hitoshi Kawai

15 times

15 times

100%

Hajime Sasaki

15 times

15 times

100%

Yoko Suzuki

15 times

15 times

100%

Hiroaki Matsumoto

15 times

15 times

100%c. Main matters for consideration by the Audit & Supervisory Board(Status of development and operation of the internal control system)
Confirmation of audit plans, audit activity reports, the risk management system at the Compliance Promotion
Board and Internal Control Committee, and inspection of stores and other important business locations(Confirmation of business plans)
Confirmation of progress of business plans through quarterly and year-end financial results(Development of auditing environment)
Confirmation of expenses related to the Audit & Supervisory Board, selection of staff to support Audit &Supervisory Board Members(Appropriateness of auditing by the Accounting Auditor)
Appointment of the Accounting Auditor, confirmation of the outline of the auditor’s audit plans, and evaluationof the auditor

78

d. Status of activities of Audit & Supervisory Board Members (full-time and part-time)(Priority audit items)• Development of a governance system and confirmation of its operational status (full-time and part-time Audit& Supervisory Board Members)
Confirmation of operational status of the Board of Directors that promotes stakeholder-oriented management- Confirmation of operational status of each advisory body to the Board of Directors
Confirmation of status of development and implementation of the internal control system and verification of
its effectiveness- Confirmation of the status of development and operation of risk management systems such as Three Lines
Model• Confirmation of progress of the medium-term management plan (full-time and part-time Audit & Supervisory
Board Members)
Confirmation of progress and issues of business model based on three business pillars: Retailing, FinTech,and investing for the future- Retailing segment: Confirmation of progress and issues of measures concerning business modeltransformation- FinTech segment: Confirmation of progress and issues of measures concerning maximization of householdshare, embedded finance, and others- Investing for the future: Confirmation of progress and issues of initiatives for balancing Impact and revenue
Confirmation of progress and issues of the Impact 2.0 aimed at realizing the 2050 Vision- Confirmation of progress and issues of Impact-related KPIs and financial KPIs
Confirmation of progress and issues of initiatives for evolving into a company that solves social issues- Confirmation of progress and issues of innovations in organizations and workstyles (project-basedorganizations, official initiatives, etc.)- Confirmation of progress and issues of DX promotion
Confirmation of progress and issues of initiatives for non-financial information disclosure- Confirmation of progress and issues for sustainability, human capital investment, and others(Ordinary audit items)- Audit of the status of execution of duties of Directors (full-time and part-time Audit & Supervisory Board Members)
Audit of decision-making of the Board of Directors and Management Committee
Audit of status of development and implementation of the internal control system
Audit of competitive transactions, conflict of interest transactions, gratuitous provision of profits, andabnormal transactions
Receipt of reports from Directors and employees- Regular meetings with the Representative Director (full-time and part-time Audit & Supervisory Board Members)- Attendance at important meetings including the Board of Directors and Management Committee (full-timeand part-time Audit & Supervisory Board Members)- Hearing reports from Directors, Executive Officers, and management of the Group on operations (full-time
Audit & Supervisory Board Members)- Site visits to offices and subcontractors (full-time and part-time Audit & Supervisory Board Members)- Regular meetings with External Directors (full-time and part-time Audit & Supervisory Board Members)- Cooperation with the auditing firm (full-time and part-time Audit & Supervisory Board Members)- Cooperation with Audit & Supervisory Board Members of Group companies (full-time Audit & Supervisory
Board Members)- Cooperation with the Audit Department and departments in charge of internal audit at Group companies (fulltime Audit & Supervisory Board Members)- Audit under the internal control system based on the system resolution as stipulated in the Companies Act(full-time Audit & Supervisory Board Members)- Audit under the Internal Control Reporting System (Financial Instruments and Exchange Act) (full-time Audit& Supervisory Board Members)- Inspection of important documents and audit of document and information management (full-time Audit &Supervisory Board Members)- Investigation of company assets and confirmation of product inventories (full-time Audit & Supervisory
Board Members)- Quarterly review of financial results (full-time Audit & Supervisory Board Members)- Audit of dividend from surplus (full-time and part-time Audit & Supervisory Board Members)- Response to year-end audits and general shareholders’ meetings (full-time and part-time Audit & Supervisory
Board Members)2) Internal audits- Internal audits are conducted by the Audit Department (20 members as of the end of March 2024) based oninternal regulations.

79

- Operational audits investigate the effectiveness, propriety, and legal compliance status of operations, and accounting
audits investigate the status of compliance with accounting standards and internal regulations in order to ensure
thorough compliance and improve operations Groupwide, including at subsidiaries.
- Audit & Supervisory Board Members and the accounting firm exchange information and opinions periodicallyin order to improve the effectiveness of each of their audit.
- Plan and results of internal audits are reported to the Board of Directors and Audit & Supervisory Board.
3) Accounting auditsa. Name of auditing firm
PricewaterhouseCoopers Japan LLC
b. Number of years of continuous audit
Five yearsc. The Certified Public Accountants engaged in the audit
Naoaki Kobayashi
Tatsuya Chiba
d. Assistants to the audit
Certified Public Accountants: 13
Others: 26
e. Policy and reason for selecting the auditing firm
The Audit & Supervisory Board of the Company confirms the independence, audit systems, and status andquality of implementation of audits of the Accounting Auditor. As a result, taking into consideration acomprehensive evaluation of independence, expertise, and propriety, the Company has determined that it isappropriate to appoint PricewaterhouseCoopers Japan LLC as the Accounting Auditor of the Company.
f. Evaluation of the auditing firm by the Audit & Supervisory Board Members and the Audit & Supervisory Board
The Audit & Supervisory Board Members and Audit & Supervisory Board have evaluated and effectively
communicated with the auditing firm to exchange opinions and understand the status of audits in a timely andappropriate manner. The Company has therefore confirmed that the accounting audits by the auditing firm arefunctioning effectively and being performed properly.
4) Audit fees
a. Compensation for Certified Public Accountants engaged in audit(Millions of yen)
Category
The Company
Consolidated
subsidiaries
Total

Previous fiscal year
Compensation for audit Remuneration for nonattestation work
audit services

Fiscal year under review
Compensation for audit Remuneration for nonattestation work
audit services

113

2

113

10

57

1

57

－

170

3

170

10

Non-audit services provided to the Company include work conducted in relation to the provision of letters of
comfort in connection with issuance of corporate bonds.
Non-audit services provided to consolidated subsidiaries include procedural services that are agreed-upon related
to Myna Point project.
b. Compensation for organizations belonging to the same network (PricewaterhouseCoopers) as Certified Public
Accountants engaged in audit (excluding a.)(Millions of yen)
Category
The Company
Consolidated
subsidiaries
Total

Previous fiscal year
Compensation for audit Remuneration for nonattestation work
audit services

Fiscal year under review
Compensation for audit Remuneration for nonattestation work
audit services

－

0

－

0

－

－

－

－

－

0

－

0

The main content of the non-audit services for the Company is research and advisory services related to tax
processing.

80

c. Other significant compensation
Not applicable.
d. Policy on determining the audit fee
The fee is decided as appropriate after considering factors including the time required for audit and the corporate
scale and characteristics of business.
e. Reason for the Audit & Supervisory Board’s consent of the compensation, etc. to the Accounting Auditor
The Audit & Supervisory Board has determined that compensation for the Accounting Auditor as proposed by
the Board of Directors is appropriate for maintaining and improving the quality of audits, upon confirming thetime required for audits and the compensation unit rate, and gave consent as provided for in Article 399,
Paragraph 1 of the Companies Act based on the “Practical Guidelines for Audit & Supervisory Board Members
Concerning the Evaluation of Accounting Auditor and Formulation of Selection Standards” published by theJapan Audit & Supervisory Board Members Association.
(4) Officer compensation, etc.
1) Policies related to deciding the amount or calculation method of officer compensation, etc.
Compensation system for officers
1. Basic policy
Compensation for Directors of the Company is determined pursuant to a compensation system linked toshareholders’ interests to fully function as an incentive for pursuing sustainable improvement in corporate value.
Specifically, compensation for Directors (excluding External Directors and non-residents in Japan) of theCompany comprises fixed basic compensation as well as performance-linked bonuses, which are based on theperformance of the Company in a given fiscal year to function as a short-term incentive, and performance-linked
share-based remuneration, which is based on the medium-to-long-term performance of the Company to function
as a medium-to-long-term incentive.
The compensation levels and the ratio of performance-liked compensation are checked every year by referring tosurvey data of officer compensation by external research institutions, and setting the compensation levels and theratio of performance-liked compensation of other companies which are similar to the Company in size as abenchmark.
External Directors will only receive basic compensation based on their position to ensure that they maintain an
independent standpoint.
2.

Policy for decision on the amount of fixed compensation (basic compensation) to each Director (including
the policy for decision on the timing as well as terms and conditions of payment of compensation)

Basic compensation for Directors of the Company is monthly fixed compensation and paid to Directors based on
the above basic policy pursuant to terms and conditions of payment according to their positions, etc., designatedby the Nominating and Compensation Committee.
3.

Policy for decision on details, and calculation method of the amount or coefficient of variable compensation(bonuses and share-based remuneration) to each Director (including policy for decision on details of
performance indicators, and calculation method of the amount or coefficient of the performance indicators,
and policy for decision on the timing and terms and conditions of payment of compensation)- Performance-linked bonuses
The performance-linked bonus is decided in accordance with the duties of each Director in order to boost
motivation for improving performance of the Company on a single fiscal year basis. Performance-linked
coefficients are set based on the degree of accomplishment of targeted performance indicators in a given fiscal
year, and these coefficients are multiplied by the standard amount of compensation defined for each rank to
decide performance-linked bonus amounts.
- Performance-linked share-based remuneration
By utilizing the Officer Compensation BIP Trust, a trust fund established through contribution of money by theCompany (hereinafter the “Trust”), shares of the Company are issued to Directors.
Specifically, in order to boost motivation to contribute to improved medium-to-long-term performance andexpanding corporate value, a certain number of fiscal years are set in line with the medium-term management81plan, and a performance-linked coefficient is determined based on the Company’s performance indicators suchas the degree of achievement of performance targets for the final fiscal year. The coefficient so determined willthen be multiplied by accumulated points awarded to Directors in every fiscal year according to each Director’srank to determine the number of shares to be issued to each Director.
Each Director shall receive shares of the Company equivalent to a certain portion of the points, while theremaining shares of the Company shall be converted into cash by the Trust, and the payment of money
equivalent to the conversion value shall be received by the Director. Provided, however, that a transfer restriction
period of one year from the time of delivery shall be established regarding the shares delivered for the initial
target period (the fiscal year ended March 31, 2020 and the fiscal year ended March 31, 2021).
If a target period is extended and the Trust is continued, the target period shall correspond to the number ofyears subject to the medium-term management plan at the time. If a new target period is set at two years, thesame transfer restriction period of one year from the time of delivery as mentioned above shall be established
for the shares to be delivered regarding the said target period.
- Performance indicators
Performance indicators of performance-linked bonus and performance-linked share-based remuneration shallbe set in line with the medium-term management plan at the time of establishment of the plan, and determinedat the Board of Directors according to changes in the environment as appropriate.
- The timing of payment of performance-linked bonus
After completion of each fiscal year, a performance-linked bonus shall be paid at a certain time during thefollowing fiscal year.
- The timing of delivery of performance-linked share-based remuneration
Directors who satisfy the eligibility requirements shall receive delivery of the shares of the Company, etc. inaccordance with the number of accumulated points calculated, in or after the month of June immediately
following the final fiscal year of the target period, in principle.
4.

Policy for decision on the ratio of performance-liked compensation for individual compensation

The ratio of performance-linked compensation shall be determined at the Board of Directors after deliberation by
the Nominating and Compensation Committee in light of the basic policy stated in 1. above.
5.

Method of determining the details of individual compensation

Individual compensation for Directors shall be determined at the Nominating and Compensation Committee as
consigned by the Board of Directors for the purpose of improvement of the transparency and objectivity of thedeliberation process related to compensation.
The Nominating and Compensation Committee consists of three or more members, two of which are, in principle,
External Directors, and members may be elected by resolution of the Board of Directors.
The Nominating and Compensation Committee shall deliberate and determine the following matters based on acompensation system and within the maximum amount of compensation resolved at the general meeting ofshareholders, considering overall factors such as the level of responsibility for the Group management and theprogress of the medium-term management plan.
- Matters related to compensation of individual Directors- Matters related to changes in the compensation system of Directors- In addition to the above, matters consulted or consigned by the Board of Directors
In the fiscal year ended March 31, 2024, the Nominating and Compensation Committee meetings were held fourtimes. The Committee discussed the compensation system for Directors, etc.
6. Other important matters on individual compensation
As for performance-linked share-based remuneration, in case of any serious wrongdoing or violation of laws andregulations committed by an eligible Director, the Company has established a system to enable it to have the
Director forfeit the beneficiary rights for the shares expected to be delivered (malus) and demand the return of theamount of money equivalent to the shares delivered (clawback) from the Director.
82

7. Reasons for judgment to the effect that the details of individual compensation for Directors are in accordancewith the policy
The Board of Directors has taken measures to include a majority of External Directors in the Nominating andCompensation Committee as mentioned above. For decisions on the details of individual compensation for
Directors, the Committee deliberates on such matters from various aspects, based on the same perspective as theabove policy for decision; therefore the Board of Directors judges the details of the compensation are inaccordance with the above policy for decision.
(Activities of the Board of Directors in relation to decision on compensation)
In March 2021, the “policy on determining officer compensation” was discussed and approved at the Board of
Directors’ meeting. From December 2023 to March 2024, the Board of Directors discussed whether to review theofficer compensation and in May 2024, they deliberated and decided on the extension of the performance-linked
share-based remuneration plan.
(Performance-linked compensation)
The compensation levels and the ratio of performance-linked compensation have been revised to increase the portionof performance-linked compensation. This revision was aimed at boosting motivation to contribute to improving
medium-to-long-term performance and corporate value in order to have officers share the interests with shareholders
and to strengthen management from a shareholder perspective.
Ratio up to the fiscal year ended March 31, 2019
Basic compensation: Performance-linked bonuses: Performance-linked share-based remuneration = 8 : 1 : 1
Ratio from the fiscal year ended March 31, 2020
Basic compensation: Performance-linked bonuses: Performance-linked share-based remuneration = 6 : 1 : 3(i) Performance-linked bonuses
Performance-linked bonuses are decided in accordance with the duties of each Director and with the goal ofincreasing motivation for improving corporate performance on a single fiscal year basis. Performance-linked
coefficients are set based on the degree of accomplishment of targets for performance indicators in a given fiscal
year, and these coefficients are multiplied by the standard amount of compensation defined for each rank. EPS(published plan) is set as the target indicator to better share value with shareholders and link them to corporate
performance. The range of performance-linked coefficient is set in the range of 0% to 200%, depending on the
degree of accomplishment of the targets.
☐ Calculation formula for performance-linked bonuses
Performance-linked bonuses = Rank-based standard amount × Performance-linked coefficient- Target indicators and performance-linked coefficients
Target indicator
Fiscal year ended
March 31, 2023
Fiscal year ended
March 31, 2024
Fiscal year ending
March 31, 2025

EPS

Target(Yen)

Performance(Yen)

Performance-linked
coefficient109.11109.37100%

140.00130.7093%141.42－0 ~ 200%☐ Limit for performance-linked bonuses- At the General Meeting of Shareholders held on June 29, 2016, the upper limit for performance-linked
bonuses (excluding bonuses paid to Directors that are also employees of the Company or Group
companies) to Directors (excluding External Directors) in a given fiscal year was set at ¥100 million.

83

(ii) Performance-linked share-based remuneration
In the fiscal year ended March 31, 2017, the Group introduced performance-linked share-based remuneration (BIP
Trust) to increase motivation to contribute to improved medium-to-long-term performance and corporate value
for the Company. Performance-linked share-based remuneration employs a scheme in which a trust fundestablished through contribution by the Company is used to issue shares of the Company to Directors.
- Over the three-year period from the fiscal year ended March 31, 2022, to the fiscal year ended March 31,
2024, Directors will be granted points based on their rank at a set time each year. These points will then be
adjusted via a performance-linked coefficient within the range of 0% to 110% determined by the Company’s
performance (EPS, ROE, and ROIC) and ESG indicators (to facilitate the promotion of the Group’s cocreation sustainability management) for the last fiscal year ended March 31, 2024. Shares of the Company
will then be allocated to each Director, reflecting their cumulative total of points post adjustment.
- Over the two-year period from the fiscal year ending March 31, 2025, to the fiscal year ending March 31,
2026, Directors will be granted points based on their rank at a set time each year. These points will then be
adjusted via a performance-linked coefficient within the range of 0% to 110% determined by the Company’s
performance (EPS, ROE, and ROIC) and ESG indicators (to facilitate the promotion of the Group’s cocreation sustainability management) for the last fiscal year ending March 31, 2026. Shares of the Company
will then be allocated to each Director, reflecting their cumulative total of points post adjustment.
☐ Calculation formula for allocation of shares
Shares allocated = Cumulative points granted based on rank × (Financial performance-linked coefficient +Non-financial performance-linked coefficient)- Target indicators and performance-linked coefficients
Target indicator

Target(Yen, unless otherwise specified)

Performance

140 or more

130.70EPS

Fiscal year
ended
March 31,2024

Financial
indicators

Nonfinancial
indicators

Average degreeofaccomplishmentof the three
indicators is 96%(Note 3)

10.0% or more

9.9%

ROIC

3.8% or more

3.6%

Inclusion in DJSI World (Note 1)

Yes

5%

Achieve 350,000 tons of
reduction in CO2 emissions (Note 2)

350,000 tons

5%

ESG indicators

0 ~ 110%200 or more

ROE

13.0% or more

ROIC

4.0% or moreFinancial
indicators－

Nonfinancial
indicators

106%

ROE

EPS

Fiscal year
endingMarch 31,2026

Performancelinked coefficient

ESG indicators

Determined byadding theaccomplishmentof non-financial
indicators to theaverage degreeofaccomplishmentof the three
indicators

Inclusion in DJSI World (Note 1)

0%, 5%

Achieve 1,000,000 tons of
reduction in CO2 emissions (Note 2)

0%, 5%

Notes: 1. Dow Jones Sustainability World Index (DJSI World): An ESG index comprising companies selected through acomprehensive evaluation of economic, environmental, and social factors from the perspective of long-term improvements
to shareholder value
2. Amount of reduction compared to the fiscal year ended March 31, 2017
3. The performance-linked coefficient for the fiscal year ended March 31, 2024 was 106%, calculated by adding 10%
accomplishment of non-financial indicators to 96% accomplishment of financial indicators.

84☐ Limit for performance-linked share-based remuneration
Upper limit for fund contributions from the Company- At the General Meeting of Shareholders held on June 20, 2019, it was determined that the upper limit forfund contributions from the Company under the performance-linked share-based remuneration schemefrom the fiscal year ended March 31, 2020, would be ¥200 million multiplied by the number of years in thegiven target period. Accordingly, the upper limit for the two-year period beginning with the fiscal year
ending March 31, 2025, and ending with the fiscal year ending March 31, 2026, will be ¥400 million.
Upper limit for shares, etc. of the Company acquired by Directors- At the General Meeting of Shareholders held on June 20, 2019, it was determined that the upper limit forshares of the Company acquired by Directors from the fiscal year ended March 31, 2020, would be 100,000
points (equivalent to 100,000 shares) multiplied by the number of years in the given target period.
Accordingly, the upper limit for the two-year period beginning with the fiscal year ending March 31, 2025,
and ending with the fiscal year ending March 31, 2026, will be 200,000 points (equivalent to 200,000
shares).
☐ Allocation of shares of the Company’s shares, etc. to Directors- Directors that satisfy the beneficiary requirements will receive allocations of shares of the Company in an
amount equivalent to the allocated points, in principle, in June or later after the conclusion of the final yearof the target period. At this time, applicable Directors will receive a number of shares of the Company
based on part of the allocated points, the remaining shares of the Company will be appraised by the trust
fund, and the applicable Directors will receive monetary payments in an amount equivalent to the appraised
liquidation value of shares. However, shares allocated under the first target period will be subject to a oneyear transfer restriction period beginning with the date of issuance during which the shares are prohibitedfrom being transferred, used as collateral, or disposed of through other means.
- Should it be decided to extend the target period and maintain the trust fund, the number of years of theextension shall be the number of years remaining in the Company’s current medium-term management
plan. Should a new target period be established with a duration of two years so as to realize the beneficial
effects of a medium- to long-term incentive, shares allocated under this period will also be subject to a oneyear transfer restriction period beginning with the date of issuance.
☐ Other compensation limits- At the General Meeting of Shareholders held on June 27, 2012, the upper limit for basic compensation(excluding salaries paid to Directors that are also employees of the Company or Group companies) to
Directors was set at ¥300 million.
- At the General Meeting of Shareholders held on June 24, 2024, the upper limit for annual compensation of
Audit & Supervisory Board Members was set at ¥100 million. The amount of monthly compensation paid
to individual Audit & Supervisory Board Members is decided through discussion by the Audit &Supervisory Board, in line with the upper limit set at the general meeting of shareholders.

852) Total compensation by officer classification and compensation type, and number of recipients (fiscal year ended
March 31, 2024)

Officer classification

Total compensation(Millions of yen)

Directors(excluding External
Directors)
Audit & Supervisory
Board Members(excluding External Audit& Supervisory Board
Members)
External Directors andAudit & Supervisory
Board Members

Total compensation by type(Millions of yen)
PerformanceBasic
Performancelinked share-based
compensation
linked bonuses
remuneration

Numbers ofrecipients

184

110

18

55

3

34

34

－

－

2

74

74

－

－

5

Notes: 1. As of March 31, 2024, the number of Directors (excluding External Directors) was three, the number of Audit &Supervisory Board Members (excluding External Audit & Supervisory Board Members) was two, and the number ofExternal Directors and External Audit & Supervisory Board Members was five.
2. The amounts of performance-linked bonuses and performance-linked share-based remuneration refer to the amounts ofexpenses to be recorded in the fiscal year under review.

3) Total compensation on a consolidated basis by officer (fiscal year ended March 31, 2024)

Name

Hiroshi Aoi
Note:

Total compensation ona consolidated basis(Millions of yen)
119

Officerclassification

Companyclassification

Director

The Company

Compensation on a consolidated basis by type(Millions of yen)
PerformancePerformanceBasic
linkedlinked share-based
compensationcompensation
remuneration
75

11

32

This information is only stated for an individual whose total compensation on a consolidated basis was ¥100 million or more.

86

(5) Status of shares held
1) Standards and approach for the classification of shares for investment
The Company classifies shares for investment into those for pure investment purposes and those for purposes
other than pure investment.
- “Shares for investment held for pure investment purposes” refer to shares held for the purpose of generating

income through changes in share prices or dividends related to the shares.
- “Shares for investment held for purposes other than pure investment” refer to shares held for the purpose ofmaintaining or building collaborative or transactional relationships that are strategically critical for improving
the Group’s corporate value.
The Group is strengthening initiatives for “co-creative investment” in the current medium-term management plan.
By pursuing synergies through a business model that integrates the three pillars consisting of Retailing and
FinTech, which utilize our core value of “credit co-creation,” and the newly added “investing for the future”(investments in new businesses + co-creative investment), we aim to create value that exceeds the sum of
individual businesses.
[Investing for the future]
In the medium-term management plan, with regard to “investing for the future,” we will create innovation forbalancing the impact of sustainability, wellbeing, and profits. We will aim at creating innovation within the
Company through “investments in new businesses” and introducing innovation from outside the Company through“co-creative investment.”87[Co-creative investment]“Co-creative investment” pursues both earnings contributions to the Retailing and FinTech segments and financial
returns based on the philosophy of co-creation. Through investing in start-ups, etc. that share the Group’s vision,
we will collaborate with partners that will co-create the future with us. We will invest a total of ¥43.0 billion by
the fiscal year ending March 31, 2026, the final year of the medium-term management plan.
Going forward, as we continue implementing “co-creative investment,” the number of stock issues we hold andthe balance sheet amount are expected to increase. In addition, “co-creative investment” includes many
investments in unlisted stocks, such as those of venture capitals and start-ups. If these companies subsequently go
public, the balance sheet amount may be greatly affected due to a significant rise in their stock prices, etc.
As one of the purposes of “co-creative investment,” we aim to improve the corporate value of investees over the
medium to long term through collaborations between the Group and the investees. This purpose carries an elementof pure investment, as we are expecting gains from a rise in stock prices (planned IRR of 20% or more). Therefore,
since the fiscal year ended March 31, 2017 when we began investing in start-ups, etc., we have classified newly
held specified shares for investment as “co-creative investment.”
Earnings contributions from synergies with co-creative investees in the fiscal year ended March 31, 2024 were
¥2.8 billion, and we aim to reach ¥5.5 billion by the fiscal year ending March 31, 2026. The internal rate of return(IRR) was 13%, which exceeds the hurdle rate of 10%.

2) Shares for investment held for purposes other than pure investmenta. Holding policies, method of verifying the rationality of holdings, and verification of the appropriateness of holding
specific issues at meetings of the Board of Directors, etc.
In principle, the Company will not engage in cross-shareholdings. Shares held by the Company are shares deemednecessary for maintaining or building upon collaborative or transactional relationships that are strategically criticalfor improving corporate value. The Company regularly verifies the rationality of shareholdings and discloses an
overview of the content thereof after annual verification at meetings of the Board of Directors. Shares withdiminished rationality for holding will be sold in phases upon considering the status of the counterparty.
Furthermore, at a meeting of the Board of Directors held in February 2016, it was determined that the Company
had already established sufficiently strong business relationships with cross-shareholding counterparties, and it
was therefore decided to undertake a phased reduction in cross-shareholdings out of consideration for asset
efficiency and stock price fluctuation risks. Since then, the returns from each cross-shareholding have beenverified at meetings of the Board of Directors held in either July or August of each year. The extent to which
holdings have been reduced was confirmed at these meetings.

88

b. Number of issues held and their balance sheet amount
Number ofissuesTotal balance sheet amount(Millions of yen)

Unlisted shares

53

4,572

Other shares

7

21,776

Issues with increased number of shares in the fiscal year under review
Total purchase amount forincrease in number of shares(Millions of yen)

Number ofissuesUnlisted shares

5

218

Other shares

1

99

Reason for increase in number of shares
Mainly for funding and investment forstart-ups related to the creation of new
businesses, etc.

Issues with decreased number of shares in the fiscal year under review
Total proceeds from sale fordecrease in number ofshares (Millions of yen)

Number ofissuesUnlisted shares

1

0

Other shares

2226

Note: Issues for which the number of shares has increased or decreased do not include fluctuations due to initial public offering,
etc.

89

c. Information on the number of shares, balance sheet amounts, etc. of each issue of specified shares for investment
and deemed shareholdings
Specified shares for investment

Issue

Fiscal year underreview

Previous fiscal year

Number of shares

Number of shares

Balance sheet amount Balance sheet amount(Millions of yen)
(Millions of yen)

2,578,800

2,578,800

TOHO CO., LTD.

Mitsubishi UFJ Financial Group, Inc.

12,75913,0742,440,000

2,440,000

3,799

2,068

920,000

920,000

Nojima Corporation

Sumitomo Mitsui Financial Group,
Inc.
WACOAL HOLDINGS CORP.

1,569

1,287

－

15,025－79－

25,000－62

90

Purpose of holding, outline of businessalliance, and quantitative effect ofholding*1, and reason for increase in
number of shares

Shares of theCompany
held*2

To facilitate smooth collaboration, as
we have business relationship otherthan leasing of store buildings, suchas the opening of GODZILLASTORE Tokyo at MARUI andissuance of GODZILLA EPOS cards

Yes

To facilitate smooth transactions withthe major financial institution

No*3

To facilitate smooth collaboration, as
we have business relationshipincluding the opening of nojima
stores at MARUI (6 stores) andissuance of nojima EPOS affiliated
cards

Yes

The shares were sold during the
fiscal year under review.

No*3

The shares were sold during the
fiscal year under review.

No[Co-creative investment]

Issue

Fiscal year underreview

Previous fiscal year

Number of shares

Number of shares

Balance sheet amount Balance sheet amount(Millions of yen)
(Millions of yen)

6,306,000

6,306,000

BASE, Inc.
2,049

1,715

2,139,000

2,139,000

euglena Co., Ltd.
1,296

2,008

166,750－

Ame Kaze Taiyo, Inc.
186－

386,100－

LANCERS, Inc.
115－

Purpose of holding, outline of businessalliance, and quantitative effect ofholding*1, and reason for increase in
number of shares

Shares of theCompany
held*2

To facilitate smooth collaboration, as
we have business relationshipincluding the opening of SHIBUYA
BASE, a physical shop space formembers of BASE, an online shop
creation service, at our Shibuya store(Modi). We also issue collaborative
credit cards featuring the Okinawabased YouTuber group “Haisai
Tanteidan.”No

We utilize MARUI stores to offer
product sales and tasting experiences
for euglena’s major food brands, aswell as pop-up events for their bionatural and skincare brands. The
shares are also held to facilitatesmooth collaboration in order toachieve the issuance of tie-up cards,
supply of biofuel by euglena, andjoint e-commerce operations.

No

We have entered into a business andcapital alliance for the purpose ofcreating new experience value
through food. The shares are held tofacilitate smooth collaboration, as we
issue Pokemaru EPOS Cards, inwhich a portion of purchase amounts
go toward supporting producers, andhold pop-up events at MARUI stores.

No

We have entered into a business andcapital alliance for the purpose ofproviding high-value financial
services to freelancers. The sharesare held to facilitate smoothcollaboration in order to develop andprovide new financial services,
including the joint development of abusiness credit card for freelancers.

No

Notes: 1. The quantitative effect of holding is not stated in order to protect the confidentiality of transactions with the counterparty
and other reasons.
For the issues above, at meetings of the Board of Directors held in August 2022 and November 2023, the Company verified
the status of revenue, including dividend yield, collaboration and business relationship, and also confirmed the status of
reduction in the total amount of holdings.
2. Information on whether or not shares of the Company are held is based on the shareholder register as of March 31, 2024.
3. These counterparties do not hold shares of the Company, but their subsidiaries hold shares of the Company.

91

☐ Changes in the number of issues of listed shares held for purposes other than pure investment and the balance
sheet amount- Since December 2015, we have gradually reduced the number and the amount of issues we held.

92

V. FINANCIAL INFORMATION
1. Method of Preparation of Consolidated and Non-Consolidated Financial Statements(1) The Company prepares its consolidated financial statements in accordance with the “Regulation on Terminology,
Forms, and Preparation Methods of Consolidated Financial Statements” (Ministry of Finance Order No. 28 of 1976),
which are different in certain respects from the application and disclosure requirements of International Financial
Reporting Standards. The accompanying consolidated financial statements are a translation of those filed with theprime minister of Japan and incorporate certain modifications to enhance foreign readers’ understanding of theconsolidated financial statements.
(2) The Company prepares its non-consolidated financial statements in accordance with the “Regulation on
Terminology, Forms, and Preparation Methods of Financial Statements, etc.” (Ministry of Finance Order No. 59 of
1963; hereinafter the “Regulation on Financial Statements”) which are different in certain respects from theapplication and disclosure requirements of International Financial Reporting Standards.
Additionally, as a special company submitting financial statements, the Company prepares its non-consolidated
financial statements based on Article 127 of the Regulation on Financial Statements.

2. Audit Certification
Pursuant to the provisions set forth in Article 193-2(1) of the Financial Instruments and Exchange Act, theCompany’s consolidated financial statements in Japanese for the fiscal year (from April 1, 2023 to March 31, 2024)
and non-consolidated financial statements in Japanese for the fiscal year (from April 1, 2023 to March 31, 2024)
have been audited by PricewaterhouseCoopers Japan LLC.
PricewaterhouseCoopers Aarata LLC merged with PricewaterhouseCoopers Kyoto on December 1, 2023 andchanged its name to PricewaterhouseCoopers Japan LLC.
Additionally, the accompanying English consolidated financial statements are audited by PricewaterhouseCoopers
Japan LLC on a voluntary basis.

3. Special Measures to Ensure the Appropriateness of Consolidated Financial Statements, Etc.
The Company undertakes special measures to ensure the appropriateness of consolidated financial statements, etc.
Specifically, in order to appropriately understand the details of accounting standards and other relevant information,
while also ensuring a framework for accurately responding to changes in the standards, the Company participatesin the Financial Accounting Standards Foundation (FASF). In addition to gathering the latest information on
accounting standards, the Company participates in seminars held by the FASF and collect information from audit
firms and professional journals.

931. Consolidated Financial Statements, Etc.
(1) Consolidated Financial Statements
1) Consolidated Balance Sheets
As ofMarch 31, 2023
AssetsCurrent assets:
Cash and deposits
Notes and accounts receivable - trade
Accounts receivable - installment
Operating loans
Merchandise
Other
Allowance for doubtful accounts
Total current assets
Non-current assets:
Property and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total property and equipment
Intangible assets
Investments and other assets:
Investment securities
Guarantee deposits
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets

*1
*2
*2,3

*4

*4

*5

*6

94

¥52,432
4,827
481,442
100,395
640
52,617(16,445)675,909(Millions of yen)
As ofMarch 31, 2024

*1
*2
*2,3

241,034(185,180)
55,854
103,395
1,911
32,720(26,171)
6,549
167,7119,661*438,51626,441
20,087
23,622
108,668
286,040¥961,950

*5

*4

*6

¥64,560
6,156
486,166
104,034
528
66,337(18,809)708,975

240,156(185,068)
55,087104,018
6,626
33,616(26,069)
7,546
173,280
10,651
39,547
25,845
18,531
26,670110,595
294,526¥1,003,501

(Millions of yen)
As ofMarch 31, 2024

As ofMarch 31, 2023
Liabilities
Current liabilities:
Accounts payable - trade
Short-term borrowings
Current portion of bonds payable
Commercial papers
Accounts payable - other
Income taxes payable
Provision for bonuses
Provision for point card certificates
Provision for share-based remuneration
Provision for loss on redemption of gift certificates
Other
Total current liabilities*7

Non-current liabilities:
Bonds payable
Long-term borrowings
Deferred tax liabilities
Provision for loss on interest repayment
Provision for loss on guarantees
Provision for share-based remuneration
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity:
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

95¥7,160103,919
20,24025,00044,624
6,167
3,093
32,477—139
15,604258,426*7¥8,17287,25421,503—64,271
6,260
3,016
36,1681,192
138
17,687
245,664

81,300352,600
135
12,500
71
817
1,694
7,841
456,961
715,388

100,000
385,600
135
8,453
61
—
1,348
8,610
504,208
749,873

35,92091,952
155,130(42,774)
240,22935,92091,999164,453(46,116)
246,258

5,915
5,915
417
246,562¥961,950

6,992
6,992
377
253,628¥1,003,501

2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income

Operating revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Advertising and promotion expenses
Provision for point card certificates
Provision of allowance for doubtful accounts
Salaries and allowances
Provision for bonuses
Commission expenses
Rent expenses on land and buildings
Depreciation
Other
Total selling, general and administrative expenses
Operating profit
Non-operating income:
Dividend income
Gain on sales of investment securities
Gain on investments in investment partnerships
Gain on deposit settlement
Other
Total non-operating income
Non-operating expenses:
Interest expenses
Provision of allowance for doubtful accounts
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Loss on valuation of investment securities
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

Fiscal year ended
March 31, 2023
*1
¥217,854*2
26,111
191,742(Millions of yen)
Fiscal year ended
March 31, 2024
*1
¥235,227*2
29,608205,619

1,586
31,86914,70826,836
2,829
19,404
13,223
10,01632,496
152,971
38,771

2,047
35,563
17,444
26,8202,785
22,95012,184
11,03733,759164,593
41,025

272
27
183
109
275
869

325
288
393
142
205
1,354

1,454
689
1,132
3,275
36,364

1,866
175
1,561
3,603
38,776

*4
*5

96

—
10
10

*3

2,500
89
2,590

923
432
2,471
65
3,893
32,482
11,293(344)
10,94921,532
59¥21,473

*4
*5

1,541
491
1,518
319
3,870
37,495
11,657
1,177
12,835
24,660(7)¥24,667

Consolidated Statements of Comprehensive Income(Millions of yen)
Fiscal year ended
March 31, 2024
¥24,660

Fiscal year ended
March 31, 2023
¥21,532

ProfitOther comprehensive income:
Valuation difference on available-for-sale securities
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests

*

775
775
¥22,308
22,249
59

97

*

1,076
1,076
¥25,736
25,743(7)3) Consolidated Statements of Changes in Equity
For the fiscal year ended March 31, 2023
(Millions of yen)
Accumulated othercomprehensive income

Shareholders’ equity

Balance at beginning of
periodSharecapitalCapitalsurplusRetainedearnings

Valuationdifference
Totalon
accumulated
Total
availableother
NonTreasury shareholders’ for-sale comprehensi controllingsharesequitysecurities ve income interests¥35,920¥91,752¥147,069¥(18,269)¥256,473¥5,140¥5,140¥438

Total net
assets¥262,052

Changes during period:
Dividends of surplus(11,005)(11,005)(11,005)

Profit attributable toowners of parent

21,473

21,473

21,473(26,001)(26,001)(26,001)

1,496

1,616

1,616

(2,407)(2,407)80

80

Purchase of treasury
shares
Disposal of treasury
sharesChange in scope of
consolidation
Change in ownershipinterest of parent due
to transactions with
non-controllinginterests
Net changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

119(2,407)

80

775

775

(21)

754

—

199

8,060

(24,505)(16,244)

775

775

(21)

(15,490)¥35,920¥91,952¥155,130¥(42,774)¥240,229¥5,915¥5,915¥417¥246,562

98

For the fiscal year ended March 31, 2024
(Millions of yen)
Accumulated othercomprehensive income

Shareholders’ equity

Valuationdifference
Totalon
accumulated
Total
availableother
NonTreasury shareholders’ for-sale comprehensi controllingsharesequitysecurities ve income interests

SharecapitalCapitalsurplusRetainedearnings¥35,920¥91,952¥155,130 ¥(42,774)¥240,229

Dividends of surplus(15,208)(15,208)(15,208)

Profit attributable toowners of parent

24,667

24,667

24,667(3,367)(3,367)(3,367)

25

27

27

(135)

(135)

45

45

Balance at beginning of
period¥5,915¥5,915¥417

Total net
assets¥246,562

Changes during period:

Purchase of treasury
shares
Disposal of treasury
sharesChange in scope of
consolidation
Change in ownershipinterest of parent due
to transactions with
non-controllinginterests
Net changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

2
(135)

45

1,076

1,076

(39)

1,036

—

47

9,322

(3,341)

6,028

1,076

1,076

(39)

7,065

¥35,920¥91,999¥164,453¥(46,116)¥246,258¥6,992¥6,992¥377¥253,628994) Consolidated Statements of Cash Flows

Fiscal year ended
March 31, 2023
Cash flows from operating activities:
Profit before income taxes
Depreciation
Impairment loss
Increase (decrease) in provision for point card certificates
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for loss on interest repayment
Increase (decrease) in provision for bonuses
Interest and dividend income
Interest expenses
Loss on retirement of non-current assets
Loss (gain) on sale of non-current assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in trade receivables
Decrease (increase) in accounts receivable - installment
Decrease (increase) in operating loans receivable
Decrease (increase) in inventories
Increase (decrease) in accounts payable - trade
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Income taxes refund
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchase of non-current assets
Proceeds from sales of non-current assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments for guarantee deposits
Proceeds from refund of guarantee deposits
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term borrowings
Net increase (decrease) in commercial papers
Proceeds from long-term borrowings
Repayments of long-term borrowings
Proceeds from issuance of bonds
Redemption of bonds
Purchase of treasury shares
Dividends paid
Other, net
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from inclusion ofsubsidiaries in consolidation
Cash and cash equivalents at end of period

100*(Millions of yen)
Fiscal year ended
March 31, 2024

¥32,482
11,499
432
4,569
1,585
(4,829)
(114)
(307)
1,454
147
15
(10)
2,471
(80)
(23,818)
13,654(448)(817)(14,049)
23,835298(1,459)(5,991)
34
16,717¥37,495
12,574
491
3,691
2,363
(4,046)
(89)
(368)
1,866
451
(2,500)(89)
1,518(1,329)(4,723)(3,639)(1,914)
1,011
8,141
50,903361(1,821)(11,491)50
38,003(9,701)
348(8,265)
1,722
(19)
670
(7,136)(22,382)(14,789)
3,469(3,581)
1,468
(14)
639
(5,458)(18,266)(10,837)(8,000)89,500(35,000)
39,981(20,000)(26,004)(11,005)(374)
18,25912,59439,708(30,564)(25,000)
85,500(38,600)
39,976(20,240)(3,367)(15,208)(374)(7,879)11,85752,421

118

281¥52,421 *¥64,560

METHOD OF PREPARATION OF ENGLISH CONSOLIDATED FINANCIAL STATEMENTS
The Company prepares its English consolidated financial statements in accordance with the “Regulation on
Consolidated Financial Statements” as a literal translation of its Japanese consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSSIGNIFICANT MATTERS THAT FORM THE BASIS FOR PREPARATION OF CONSOLIDATEDFINANCIAL STATEMENTS
1. Matters related to the scope of consolidation(1) Number of consolidated subsidiaries: 11
Names of major consolidated subsidiaries:
This information is omitted since it is provided in I. OVERVIEW OF COMPANY, 4. Subsidiaries and Associates.
Epos Small Amount and Short Term Insurance Co., Ltd. is included in the scope of consolidation due to increased
importance from the fiscal year.
(2) Names of major non-consolidated subsidiaries:
D2C & Co. Inc., okos Co., Ltd., MARUI KIT CENTER CO., LTD., etc.
Reasons for exclusion from the scope of consolidation:
The Company’s 11 non-consolidated subsidiaries are excluded from the scope of consolidation because each of
the sums of their total assets, operating revenue, profit (an amount prorated to ownership) and retained earnings(an amount prorated to ownership) has no significant impact on the Company’s consolidated financial statements.
2. Matters related to the application of the equity method(1) Non-consolidated subsidiaries accounted for by the equity method: Not applicable(2) Associates accounted for by the equity method: Not applicable(3) The Company does not apply the equity method to its 11 non-consolidated subsidiaries and its five associates(MIZONOKUCHISHINTOSHI Co., Ltd., etc.), because their respective profit (an amount prorated toownership) and retained earnings (an amount prorated to ownership) have no significant impact on the
consolidated financial statements.
3. Matters related to the fiscal year of consolidated subsidiaries
The fiscal year-end for consolidated subsidiaries is the same as that of the Company.
4. Matters related to accounting policies(1) Basis and method for valuation of important assets
1) Securities
Available-for-sale securities
Securities other than stocks, etc. with no market value
Available-for-sale securities with a determinable market value are stated at fair value based on the market
value at the balance sheet date, and valuation difference, net of applicable income taxes, are reported as aseparate component of net assets. Cost of securities sold is computed based on the moving-average method.
101

Stocks, etc. with no market value
Available-for-sale securities without a determinable market value are stated at cost, principally determinedby the moving-average method.
Investments in partnerships, etc. are stated at the Company’s share of net asset value based on the mostrecent financial statements available according to the financial reporting date specified in the respective
partnership agreement.
2) Inventories
Merchandise is measured at the lower of cost determined by the monthly weighted-average method or net
selling value.
(2) Method of depreciation and amortization of significant assets
1) Property and equipment (excluding leased assets)
Depreciated using the straight-line method
2) Intangible assets (excluding leased assets)
Depreciated using the straight-line method. Software for internal use, however, is amortized using the straightline method over the useful life estimated by the Company (within five years).
3) Leased assets
For finance leases that do not transfer ownership of the leased assets to the lessee, leased assets are depreciatedby the straight-line method over the lease terms with no residual value.
(3) Basis for recognition of significant allowance and provisions
1) Allowance for doubtful accounts
The allowance for doubtful accounts is stated at the amount determined based on the historical experience ofbad debt with respect to ordinary receivables (“general reserve”), plus an estimate of uncollectible amounts
determined by reference to specific doubtful receivables of customers experiencing financial difficulties(“specific reserve”).
2) Provision for bonuses
The provision for bonuses is accrued at the fiscal year-end to which such bonuses are attributable.
3) Provision for point card certificates
The provision for point card certificates is accrued to the estimated amount required based on the balance ofcredit card points awarded to cardholders outstanding at the fiscal year-end.
4) Provision for loss on redemption of gift certificates
The provision for loss on redemption of gift certificates is provided at the estimated amount to be redeemed in
the future based on historical experience.

1025) Provision for loss on interest repayment
The provision for loss on interest repayment is provided at the estimated amount of repayment claims oninterest on consumer loans at the fiscal year-end.
6) Provision for loss on guarantees
The provision for loss on guarantees is provided at the estimated amount of loss arising from the Group’s
guarantee obligations of customers’ liabilities in relation to loans to individuals from financial institutions withwhich the Group has guarantee service arrangements.
7) Provision for share-based remuneration
The provision for share-based remuneration is provided at the estimated amount for share-based remuneration
to directors and employees at the fiscal year-end in accordance with the internal rule for stock delivery.
(4) Basis for recognition of significant revenue and expense
The Group operates, in the Retailing segment, rental and operational management of commercial facilities, etc.,
purchasing and sale of apparel, luxury and accessory goods, space production, publicity and advertising, totallogistics service for fashion goods, comprehensive building management, etc., while the FinTech segment includes
provision of credit card services, cash advance services, rent guarantee services, IT systems services, real estate
rental, sales of investment trusts, small-amount short-term insurance services, etc.
Under the Retailing segment, revenue from fixed term tenants for the service of rental and operational managementof commercial facilities is recognized pursuant to “Accounting Standard for Lease Transactions” (ASBJ Statement
No. 13, March 30, 2007).
For sale of goods and provision of services, revenue is mainly recognized at the time when these goods or createdworks are delivered to customers, deeming that control of these goods or works is transferred to customers andperformance obligations are satisfied at the time of delivery. For product sales in e-commerce, revenue is recognizedat the time of shipment of products. If the Company acts as an agent in the sales of products, revenue is recognizedon a net basis.
In the FinTech segment, financial charges earned on installment sales and consumer loan interest income for credit
card services and cash advance services are recognized on an accrual basis by the method of charging on the
declining balance of loans, pursuant to the “Accounting Standard for Financial Instruments” (ASBJ Statement No.
10, July 4, 2019).
For income from credit card services, the Company records revenue from affiliate commissions at the time whencredit cards are used pursuant to contracts with customer affiliated stores, as provision of services is complete andperformance obligations are satisfied at that point in time. The annual fee received from holders of the EPOS cardis recognized as revenue over the course of the year, reflecting the way in which the performance obligations ofproviding membership privilege services to customer cardholders are satisfied.
(5) Cash and cash equivalents
In preparing the consolidated statements of cash flows, the Group considers cash on hand, readily available deposits,
and highly liquid short-term investments with maturities of three months or less when purchased that are exposed
to an insignificant risk of changes in value to be cash and cash equivalents.
103

(6) Consumption taxes
National and local consumption taxes are accounted for by the tax-excluded method. Non-deductible consumption
tax and other taxes imposed on fixed assets are recorded as period costs.
(7) Application of the group tax sharing system
The Company and some consolidated subsidiaries have applied the group tax sharing system.

104

SIGNIFICANT ACCOUNTING ESTIMATES
Of the amounts recorded in the consolidated financial statements for the current fiscal year that are accounting
estimates, items which may pose a significant risk to the consolidated financial statements for the following fiscal
year are as follows.
1. Valuation of unlisted shares(1) Amount recorded in the consolidated financial statements for the current fiscal year
(Millions of yen)
As of March 31, 2023

Unlisted shares excluding
subsidiaries

6,673(49 issuances)

As of March 31, 2024
5,354
(51 issuances)(2) Calculation method for amounts recorded in the consolidated financial statements for the current fiscal year
As the Group seeks a transition of its business model, it invests in start-up companies with which it may collaboratein the future. Of these investments, unlisted shares are included in “investment securities” in the consolidatedbalance sheet. The Company records unlisted shares at cost in the consolidated balance sheet because these areconsidered stocks, etc. without a market value in accordance with ASBJ Statement No. 10 “Accounting Standard
for Financial Instruments.”
The Company recognizes an impairment loss on unlisted shares when there is a decrease in the net asset value(based on net asset per share) by more than 50% compared to its acquisition cost due to the deterioration of thefinancial condition, or when in cases where the acquisition cost of the unlisted shares reflects excess earning power,
there is a decline in excess earning power, such as when the business plan which is developed at the time ofacquisition of the shares is no longer expected to be achieved. If the investee is an associate, the Company recognizes
an impairment loss when the recoverability within a certain period of time is not supported by sufficient evidence.
When impairments are implemented, the difference between the net asset value and acquisition cost is recorded asloss on valuation of investment securities.
(3) Key assumptions used in calculating amounts recorded in the consolidated financial statements for the current
fiscal year
When implementing impairments for unlisted shares that were acquired in consideration of excess earning power,
the net asset value is calculated based on historical financial information of the investee in addition to business plansof the investee, etc., and the difference between the net asset value and acquisition cost is recorded as loss on
valuation of investment securities.
(4) Effect on the consolidated financial statements for the following fiscal year
Of the above, ¥3,041 million for 19 issuances have results that have failed to meet plans as of the time of acquisition,and if business results at investees fail to meet plans in the next fiscal year, a loss on valuation of investment
securities or loss on valuation of shares of subsidiaries and associates may be recorded in the following fiscal year.

105

2. Impairment of non-current assets at stores(1) Amount recorded in the consolidated financial statements for the current fiscal year(a) Stores that recorded impairment loss in the current fiscal year due to recognition of indications of impairment(Millions of yen)
As of March 31, 2023

As of March 31, 2024

Book value of non-current
assets after impairment——

Impairment loss——(b) Stores that did not record impairment loss in the current fiscal year despite recognition of indications of
impairment(Millions of yen)
As of March 31, 2023
Book value of non-current
assets

As of March 31, 2024

5,537

5,938

(c) Stores with losses from operating activities during only the current fiscal year
(Millions of yen)
As of March 31, 2023
Book value of non-current
assets

As of March 31, 2024

4,904

—

(2) Calculation method for amounts recorded in the consolidated financial statements for the current fiscal year
In creating accounting estimates for impairment of non-current assets, the Company uses mainly stores as a basic
unit of measurement, with this measurement also acting as the smallest cash-generating unit with respect to noncurrent asset grouping. The Group identifies events that may indicate impairment (“indications of impairment”) ofassets or a group of assets at each store (“non-current assets at stores”) “if operating results are, or expected to be,
negative for consecutive periods,” or, “if there are changes to the manner in which the assets are used that reduces
the recoverable amount of the assets significantly.”
Additionally, the Company considers the operating activities of each store to include not only profits and losses
from retail sales, but also the issuance of EPOS cards which is the source of the FinTech business profit or loss. In
assessing whether there is an indication of impairment, the profit or loss from operating activities in which the noncurrent assets at stores are used includes both operating profit or loss related to Retailing business at each store andoperating profit or loss related to FinTech business arising from the issuance of credit cards. The operating profit orloss related to the FinTech business is determined as the operating profit or loss arising from the EPOS cards
historically issued by each store multiplied by a ratio of EPOS cards that will not be used after store closures which
is determined based on the historical data from the closed stores, and the total number of cards issued by those stores.
For certain stores for which indications of impairment were identified, if the total estimated undiscounted future
cash flows derived from the non-current assets at stores was less than the carrying amount, the Group reduced thecarrying amount to the recoverable amount. The reduction is recognized as impairment loss.

106

(3) Key assumptions used in calculating amounts recorded in the consolidated financial statements for the current
fiscal year
Significant assumptions in estimating the total undiscounted future cash flows derived from the non-current assets
at each store include future merchandise sales based on the sales strategies developed by each store, rental revenues
from leasing space in stores to third parties, and future cash flows that each store contributes to the FinTech businessthrough the issuance of credit cards.
Accounting estimates for future merchandise sales based on the sales strategies developed by each store and therental revenues from leasing space in stores to third parties are made based on historical results. Additionally, future
cash flows that each store contributes to the FinTech business through the issuance of credit cards are estimatedunder the projection that there will be steady growth.
Additionally, if the assumptions used in the above estimates and future cash flow calculations change drastically,
there is a possibility that the Company’s financial condition and operating results for the following fiscal year may
be significantly affected.
(4) Effect on the consolidated financial statements for the following fiscal year
For stores that have been recognized as having indications of impairment, if the above key assumptions and future
results become dissociated and profits and losses at each store deteriorate in the following fiscal year, the Company
will designate such stores as having indications of impairment and may record an impairment loss in the following
fiscal year, and for stores for which profits and losses from operating activities are negative only in the current fiscal
year, if profits and losses from operating activities are also negative in the following fiscal year, the Company will
designate such stores as having indications of impairment and may record an impairment loss in the following fiscal
year.
3. Estimates for allowance for doubtful accounts related to operating loans and accounts receivable installment(1) Amount recorded in the consolidated financial statements for the current fiscal year
(Millions of yen)
As of March 31, 2023
Allowance for doubtful
accounts
Provision of allowance for
doubtful accounts (selling,
general and administrative
expenses)

As of March 31, 2024

15,623

17,773

14,70017,401(2) Calculation method for amounts recorded in the consolidated financial statements for the current fiscal year
To prepare for losses arising from default of receivables including operating loans and accounts receivable installment, the Company estimates the future uncollectible amounts utilizing a doubtful account ratio based on
historical default rates, making necessary adjustments such as future projections. Receivables are categorized basedon days in delinquency and the necessity of requiring legal counsel, etc., with doubtful account ratios calculated foreach category.
(3) Key assumptions used in calculating amounts recorded in the consolidated financial statements for the current
fiscal year107

As of the end of the current fiscal year, the Company has assumed that a trend of historical bad debt for each categoryof receivables for a certain period of time in the past will continue in the future. Under this assumption, to prepare
for losses arising from these effects, the Company estimates the future uncollectible amounts utilizing a doubtful
account ratio calculated based on recent default rates that can be estimated to reflect most the bad debt expenses
expected to be incurred in the future.
(4) Effect on the consolidated financial statements for the following fiscal year
As the allowance for doubtful accounts for the end of the current fiscal year is the best estimate that can be made asof this time, there are uncertainties in the assumptions used in the estimates and if credit risk of debtors changes due
to changes in the economic environment etc., and there is a possibility that the amounts of allowance for doubtful
accounts and provision of allowance for doubtful accounts recognized in the consolidated financial statements forthe following fiscal year may be significantly affected.
4. Estimates for provision for loss on interest repayment(1) Amount recorded in the consolidated financial statements for the current fiscal year
(Millions of yen)
As of March 31, 2023
Provision for loss on interest
repayment
Provision for loss on interest
repayment (selling, general andadministrative expenses)

As of March 31, 2024

12,500

8,453

—

—

(2) Calculation method for amounts recorded in the consolidated financial statements for the current fiscal year
The Company estimates the provision for loss on interest repayment with reference to “Auditing Treatment for
Recording Allowance for Losses on Claims for Interest Repayment of Consumer Finance Companies” (Industry
Audit Practice Committee Report No. 37) issued by the Japanese Institute of Certified Public Accountants (theIndustry Audit Practice Committee). The underlying data used in the calculation includes (i) the likelihood that
customers will claim refunds, (ii) the expected amount of the claims, and (iii) the number of customers who will
potentially claim the refund, which are all multiplied to determine the provision for loss on interest repayment. For(i)(ii)(iii), the Company analyzes historical data and makes forecasts for the future under certain assumptions.
(3) Key assumptions used in calculating amounts recorded in the consolidated financial statements for the current
fiscal year
A key assumption used in estimating provision for loss on interest repayment is the likelihood that customers willclaim refunds ((i) provided in (2) above). During the current fiscal year, the Company has assumed that thelikelihood will continue to gradually decrease in the future.

108

(4) Effect on the consolidated financial statements for the following fiscal year
Owing to the nature of provision for loss on interest repayment as recording the expected amount of future
repayment as a lump sum, forecasts must be made for long periods of time, which in turn introduces uncertainties
to estimates. Additionally, the Company cannot deny that it is possible that estimates for future repayment amounts
may increase or decrease owing to changes in the social environment. As a result, depending on the state ofoccurrence of interest repayments in the following fiscal year onward, there may be additional recording ofprovisions or the occurrence of reversals.
ACCOUNTING STANDARD ISSUED BUT NOT YET APPLIED
Accounting Standard for Current Income Taxes (ASBJ Statement No. 27, October 28, 2022)
Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No. 25, October 28, 2022)
Implementation Guidance on Tax Effect Accounting (ASBJ Guidance No. 28, October 28, 2022)(1) Overview
The above standards and guidance establish the accounting classification of current income taxes when othercomprehensive income is taxed, and the treatment of tax effect related to sales of shares of subsidiaries, etc.
under the group taxation regime.
(2) Scheduled date of application
The Company plans to apply the aforementioned standards and guidance from the beginning of the fiscal year
ending March 31, 2025.
(3) Effect of application
There is no significant impact from the application of the aforementioned standards and guidance.
CHANGES IN REPRESENTATION METHODS
Consolidated Balance Sheets“Accounts payable - other,” which was included in “other” under “current liabilities” in the previous fiscal year, isseparately stated from the current fiscal year since its monetary importance has increased.
In order to reflect the change in representation methods, a reclassification of accounts has been made for the
consolidated financial statements for the previous fiscal year. As a result, ¥44,624 million previously included in“other” has been reclassified to “accounts payable - other.”Consolidated Statements of Income“Gain on sales of investment securities,” which was included in “other” under “non-operating income” in theprevious fiscal year, is separately stated from the current fiscal year since its monetary importance has increased.
In order to reflect the change in representation methods, a reclassification of accounts has been made for the
consolidated financial statements for the previous fiscal year. As a result, ¥27 million previously included in “other”
has been reclassified to “gain on sales of investment securities.”
ADDITIONAL INFORMATION
Officer Remuneration Board Incentive Plan Trust
The Company has an incentive plan using the “Officer Remuneration Board Incentive Plan Trust (“BIP Trust”)” toprovide an incentive to Directors and Executive Officers (excluding External Directors and non-residents in Japan)
109

of the Company and Directors of 14 subsidiaries of the Group (excluding External Directors and non-residents inJapan; collectively, with the Directors and Executive Officers of the Company, the “Executives”).
(1) Overview of the plan
The Company sets up a trust with the Executives who fulfill certain requirements as beneficiaries, by contributing
funds to acquire the Company’s shares. The trust acquires the Company’s own shares from the stock market for thenumber of shares required for delivering to the Executives based on the prescribed internal rule for stock delivery.
Then, in accordance with the internal rule, the Company makes a delivery or payment of its shares and cash
equivalents to the amount obtained by converting a part of the shares into cash based on the rank of each Executive
and degree of achievement of the performance target.
The Company applies the “Practical Solution on Transactions of Delivering the Company’s Own Stock to
Employees, etc. through Trusts” (ASBJ PITF No. 30, March 26, 2015) for the accounting treatment of the plan.
(2) The Company’s shares held at the trust
The Company’s shares held at the trust are carried at their book value at the trust (excluding incidental expenses)
and accounted for as treasury shares under net assets. The book value of applicable treasury shares is ¥975 million
and the number of shares is 491,831 shares as of March 31, 2024.
Stock Benefit Employee Stock Ownership Plan Trust
The Company has an incentive plan using the “Stock Benefit Employee Stock Ownership Plan Trust (“ESOP Trust”)”
to provide an incentive to the Group’s employees holding senior management positions (hereinafter the “Senior
Managers”), aiming to enhance their commitment to further improve the business performance and corporate value
over the medium-to-long term.
(1) Overview of the plan
The Company sets up a trust with the Senior Managers who fulfill certain requirements as beneficiaries, bycontributing funds to acquire the Company’s shares. The trust acquires the Company’s own shares from the stock
market for the number of shares required for delivering to the Senior Managers based on the prescribed internal rule
for stock delivery.
Then, in accordance with the internal rule, the Company makes a delivery or payment of its shares and cash
equivalents to the amount obtained by converting a part of the shares into cash based on the rank of each Senior
Manager and degree of achievement of the performance target.
The Company applies the “Practical Solution on Transactions of Delivering the Company’s Own Stock to
Employees, etc. through Trusts” (ASBJ PITF No. 30, March 26, 2015) for the accounting treatment of the plan.
(2) The Company’s shares held at the trust
The Company’s shares held at the trust are carried at their book value at the trust (excluding incidental expenses)
and accounted for as treasury shares under net assets. The book value of applicable treasury shares is ¥503 million
and the number of shares is 274,736 shares as of March 31, 2024.

110

MATTERS RELATED TO CONSOLIDATED BALANCE SHEETS*1

The amount of notes and accounts receivable - trade from contracts with customers are reported on the
consolidated balance sheets in “REVENUE RECOGNITION, 3. Information to understand the amount ofrevenue for the current fiscal year and next fiscal year onward.”*2 The following balances for receivables have already been liquidated and are therefore excluded from theconsolidated balance sheets:
As ofMarch 31, 2023

(Millions of yen)
As ofMarch 31, 2024

¥125,825
113,610¥199,730
109,638

33,36336,555

Card shopping:
Lump sums receivable
Revolving receivable
Cash advance:
Revolving receivable*3

The consolidated subsidiary that operates in the credit card business provides cash advance services tocustomers. The unused balance of loans contingent with the loan commitments is as follows:

Total loan limits
Amount executed as loans
Unused balance(Millions of yen)
As of
As of
March 31, 2023 March 31, 2024
¥1,342,128¥1,357,753
133,758
140,589¥1,208,370¥1,217,163

The figures include amounts of receivables subject to liquidation. Under the provisions of the loan service contract,
the Group is able to decline a loan request or decrease a loan limit when a customer’s financial condition or othercircumstances change. Thus, the total unused balance will not necessarily be executed as loans.

*4

As a result of the acceptance of national subsidies, the following reduction entry amount was deducted fromthe acquisition cost of property and equipment:

Reduction entry amount*5(Millions of yen)
As of
As of
March 31, 2023 March 31, 2024
¥66
¥66

Shares of non-consolidated subsidiaries and associates included in the balance of “Investment securities” areas follows:
As ofMarch 31, 2023

(Millions of yen)
As ofMarch 31, 2024

¥3,609¥4,256650

284

Shares of subsidiaries and associates
Investments in other securities of subsidiaries andassociates

111

*6

Investments in capital of non-consolidated subsidiaries and associates included in the balance of “Other” areas follows:
As ofMarch 31, 2023

(Millions of yen)
As ofMarch 31, 2024

¥65

¥32

Investments in capital of non-consolidated
subsidiaries and associates*7

Contract liabilities under “Other” are reported in “REVENUE RECOGNITION, 3. Information to understandthe amount of revenue for the current fiscal year and next fiscal year onward.”

8

Contingent liabilities(1) The Group has commitments to guarantee customers’ liabilities in relation to their personal loans from financial
institutions with which the Group has guarantee service arrangements.

Guarantee obligations(Millions of yen)
As of
As of
March 31, 2023 March 31, 2024
¥13,479¥12,411(2) The maximum amount of liabilities for guarantees for suppliers’ trade payables is as follows.

Guarantee obligations

As ofMarch 31, 2023¥—

(Millions of yen)
As ofMarch 31, 2024
¥706

MATTERS RELATED TO CONSOLIDATED STATEMENTS OF INCOME*1

Operating revenue is presented with no distinction made between revenue from contracts with customers andother revenue. Revenue from contracts with customers is reported in “REVENUE RECOGNITION, 1.
Disaggregation of revenue” of the consolidated financial statements.

*2

The balance of year-end merchandise inventories has been written down due to a decline in profitability. The
amount of write-downs included in cost of sales is as follows:

Write-downs included in cost of sales*3(Millions of yen)
Fiscal year ended Fiscal year ended
March 31, 2023 March 31, 2024
¥0¥2

Gain on sales of non-current assets consisted of the following:Land, etc.
Total

(Millions of yen)
Fiscal year ended Fiscal year ended
March 31, 2023 March 31, 2024¥—
¥2,500¥—¥2,500112

*4

Loss on retirement of non-current assets consisted of the following:

Buildings and structures
Furniture and fixtures, etc.
Total

(Millions of yen)
Fiscal year ended Fiscal year ended
March 31, 2023 March 31, 2024
¥116
¥401
807
1,139
¥923
¥1,541*5 Impairment loss
For the fiscal year ended March 31, 2023
The Group recognized impairment loss on the following asset groups.
(Millions of yen)
Use
E-commercebusiness

Location
Head office, etc.
Nakano-ku, Tokyo andelsewhere

Type of assets

AmountSoftwareFurniture and fixtures

¥254
178

Total

¥432

For the fiscal year ended March 31, 2024
The Group recognized impairment loss on the following asset groups.
(Millions of yen)
Use
E-commercebusiness
Other

Location
Head office, etc.
Nakano-ku, Tokyo andelsewhere
Head office, etc.
Nakano-ku, Tokyo andelsewhere

Type of assets

AmountSoftware
Software and other
Total

¥417
74
¥491

While assets are mainly grouped with stores in the Group as the basic unit representing the minimum unit
responsible for generating cash flows, those in e-commerce business are grouped on the basis of business, rental
properties are grouped on the basis of properties, and other business assets are grouped on the basis of entity.
The asset groups above showed some indications of impairment, such as continuing to suffer loss from operating
activities, and future cash flows were calculated and found to be less than their carrying amounts. Accordingly, thecarrying amounts of the asset groups above have been written down to the recoverable amounts and the amount of
the write-down has been reported as impairment loss under extraordinary losses. The Group estimated therecoverable amount of each asset group based on value in use or fair value less costs to sell.

113

MATTERS RELATED TO CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME* Other comprehensive income‒related reclassification adjustments and tax effect(Millions of yen)
Fiscal year ended Fiscal year ended
March 31, 2023 March 31, 2024
Valuation difference on available-for-sale securities:
Amounts incurred for the year
Reclassification adjustments
Before tax effect adjustment
Tax effect
Valuation difference on available-for-sale securities
Total other comprehensive income¥1,120
(10)
1,109
(334)
775
¥775

¥1,933
(378)
1,555
(479)
1,076
¥1,076

MATTERS RELATED TO CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the fiscal year ended March 31, 2023
1. Class & number of shares issued and treasury shares
Number of shares Number of sharesat the beginningthat increasedof the year
during the year

Number of sharesthat decreased
during the year

Number of sharesat the endof the year

Shares issued:
Common stockTotal

208,660,417——

208,660,417

208,660,417——

208,660,417

8,503,136

11,480,425

669,600

19,313,961

8,503,136

11,480,425

669,600

19,313,961

Treasury shares:
Common stock
Total

Notes: 1. Of the increase in the number of shares of common stock under treasury shares, 11,479,600 shares were
due to the purchase of treasury shares and 825 shares were due to the purchase of odd lot shares.
2. The decrease of 669,600 shares of common stock under treasury shares was due to the introduction of a
restricted stock grant plan for employees of the Group.
3. The number of shares of common stock at the beginning and end of the fiscal year ended March 31, 2023
includes 766,567 shares of the Company held in the BIP Trust and ESOP Trust.
2. Stock acquisition rights, etc.
Not applicable.

114

3. Dividends(1) Dividends paid

Resolution
Ordinary General
Meeting of
Shareholders held on
June 28, 2022
Board of Directors’
meeting held on
November 11, 2022

Class of share

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Record date

Effective dateCommon stock¥5,224¥26

March 31, 2022

June 29, 2022

Common stock¥5,781¥29

September 30,
2022

December 5,
2022

Notes: 1. The amount of dividends resolved at the Ordinary General Meeting of Shareholders held on June 28,2022, includes ¥19 million of dividends for the BIP Trust and ESOP Trust.
2. The amount of dividends resolved at the Board of Directors’ meeting held on November 11, 2022,
includes ¥22 million of dividends for the BIP Trust and ESOP Trust.
(2) Dividends with a record date during the fiscal year ended March 31, 2023, but with an effective date
subsequent to the fiscal year ended March 31, 2023, are as follows:

Resolution
Ordinary General
Meeting of
Shareholders held on
June 27, 2023

Class of share

Total amount ofdividends(Millions of yen)

Common stock¥5,703

SourceDividends
per share(Yen)

Retainedearnings

Record date

Effective
date

March 31,2023

June 28,2023¥30

Note: The amount of dividends resolved at the Ordinary General Meeting of Shareholders held on June 27, 2023,
includes ¥22 million of dividends for the BIP Trust and ESOP Trust.

For the fiscal year ended March 31, 2024
1. Class & number of shares issued and outstanding and treasury shares
Number of shares Number of shares Number of sharesat the beginningthat increased
that decreasedof the year
during the year
during the year
Shares issued andoutstanding:Common stock
208,660,417
—
—
Total

Number of sharesat the endof the year
208,660,417

208,660,417——

208,660,417

19,313,961

1,504,237

11,40020,806,798

19,313,961

1,504,237

11,40020,806,798

Treasury shares:
Common stock
Total

Notes: 1. Of the increase in the number of shares of common stock under treasury shares, 1,482,600 shares were
due to the purchase of treasury shares, 1,047 shares were due to the purchase of odd lot shares, and 20,590
shares were due to the free-of-charge acquisition of stock related to the restricted stock grant plan.
2. The decrease of 11,400 shares of common stock under treasury shares was due to the grant of stock related
to the restricted stock grant plan.
3. The number of shares of common stock at the beginning and end of the fiscal year ended March 31, 2024
includes 766,567 shares of the Company held in the BIP Trust and ESOP Trust.

115

2. Stock acquisition rights, etc.
Not applicable.
3. Dividends(1) Dividends paid

Resolution
Ordinary General
Meeting of
Shareholders held on
June 27, 2023
Board of Directors’
meeting held on
November 14, 2023

Class of share

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Record date

Effective dateCommon stock¥5,703¥30

March 31, 2023

June 28, 2023

Common stock¥9,505¥50

September 30,
2023

December 6,
2023

Notes: 1. The amount of dividends resolved at the Ordinary General Meeting of Shareholders held on June 27, 2023,
includes ¥22 million of dividends for the BIP Trust and ESOP Trust.
2. The amount of dividends resolved at the Board of Directors’ meeting held on November 14, 2023, includes¥38 million of dividends for the BIP Trust and ESOP Trust.
(2) Dividends with a record date during the fiscal year ended March 31, 2024, but with an effective date
subsequent to the fiscal year ended March 31, 2024, are as follows:

Resolution
Ordinary General
Meeting of
Shareholders held on
June 24, 2024

Class of share

Total amount ofdividends(Millions of yen)

Common stock¥9,619SourceDividends
per share(Yen)

Retainedearnings¥51

Record date

Effective
date

March 31,2024

June 25,2024

Note: The amount of dividends resolved at the Ordinary General Meeting of Shareholders held on June 24, 2024,
includes ¥39 million of dividends for the BIP Trust and ESOP Trust.

116

MATTERS RELATED TO CONSOLIDATED STATEMENTS OF CASH FLOWS* Reconciliations of cash and cash equivalents in the consolidated statements of cash flows to accounts andamounts in the accompanying consolidated balance sheets are as follows:
Fiscal year ended
March 31, 2023
¥52,432(11)¥52,421

Cash and deposits
Time deposits with maturity in excess of three months
Cash and cash equivalents(Millions of yen)
Fiscal year ended
March 31, 2024
¥64,560—¥64,560LEASES
1. Finance lease transactions(As a lessee)
Finance lease transactions that do not transfer ownership(1) Details of leased assets
Property and equipment
These assets mainly comprise buildings and properties in connection with the Retailing segment.
(2) Method of depreciation and amortization of leased assets
This information is provided in “SIGNIFICANT MATTERS THAT FORM THE BASIS FOR PREPARATION
OF CONSOLIDATED FINANCIAL STATEMENTS, 4. Matters related to significant accounting policies, (2)Method of depreciation and amortization of significant assets.”
2. Operating lease transactions(As a lessee)
Future minimum lease payments under non-cancellable operating leases:
As ofMarch 31, 2023
¥1,9646,541¥8,506

Within one year
Over one year
Total

(Millions of yen)
As ofMarch 31, 2024
¥1,964
4,577¥6,541(As a lessor)
Future minimum lease receipts under non-cancellable operating leases:
As ofMarch 31, 2023
¥7,564
5,579¥13,144

Within one year
Over one year
Total

117

(Millions of yen)
As ofMarch 31, 2024
¥10,782
4,947¥15,730

FINANCIAL INSTRUMENTS
1. Status of financial instruments(1) Policy on financial instruments⚫ Since its founding in 1931, the Group has evolved its unique business model merging retailing and financial
service, and established its strength and position not found in other companies. Recently, the Group newly
added forward-looking investments consisting of co-creative investment and investment in new businesses,
and with a business model that integrates the three pillars consisting of retailing, FinTech, and forward-looking
investments, the Group aims to further increase its corporate value. In FinTech, operating receivables (accounts
receivable - installment and operating loans) increased owing to growth in card credit transactions and stablehandling of cash advance. The Group properly conducts credit control based on the belief, which has been
nurtured since its foundation, that “creditability should be built together with customers.”⚫ The amount of funds procured has been increasing due to continuously growing demand for funds as the
FinTech segment grows. We proceed with the fund procurement with utmost priority on financial security.
The Group utilizes derivative transactions only to avoid risks, including the interest rate fluctuation risk onloans, and does not use them for speculative purposes.
⚫ With regard to growth investments, we aim to build a three-pillar business model consisting of Retailing,
FinTech, and Forward-looking Investments. We will mitigate investment risks and increase returns by realizing“Co-Creation” through combining the businesses and human resources of the Group with intangible assets
such as know-how and skills of its investees. In addition, we will not engage in cross-shareholdings, inprinciple, except for cases in which such holdings are deemed necessary for maintaining or building uponcollaborative or transactional relationships that are strategically critical for improving corporate value. The
Group has decided to undertake a phased reduction in cross-shareholdings with counterparts with which it has
already established sufficiently strong business relationships, out of consideration for asset efficiency and stock
price fluctuation risks.

118

(2) Financial instruments, their risks, and the risk management system⚫ Accounts receivable - installment and operating loans, which are the Group’s major operating receivables, aregenerated from the use of EPOS cards such as card credit transactions and cash advances. These receivables
involve credit risks such as delay in payment or bad debt if a customer fails to perform its obligations incompliance with the contract. In accordance with the internal risk management rules, the Group mitigates suchrisk by monitoring and evaluating the credit status of each customer by means of third-party personal credit
information agencies and the Group’s own credit monitoring system.
⚫ Investment securities primarily consist of shares issued by companies with which the Group has business
relationships and shares obtained through “co-creative investment” which are “forward-looking investments”
in growing companies. These securities entail both the credit risk of the issuers and the market risk due tomarket price fluctuations. With regard to “co-creative investment,” the Group makes investment decisions after
checking profitability including not only financial returns but also collaborative returns to be generated fromcollaboration with the Group. Also, the Group mitigates risks by regularly monitoring the fair value and thefinancial condition, etc. of the counterparties as well as by selling in phases shares with diminished rationality
for holding upon considering the transaction relationship with the counterparties.
⚫ Fund procurement may be constrained if financial markets fall into turmoil, the Group’s business performance
significantly deteriorates, or its creditworthiness suddenly declines. There are liquidity risks that the Group
cannot raise sufficient funds, and may fall short of funds necessary for each business or may not be able torepay loans or corporate bonds, etc. on the due date of repayment or redemption. Furthermore, there are interest
rate fluctuation risks that the procurement interest rates fluctuate depending on the market environment andother factors, resulting in higher procurement costs.
Amid FinTech projected to grow, demand for funds will continue to expand and the risk concerning fundprocurement will increase in the future. Therefore, the Group takes the following measures from theperspectives of safety and cost.
-

We seek to maintain a level of interest-bearing debt that is equivalent to around 90% of operatingreceivables, considering a decline in financial security due to an increase in debts.

-

We diversify our fund procurement methods by indirectly procuring funds from financial institutions,directly procuring funds through issuance of bonds and commercial papers, as well as liquidating
operating receivables. We also strike a balance among procurement menus.

-

In order to cope with the risk of refinancing the funds, we maintain consistent levels of annual repayment
and/or redemption amounts by controlling the years of procurement, and have established a backup
system mainly by executing commitment line contracts and establishing overdraft facilities with financial
institutions for such amounts.

-

As for the interest rate of funds procured, we curb a sharp increase in procurement costs due to thefluctuations in market interest rates by maintaining the structure of fixed interest rates at a certain rate.

(3) Supplementary explanation of the estimated fair value of financial instruments
The calculation of the fair value of financial instruments rests on variable factors, and therefore such prices maychange depending on different assumptions and factors used.

119

2. Estimated fair value of financial instruments
Carrying value, fair value, and the difference between them are summarized below.
“Cash and deposits,” “notes and accounts receivable - trade,” “accounts payable - trade,” “short-term borrowings,”“current portion of bonds payable,” “commercial papers” and “income taxes payable” are omitted from the tablebelow as their fair value approximates their carrying amounts because they are in cash and are settled within shortperiods of time.
For the fiscal year ended March 31, 2023

(1) Accounts receivable - installment
Allowance for doubtful accounts*1(2) Operating loans
Allowance for doubtful accounts*2

Carrying value
481,442(12,287)
469,155
100,395(2,881)
97,513(3) Investment securities:
Available-for-sale securities(4) Guarantee deposits
Assets, total(1) Bonds payable(2) Long-term borrowings
Liabilities, total

22,883
26,603
616,156
81,300352,600¥433,900

Fair value(Millions of yen)
Difference

504,456

35,301

106,112

8,598

22,883
26,545659,997
81,223352,243¥433,466—(58)
43,841(76)(356)¥(433)*1 The amount presents the total of general reserve and specific reserve for accounts receivable - installment.
*2 The amount presents the total of general reserve and specific reserve for operating loans.
Note:

Stocks, etc. with no market value and investments in partnerships, etc. are not included in “(3)Investment securities.” Carrying values of these financial instruments are as follows.
(Millions of yen)
Category

As of March 31, 2023

Stocks with no market value*1

8,925
*2

6,707

Total

15,633

Investments in partnerships, etc.

*1 Stocks, etc. with no market value include unlisted shares. In accordance with Paragraph 5 of the “Implementation
Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, March 31, 2020),
they are excluded from the scope of disclosure.
*2 Investments in partnerships, etc. are primarily those in investment limited partnerships. In accordance with
Paragraph 24-16 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ
Guidance No. 31, June 17, 2021), they are excluded from the scope of disclosure.

120

For the fiscal year ended March 31, 2024

(1) Accounts receivable - installment
Allowance for doubtful accounts*1(2) Operating loans
Allowance for doubtful accounts*2

Carrying value
486,166(14,255)
471,910104,034(3,149)100,884(3) Investment securities:
Available-for-sale securities(4) Guarantee deposits
Assets, total(1) Bonds payable(2) Long-term borrowings
Liabilities, total

Fair value

24,62625,985
623,406
100,000
385,600¥485,600(Millions of yen)
Difference

507,769

35,859110,754

9,870

24,62625,337
668,488
99,547384,194¥483,742—(648)
45,081(452)(1,405)¥(1,857)*1 The amount presents the total of general reserve and specific reserve for accounts receivable - installment.
*2 The amount presents the total of general reserve and specific reserve for operating loans.
Note:

Stocks, etc. with no market value and investments in partnerships, etc. are not included in “(3)Investment securities.” Carrying values of these financial instruments are as follows.
(Millions of yen)
Category

As of March 31, 2024

*1

Stocks with no market value

8,862

Investments in partnerships, etc.*2

6,085

Total

14,948*1 Stocks, etc. with no market value include unlisted shares. In accordance with Paragraph 5 of the “Implementation
Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, March 31, 2020),
they are excluded from the scope of disclosure.
*2 Investments in partnerships, etc. are primarily those in investment limited partnerships. In accordance with
Paragraph 24-16 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ
Guidance No. 31, June 17, 2021), they are excluded from the scope of disclosure.
3. Redemption schedule for monetary claims with maturities
For the fiscal year ended March 31, 2023

Cash and deposits
Notes and accounts receivable - trade
Accounts receivable - installment
Operating loans
Guarantee deposits*
Total

Due in one
year or less¥52,432
4,827
355,785
63,430136¥476,612(Millions of yen)
Due after one Due after five
year through years through Due after ten
five years
ten years
years
¥—
¥—
¥—
—
—
—
56,987
37,14331,52636,878
55
30
289
793
1,556
¥94,155¥37,992¥33,114* Monetary claims whose dates of redemption are not determined are not included in the redemption schedule.
121

For the fiscal year ended March 31, 2024

Cash and deposits
Notes and accounts receivable - trade
Accounts receivable - installment
Operating loans
Guarantee deposits*
Total

Due after one
Due in one
year throughyear or lessfive years¥64,560¥—
6,156—
342,061
74,968
74,102
29,852
74
1,008¥486,955¥105,829(Millions of yen)
Due after five
years through Due after ten
ten years
years
¥—
¥—
—
—
35,64633,489
49
29
—
1,556
¥35,696¥35,075* Monetary claims whose dates of redemption are not determined are not included in the redemption schedule.
4. Repayment schedule for bonds payable, long-term borrowings, and other interest bearing debt
For the fiscal year ended March 31, 2023

Short-term borrowings
Current portion of bonds payable
Commercial papers
Bonds payable
Long-term borrowings
Total

Due
Due
Due
after
after one after two
three
year
years
years
Due inthroughthroughthrough
one year
two
three
four
or less
years
years
years
¥103,919¥—¥—¥—
20,240———25,000————21,30020,00010,000—52,50056,40079,000¥149,159 ¥73,800 ¥76,400 ¥89,000(Millions of yen)
Due
after
four
years
throughDuefiveafter five
years
years
¥—
¥—
—
—
—
—
21,0009,000
49,200115,500¥70,200 ¥124,500

For the fiscal year ended March 31, 2024

Short-term borrowings
Current portion of bonds payable
Commercial papers
Bonds payable
Long-term borrowings
Total(Millions of yen)Due
Due after Due after Due after
after
two
three
four
one year
years
years
years
Due inthroughthroughthroughthrough Due after
one year
two
three
four
five
five
or less
years
years
years
years
years
¥87,254
¥—
¥—
¥—
¥—
¥—
21,503
—
—
—
—
—
—
—
—
—
—
—
—
20,00020,00021,00025,00014,000—56,40079,00055,20075,150119,850¥108,757 ¥76,400¥99,000¥76,200 ¥100,150 ¥133,850

5. Breakdown of fair value by level within the fair value hierarchy
The fair value of financial instruments is classified into the following three levels according to observability andmateriality of inputs used to measure fair value:122

Level 1 fair value: Fair value measured using quoted prices (unadjusted) in active markets for identicalassets or liabilities
Level 2 fair value: Fair value measured using inputs other than those in Level 1 that are observable,
either directly or indirectly
Level 3 fair value: Fair value measured using significant unobservable inputs
If multiple inputs are used that are significant to the fair value measurement, the fair value measurement iscategorized in its entirety in the level of the lowest level input that is significant to the entire measurement.
(1) Financial assets and financial liabilities measured at fair value
As of March 31, 2023
(Millions of yen)
Category

Fair value
Level 1

Level 2

Level 3

Total

20,5901,842

449

22,883

20,5901,842

449

22,883

Investment securities
Available-for-sale securities
Assets, total
As of March 31, 2024
(Millions of yen)
Category

Fair value
Level 1

Level 2

Level 3

Total

22,1302,092

403

24,626

22,1302,092

403

24,626

Investment securities
Available-for-sale securities
Assets, total(2) Financial assets and financial liabilities not carried at fair value
As of March 31, 2023
(Millions of yen)
Category

Fair value
Level 1

Level 2

Level 3

Total

Accounts receivable - installment——

504,456

504,456

Operating loans——

106,112106,112

Guarantee deposits—

26,545—26,545—26,545

610,569

637,114

Bonds payable—

81,223—

81,223Long-term borrowings—

352,243—352,243—

433,466—

433,466

Assets, total

Liabilities, total

123

As of March 31, 2024
(Millions of yen)
Category

Fair value
Level 1

Level 2

Level 3

Total

Accounts receivable - installment——

507,769

507,769

Operating loans——

110,754

110,754

Guarantee deposits—

25,337—25,337—25,337

618,524

643,862

Bonds payable—

99,547—

99,547Long-term borrowings—

384,194—

384,194—

483,742—483,742

Assets, total

Liabilities, total

Note: A description of the valuation technique(s) and inputs used in the fair value measurements
Assets:Investment securities
Listed shares are measured at their quoted prices on the stock exchange, and classified as Level 1 fair value.
Fair value of unlisted investment trusts is based on publicly disclosed net asset value, etc. and classified as
Level 2 fair value. For privately placed bonds for which no quoted market prices are available, the fair value
is measured by the present value of the total amount of principal and interest discounted at interest rates
reflecting a remaining period and credit risk of said bonds and classified as Level 2. Fair value of bonds withstock acquisition rights is measured using a discounted present value of future cash flows and stock pricevolatility, and is classified as Level 3 fair value.
Accounts receivable - installment and Operating loans
The fair value is determined at their present value by discounting, using the risk-free rate, future cash flowsthat are adjusted for their credit risks identified in the credit control process, and is classified as Level 3 fairvalue. With regard to doubtful receivables and loans, the allowance for doubtful accounts is estimated basedon the present value of their estimated future cash flows. The fair value approximates the amount of carrying
value less allowance for doubtful accounts. Thus, the amount of carrying value less allowance for doubtful
accounts is used as Level 3 fair value.
Guarantee deposits
The fair value is determined as their present value by discounting future cash flows at the risk-free rate, andis classified as Level 2 fair value. The amount includes the current portion of guarantee deposits.
Liabilities:
Bonds payable
The fair value is based on the present value calculated by discounting the sum of principal and interests using
an interest rate reflecting credit risk and redemption periods are taken into account, and is classified as Level
2 fair value.
Long-term borrowings
The carrying value of long-term borrowings with a floating interest rate approximates its fair value since theinterest rate reflects the market rate in the short term. Thus, carrying value is used as its fair value. The fairvalue of long-term borrowings with fixed interest rates is calculated by discounting the sum of principal andinterests using an interest rate that would be applied to similar new borrowings, and is classified as Level 2
fair value.
124

SECURITIES
1. Available-for-sale securities
For the fiscal year ended March 31, 2023
(Millions of yen)
Carrying value

Acquisition cost

¥20,233
1,462
829
22,526¥12,805
1,399
807
15,012¥7,428
62
21
7,513

¥357
0
—
357
¥22,883

¥407
100
—
507
¥15,520

¥(50)
(99)
—
(150)
¥7,363Carrying value exceeding acquisition cost:(1) Shares(2) Bonds(3) Other
Subtotal
Carrying value not exceeding acquisition cost:(1) Shares(2) Bonds(3) Other
Subtotal
Total

Difference

Note: Unlisted shares in the amount of ¥5,316 million as of March 31, 2023 and contributions to investment limited
partners, etc. in the amount of ¥6,056 million as of March 31, 2023 are not included in the above “Availablefor-sale securities” as they are stocks, etc. with no market value.

For the fiscal year ended March 31, 2024
(Millions of yen)
Carrying value

Acquisition cost

¥20,834
1,416
660
22,911¥11,189
1,399
659
13,248¥9,64416
1
9,662¥1,296—418
1,714¥24,626¥1,999—419
2,419¥15,667¥(703)—(0)(704)¥8,958Carrying value exceeding acquisition cost:(1) Shares(2) Bonds(3) Other
Subtotal
Carrying value not exceeding acquisition cost:(1) Shares(2) Bonds(3) Other
Subtotal
Total

Difference

Note: Unlisted shares in the amount of ¥4,573 million as of March 31, 2024 and contributions to investment limited
partners, etc. in the amount of ¥5,801 million as of March 31, 2024 are not included in the above “Availablefor-sale securities” as they are stocks, etc. with no market value.

1252. Available-for-sale securities sold during the fiscal year
For the fiscal year ended March 31, 2023
(Millions of yen)
(1) Shares(2) Bonds(3) Other
Total

Proceeds from sales
¥126
700
922
¥1,748

Total gain on sales

Total loss on sales
¥10
—
28
¥38

¥—
—
2
¥2

For the fiscal year ended March 31, 2024
(Millions of yen)
(1) Shares(2) Bonds(3) Other
Total

Proceeds from sales
¥226
—
1,411
¥1,637

Total gain on sales

Total loss on sales

¥89
—
288
¥378

¥—
—
—
¥—

3. Impairment of securities
For the fiscal year ended March 31, 2023
Impairment loss on securities in the amount of ¥2,471 million was recorded (which were available-for-sale securities,
consisting of ¥2,371 million of unlisted shares, and ¥99 million of convertible-bond-type bonds with stockacquisition rights).
For the fiscal year ended March 31, 2024
Impairment loss on securities in the amount of ¥1,804 million was recorded (which were available-for-sale securities,
consisting of ¥1,034 million of unlisted shares; and securities of subsidiaries and associates, consisting of ¥286
million of shares of non-consolidated subsidiaries and ¥483 million of other securities of subsidiaries and associates).
When the fair value of investment securities declines by 30% to 50% compared to its acquisition cost, the Group
recognizes an impairment loss after comprehensively evaluating the recoverability of the market price.

126

DEFERRED TAX ACCOUNTING
1. Major components of deferred tax assets and deferred tax liabilities are as follows:

Deferred tax assets:
Depreciation
Impairment loss
Provision for loss on interest repayment
Provision for point card certificates
Net unrealized loss on non-current assets
Provision for bonuses
Net operating loss carried forward
Other
Subtotal
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Reserve for special account for advanced depreciationof non-current assets
Valuation difference on available-for-sale securities
Other
Total deferred tax liabilities
Deferred tax assets, net

As ofMarch 31, 2023

(Millions of yen)
As ofMarch 31, 2024

¥4,5202,920
3,825
10,503
1,152
1,016
7,916
8,704
40,559(8,419)32,140¥3,9632,848
2,586
12,533
1,109
986
7,655
7,961
39,645(9,755)29,889

8,798

7,826

2,617
772
12,188¥19,952

3,079
587
11,493¥18,396

2. Reconciliations between the statutory tax rate and the effective tax rate reflected in the consolidated
statements of income are as follows:
As ofMarch 31, 2023
30.6%

Statutory tax rate
Adjustments:
Permanent differences such as entertainment
expenses, etc.
Permanent differences such as dividends, etc.
Change in valuation allowance
Inhabitants’ tax
Difference in tax rates of consolidated subsidiaries
Other
Effective tax rate

As ofMarch 31, 2024
30.6%

0.3

0.1

(0.1)
3.2
0.2
(0.4)
(0.1)
33.7%

(0.1)
4.7
0.2
0.3
(1.6)
34.2%

3. Accounting treatment of corporate tax, local corporate tax and related tax effect accounting:
The Company and some consolidated subsidiaries have applied the group tax sharing system. In accordance withthe “Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System” (PITF No. 42,
August 12, 2021), the Company conducts accounting treatment and disclosure of corporate tax, local corporate tax
and related tax effect accounting.

127

4. Adjustments to the amount of deferred tax assets and deferred tax liabilities due to change in income
tax rates
Under the revised tax law, some consolidated subsidiaries will be subject to the size-based business tax.
For consolidated subsidiaries newly subject to the size-based business tax, deferred tax assets and deferred tax
liabilities related to temporary differences that are expected to reverse in the fiscal year beginning on or after April
1, 2026 are calculated using the new statutory tax rate.
This tax rate change has only a minimal impact on the consolidated financial statements for the current fiscal year.
ASSET RETIREMENT OBLIGATIONS
1. Asset retirement obligations recognized in the consolidated balance sheets(1) Overview of asset retirement obligations
The Group’s asset retirement obligations mainly include the cost of restoring the store sites to their original condition
under the real estate lease contracts of stores.
(2) Method of calculation of asset retirement obligations
The Group calculated its asset retirement obligations by assuming the lease period as the expected period of use andapplying discount rates of 0.02% to 0.31%.
(3) Changes in the total amount of asset retirement obligations
The changes in the balance of asset retirement obligations are as follows:

Beginning balance
Increase (decrease) due to change in estimate
Adjustments due to passage of time
Decrease due to fulfillment of obligation
Ending balance(Millions of yen)
Fiscal year ended Fiscal year ended
March 31, 2023 March 31, 2024
¥1,649¥1,694
47
—
2
2
(5)
(348)
¥1,694¥1,348128

INVESTMENT AND RENTAL PROPERTY
Certain consolidated subsidiaries of the Company hold commercial properties, including land, for rental in theTokyo metropolitan area and other areas.
The net rental income in connection with these properties for the fiscal year ended March 31, 2023 was ¥15,420
million; the rental income was included in “Operating revenue” and the associated rental expenses were included
in “Cost of sales” and “Selling, general and administrative expenses.” The net rental income in connection withthese properties for the fiscal year ended March 31, 2024 was ¥16,633 million; the rental income was included in“Operating revenue” and the associated rental expenses were included in “Cost of sales” and “Selling, general andadministrative expenses,” and the gain on sales of non-current assets of ¥2,500 million was included in extraordinary
income.
The carrying value, changes during the year, and the fair value of such assets are as follows:(Millions of yen)
Fiscal year ended Fiscal year ended
March 31, 2023 March 31, 2024
Carrying value:
Beginning balance
Changes during the year
Ending balance
Fair value¥130,138
185¥130,323¥287,541¥130,323
382¥130,706¥287,990

Notes: 1. Carrying value represents the amount in the consolidated balance sheets that is carried at the acquisition
cost less accumulated depreciation.
2. Major factors of changes during the year include an increase in assets in the amount of ¥846 million for
the fiscal year ended March 31, 2023, and an increase in assets in the amount of ¥2,129 million for the
fiscal year ended March 31, 2024.
3. Fair value is basically based on the appraised value provided by third-party real estate appraisers(including value adjusted based on certain indexes, etc.).

129

REVENUE RECOGNITION
1. Disaggregation of revenue
Disaggregation of revenue from contracts with customers is as follows:

I. For the fiscal year ended March 31, 2023

(Millions of yen)

6,207
4,811
2,359
19,309——3,942

Reportable segment
FinTech————46,655
3,757
1,233

Revenue from contracts with customers

36,63151,64688,277

Other revenue (Note)

32,62996,946

129,576

Revenue from external customers

69,260148,593

217,854

Retailing
Commissions on consignment sales (net)
Rent revenue and others
Consignment revenue
Related business revenue
Affiliate commissions
Service income
IT and others

Total
6,207
4,811
2,359
19,30946,6553,757
5,176

Note: Other revenue includes revenue from fixed term tenants under the “Accounting Standard for Lease
Transactions” (ASBJ Statement No. 13, March 30, 2007), and installment and revolving fees and interest on credit
card cash advances under the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4,2019).

II. For the fiscal year ended March 31, 2024
(Millions of yen)

5,513
4,469
1,620
17,252——
4,625

Reportable segment
FinTech————51,906
4,224
2,210

Revenue from contracts with customers

33,48058,341

91,822Other revenue (Note)

36,723

106,681

143,404

Revenue from external customers

70,203

165,023

235,227

Retailing
Commissions on consignment sales (net)
Rent revenue and others
Consignment revenue
Related business revenue
Affiliate commissions
Service income
IT and others

Total
5,513
4,469
1,620
17,252
51,9064,224
6,835

Note: Other revenue includes revenue from fixed term tenants under the “Accounting Standard for Lease
Transactions” (ASBJ Statement No. 13, March 30, 2007), installment and revolving fees and interest on credit card
cash advances under the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019),
and insurance premiums revenue as defined under the Insurance Act.

130

2. Useful information in understanding revenue
Major revenue from contracts with customers is as follows:
Retailing segment
Commissions on consignment sales (net)In consignment sales in which MARUI CO., LTD. sells goods and services on consignment, customers retain
ownership of products, and the role of the Group is a provider of services for arranging for consigned products
to be provided to customers. Therefore, the Group recognizes revenue as an agent transaction, thereby revenue
is recognized on a net basis by deducting the cost of these products from the consideration to be received fromsales of products at stores or through e-commerce, in accordance with consignment sales contracts.

Rent revenue and others
In consignment contracts in which MARUI CO., LTD. offers to external business operators rent spaces, etc. in
Marui stores and permits such operators to display and sell merchandise, the role of the Group is to provide
arrangement for the products of business partners of consignment sales to be provided to customers. Therefore,
the Group recognizes revenue from these contracts as an agent transaction, thereby revenue is recognized on a
net basis by deducting the cost of these products from the consideration to be received from sales of products.
Revenue from sales of goods
Consideration received from sales of clothing, accessories, foodstuffs, and other merchandise to customers atstores or through e-commerce by MARUI CO., LTD. is recognized as revenue. If products are sold at stores,
customer obtains control of the products at the time of delivery of the products, and the Company’s performanceobligations are deemed to be satisfied. Revenue is therefore recognized at the time of delivery of the products.
If products are sold via e-commerce, customer obtains control of the products on the date of shipment of the
products, and the Company’s performance obligations are deemed to be satisfied. Revenue is therefore
recognized at the time of shipment of the products.

Related business revenue
Related services refer to those other than services relating to stores and e-commerce, excluding real estate lease
contracts (design and construction of commercial facilities, property management, comprehensive building
management, etc.). Consideration for the services is recognized as revenue at the time when the provision ofservices is completed, or at the time when the works are delivered to customers.

FinTech segment
Affiliate commissions
In these transactions, customers are affiliates who operate facilities and services used by card members of EPOS
cards, which are credit cards issued by Epos Card Co., Ltd. Commissions income to be received based oncontracts with customers are recognized as revenue at the time when the company provides credit card settlement
service, as the company’s performance obligations are satisfied at that time.

131Service income
In these transactions, customers are card members of EPOS cards, which are credit cards issued by Epos Card
Co., Ltd. The annual fee is recognized as revenue over the annual membership period during which theperformance obligations of providing membership privilege services to customers are satisfied. Service fee
income other than annual fee is recognized as revenue at the time when the provision of services is completed.
3. Information to understand the amount of revenue for the current fiscal year and next fiscal year onward(1) Contract liability balance, etc.
Beginning and ending balances of receivables from contracts with customers and contract liabilities are as
follows. Contract liabilities are included in “Other” on the consolidated balance sheets.

I. For the fiscal year ended March 31, 2023
(Millions of yen)
Fiscal year ended March 31, 2023
Beginning balance
Receivables from contracts
with customers
Notes receivable
Accounts receivable - trade
Contract liabilities

Ending balance
4,746

4,827

30

33

4,716

4,794

852

993

Contract liabilities consist of unearned balance of annual fee income at the end of the fiscal year. Contract liabilities
are reversed with the recognition of revenue.
The beginning balance of contract liabilities included ¥852 million of revenue recognized in the fiscal year ended
March 31, 2023. Contract liabilities increased by ¥141 million during the fiscal year ended March 31, 2023 mainly
due to an increase in card members from whom annual fee income is received. For the fiscal year ended March 31,
2023, the Group recognized no revenue for which performance obligations had been satisfied (or partially satisfied)in past periods.

II. For the fiscal year ended March 31, 2024
(Millions of yen)
Fiscal year ended March 31, 2024
Beginning balance
Receivables from contracts
with customers
Notes receivable
Accounts receivable - trade
Contract liabilities

Ending balance
4,827

6,156

33

15

4,794

6,141

993

1,167

Contract liabilities consist of unearned balance of annual fee income at the end of the fiscal year. Contract liabilities
are reversed with the recognition of revenue.
The beginning balance of contract liabilities included ¥993 million of revenue recognized in the fiscal year ended
March 31, 2024. Contract liabilities increased by ¥173 million during the fiscal year ended March 31, 2024 mainly
due to an increase in card members from whom annual fee income is received. For the fiscal year ended March 31,1322024, the Group recognized no revenue for which performance obligations had been satisfied (or partially satisfied)in past periods.

(2) Transaction price allocated to the remaining performance obligations
Description is omitted since the Group has no significant contract with a contract period exceeding one year.

SEGMENT INFORMATION, ETC.
SEGMENT INFORMATION
1. Overview of reportable segments
The Group defines its reportable segments as a component of the Group for which separate financial information isavailable and whose operating results are regularly evaluated by the Board of Directors to make decisions about
how resources are to be allocated among the Group and assess their performance.
The Group consists of the following two reportable segments identified by products and services: “Retailing” and“FinTech.”
The Retailing segment engages in the rental and the management of commercial property, purchasing and sale ofclothes and accessories, space production, advertising, total fashion distribution, general building management, etc.
The FinTech segment engages in the credit card services, the consumer loans, the rent guarantee businesses, IT
systems, real estate rental, sales of investment trusts, and small-amount short-term insurance services.
2. Basis of measurement for the amounts of operating revenue, income or loss, assets, and other items bysegment
The accounting policies of each reportable segment are largely consistent with those disclosed in “SIGNIFICANT
MATTERS THAT FORM THE BASIS FOR PREPARATION OF CONSOLIDATED FINANCIAL
STATEMENTS.”
Segment income is measured on the basis of operating profit. Intersegment operating revenue and transfers areaccounted for based on the prevailing market price.

133

3. Information on operating revenue, income or loss, assets, and other items by segment
For the fiscal year ended March 31, 2023
(Millions of yen)
Reportable segment
Retailing
FinTech
Total
Operating revenue:
Outside customers
Intersegment operating revenue
and transfers
Total
Segment income
Segment assets*3
Other items:
Depreciation and amortization
Increase in property andequipment and intangible assets
Notes: 1.

Adjustment Consolidated*1*2¥69,260¥148,593¥217,854¥—¥217,854

6,562

2,039

8,601

(8,601)—¥75,823¥3,614¥253,743¥150,633¥42,483¥688,352¥226,456¥46,098¥942,095¥(8,601)¥(7,327)¥19,854¥217,854¥38,771¥961,950¥6,375¥4,173¥10,549¥950¥11,499

7,903

2,899

10,803(1,192)

9,611

Adjustments are as follows:(1) Adjustment to segment income consists of intersegment elimination of ¥2,307 million and corporate expenses of ¥(9,634)
million that are not allocated to each reportable segment. Corporate expenses are mainly expenses of the Company that are
not attributable to reportable segments.
(2) Adjustment to segment assets mainly consists of intersegment elimination of ¥(595,518) million and corporate assets of¥622,772 million, which mainly represent the Company’s loans in connection with the Group’s cash management system.
2.

Segment income is reconciled to operating profit in the consolidated statements of income.

3.

Fixed assets at stores are included in Retailing segment assets. However, stores are important touch points for acquiring newcustomers based on the business model generating synergies by integrating “stores, cards, and the Web” of the Group.
Therefore, these assets also contribute to the FinTech segment income as locations for issuing EPOS cards.

For the fiscal year ended March 31, 2024
(Millions of yen)
Reportable segment
Retailing
FinTech
Total
Operating revenue:
Outside customers
Intersegment operating revenue
and transfers
Total
Segment income
Segment assets*3
Other items:
Depreciation and amortization
Increase in property andequipment and intangible assets
Notes: 1.

Adjustment Consolidated*1*2¥70,203¥165,023¥235,227¥—¥235,227

7,100

2,113

9,213

(9,213)—¥77,303¥6,960¥257,487¥167,137¥42,364¥712,574¥244,441¥49,324¥970,061¥(9,213)¥(8,299)¥33,439¥235,227¥41,025¥1,003,501¥6,126¥5,252¥11,378¥1,195¥12,574

12,8104,803

17,614(2,093)

15,520Adjustments are as follows:(1) Adjustment to segment income consists of intersegment elimination of ¥1,877 million and corporate expenses of ¥(10,176)
million that are not allocated to each reportable segment. Corporate expenses are mainly expenses of the Company that are
not attributable to reportable segments.

134

(2) Adjustment to segment assets mainly consists of intersegment elimination of ¥(609,066) million and corporate assets of¥650,526 million, which mainly represent the Company’s loans in connection with the Group’s cash management system.
2.

Segment income is reconciled to operating profit in the consolidated statements of income.

3.

Fixed assets at stores are included in Retailing segment assets. However, stores are important touch points for acquiring
new customers based on the business model generating synergies by integrating “stores, cards, and the Web” of the Group.
Therefore, these assets also contribute to the FinTech segment income as locations for issuing EPOS cards.

RELATED INFORMATION
For the fiscal year ended March 31, 2023
1. Information by product and service
This information is omitted since the same information is provided in “SEGMENT INFORMATION.”
2. Information by geographic region(1) Operating revenue
This information is omitted since operating revenue from outside customers in Japan accounted for more than 90%
of total operating revenue in the consolidated statements of income.
(2) Property and equipment
Not applicable as the Group has no property and equipment outside of Japan.
3. Information by major customer
This information is omitted since there are no outside customers who accounted for 10% or more of operating
revenue in the consolidated statements of income.

For the fiscal year ended March 31, 2024
1. Information by product and service
This information is omitted since the same information is provided in “SEGMENT INFORMATION.”
2. Information by geographic region(1) Operating revenue
This information is omitted since operating revenue from outside customers in Japan accounted for more than 90%
of total operating revenue in the consolidated statements of income.
(2) Property and equipment
Not applicable as the Group has no property and equipment outside of Japan.
3. Information by major customer
This information is omitted since there are no outside customers who accounted for 10% or more of operating
revenue in the consolidated statements of income.
135

IMPAIRMENT LOSS ON NON-CURRENT ASSETS BY REPORTABLE SEGMENT
For the fiscal year ended March 31, 2023
(Millions of yen)

Impairment loss

Reportable segment
Retailing
FinTech
Total
¥432
¥—
¥432

Corporate/
Eliminations
¥—

Total
¥432

For the fiscal year ended March 31, 2024
(Millions of yen)

Impairment loss

Reportable segment
Retailing
FinTech
Total
¥417
¥74
¥491

Corporate/
Eliminations
¥—

Total
¥491

AMORTIZATION OF GOODWILL AND UNAMORTIZED BALANCE BY REPORTABLE SEGMENT
Not applicable.
GAIN ON NEGATIVE GOODWILL BY REPORTABLE SEGMENT
Not applicable.

136

RELATED PARTY INFORMATION
Transactions between the Company and related parties
For the fiscal year ended March 31, 2023
Directors, audit & supervisory board members and major shareholders of the Company (only individuals), etc.
Type
Company, etc.
in which amajority ofthe voting
rights are
owned bydirectors/
audit &
supervisoryboard
members andtheir close
relatives

Note:

Name ofcompany

Location

NakanoCo., Ltd.

Shinjuku,
Tokyo

Seiwa
Kogyo
Co., Ltd.

Shinjuku,
Tokyo

Capital(Millions of
yen)
¥10

¥10

Business
Real estate
rentalReal estate
rentalVotingrightsDirect1.2%

Direct0.9%

Relationship
Property
rentalConcurrent
position as
director
Property
rentalConcurrent
position as
director

Transaction

Amount(Millionsof yen)Property
rental¥18

Property
rental¥5

Account
nameGuarantee
deposits
Other
current
liabilities

Balance(Millionsof yen)
¥41
¥1

—

¥—

Terms and conditions and policy for determining terms and conditions, etc.
The terms and conditions for rental agreements are determined in the same way as third-party
transactions with reference to neighborhood rents.

Non-consolidated subsidiaries of the Company¥689 million of the allowance for doubtful accounts is stated for doubtful receivables and loans withrespect to the non-consolidated subsidiaries.

For the fiscal year ended March 31, 2024
Directors, audit & supervisory board members and major shareholders of the Company (only individuals), etc.
Type
Company, etc.
in which amajority ofthe voting
rights are
owned bydirectors/
audit &
supervisoryboard
members andtheir close
relatives

Note:

Name ofcompany

Location

NakanoCo., Ltd.

Shinjuku,
Tokyo

Seiwa
Kogyo
Co., Ltd.

Shinjuku,
Tokyo

Capital(Millions of
yen)
¥10

¥10

Business

VotingrightsReal estate
rentalDirect1.2%

Real estate
rentalDirect0.9%

Relationship
Property
rentalConcurrent
position as
director
Property
rentalConcurrent
position as
director

Transaction

Amount(Millionsof yen)Property
rental¥32

Property
rental¥5

Account
nameGuarantee
deposits
Other
current
liabilities

Balance(Millionsof yen)—Terms and conditions and policy for determining terms and conditions, etc.
The terms and conditions for rental agreements are determined in the same way as third-party
transactions with reference to neighborhood rents.

Non-consolidated subsidiaries of the Company¥865 million of the allowance for doubtful accounts is stated for doubtful receivables and loans withrespect to the non-consolidated subsidiaries.
¥175 million of the provision of allowance for doubtful accounts is stated for the fiscal year ended March
31, 2024.
137

¥41
¥1

¥—

PER SHARE INFORMATION(Yen)
Fiscal year ended Fiscal year ended
March 31, 2023
March 31, 2024
¥1,348.13¥1,299.97
130.70109.37

Book value per share
Earnings per share

Notes: 1. Diluted earnings per share is not stated as there are no diluted shares.
2. In the computation of earnings per share, the Company’s shares held by the BIP Trust and ESOP Trust(766 thousand shares for each of the fiscal years ended March 31, 2023 and 2024) are included in thenumber of treasury shares deducted from the average number of shares during the period.
3. In the computation of book value per share, the Company’s shares held by the BIP Trust and ESOP
Trust (766 thousand shares for each of the fiscal years ended March 31, 2023 and 2024) are includedin the number of treasury shares deducted from the number of shares issued and outstanding at the endof the fiscal year.
4. The basis for calculating earnings per share is as follows.
Fiscal year ended Fiscal year ended
March 31, 2023
March 31, 2024
Earnings per share
Profit attributable to owners of parent¥21,473¥24,667(Millions of yen)Amount not attributable to common shareholders——(Millions of yen)
Profit attributable to owners of parent related to
21,473
24,667common stock (Millions of yen)
Average number of common stock
196,340
188,736(Thousands of shares)
SIGNIFICANT SUBSEQUENT EVENTS
Establishment of Limit for Acquisition of Treasury Stock
The Company has resolved at its Board of Directors meeting held on May 14, 2024, to establish a limit for theacquisition of treasury stock in accordance with the provision of Article 156 of the Companies Act as applied
pursuant to Article 165, Paragraph 3 of the same act, as follows.
1. Reason for purchase of treasury stock
To date, the Group has promoted capital optimization in line with the business structure transformation. First, in
responding to reform to a business structure centered on FinTech, the Group conducted approximately ¥100.0
billion worth of share buybacks under a policy of reducing the equity ratio of the FinTech segment toapproximately 10% in line with the average in the industry and achieved this target in the fiscal year ended
March 31, 2021. Next, in the current five-year medium-term management plan that ends in the fiscal year
ending March 31, 2026, the Group acquired treasury stock worth ¥50.0 billion by the fiscal year ended March
31, 2023 to eliminate surplus capital in the Retailing segment. As a result, the capital structure has been
optimized and the target equity ratio of around 25% has been achieved in the targeted balance sheet, and thecapital policy has been changed from the fiscal year ended March 31, 2024. The Group intends to buy back its
own shares in a flexible manner while comprehensively taking into account its financial condition and stock
price level, etc. In the current fiscal year, the Group has set a ¥20.0 billion buyback limit in order to respond tothe case where future profitability is not fully factored into the stock price.
138

2. Details of matters relating to the acquisition of treasury stock(1) Class of shares to be acquired

Common stock(2) Total number of shares that may be acquired

Up to 11 million(5.86% of the total number of shares issued, excluding treasury stock)(3) Total value of acquired shares

Up to ¥20.0 billion(4) Acquisition period

From June 1, 2024 to September 30, 2024

139

5) Consolidated Supplementary Schedules
Schedule of bonds payableCompany nameIssue
32nd Series Unsecured
Corporate Bond
34th Series Unsecured
Corporate Bond
(Green bond)35th Series Unsecured
Corporate Bond
36th Series Unsecured
Corporate Bond
37th Series Unsecured
Corporate Bond
38th Series Unsecured
Corporate Bond
39th Series Unsecured
Corporate Bond
(Social bond)
1st Unsecured Security Token
Bond(Social bond)40th Series Unsecured
Corporate Bond
41st Series Unsecured
Corporate Bond
42nd Series Unsecured
Corporate BondMARUI GROUP
CO., LTD.

2nd Unsecured Security
Token Bond
(Social bond)
3rd Unsecured Security Token
Bond(Social bond)Issue date
May 25,2017

Millions of yen
Interest
Balance at
rate Collateral
Balance at
beginning of
end of period (%)
period10,00010,0000.300 None
(10,000)

Oct. 25,2018

Maturitydate
May 24,2024
Oct. 25,2023

10,000

—

0.190

None

10,00010,000(10,000)

0.170

None

10,00010,000

0.250

None

10,000

—

0.120

None

10,00010,000

0.240

None

Mar. 31,
2022

1,300

1,300
(1,300)

0.310

None

Mar. 31,2025

Jun. 20,
2022

121

—

1.000

None

Jun. 20,2023

10,00010,000

0.330

None

21,00021,000

0.540

None

9,000

9,000

0.850

None

Oct. 13,
2022

119

—

1.000

None

Sep. 12,

—

203
(203)

1.000

None

Oct. 18,2019
Oct. 18,2019
Dec. 1,2020
Dec. 1,
2020

Aug. 31,2022
Aug. 31,2022
Aug. 31,
2022

2023

Oct. 18,
2024
Oct. 16,2026
Dec. 1,2023
Dec. 1,
2025

Aug. 29,2025
Aug. 31,2027
Aug. 31,2032
Oct. 13,
2023
Sep. 12,2024

43rd Series Unsecured
Corporate Bond

Jan. 23,2024—

10,000

0.400

None

Jan. 22,2027

44th Series Unsecured
Corporate Bond

Jan. 23,2024—

25,000

0.629

None

Jan. 23,2029

45th Series Unsecured
Corporate Bond

Jan. 23,
2024

—

5,000

0.897

None

Jan. 23,2031¥101,540¥121,503(21,503)

—

—

—

—

Total

—

Notes: 1. Amounts in parentheses under “Balance at end of period” are amounts scheduled for repayment within
one year.
2. Annual redemption schedule over a period of five years from the fiscal year-end are as follows:

Due in one
year or less
¥21,503

Due after one
year throughtwo years¥20,000

Due after two
years throughthree years¥20,000140

Due after three
years throughfour years(Millions of yen)
Due after four
years throughfive years¥21,000¥25,000

Schedule of borrowings
Millions of yen
Balance at
beginning of
periodAverageinterest rate(%)

Balance at
end of period

Maturity date

Short-term borrowings¥65,319¥34,754

0.39—

Current portion of long-termborrowings

38,60052,500

0.35

—

418

451

—

—

352,600

385,600

0.42

Jun. 2025 –Dec. 2033

976

798

—

Apr. 2025 –Sep. 2028

25,000———¥482,913¥474,104——

Current portion of leaseobligations
Long-term borrowings (excluding
current portion)
Lease obligations (excluding
current portion)
Other interest-bearing debt
Commercial papers(current portion)

Total

Notes: 1. The average interest rate is the weighted average rate applicable to the year-end balance of borrowings,
etc.
2. The average interest rate for lease obligations is not provided since the amount equivalent to interests
included in the total lease payments are allocated to each fiscal year based on the straight-line method.
3. Annual repayment schedule of long-term borrowings and lease obligations (excluding current portion)over a period of five years from the fiscal year-end are as follows:(Millions of yen)
Due after three
Due after four
Due after one year Due after two years years through four years through fivethrough two years through three years
years
years
Long-term borrowings
Lease obligations¥56,400¥79,000¥55,200¥75,150

328

229

166

74

Schedule of asset retirement obligations
This information is omitted since it is provided in “ASSET RETIREMENT OBLIGATIONS.”141

(2) Other
Quarterly financial information for the fiscal year ended March 31, 2024 (unaudited)
Cumulative period
Operating revenue (Millions of yen)
Profit before income taxes (Millionsof yen)Profit attributable to owners ofparent (Millions of yen)
Earnings per share (Yen)

Accounting period
Earnings per share (Yen)

1st quarter2nd quarter3rd quarter¥53,534¥112,148¥170,499¥235,227

6,538

17,53026,54637,495

4,337

11,475

17,623

24,667

22.91

60.61

93.23

130.70

1st quarter2nd quarter3rd quarter

4th quarter¥37.70¥32.63¥37.50¥22.91

142

Full year2. Non-Consolidated Financial Statements, Etc.
(1) Non-Consolidated Financial Statements
1) Non-Consolidated Balance Sheets(Millions of yen)
As ofMarch 31, 2024

As ofMarch 31, 2023
AssetsCurrent assets:
Cash and deposits
Short-term loans receivable from subsidiaries andassociates
Other
Allowance for doubtful accounts
Total current assets
Non-current assets:
Property and equipment
Buildings
Structures
VehiclesTools, furniture and fixtures
Construction in progress
Total property and equipment
Intangible assets
Investments and other assets:
Investment securities
Shares of subsidiaries and associates
Investments in other securities of subsidiaries andassociates
Investments in capital of subsidiaries and associates
Other
Total investments and other assets
Total non-current assets
Total assets¥37,468*1

525,436*1

534,994

*1

3,209
(721)
565,392

*1

6,719
(896)
590,215*1

143¥49,398

13
1
0
1,296
—
1,310
61

14
1
0
1,308
6
1,330
50

33,131
242,206

33,571
243,184

650

284

65
1,869
277,923
279,295¥844,688

*1

32
1,774
278,848
280,229¥870,444

(Millions of yen)
As ofMarch 31, 2024

As ofMarch 31, 2023
Liabilities
Current liabilities:
Short-term borrowings
Current portion of bonds payable
Short-term borrowings from subsidiaries andassociates
Commercial papers
Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received
Provision for bonuses
Provision for share-based remuneration
Other
Total current liabilities¥103,800
20,240*1*1*1

Non-current liabilities:
Bonds payable
Long-term borrowings
Deferred tax liabilities
Provision for share-based remuneration
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity:
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surpluses
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for promoting open innovation
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

144

56,49525,000
252
591
140
174
211
—
201
207,107¥86,200
21,503*1*1*156,107
—
2,390
689
102
173
226
740
121
168,254

81,300352,600
1,366
501
67
435,834
642,942

100,000
385,600
1,605—
67
487,272
655,526

35,92035,92091,307
11991,42791,307
122
91,429

8,980

8,980

728
101,526
111,235(42,774)
195,809728
116,989
126,698(46,116)
207,932

5,936
5,936
201,745¥844,688

6,985
6,985
214,918¥870,444

2) Non-Consolidated Statements of Income

Operating revenue*1*1,2
Operating expenses
Operating profit
Non-operating income*1Interest income
Dividend income
Gain on investments in investment
partnerships
Other
Total non-operating income
Non-operating expenses*1
Interest expenses
Provision of allowance for doubtful*1
accounts
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Loss on valuation of shares of subsidiaries andassociates
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitFiscal year ended
March 31, 2023
¥19,796
7,652
12,144
2,356
263

145

(Millions of yen)
Fiscal year ended
March 31, 2024
*1
¥40,639*1,2
7,721
32,918
*1

1,959
316

183

393

85
2,889

78
2,747

1,384

*1

1,794

689

*1

175

718
2,792
12,241985
2,956
32,709

10
0
11

89
—
89

2,371

1,518

2,407

735

0
4,778
7,473
199
(80)
119
¥7,35435
2,288
30,510
62
(223)
(161)
¥30,671

3) Non-Consolidated Statements of Changes in Equity
For the fiscal year ended March 31, 2023
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings
Legalretainedearnings

Reserveforpromotingopen
innovation

Retainedearnings
brought
forwardTotal
retainedearnings¥8,980¥641¥105,264¥114,886

Dividends of surplus(5,224)(5,224)

Dividends of surplus (Interim
dividend)(5,781)(5,781)

Profit

7,354

7,354

86

(86)

—

Balance at beginning of period

SharecapitalLegalcapitalsurplus¥35,920¥91,307

Other capital Total capitalsurplussurpluses¥—¥91,307

Changes during period:

Purchase of treasury shares
119

Disposal of treasury shares

119

Transfer to reserve forpromoting open innovationfrom retained earnings
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

—

—

119

119

—

86

(3,737)(3,651)¥35,920¥91,307¥119¥91,427¥8,980¥728¥101,526¥111,235

146

(Millions of yen)
Shareholders’ equity
TreasurysharesBalance at beginning of period¥(18,269)

Total
shareholders’equity¥223,846

Valuation andtranslation adjustments
Valuation
Total valuationdifference onand translation
available-foradjustments
sale securities¥5,206¥5,206Total
net assets¥229,052

Changes during period:
Dividends of surplus(5,224)(5,224)

Dividends of surplus (Interim
dividend)(5,781)(5,781)

Profit

7,354

7,354

Purchase of treasury shares(26,001)(26,001)(26,001)

Disposal of treasury shares

1,496

1,616

1,616

—

—

Transfer to reserve for promoting
open innovation from retained
earnings
Net changes in items other thanshareholders’ equity

729

729

729

Total changes during period(24,505)(28,036)729

729(27,307)

Balance at end of period¥(42,774)¥195,809¥5,936¥5,936¥201,745147For the fiscal year ended March 31, 2024
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings
Legalretainedearnings

Reserveforpromotingopen
innovation

Retainedearnings
brought
forwardTotal
retainedearnings¥8,980¥728¥101,526¥111,235

Dividends of surplus(5,703)(5,703)

Dividends of surplus (Interim
dividend)(9,505)(9,505)

Profit30,67130,671

Balance at beginning of period

SharecapitalLegalcapitalsurplus¥35,920¥91,307

Other capital Total capitalsurplussurpluses¥119¥91,427

Changes during period:

Purchase of treasury shares
Disposal of treasury shares

2

2

Transfer to reserve forpromoting open innovationfrom retained earnings
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

—

—

2

2

—

—

15,462

15,462¥35,920¥91,307¥122¥91,429¥8,980¥728¥116,989¥126,698

148

(Millions of yen)
Shareholders’ equity
TreasurysharesBalance at beginning of period

Totalshareholders’ equity¥(42,774)¥195,809

Valuation andtranslation adjustments
Valuation
Total valuationdifference onand translation
available-foradjustments
sale securities¥5,936¥5,936Total
net assets¥201,745

Changes during period:
Dividends of surplus(5,703)(5,703)

Dividends of surplus (Interim
dividend)(9,505)(9,505)

Profit30,67130,671

Purchase of treasury shares(3,367)(3,367)(3,367)

Disposal of treasury shares

25

27

27

—

—

Transfer to reserve for promoting
open innovation from retained
earnings
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

1,049

1,049

1,049

(3,341)

12,123

1,049

1,049

13,172¥(46,116)¥207,932¥6,985¥6,985¥214,918

149

NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTSSIGNIFICANT ACCOUNTING POLICIES

1. Basis and method for valuation of assets
Securities
1) Shares in subsidiaries and associates
Stated at cost using the moving average method
2) Available-for-sale securities
Securities other than stocks, etc. with no market value
Stated at the quoted market price (with any unrealized gains or losses reported as a separate componentof net assets at a net-of-tax amount and cost of sales determined by the moving-average method)
Stocks, etc. with no market value
Mainly stated at cost using the moving-average method.
Investments in partnerships, etc. are stated at the Company’s share of net asset value based on the mostrecent financial statements available according to the financial reporting date specified in therespective partnership agreement.

2. Method of depreciation and amortization of non-current assets(1) Property and equipment
Property and equipment are depreciated using the straight-line method.
(2) Intangible assets
Intangible assets are amortized using the straight-line method. Software for internal use, however, isamortized using the straight-line method over the useful life estimated by the Company (within five
years).

3. Basis for recognizing allowance and provisions(1) Allowance for doubtful accounts
The allowance for doubtful accounts is stated at the amount determined based on the historical experienceof bad debt with respect to ordinary receivables (“general reserve”), plus an estimate of uncollectible
amounts determined by reference to specific doubtful receivables of customers experiencing financial
difficulties (“specific reserve”).
(2) Provision for bonuses
The provision for bonuses is accrued at the fiscal year-end to which such bonuses are attributable.
(3) Provision for share-based remuneration
The provision for share-based remuneration is provided at the estimated amount for share-based
remuneration to directors and employees at the fiscal year-end in accordance with the internal rule forstock delivery.

150

4. Basis for recognition of revenue and expense
Revenue of the Company is primarily dividend income and business management fee received from theGroup companies. The Company recognizes revenue from dividend income on the effective date of dividends.
Performance obligations for the business management fee is to provide the entrusted services to the Group
companies according to the contracts with the Group companies, and the Company’s performance obligations
are satisfied at the time when such services are rendered. Therefore, the Company recognizes revenue or
expenses at that point in time.

5. Consumption taxes
National and local consumption taxes are accounted for by the tax-excluded method.

6.

Application of the group tax sharing system
The Company has applied the group tax sharing system.

SIGNIFICANT ACCOUNTING ESTIMATES
Valuation of unlisted shares(1) Amount recorded in the non-consolidated financial statements for the current fiscal year
(Millions of yen)
Unlisted shares excluding
subsidiaries

As of March 31, 2023

As of March 31, 2024

¥6,67348 issuances¥5,35450 issuances(2) Calculation method for amounts recorded in the non-consolidated financial statements for the current
fiscal year
The description on the method of calculation is omitted since the same information is provided in“NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SIGNIFICANT ACCOUNTINGESTIMATES, 1. Valuation of unlisted shares” in the consolidated financial statements.
(3) Key assumptions used in calculating amounts recorded in the non-consolidated financial statements
for the current fiscal year
The description on the key assumptions used in the calculation is omitted since the same information
is provided in “NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SIGNIFICANTACCOUNTING ESTIMATES, 1. Valuation of unlisted shares” in the consolidated financial
statements.
(4) Effect on the non-consolidated financial statements for the following fiscal year
Of the above, ¥3,041 million for 19 issuances have results that have failed to meet plans as of the timeof acquisition, and if business results at investees fail to meet plans in the next fiscal year, a loss on
valuation of investment securities or loss on valuation of shares of subsidiaries and associates may berecorded in the following fiscal year.
151

CHANGES IN REPRESENTATION METHODS

Non-Consolidated Statements of Income“Dividend income,” which was included in “other” under “non-operating income” in the previous fiscal year, isseparately stated from the current fiscal year since its monetary importance has increased. In order to reflect thechange in representation methods, a reclassification of accounts has been made for the non-consolidated financial
statements for the previous fiscal year.
As a result, ¥349 million included in “other” under “non-operating income” in the non-consolidated statements
of income for the previous fiscal year has been reclassified to “dividend income” of ¥263 million and “other” of¥85 million.

ADDITIONAL INFORMATION
Officer Remuneration Board Incentive Plan Trust
The information on the Officer Remuneration Board Incentive Plan Trust (“BIP Trust”) is omitted since thesame information is provided in “NOTES TO CONSOLIDATED FINANCIAL STATEMENTS,
ADDITIONAL INFORMATION” in the consolidated financial statements.

Stock Benefit Employee Stock Ownership Plan Trust
The information on the Stock Benefit Employee Stock Ownership Plan Trust is omitted since the same
information is provided in “NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, ADDITIONAL
INFORMATION” in the consolidated financial statements.

152

MATTERS RELATED TO NON-CONSOLIDATED BALANCE SHEETS*1 The amounts of monetary claims and debts to subsidiaries and associates are as follows:(Millions of yen)
As of March 31, 2023
Short-term monetary claims
Short-term monetary debts
Long-term receivables¥525,623
57,331
1,452

As of March 31, 2024
¥537,254
59,0391,410

Contingent liabilities
The Group provides guarantees for unpaid funds to business partners of Epos Card Co., Ltd., a consolidated
subsidiary, as follows:(Millions of yen)
As of March 31, 2023

As of March 31, 2024

¥20,328¥33,273

MATTERS RELATED TO NON-CONSOLIDATED STATEMENTS OF INCOME*1. Transaction volumes with subsidiaries and associates are as follows:
Fiscal year ended
March 31, 2023

(Millions of yen)
Fiscal year ended
March 31, 2024

Transaction volumes ofoperating transactions
Operating revenue
Operating expenses
Transaction volumes of nonoperating transactions
Interest income
Provision of allowance for
doubtful accounts¥19,795
1,945¥40,639
2,226

3,075

2,163

2,356

1,959

689

175

153

*2 The main expenses and amounts recorded under operating expenses are as follows. As the Company is aholding company, the entire amount is recorded as general and administrative expenses.

Salaries and allowances
Provision for bonuses
Outsourcing expenses
Commission expenses
Depreciation(Millions of yen)
Fiscal year ended
March 31, 2024
¥2,331
226
1,949
864
23

Fiscal year ended
March 31, 2023
¥2,096
211
1,950
926
36

SECURITIESThe fair values of the shares of subsidiaries and associates have been omitted, as they are stocks, etc. with nomarket value.
Balance sheet amounts of the stocks, etc. with no market value are as follows:

Shares of subsidiaries(Millions of yen)
Fiscal year ended
March 31, 2024
¥242,403

Fiscal year ended
March 31, 2023
¥240,848

Shares of associates

1,357

781

Total

¥242,206¥243,184

DEFERRED TAX ACCOUNTING
1. Principal components of deferred tax assets and deferred tax liabilities are as follows:(Millions of yen)
As ofMarch 31, 2023

As ofMarch 31, 2024

(Deferred tax assets)
Valuation difference on shares of subsidiaries andassociates due to restructuring
Other¥1,305¥1,305

4,820

5,648

Subtotal

6,125

6,953

Valuation allowance(4,553)(5,158)

Total

1,572

1,795

321

321

2,617

3,079

2,938

3,400

¥(1,366)¥(1,605)(Deferred tax liabilities)
Reserve for promoting open innovation
Valuation difference on available-for-salesecurities
Total
Net deferred tax assets154

2. Reconciliations between the statutory tax rate and the effective tax rate reflected in the nonconsolidated statements of income are as follows:
As ofMarch 31, 2023
30.6%

Statutory tax rate
Adjustments:
Permanent differences such asentertainment expenses, etc.
Permanent differences such as
dividends, etc.
Change in valuation allowance
Other
Effective tax rate

As ofMarch 31, 2024
30.6%

0.9

0.1

(51.8)(33.3)

22.4
(0.6)
1.6%

2.0
0.1
(0.5)%

3. Accounting treatment of corporate tax, local corporate tax and related tax effect accounting:
The Company has applied the group tax sharing system. In accordance with the “Practical Solution on the
Accounting and Disclosure Under the Group Tax Sharing System” (PITF No. 42, August 12, 2021), the Company
conducts accounting treatment and disclosure of corporate tax, local corporate tax and related tax effectaccounting.

REVENUE RECOGNITION
Useful information in understanding revenue from contracts with customers is omitted since the same information
is provided in “NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS, SIGNIFICANTACCOUNTING POLICIES, 4. Basis for recognition of revenue and expense” in the non-consolidated financial
statements.
SIGNIFICANT SUBSEQUENT EVENTSThis information is omitted since it is provided in “V. FINANCIAL INFORMATION, 1. Consolidated Financial
Statements,

Etc.,

NOTES

TO

CONSOLIDATEDSUBSEQUENT EVENTS.”

155

FINANCIALSTATEMENTS,SIGNIFICANT

4) Supplementary Schedules
Schedule of property and equipment, etc.

Category

Asset type

Property and
Buildings
equipment
Structures
VehiclesTools, furnitureand fixtures
Construction inprogress
Total
Intangible
Other
assets
Total(Millions of yen)
Decrease
Balance at
Amortization
Accumulated
duringend ofduring period
depreciation
periodperiodBalance at
beginningof period

Increaseduringperiod

¥124

¥1

¥—

¥0

¥125

¥111

21
34

—
—

—
—

0
—

21
34

20
34

2,045

19

6

6

2,058

750

—

6

—

—

6

—

¥2,225

¥28

¥6

¥7

¥2,247

¥916

¥223

¥3

¥—

¥14

¥227

¥177

¥223

¥3

¥—

¥14

¥227

¥177

Note: The balances at beginning and end of period are based on the acquisition costs.

The schedule for allowance and provisions consists of the following:(Millions of yen)
Item
Allowance for doubtful accounts
Provision for bonuses
Provision for share-based
remuneration

Balance at
beginning of
period¥721
211

Increase during
period501

Decrease during Balance at end of
periodperiod

¥175
226

¥0
211

¥896
226

290

52

740

(2) Major Assets and Liabilities
The Group prepares consolidated financial statements, and therefore the details of the major assets and liabilities
are omitted.

(3) Other
Not applicable.

156

Independent Auditor’s Report
To the Board of Directors of MARUI GROUP CO., LTD.
THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
OpinionWe have audited the consolidated financial statements of MARUI GROUP CO., LTD. and its
subsidiaries (the Group), which comprise the consolidated balance sheets as at March 31, 2024, andthe consolidated statements of income, consolidated statements of comprehensive income,consolidated statements of changes in equity and consolidated statements of cash flows for the year
then ended, and notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at March 31, 2024, and its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance withaccounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of theGroup in accordance with the ethical requirements that are relevant to our audit of the consolidated
financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordancewith these requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were addressedin the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Valuation of unlisted shares(Key audit matter description)
The Company invests in start-up companies with which it may collaborate in the future. These
investments, identified as unlisted shares, are included in "Investment securities" in the
consolidated balance sheet. As described in significant accounting estimates in the notes to theconsolidated financial statements, unlisted shares amounted to 5,354 million yen as of the end of
the current fiscal year (as of March 31, 2024) (0.5% of consolidated total assets).
The Company records unlisted shares (excluding shares of subsidiaries) at cost in the consolidatedbalance sheets because these are considered unquoted equity investments in accordance with ASBJ
Statement No.10 “Accounting Standard for Financial Instruments”. The Company recognizes an
impairment loss on unlisted shares when there is a decrease in the net asset value, based on net
asset per share, of more than 50% compared to the acquisition cost due to the deterioration offinancial condition. For acquired unlisted shares whose acquisition price reflected excess earning
PricewaterhouseCoopers Japan LLC
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power, net asset value is calculated based on the performance of past financial information and thebusiness plan of the investees for the purpose of impairment. The difference between the net asset
value and the acquisition cost is recorded as a loss on valuation of investment securities. The
Company recognized 1,518 million yen of loss on valuation of investment securities during thecurrent fiscal year.
In the valuation of unlisted shares, the Company is required to verify the timeliness and reliability offinancial information of the investees in order to determine the financial condition and excess
earning power of the investees and to evaluate matters that may affect the financial condition of theinvestees. The Company also needs to verify the reasonableness of the investees’ business plans inassessing recoverability, which involves a high degree of estimation uncertainty and subjectivity.
The Company’s investments in start-up companies are positioned as part of a new business area, in
addition to Retail and FinTech. The Company has limited historical experience with investments instart-up companies. Based on the above and the fact that the Company has a significant amount of
unlisted shares, we determined this was a key audit matter.
(How our audit addressed the key audit matter)
Our audit procedures performed over the valuation of unlisted shares principally included thefollowing:(1) Understanding and evaluating internal controls
・ Obtained an understanding of internal controls related to management’s valuation ofunlisted shares.
・ Obtained an understanding of the Company’s internal rules for valuation of unlisted shares
and assessed whether these rules were consistent with ASBJ Statement No.10 “AccountingStandard for Financial Instruments” .
(2) Assessing and verifying accounting estimates made by the Company
・ Audit procedures performed in evaluating unlisted shares principally included thefollowing:‑
Obtained financial statements of the investees to consider reliability of the financial
information used by the Company in the valuation of unlisted shares and confirmed, by
taking into account risks and materiality, consistency of the information with theCompany’s information on investees’ business conditions and financial information.
‑
Inquired of the Company about the financial condition of the investees.
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For acquired unlisted shares whose acquisition price reflected excess earning power,
inspected materials related to investees’ business conditions and fundings to assess
whether there was a decline in excess earning power.
・ Verified the mathematical accuracy of the impairment loss calculation for unlisted shares
which were impaired during the current fiscal year.
Assessment of indications of impairment and recognition of impairment loss on non-current assets
at stores(Key audit matter description)
As of March 31, 2024, the Group recorded property and equipment in the consolidated balance
sheet of 173,280 million yen. This is included in non-current assets (comprised of buildings andstructures, land, and other assets) of 122,562 million yen (12% of consolidated total assets) at stores(22 Marui stores and 5 Modi stores) held by the Group.
As described in significant accounting estimates in the notes to the consolidated financial
statements, the smallest cash-generating unit of the Group’s non-current assets is primarily thestores. The Group identifies events that may indicate impairment of assets or a group of assets at

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each store if “operating profit or loss from operating activities is, or expected to be, negative forconsecutive periods” or, if “there are changes to the manner in which the assets are used that
reduces the recoverable amount of the assets significantly”.
When the Group considers “operating profit or loss from operating activities is, or expected to be,
negative for consecutive periods”, operating activities of each store include not only profit or loss
from Retail but also the issuance of EPOS cards which is the source of FinTech’s profit or loss.
Therefore, in assessing whether there is an indication of impairment, the profit or loss fromoperating activities in which the non-current assets at stores are used includes both operating profit
or loss related to Retail at each store and operating profit or loss related to FinTech arising from theissuance of credit cards. The operating profit or loss related to FinTech is determined as theoperating profit or loss arising from the EPOS cards historically issued by each store multiplied by aratio of EPOS cards that will not be used after store closures which is determined based on thehistorical data from the closed stores.
When indications of impairment are identified for certain stores, and if the total estimatedundiscounted future cash flows derived from the non-current assets at stores was less than the
carrying amount, the Group reduces the carrying amount to the recoverable amount and thedifference is recorded in extraordinary losses as impairment loss. However, no impairment loss wasrecognized in the current year as the total estimated undiscounted future cash flows derived fromthe non-current assets at stores exceeded the carrying amount.
The Group calculates the total undiscounted future cash flows derived from the non-current assets
at each store as the sum of future cash flows at each store related to Retail and future cash flows
related to FinTech derived from the issuance of credit cards by each store. Significant assumptions
in estimating the total undiscounted future cash flows include future merchandise sales based on
the sales strategies developed by each store, rental revenues from leasing space in stores to third
parties, and the future cash flows related to FinTech derived from the issuance of credit cards byeach store. The accounting estimates for the future merchandise sales based on the sales strategies
developed by each store and the rental revenues from leasing space in stores to third parties are
based on historical results. The future cash flows related to FinTech derived from the issuance ofcredit cards by each store are estimated based on an assumption of consistent growth.
Estimates for the future merchandise sales by store and the rental revenues from leasing space instores to third parties, as well as estimates for future cash flows related to FinTech derived from theissuance of credit cards by each store based on the sales strategies involve management judgement
and a high degree of estimation uncertainty.
Based on the above, we determined this was a key audit matter.
(How our audit addressed the key audit matter)
Our procedures performed in examining the assessment of indications of impairment andrecognition of impairment loss for non-current assets at stores principally included the following:(1) Understanding and evaluating internal controls
・ Obtained an understanding of internal controls related to management’s identification ofindications of impairment.
・ Evaluated the design and implementation of internal controls related to the identification ofindications of impairment as well as tested the operating effectiveness of internal controls
related to a) preparation of supporting documents used in assessing indications of
impairment and b) assessment of indications of impairment.
・ Obtained an understanding of internal controls related to management’s preparation andapproval of the business plans by store and the FinTech business plans.
・ Evaluated the design and implementation and tested the operating effectiveness of internal

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controls related to the preparation and approval of the business plans by store and the
FinTech business plans.
(2) Assessing the reasonableness of accounting estimates made by the Company
・ For a case where the “operating profit or loss from operating activities is, or is expected tobe, negative for consecutive periods,” we confirmed the accuracy of the operating profit orloss by store and the reasonableness of the profit or loss from the FinTech Business to assess
the reasonableness of identification of indications of impairment.
・ For a case where “there are changes to the manner in which the assets are used that reduce
the recoverable amount of the assets significantly,” we inquired with management andreviewed the minutes of the Board of Directors meetings to assess the reasonableness of theidentification of indications of impairment. In addition, we examined whether there wereany other events that should be identified as indications of impairment.
・ Our audit procedures performed over the business plans by store and the FinTech businessplans principally included the following:- Verified the consistency of the business plans by store and the FinTech business plans
with those approved by management.
- Compared the business plans by store and the FinTech business plans from prior years
with actual results, considered reasons for any underachievement, and considered if
such underachievement was reflected in the business plans for the following fiscal year
and beyond.
- For future profit or loss and cash flows included in the business plans used for theassessment of recognition of impairment loss, examined whether the assumptions,
including future merchandise sales by store, rent revenues from stores and the future
cash flows related to FinTech derived from the issuance of credit cards by each store,
were reasonable compared with the historical trading volume, net sales and future cash
flows related to FinTech derived from the issuance of credit cards by each store. We
also calculated the estimated undiscounted future cash flow independently, considering
the uncertainty in business plans by store and the FinTech business plans, andconsidered the impact on the Company's determination of the recognition of
impairment losses on property and equipment.
・ For the profit or loss related to FinTech derived from EPOS cards historically issued by eachstore and the ratio to be multiplied by the cash flows, both of which were used to determine
the profit or loss of FinTech derived from the issuance of credit cards by each store and thefuture cash flows, compared with the changes in the number of customers at stores thatwere closed in previous years.
Other Information
The other information comprises the information included in the Annual Securities Report, but does
not include the consolidated financial statements and our auditor’s report thereon. Management is
responsible for the other information. In addition, those charged with governance are responsible foroverseeing the Group’s reporting process of the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated.

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If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing theGroup’s ability to continue as a going concern and disclosing, as applicable, matters related to going
concern.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is nota guarantee that an audit conducted in accordance with auditing standards generally accepted inJapan will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
 Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, while the purpose of the consolidated
financial statement audit is not to express an opinion on the effectiveness of the Group’s internal
control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to

5 of 6the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.
 Evaluate whether the presentation and disclosures of the consolidated financial statements are inaccordance with accounting principles generally accepted in Japan, the overall presentation,
structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events ina manner that achieves fair presentation.
 Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and where applicable,
actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those mattersthat were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because theadverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
FEE-RELATED INFORMATION
In connection with our audit of the consolidated financial statements for the year ended March 31,
2024, the amounts of fees for the audit and the other services charged to MARUI GROUP CO., LTD.
and its controlled entities by PricewaterhouseCoopers Japan LLC and other PwC Network firms aredisclosed in IV. CORPORATE INFORMATION 4. Corporate Governance (3) Audits.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Naoaki Kobayashi

Tatsuya Chiba

Designated Engagement Partner
Certified Public Accountant

Designated Engagement Partner
Certified Public Accountant

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